STOCK MARKET WATCH -- Monday, 23 March 2015

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Monday, 23 March 2015[font color=black][/font]

SMW for 20 March 2015

AT THE CLOSING BELL ON 20 March 2015
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Dow Jones 18,127.65 +168.62 (0.94%)
S&P 500 2,108.10 +18.83 (0.90%)
Nasdaq 5,026.42 +34.04 (0.68%)


[font color=green]10 Year 1.93% -0.02 (-1.03%)
30 Year 2.51% -0.02 (-0.79%) [font color=black]


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[font size=2]Market Conditions During Trading Hours[/font]
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(click on link for latest updates)
Market Updates
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[font size=2]Euro, Yen, Loonie, Silver and Gold[center]

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[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
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Economic Calendar
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Yahoo Finance
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[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
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The Big Picture
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Brad DeLong
Bonddad
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goldmansachs666
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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
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[font color=black][font size=2]Handy Links - Videos:[/font][/font]
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Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
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[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison
6/4/12 Matthew Kluger, lawyer, sentenced to 12 years in prison, along with co-conspirator stock trader Garrett Bauer (9 years) and co-conspirator Kenneth Robinson (not yet sentenced) for 17 year insider trading scheme.
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."
8/22/12 Doug Whitman, Whitman Capital LLC hedge fund founder, convicted of insider trading following a trial in which he spent more than two days on the stand telling jurors he was innocent
10/26/12 UPDATE: Former Goldman Sachs director Rajat Gupta sentenced to two years in federal prison. He will, of course, appeal. . .
11/20/12 Hedge fund manager Matthew Martoma charged with insider trading at SAC Capital Advisors, and prosecutors are looking at Martoma's boss, Steven Cohen, for possible involvement.
02/14/13 Gilbert Lopez, former chief accounting officer of Stanford Financial Group, and former controller Mark Kuhrt sentenced to 20 yrs in prison for their roles in Allen Sanford's $7.2 billion Ponzi scheme.
03/29/13 Michael Sternberg, portfolio mgr at SAC Capital, arrested in NYC, charged with conspiracy and securities fraud. Pled not guilty and freed on $3m bail.
04/04/13 Matthew Marshall Taylor,fmr Goldman Sachs trader arrested, charged by CFTC w/defrauding his employer on $8BN futures bet "by intentionally concealing the true huge size, as well as the risk and potential profits or losses associated."
04/04/13 Matthew Taylor admits guilt, makes plea bargain. Sentencing set for 26 June; faces up to 20 years in prison but will likely only see 3-4 years. Says, "I am truly sorry."
04/11/13 Ex-KPMG LLP partner Scott London charged by federal prosecutors w/passing inside tips to a friend in exchange for cash, jewelry, and concert tickets; expected to plead guilty in May.
08/01/13 Fabrice Tourré convicted on six counts of security fraud, including "aiding and abetting" his former employer, Goldman Sachs
08/14/13 Javier Martin-Artajo and Julien Grout charged with wire fraud, falsifying records, and conspiracy in connection with JP Morgan's "London Whale" trade.
08/19/13 Phillip A. Falcone, manager of hedge fund Harbinger Capital Partners, agrees to admit to "wrongdoing" in market manipulation. Will banned from securities industry for 5 years and pay $18MM in disgorgement and fines.
09/16/13 Javier Martin-Artajo and Julien Grout officially indicted on charges associated with "London Whale" trade.
02/06/14 Matthew Martoma convicted of insider trading while at hedge fund SAC (Stephen A. Cohen) Capital Advisors. Expected sentence 7-10 years.
03/24/14 Annette Bongiorno, Bernard Madoff's secretary; Daniel Bonventre, director of operations for investments; JoAnn Crupi, an account manager; and Jerome O'Hara and George Perez, both computer programmers convicted of conspiracy to defraud clients, securities fraud, and falsifying the books and records.
05/19/14 Credit Suisse, which has an investment bank branch in NYC, agrees to plead guilty and pay appx. $2.6 billion penalties for helping wealthy Americans hide wealth and avoid taxes.
09/08/14 Matthew Martoma, convicted SAC trader, sentenced to 9 years in prison plus forfeiture of $9.3 million, including home and bank accounts







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[font size=3][font color=red]This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.[/font][/font][/font color=red][font color=black]

[tclambert]

1. Tansy, I like your new sig line.

I sometimes wonder what alien observers would think of humanity's gender relations. Surely they would try to find a way to exterminate the predatory/parasitic male gender to allow the female gender to develop to their full potential. They would just have to design some sort of fertilization system with genetic mixing and matching so females could reproduce without males. That doesn't sound that difficult. Without the destructiveness of men to hold them back, women might build a terrific civilization.

[Demeter]

5. Despite my difficulties with the other half of the human race

that wouldn't be my first choice. I would hate a totally female society. Too many senseless catfights.

[Demeter]

2. Fifty Lashes and Hobson's Choice, Argentina Edition posted by Anna Gelpern

http://www.creditslips.org/creditslips/2015/03/its-me-or-her-argentina-edition.html



Big day in sovereign debt. After months of kicking the can down the road and a couple of anticlimactic decisions from English courts that made no practical difference in the pari passu injunction, a giant big shoe has just dropped in the Southern District of New York. Judge Griesa ruled that Argentina's dollar-denominated local law bonds were covered by his injunction just the same as New York and English law bonds. In the process, he defined (or redefined?) the injunction super-broadly, effectively blocked Argentina from issuing new foreign currency debt under its own law, potentially expanded the reach of the pari passu clause for other sovereigns, told Argentina that it was all out of comity, and told Citi to choose between New York and Cristina Fernandez de Kirchner. Judge Griesa's 2012 injunction was styled as a remedy for violating the pari passu clause in Argentina's defaulted bonds. In theory, the remedy could be acceleration (as Argentina had argued), a fine, specific performance, or fifty lashes (ok, maybe not fifty lashes). The judge has lots of discretion in choosing an equitable remedy, which need not mirror the breached clause.

Because the injunction applied to "Exchange Bonds" and described bonds for which Bank of New York Mellon (BNYM) was trustee, it did not track the pari passu clause, which promised equal ranking with Argentina's "External Indebtedness." Exchange Bonds issued in the 2005 and 2010 restructurings include bonds that are not External Indebtedness and bonds not held through BNYM; External Indebtedness includes foreign currency debt unrelated to the restructuring. External Indebtedness excludes "Domestic Foreign Currency Indebtedness" (DFCI) "offered exclusively" in Argentina or issued in exchange for peso debt.

Citi, which is custodian for Argentine law, US dollar-denominated Exchange Bonds, has long argued that they should get paid because they (i) did not fit the description of Exchange Bonds in the original injunction, (ii) were mixed up with and indistinguishable from local law bonds that were not part of the exchange (including bonds issued to settle an investment dispute with Repsol), and (iii) because they were not External Indebtedness. For a while, it succeeded even as New York and English-law bonds have been blocked. No more of that.
According to Judge Griesa, his injunction covers BOTH Exchange Bonds AND External Indebtedness:

The operative paragraphs of the Injunction do not speak in terms of “external indebtedness,” and as a result, Citibank’s participation in making payments on exchange bonds is prohibited. This is true whether or not the exchange bonds are external indebtedness. Nonetheless, the court finds that the vast majority of exchange bonds governed by Argentine law and payable in U.S. dollars would not constitute DFCI, but rather would qualify as external indebtedness of the Republic. Thus, payment on these exchange bonds would violate the Equal Treatment Provision of the FAA, providing an additional reason as to why the Injunction applies.

The judge went out of his way to define DFCI narrowly, and External Indebtedness broadly, potentially expanding the reach of the pari passu clause to all foreign currency debt that could be sold to foreigners, using foreign offering documents, etc., even if it is governed by Argentine law. This effectively blocks Argentina from issuing new foreign currency debt under any law, killing Matt Levine's glorious map. More importantly, other sovereign debtors and their lawyers might have a look at their External Indebtedness and DFCI definitions to decide whether they need tweaking in light of this latest. If it is not DFCI, it might be pari passu. The judge rejected arguments that Citi was not a participant in the payment process, much of which goes through Argentine entities, reiterating that anyone who is not an exchange bondholder is prohibited from helping Argentina. (Note to Uber: Do not drive exchange bondholders to the airport, they might be catching a flight for Caja de Valores.)

MORE INSANITY AT LINK

[Demeter]

3. STEM Grads Are at a Loss Those who claim there's a STEM skills shortage are ignoring the evidence.

http://www.usnews.com/opinion/articles/2014/09/15/stem-graduates-cant-find-jobs

All credible research finds the same evidence about the STEM workforce: ample supply, stagnant wages and, by industry accounts, thousands of applicants for any advertised job. The real concern should be about the dim employment prospects for our best STEM graduates: The National Institutes of Health, for example, has developed a program to help new biomedical Ph.D.s find alternative careers in the face of “unattractive” job prospects in the field. Opportunities for engineers vary by the field and economic cycle – as oil exploration has increased, so has demand (and salaries) for petroleum engineers, resulting in a near tripling of petroleum engineering graduates. In contrast, average wages in the IT industry are the same as those that prevailed when Bill Clinton was president despite industry cries of a “shortage.” Overall, U.S. colleges produce twice the number of STEM graduates annually as find jobs in those fields.

In the face of these stark facts, we now see several studies that seem to be desperate Hail Mary passes, using rather unconventional means to find “shortages.” Some analysts do this by expanding the definition of STEM jobs – traditionally those involved in innovation, discovery and development – to include air conditioning technicians and even some retail jobs to make the case that this workforce is large and growing. Without any coherent meaning, such analyses now serve only rhetorical purposes to advance particular legislation.

Cries that “the STEM sky is falling” are just the latest in a cyclical pattern of shortage predictions over the past half-century, none of which were even remotely accurate. In a desert of evidence, the growth of STEM shortage claims is driven by heavy industry funding for lobbyists and think tanks. Their goal is government intervention in the market under the guise of solving national economic problems. The highly profitable IT industry, for example, is devoting millions to convince Congress and the White House to provide its employers with more low-cost, foreign guestworkers instead of trying to attract and retain employees from an ample domestic labor pool of native and immigrant citizens and permanent residents. Guestworkers currently make up two-thirds of all new IT hires, but employers are demanding further increases. If such lobbying efforts succeed, firms will have enough guestworkers for at least 100 percent of their new hiring and can continue to legally substitute these younger workers for current employees, holding down wages for both them and new hires.

Claiming there is a skills shortage by denying the strength of the U.S. STEM workforce and student supply is possible only by ignoring the most obvious and direct evidence and obscuring the issue with statistical smokescreens – especially when the Census Bureau reports that only about one in four STEM bachelor’s degree holders has a STEM job, and Microsoft plans to downsize by 18,000 workers over the next year...

MORE

[jtuck004]

4. So we should invest in junior college education, help people get to this faster. n/t

[Demeter]

6. Get to what? The unemployment line?

We need a cultural revolution, which values people, not money or high tech toys.

[jtuck004]

11. Yeah, that.

"We need a cultural revolution, which values people..."

You are more than correct.

Never, ever, ever, ever gonna happen. Not in this worldtime.

[wordpix]

26. How about STEM research into this potential cancer cure? (med mj)

http://www.cancer.gov/cancertopics/pdq/cam/cannabis/healthprofessional/page4

It burns me up that it's proven mmj has antitumor properties according to animal studies in the mid-2000s and not one cancer/mmj trial had been conducted with human subjects in this country. Disgusting.

I am a registered mmj cancer patient in my state and since there's no human trial, I have no idea how much mmj to take to get the antitumor effect. LOTS of research needed on this.

[Demeter]

7. Blue Shield of California loses state tax-exempt status; health insurer has big cash stockpile

http://www.greenfieldreporter.com/view/story/d42da1c76d5541e5b854730caa47ae34/CA--Blue-Shield-Tax-Status

Blue Shield of California is protesting a state decision to strip the nonprofit health insurer of its tax-exempt status, which the company has held since its founding in 1939. The California Franchise Tax Board quietly revoked the tax break in August, the Los Angeles Times reported Wednesday (http://lat.ms/1FBUw3s ). The decision could put San Francisco-based Blue Shield on the hook for tens of millions of dollars in state taxes each year. The insurer has paid federal taxes for years.

A spokeswoman for the tax agency declined to comment on why the insurer lost its status. The highly unusual action came after a lengthy state audit reviewed the justification for Blue Shield's taxpayer subsidy, according to the newspaper. Blue Shield said it is protesting the decision, but state officials have ordered it to file tax returns back to 2013 in the meantime. California's third-largest health insurer has faced criticism over its rate increases, executive pay and financial reserves.

Insurance Commissioner Dave Jones, a longtime critic of Blue Shield, said Wednesday that the company has also shifted its health insurance products from the Department of Insurance to the Department of Managed Health Care to avoid $100 million in premium taxes each year.

"Blue Shield is dodging taxes that other legitimate businesses and families and individuals pay, so it's fundamentally unfair and corrosive to our system of tax collection," Jones said.

Blue Shield spokesman Sean Barry told The Associated Press in an email that the vast majority of the company's policies are already regulated by the Department of Managed Health Care and the company's reasons for shifting business there are not related to taxes. Barry added that the requirements for plans sold under the Department of Managed Health Care have been historically more rigorous than those regulated by the Department of Insurance.

In 2011, facing a backlash over rate increases, the insurer capped its profits at 2 percent of annual revenue and returned about $560 million to customers and community groups from 2010 to 2012, the Times reported. Blue Shield also has given more than $325 million over the last decade to its own charitable foundation. But some consumer advocates and health policy experts told the newspaper those moves aren't enough in light of the company's huge cash stockpile. Blue Shield's surplus of $4.2 billion at the end of 2014 is four times as much as the Blue Cross and Blue Shield Association requires its member insurers to hold to cover future claims. Critics also note that the company has not served the state's poorest residents and has frequently has run afoul of state regulators. The 2011 disclosure that its former chief executive earned nearly $5 million stirred protests.

Some consumer groups have questioned whether certain Blue Shield spending is out of line with its nonprofit mission...Blue Shield has about 3.4 million customers and 5,000 employees and brought in $13.6 billion of revenue last year.

[wordpix]

27. "surplus of $4.2 billion at end of 2014" but whaaaa, we can't afford to pay taxes

poor widdle "non-profit" insurance company can't afford to pay taxes OR insure the poor

[Demeter]

8. Big Data shocker: Over 6 million Americans have reached the age of 112

http://www.theregister.co.uk/2015/03/17/big_data_reveals_that_65m_americans_have_reached_age_112/

Just 13 are claiming benefits, and 67,000 of them are WORKING

In an illustration of what can happen when you use Big Data uncritically, it has emerged that no less than 6.5 million living Americans have reached the ripe old age of 112. Even more amazingly, it appears that just 13 of the super-silver legions are claiming benefits - and tens of thousands of them appear to be holding down jobs at least part-time. Were they being taken seriously, the Social Security Administration's records would be shattering assumptions regarding the numbers of supercentenarians alive in the world today.

The fact that US social security records nominally contain more than six million Americans aged 112+ emerged in a recent report from the social security Inspector-General's office. The same records appear to indicate that the oldest American still alive would have been born in 1869, a mere four years after the culmination of the American Civil War. Only 13 of the 6.5 million are actually claiming Social Security benefits, it seems, but the other numbers have not been formally deleted and thus create an opportunity for fraudsters to give false details when providing their financial information.

The Associated Press quotes Senator Ron Johnson as saying "This is a real problem." The mess-up has obviously occurred in the SSA's failure to collect and administer death records for millions of people. Johnson is chairman of the Senate Committee on Homeland Security and Governmental Affairs, which plans a hearing on Monday in which it will look into problems with death records maintained by the Social Security Administration.

"When you have a fake Social Security number, that's what allows you to fraudulently do all kinds of things, claim things like the earned income tax credit or other tax benefits," added the senator. While none of the aged-112+ Social Security numbers are documented as having definitely been exploited for fraudulent purposes, the report raises concerns that such fraud could be taking place - with 67,000-odd of the numbers having been used between 2006 and 2011 to report more than $3bn in income. Sean Brune, a senior adviser in the Social Security Administration, noted that the 6.5 million records in question would probably be completely paper-based, dating from before the agency started using electronic records in 1972. According to figures validated last October, the Gerontology Research Group claims there are only 61 people in the world known to be 112 or over as of publication, although that number may rise to 63 this Friday. El Reg wishes a very happy birthday to Maria-Giuseppa Robucci-Nargiso of Italy, and Sue Hirano of Japan...

[Demeter]

9. Turn the page on fairy tale economics, says Monty Python star

http://www.timeshighereducation.co.uk/news/turn-the-page-on-fairy-tale-economics-says-monty-python-star/2019151.article

A “fairy tale” approach to economics teaching at university level has resulted in worldwide financial instability and a new approach to higher education curricula is needed, according to Terry Jones, the comedian and screenwriter.

The film-maker and Monty Python star, who himself penned a book of fairy stories in 1981, was commenting ahead of the premiere this month of his documentary film, Boom Bust Boom, which supports the global “postcrash” movement – a campaign that calls on universities to give more prominence to alternative economic theories after the 2008 financial crash.

“There is a direct link between our unstable economy and the way economics is taught,” Mr Jones told Times Higher Education. “We cannot expect graduate economists to engage with the real world if they are taught crashes do not exist. They are taught capitalism is stable, that humans are always rational. This is a fairy tale and it’s the reason we are in this mess.”

MORE

[Demeter]

10. What Happened to the “Feel Good” Economy?

http://www.nakedcapitalism.com/2015/03/happened-feel-good-economy.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

[Demeter]

12. 'I'll Be Gone and You'll Be Gone'

http://blogs.worldbank.org/publicsphere/ill-be-gone-and-youll-be-gone

There was an article in the New York Times recently with the title 'What's Really Wrong With Wall Street Pay?' In the article, the writer discusses a problem world leaders want to do something about but are not sure how. How do you stop compensation packages for bankers and traders in global markets from encouraging them to take the kinds of wild risks that have done so much damage to the global economy? I wish the leaders the very best of luck in dealing with that one. Success in the endeavor is far from certain...to put it gently. What caught my eye as I was reading the piece is what the writer says bankers call the "I.B.G-Y.B.G." problem, as in 'I'll be gone and you will be gone'. It is the moral hazard problem. Traders in global markets take incredible risks and recklessly, they collect their bonuses and move on. The firm takes all the risk. Well, it turns out that taxpayers take risks as well, since governments have had to bail out so many banks deemed too big to fail.

Well, my point is this: in international development don't we have our own version of the "I.B.G.-Y.B.G." problem? When those who design development projects and get them approved by relevant authorities, move on, get promoted, and are not held accountable for results, is that not a case of you'll be gone and I'll be gone? If you are not going to be held accountable for implementation and results you don't have to worry about whether or not the project will produce results under real world conditions. You can cut and paste global best practice on a technical issue into projects to be implemented in vastly different environments. Job done. When implementation challenges inevitably arise and hold things up, well, that is somebody else's problem. For the design team it is a case of ' I'll be gone and you'll be gone'.

There is talk that just as the G-20 leaders are grappling with this problem as it affects global financial markets, leaders in international development institutions are worrying about incentives and accountability with regard to the design of development projects. I am not at all clear which set of leaders has the easier task. And that says a lot.

[Demeter]

13. Yield Curve, Futures, Suggest No Rate Hike Until December; GDP Forecast Halved Again to 0.3%

http://globaleconomicanalysis.blogspot.com/2015/03/yield-curve-futures-suggest-no-rate.html

Curve Watcher's Anonymous is investigating the yield curve following Janet Yellen's exceptionally dovish FOMC announcement on Wednesday.

Read more at http://globaleconomicanalysis.blogspot.com/2015/03/yield-curve-futures-suggest-no-rate.html#MeCbyTjWYc2K33f8.99

[Demeter]

14. Write to Senator Wyden and tell him to oppose Fast Track! PETITION

http://www.prosperousamerica.org/150320_action_no_fast_track_to_wyden

A Fast Track bill would have been filed in February if Sen. Ron Wyden, Ranking Member of the Senate Finance Committee, had agreed to sign on with Chairman Orrin Hatch. But Senator Wyden refused, so far.

It's important to thank legislators who do the right thing. Please write to Senator Ron Wyden to thank him and urge him to stay committed to protecting Congress' role with regard to Fast Track trade authority.

Keep up the pressure. We thank 'em for doing good and spank 'em for doing bad.

CPA makes it easy. Fill out the form AT LINK to send a thank you email to Senator Wyden.

[Hotler]

15. Good morning, did you folks see this?

If you thought it was "Blood for Oil"--you're wrong. It was far, far worse.

http://www.democraticunderground.com/10026398349

There was no way in hell that Baker's clients, from Exxon to Abdullah, were going to let a gaggle of neo-con freaks smash up Iraq's oil industry, break OPEC production quotas, flood the market with six million barrels of Iraqi oil a day and thereby knock its price back down to $13 a barrel where it was in 1998.

Big Oil simply could not allow Iraq's oil fields to be privatized and taken from state control. That would make it impossible to keep Iraq within OPEC (an avowed goal of the neo-cons) as the state could no longer limit production in accordance with the cartel's quota system..

The problem with Saddam was not the threat that he'd stop the flow of oil – he was trying to sell more. The price of oil had been boosted 300 percent by sanctions and an embargo cutting Iraq's sales to two million barrels a day from four. With Saddam gone, the only way to keep the damn oil in the ground was to leave it locked up inside the busted state oil company which would remain under OPEC (i.e. Saudi) quotas.

The James Baker Institute quickly and secretly started in on drafting the 323-page plan for the State Department. In May 2003, with authority granted from the top (i.e. Dick Cheney), ex-Shell Oil USA CEO Phil Carroll was rushed to Baghdad to take charge of Iraq's oil. He told Bremer, "There will be no privatization of oil – END OF STATEMENT." Carroll then passed off control of Iraq's oil to Bob McKee of Halliburton, Cheney's old oil-services company, who implemented the Baker "enhance OPEC" option anchored in state ownership.

[Demeter]

16. Yes, that's Greg Palast, last of the greats

Well worth your time to read:

If you thought it was "Blood for Oil"--you're wrong. It was far, far worse.

http://www.gregpalast.com/how-bush-won-the-war-in-iraq-really/

All about the Yom Kippur war of 1973, and the conspiracy to screw us all by raising oil prices in perpetuity since.

[Demeter]

17. Ukraine's Oligarchs Are at War (Again)

http://www.bloombergview.com/articles/2015-03-20/ukraine-s-oligarchs-are-at-war-again-

Ending the destructive power that billionaires exercised over Ukrainian politics was an important goal of last year's "revolution of dignity" in Kiev, yet some of the more civic-minded of these businessmen wound up running the country anyhow. They now seem to have gone back to their old ways...Even before the chocolate mogul Petro Poroshenko became president last year, Igor Kolomoisky (net worth $1.3 billion) was appointed governor of his native Dnipropetrovsk region. Now, the two so-called oligarchs are locked in an open battle that augurs ill for Ukraine's immediate future.

Standoff in Ukraine

Kolomoisky was for many Ukrainians a hero of the post-revolutionary period. He took on the governorship as Russia was stirring up trouble throughout eastern Ukraine in the hope of producing a broad-based uprising against the pro-Western provisional government in Kiev. To keep Dnipropetrovsk in Ukraine, Kolomoisky became the most generous sponsor of Ukrainian nationalist volunteer battalions. Even the fleet of armored vehicles used by his Privatbank, the biggest retail bank in Ukraine, was partially repurposed for use in the war. Thanks to those efforts, separatism failed to catch on in Dnipropetrovsk. Another wealthy industrialist, Sergei Taruta, who was appointed governor of Donetsk, failed in part because he couldn't match Kolomoisky's passionate personal commitment. Much of the Donetsk region is now controlled by pro-Russian rebels. Kolomoisky, however, wasn't being entirely selfless. He lobbied hard against competitors, such as Rinat Akhmetov (net worth $6.7 billion) and Viktor Pinchuk ($1.5 billion), and seemed to believe he should be able to expand his business empire in exchange for the help he rendered to the Ukrainian state. He also continued exerting power over several nominally state-controlled businesses at which he had installed his managers under the previous regime. PINCHUK OF THE CLINTON FOUNDATION FUNDING SCANDAL

One of these was Ukrtransnafta, Ukraine's state-owned oil pipeline operator, where Kolomoisky had a loyal figure, Oleksandr Lazorko, appointed as chief executive in 2009. That personnel change resulted in a redistribution of pipeline capacity in favor of an under-used, Kolomoisky-owned refinery and enabled the plant to receive crude oil from Azerbaijan without incurring the substantial extra cost of carrying it by rail. The Russian oil giant Lukoil, which as a result had to shut down its refinery, complained bitterly about being squeezed out of the pipeline and was forced to look for alternative transport. Poroshenko remains an oligarch despite a (unfulfilled) promise to sell his confectionery company as president, but he has no personal interest in the oil business. Kolomoisky's independence and influence, however, pose a political threat. "He was too demonstrative in his puppeteering," Mustafa Nayyem, a legislator with Poroshenko's electoral bloc, told me of Kolomoisky. "The elite grew scared of him."

On Thursday, the government appointed a new chief executive for Ukrtransnafta, but Lazorko didn't want to leave. The bodyguards for the new appointee had to fight through a security cordon to get their boss into the office. Kolomoisky's reaction was swift. He occupied Ukrtransnafta's headquarters with a detail of camouflaged men, arriving with an entourage that included legislators. Video footage of the raid looks as dramatic as anything seen in the 1990's, when the former Soviet Union's first billionaires were working on their first millions. Asked by a Radio Liberty journalist what a regional governor was doing at a state company's office so late, Kolomoisky replied (I'm editing out copious cursing): "I came to see you. I have no other chance to see your face, Radio Liberty. Why aren't you asking how Ukrtransnafta was seized and Russian subversives got in here? Or have you come to see Kolomoisky? We liberated the building from Russian subversives who had seized it, and you and your Liberty are sitting here watching like a dame watches for her unfaithful husband." Apparently, Ukrainian energy minister Vladimir Demchishin, who visited Kolomoisky from Ukrtransnafta, got a more convincing explanation, because he decided against calling the police to oust Kolomoisky from the building. Sevgil Musaeva, editor of Ukraine's most popular news website, Pravda.com.ua, quoted a Ukrainian official as saying Kolomoisky told Demchishin that if needed he could bring 2,000 volunteer fighters to Kiev, "because enterprises are being taken away from him." By "enterprises" Kolomoisky meant Ukrtransnafta and another state-controlled energy company, Ukrnafta, in which he owns a minority stake but controls the management. On Thursday, the parliament in Kiev passed a law allowing the government to reassert control over such companies.

It would now be natural for Poroshenko to fire Kolomoisky as governor. "The country received a challenge yesterday," Nayyem wrote in a blog post. Failure to respond, he said, would show Ukraine's creditors and allies that it is indeed "the failed state of which Vladimir Putin has been dreaming for many years." Even if Poroshenko fires Kolomoisky, however, his wealth and influence on the volunteer battalions would still make him a powerful figure. When he labels someone a "Russian subversive," thousands of armed people listen, if only because he has been better able to equip and pay them than the government in Kiev. Kolomoisky is too shrewd a businessman to bring about a military coup, but he will hardly allow Poroshenko -- who was until recently his equal -- to push him around.

Despite its pro-Western yearnings, Ukraine remains an oligarch-run country plundered for years by a small group of ruthless men. So far, the Ukrainian people have been unable to bring them down, choosing instead to back different sides in their disputes. That means last year's revolution isn't really over, and the best hope is for it to continue by peaceful means.

[Demeter]

18. Bond Markets Bet on Grexit

http://www.bloombergview.com/articles/2015-03-20/mr-market-is-predicting-a-bad-ending-for-greece

Two taboos about Greece's future as a member of the euro club were broken this week when the German finance minister all but invited Greece to return to the drachma and the Dutch finance minister floated a temporary ban on Greeks' taking their money out of the country. Suggestions that some German officials are less than enthusiastic about Greece remaining in the euro and that capital controls are possible aren't all that surprising. Nevertheless, the openness with which they were discussed shows the lack of progress the newly elected government has made in reaching agreement with the nation's creditors. Greece's financial future looks increasingly perilous.

Capital Controls

The bond vigilantes are giving Greece a huge vote of no confidence, doubling the country's 10-year yield in the past six months and driving its three-year borrowing cost to a frankly unsustainable 23 percent. At that level, investors are signaling genuine concern that the country won't be able to pay its debts and can't retain its membership in the single-currency club:



Greek Yields

German Finance Minister Wolfgang Schaeuble expects Greece to leave the euro, according to Friday's edition of Bild. The German newspaper, which didn't cite its sources, said Schaeuble "is internally anticipating: the Greeks are going to leave the euro. But German Chancellor Merkel reportedly wants to keep the Greeks in the euro -- for political reasons." While Angela Merkel has the bigger say in what happens to Greece, it's not clever to rile the finance minister of your biggest national creditor, as Greece has consistently done this year.

Last week's revelation of a now infamous video of Greek Finance Minister Yanis Varoufakis raising his middle finger to Germany at a 2013 conference won't have done anything to temper Schaeuble's obvious mistrust of his counterpart. On Monday, he accused the Greek administration of "lying to the public" in its pledges to undo economic austerity measures. On Wednesday, he said "time is running out for Greece." Last week, he suggested Varoufakis wasn't up to speed on the terms of his country's bailout: "I'm willing to lend him my copy," was Schaeuble's barbed comment. That prompted Greece's ambassador in Berlin to formally complain that his government had been insulted.

Dutch Finance Minister Jeroen Dijsselbloem broke the second taboo -- the possibility of capital controls -- when he raised the scenario that dare not speak its name in a radio interview on Tuesday. He said a temporary bank shutdown to restrict capital flows might give Greece a breathing space, much as it did in Cyprus:

"It’s been explored what should happen if a country gets into deep trouble -- that doesn’t immediately have to be an exit scenario. We had to take radical measures, banks were closed for a while and capital flows within and out of the country were tied to all kinds of conditions, but you can think of all kinds of scenarios."

The Greek government dismissed his comments as "fantasy scenarios," while Prime Minister Alexis Tsipras said Friday that bank deposits are "secure." What else could he say? Greece's banks are bleeding cash, with the most recent official figures showing just 148 billion euros ($158 billion) of deposits left in the banking system in January, a drop of 10 percent in just two months. Outflows surged to as much as 400 million euros on Wednesday, five times the average in previous days, according to Greek newspaper Ekathimerini. No wonder the stock-market value of Greek banks has halved this year:


Greek Banks

MORE

[mother earth]

28. I'm thinking Stiglitz is right & Germany should leave the Euro, that way the EU can actually reform

& survive without being killed off by austerity. Let the bastards go it alone, see how far that'll take 'em.

[Demeter]

29. And give up Empire?

Germany has what it fought two world wars (and several smaller conflicts) to obtain: the domination of Europe. They aren't going to give it up voluntarily.

The fact that Germany is destroying all of Europe in the process of dominating it, with malice aforethought, is just part of the total plan and a continuation of the policies of former leaderships. And if, as some posit, for Germany one need only read Rothschild, there is still no difference, although the Rothschilds are spread out and seem to still be driving Austrian banks into the ground for profit; it's their hobby.

IMO, Truman nuked the wrong country. But he was a racist and V-E Day had been declared already. Putting Europeans under US Empire via the Marshall Plan made sense, given centuries of cultural ties and common notions and the complete devastation of infrastructure...but then, we did it to Japan, too, anyway, perhaps motivated by a little guilt over Hiroshima and Nagasaki, once that horror was revealed to the public.

Absolute power, folks. Absolute power. Until the nations rise up and renounce it.

[Demeter]

19. Cash Dinosaur: France Limits Cash Transactions to €1,000, Puts Restrictions on Gold; Bitcoin End?

A few days ago I asked How Long Before Cash is Banned? My question was in reference to reader CNA (Cards Not Appreciated) who commented ...

Hi Mish

I've been in Italy for a month. It's quite amazing how many places ask you to pay cash. Even at hotels, they would like you to pay your €1000+ bills in cash. And people 'wonder' why these countries always get into trouble.

CNA

Cash Dinosaur

My belief is that cash is going the way of the dinosaur. Just today we see another step in that direction.

France to Limit Cash Transactions

Via translation from El Economista, please consider France Limits Cash Payments to 1,000 Euros https://translate.google.com/translate?sl=es&tl=en&js=y&prev=_t&hl=en&ie=UTF-8&u=http%3A%2F%2Fwww.eleconomista.es%2Fempresas-finanzas%2Fnoticias%2F6563343%2F03%2F15%2FFrancia-limita-los-pagos-en-efectivo-a-1000-euros-para-evitar-el-blanqueo.html&edit-text=

The French Government will limit cash payments to 1,000 euros, compared to 3,000 euros today, a move that will come into force in September to combat terrorist financing and money laundering, in an announcement from Finance Minister Michel Sapin.

For non-residents (mainly tourists) the limit will drop from 15,000 to 10,000 euros.

Also, starting next year, banks will have to notify authorities of any income or withdrawals of more than 10,000 euros per month.

Restrictions apply to suitcases with money or goods of value like gold.

Yesterday, Today, Tomorrow

Yesterday the French cash limit was 3,000 euros. Today the cash limit is 1,000 euros. Tomorrow (not in the literal sense as timing is uncertain), cash transactions will be restricted to 100 euros, then banned altogether. The same applies everywhere, including the US. Want to buy a candy bar? The government will want to know where the purchase was made, how much you paid, and where you got the money to buy the candy bar.


Digital currencies will soon be mandatory. I believe the only reason bitcoin has survived is the Fed wants to study digital currencies. When the Fed decides to go 100% digital (I have no timeframe in mind) bitcoin may very well go back to its initial roots: worthless. The primary user of bitcoin right now is Chinese money laundering. Disagree? Then please explain why 80% of Bitcoin Transaction Volume is Chinese. How long can that really last? Digital currencies are coming. Is bitcoin the answer?

Read more at http://globaleconomicanalysis.blogspot.com/2015/03/cash-dinosaur-france-limits-cash.html#LaqDHf7AvdZ1cfhc.99

[Demeter]

20. Serfdom Is Better Than What the West is Heading For IAN WELSH

http://www.ianwelsh.net/serfdom-is-better-than-what-the-west-is-heading-for/

One of the things that we forget about Feudalism is that serfs had rights: economic rights. They had the right to farm common land, they had the right to take wood from common forests, they had the right to live where they had lived before...This is not to say that they were free, they certainly were not. But they were not slaves; they had access to, as it were, capital: what they needed to grow their own food, shelter themselves and clothe themselves.

We have an overly grim view of the Middle Ages, but, in various periods and various places, serfs, let alone freeholders, lived quite well. Much of what we associate as the worst of the Middle Ages actually happened either in the Dark Ages or in the Renaissance. For example, torture really takes off in the Renaissance, because as Stirling Newberry has pointed out, torture chambers and so on take a lot of iron and they didn’t have it to waste in the Middle Ages. Late serfdom (after the Renaissance) was pleasant enough for serfs that they had to be forced off their land: The factories were worse. In factories, they lived shorter, sicker lives and worked far more. Capitalism is based on dependency—on wage laborers needing to work for someone else, or their lives are miserable or short. (Marx’s “whip of hunger”.) It is voluntary only in the sense that you can offer your labor to anyone willing to pay, not in the sense that you can opt out of the system and have anything approaching a decent life. Today, if you lose your job and you’re an ordinary person, you can’t support yourself. If the government, friends or family don’t give you what you need, you have to beg for it. If you don’t get it, you die. Homesteading laws and laws which allowed people to take unused or underused property and use it to support themselves have been drastically weakened. Absent a job, or charity, you will probably wind up dead. If you don’t, you will be miserable.

Our forebears in the 19th century understood this. It’s why they called jobs “wage slavery.” You do what you’re told by your boss, where you’re told to do it, when you’re told to do it, how you’re told to do it, and if you don’t, feel free to try and find another job. Whether you can find another job is often unrelated to your personal attributes and has little to do with anything approaching virtue (those who doubt this are invited to investigate how Wall Street and Fleet Street make their money). How well most people are paid is a market decision in the sense that it has to do with the balance between labor supply and demand, and labor power and the power of capital: For all intents and purposes labor only has pricing power if it is organized and politically powerful or if the labor market is tight. Those who came out of the Great Depression understood this because they had seen many people, through no fault of their own, reduced to poverty, unable to find any work. Because of this they tightened labor laws, tried to make unions more powerful and taxed the heck out of rich people so they couldn’t use their money to destroy the liberal state.

What they didn’t do was overthrow capitalism; they didn’t see a better, more practical way to organize society. As a result, many men stayed in positions of vast private power and wealth (even if they personally were heavily taxed) and were eventually able to use that money to overthrow the liberal state in England and the US, and from there they have been able to undermine it virtually everywhere, including in most of the European socialist states. What is on offer, then, is not neo-feudalism, with neo-serfs, but aristocrats and their slaves–slaves towards whom the aristocrats feel less and less an obligation to even feed (see all the cuts to food stamps). In some ways it’s superior to even slavery for the master-class: Surplus labor beyond what is needed to keep wages down is now completely disposable and doesn’t have to be paid for, after all.

So understand this: What is being offered you, increasingly, is a chance to scramble for pennies from your masters and when considered superfluous to their needs, to suffer and quite probably die before your time.

Serfdom? You should be so lucky.

[Demeter]

21. COMMENT FROM NAKED CAPITALISM READER

60 years ago, Hannah Arendt pointed this out in The Human Condition. She asserted that the source of capital for early modern capitalism was confiscation of the church’s assets, followed by confiscation of the common land and the serfs’ economic assets (not to mention destruction of the guilds). I’d also argue that torture grew considerably in the 1500s and 1600s because of the Reformation. Both Catholics and Protestants at the time were great torturers and witch burners. In the U.S.A., because of romanticized views of Protestantism, there is some weird idea that only Catholics abused people. Yet witch burning went on in northern German and Scotland (and there are a number of famous cases in Sweden) as part of the establishment of Protestantism and further subjugation of women. Do people think that some Catholic bishop turned up in colonial Massachusetts to preside over the Salem witch trials? I’m always amused, too, by the idea that the serfs had too much free time because of the Catholic church cycle of festivals. Better to work on Sunday and Christmas? In short, Welsh is reminding us of an alternative view that should be made more visible once again.

http://www.nakedcapitalism.com/2015/03/links-32115.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

[Demeter]

24. AN ADDITIONAL COMMENT (EXCERPT)

...It should be noted, however, that the Salem witch trials effectively ended the old congregationalist orthodoxy in MA. They blew their wad in a massive delusional abuse of power and that was it. The Mathers, et al were removed from Harvard and had to found Yale in order to try to form a new basis for some kind of continuing influence. Harvard then freely liberalized without them. In some ways this mimics in miniature the more explosive process of change in Europe...


AND THAT'S WHAT WE NEED NOW...FOR THE 1% TO BLOW THEIR WAD IN A MASSIVE DELUSIONAL ABUSE OF POWER AND BE REMOVED FROM THE LEVERS OF POWER....

[Demeter]

22. 1% rigged everything: Why no one can end Ronald Reagan’s “dead wrong” voodoo economics

http://www.salon.com/2015/03/19/the_1_percent_rigged_everything_why_no_one_can_end_ronald_reagans_dead_wrong_voodoo_economics/

A thriving middle class is the cause of growth. The middle class creates rich people -- not the other way around



Venture capitalist Nick Hanauer, a highly visible champion of Seattle’s $15/hour minimum wage, wrote a piece in the Atlantic last month pushing on another front in the war against toxic income inequality. “Stock Buybacks Are Killing the American Economy,” he warned, and getting rid of them would be a tremendous boon to the economy. This latest front rebukes those who say that raising the minimum wage does little to address what ails the American middle class. First, it underscores the obvious: that battling against decades of bad economic policy must necessarily be a multi-pronged affair, with no single action able to solve everything at once. But second, it starkly highlights how much of the problem can be traced to a single source—the profoundly misguided notion that giving even more money to rich people would produce prosperity for all. Instead, the exact opposite has happened. That’s why the attack on stock buybacks is an even more profound attack on economics as usual, even if it, too, only represents one facet of what has to be a multi-faceted approach. Corporate profits have doubled since the post-World War II boom years, from an average of 6 percent of GDP to more than 12 percent today, Hanauer pointed out, and yet “job growth remains anemic, wages are flat, and our nation can no longer seem to afford even its most basic needs.” Stock buybacks—which (as explained here) were virtually forbidden from 1934 through 1982—are a key reason why our economy is so cash-starved when it comes to wealth-producing investments:

Over the past decade, the companies that make up the S&P 500 have spent an astounding 54 percent of profits on stock buybacks. Last year alone, U.S. corporations spent about $700 billion, or roughly 4 percent of GDP, to prop up their share prices by repurchasing their own stock….

It is mathematically impossible to make the public- and private-sector investments necessary to sustain America’s global economic competitiveness while flushing away 4 percent of GDP year after year.

Hence, Hanauer argued, it’s time to end stock buybacks—they are crippling our ability to grow our economy robustly. Along the way, Hanauer also sharply criticized what he called “the 40-year obsession with ‘shareholder value maximization’” SVM as the narrow-minded definition of corporate purpose, which has been used to justify, rationalize and obfuscate the buyback explosion, and other ills of corporate misgovernance that have become commonplace in the post-1980 era...Hanauer has plenty of company raising this argument and his critique of SVM, from UMass economist William Lazonick writing in the Harvard Business Review (“Profits Without Prosperity”) to a book by Cornell Law School’s Lynn Stout (“The Shareholder Value Myth: How Putting Shareholders First Harms Investors, Corporations, and the Public”), to the white paper Hanauer himself cited, titled “The World’s Dumbest Idea,” by GMO asset allocation manager James Montier, to a 2014 report from the Aspen Institute, cited by Steve Denning of Forbes, noting it “showed that thought leaders were coming to the same conclusion (questioning SVM). In a cross-section of business leaders, including both executives and academics, a majority, particularly corporate executives, agreed that the primary purpose of the corporation is not to maximize shareholder value, but rather ‘to serve customers’ interests.’”

With all this criticism out there—from corporate governance observers and participants in alike—and the strength of the supporting data, it seemed a bit strange to see a March 2 Wonkblog post by Max Ehrenfreund jarringly titled “The fringe economic theory that might get traction in the 2016 campaign,” particularly since the post itself treated both Stout and Hanauer quite seriously. “In what universe is this argument ‘fringe’?” Lawyers Guns and Money blogger Robert Farely tweeted, retweeted by UC Berkeley economist Brad DeLong. The title was even stranger in light of a September 2013 Wonkblog post by Steven Pearlstein, straigthforwardedly titled “How the cult of shareholder value wrecked American business.” But it’s certainly true that you can’t reliably tell fringe from mainstream in economics anymore, especially if you’re trying to track ideas through shifting reference frames. Defaulting on the debt in order to be “fiscally conservative,” anyone? That fringe-of-the-fringe-of-the-fringe idea very nearly became reality and still might, do so again later this year.

More fundamental, it seemed to me, was the underlying ongoing battle over how economic arguments and analysis are framed, and why that matters—a battle much broader and longer than the 2016 campaign. So I contacted Hanauer, and asked about how he had framed his his article—which in turn was a critique of how Obama had framed his comments on income inequality in his State of the Union speech. At the beginning of his article, Hanauer wrote that Obama “missed the opportunity to draw an important connection between rising income inequality and stagnant economic growth.” So I asked him what that connection was, why is it so important, and what could be done about it. In his view, Obama saw extreme inequality as wrong in moral terms, which resonates well with his base, but failed to grasp that it was wrong economically as well, which could resonate much more broadly.

“The problem I highlighted was that President Obama didn’t offer an alternative theory of growth,” Hanaauer said. “He could have, but he didn’t. He’s given six state of the unions, talked a little bit about inequality, he’s made some moral arguments about how it’s bad, he has not once offered an alternative explanation for how an economy like ours grows. And and so if you’re not willing to litigate the methods of growth, then you’re ceding that to the other side.”

It’s not just Obama, in Hanauer’s view. “This is what progressives have done for generations, is that we ceded to the other side that the rich are job creators; we ceded to the other side that less regulation equals more growth; we ceded to the other side that if wages go up, then employment goal go down. And then we wonder and complain about the policies that flow naturally and logically from that set of baseline assumptions. That’s the problem,” he said—a failure to contest the basic framework of economic thought. Hanauer has challenged that framework, with what he calls “middle-out economics”, which was the subject of the summer 2013 issue of Democracy.

He made the same point again, about the failure to contest fundamentals, with a slightly different emphasis and explanation. “The problem with our politics is President Obama and the people who surround him, don’t represent an alternative to trickle down economics, they are trickle-down-lite,” Hanauer told me. “They’re sort of kinder-and-gentler trickle-down economics. They can talk a little bit about the importance of the middle class, but, in my opinion, they haven’t quite seen clearly that they’ve gotten cause-and-effect reversed. They still think that a thriving middle class is an effect of growth, a consequence of growth, and the truth is in a technological, modern economy, a thriving middle class is the cause of growth…. The middle class creates rich people, not the other way around.”

This used to be well-understood by everyone. During America’s long post-World War II boom, the incomes of all levels growing approximately equally—though slightly slower at the very top. “That’s how you sustain virtuous cycle of increasing returns which capitalism can be. Capitalism can be constructed in a way so that everyone does better all the time. It’s a beautiful thing,” Hanauer said. “But if the power dynamics change in really extreme ways, as they have in the last 30 years, and all of the value of enterprise is sucked out by a few owners and the senior managers, then you basically killed the goose that layed the golden egg.” That’s what stock buybacks are all about.

MUCH MORE---MUST READ!



Paul Rosenberg is a California-based writer/activist, senior editor for Random Lengths News, and a columnist for Al Jazeera English. Follow him on Twitter at @PaulHRosenberg.

[Demeter]

23. Software giants push for trade deal

http://thehill.com/policy/technology/236474-software-giants-push-for-trade-deal



Executives at top software companies are pressuring lawmakers to support “fast-track” trade legislation. Officials from Apple, IBM, Microsoft, Oracle and other major companies told top lawmakers on the Senate Finance and House Ways and Means committees Friday that their industry needs laws to protect against restrictions on the free flow of data.

“To have a truly 21st Century trade regime, which empowers commercial opportunities where the Untied States has real competitive advantage, we need our negotiators to focus on these barriers specifically,” the 15 executives who sit on the board of BSA The Software Alliance wrote to lawmakers.

“We urge prompt action on TPA [trade promotion authority] to set specific goals on open markets for digital trade.”

Software and tech companies have been pushing for lawmakers to pass fast-track authority and give the Obama administration new powers to negotiate trade deals. Congress could set priorities for negotiations through TPA but then would only be able to give up-or-down vote on trade deals.

Of particular concern for the software companies are measures in other countries that restrict them from sending data easily or that require them to host servers within those countries' borders. While countries often frame those policies as security measures, they are in many cases “simply aimed at creating opportunities for domestic entities to the disadvantage of American developers of software and providers of data services,” the companies wrote.

“We need trade agreements to address these market access restrictions on digital commerce directly.”

[Demeter]

25. U.S. court authorizes Citigroup to process Argentine bond payments

http://www.reuters.com/article/2015/03/23/us-argentina-debt-citigroup-idUSKBN0MI0N120150323

Citigroup Inc said it has been authorized by a U.S. judge to process two Argentine debt payments, the bank said, which could ease tensions between the bank and the default-hit nation. The U.S. bank, which acts as custodian of some Argentine bonds, has been embroiled in a court battle between the South American country and a group of New York-based hedge funds seeking full payment on their defaulted sovereign bonds. A potential resolution may have moved closer after a ruling by the U.S. District Court for the Southern District of New York on Friday.

The court has stipulated that it will not restrict Citi from meeting its payment-processing obligations relating to dollar-denominated Argentine bond payments under local law due on March 31 and June 30, the bank said in a statement. The court also said it will not impede the bank from exiting the Argentine custody business, as it has said it wants to do.

Leftist President Cristina Fernandez's government had threatened to cancel Citibank Argentina's operating license if it refused to process payments to other bond holders. U.S. District Judge Thomas Griesa in New York ruled that Argentina must settle with the hedge funds seeking full payment on their defaulted sovereign bonds before it continues paying interest to the large majority of investors who accepted significant writedowns on the debt holdings after the country's record default on $100 billion in 2002. Most investors holding Argentina bonds exchanged them for bonds worth much less, but a group of bondholders rejected the swaps.

These holdouts, including billionaire Paul Singer's Elliott Management LP hedge fund and its NML Capital affiliate, as well as the Aurelius Capital Management hedge fund, have insisted they be paid in full if holders of exchanged bonds are paid. Commenting on the agreement, a spokesman for NML said, "NML and other creditors reached an agreement with Citibank, according to which Citibank agreed not to appeal the court's determination that the pari passu injunction covers all of Argentina's exchange bonds. The spokesman added that Griesa had approved the agreement that was "specifically tailored to address the unique circumstances facing Citi Argentina after Citibank announced it was exiting the custody business in Argentina."

[mother earth]

30. The IMF Would Be 'Delighted' To Cooperate With China On AIIB, Says Lagarde (3-22-15)

BEIJING, March 22 (Reuters) - China received critical support from the International Monetary Forum and Asian Development Bank on Sunday for its goal of establishing a new Chinese-led multilateral lender, adding to a growing wave of endorsements that has worried the United States.

Leaders of the IMF and ADB, speaking at a conference in Beijing, said they were in talks with or happy to cooperate with the Asian Infrastructure Investment Bank (AIIB), a $50 billion lender to be majority funded by China that is seen by some as a rival to these established international financial institutions.

The United States, concerned about China's growing diplomatic clout, has urged countries to think twice about signing up and questioned whether the AIIB will have sufficient standards of governance and environmental and social safeguards.

Some 27 countries have already signed up to participate in the AIIB, China's Finance Minister Lou Jiwei told China National Radio on Saturday. It will provide project loans to developing countries and is slated to begin operations at the end of 2015.

The United States' key strategic allies in the region, Australia, Japan and South Korea, are also considering joining the proposed Beijing-based bank.

Early opposition to the AIIB from Western countries partially dissolved after Britain said this month it would join, with France, Germany and Italy swiftly following suit.

Canberra could formally decide to sign up to the AIIB when the full cabinet meets on Monday, Australian media have said.

At least eight more countries may join the lender by the March 31 deadline, Jin Liqun, secretary-general of the interim secretariat that is establishing the AIIB, told a panel at the conference on Sunday.

The fund will have approval from its shareholders at the start to double its capitalization to $100 billion, he said.

"China will follow the rules of the international community and will not bully other members but work together with them and try to reach consensus in all the decisions we make without brandishing the majority shareholder status," he said.

BANDWAGON

In an editorial published on the same day, China's official Xinhua news agency suggested that the United States might be embarrassed that many of its allies had not heeded its warnings.

"For decision-makers in the United States, they really have to be reminded that if they do not jump on the bandwagon of change in time, they will soon be overrun by the bandwagon itself," it said.

IMF Managing Director Christine Lagarde said on Sunday that the fund would be "delighted" to cooperate with the AIIB.

China's Lou and ADB President Takehiko Nakao said at the conference they had held discussions on possible cooperation, with the Chinese finance minister adding that topics discussed included safeguard standards.

Lou has previously said AIIB would complement rather than compete with other institutions such as the ADB, the Manila-based multilateral lender dominated by Japan and the United States.

The AIIB's Jin said developing countries in Asia would receive the bulk of loans for infrastructure projects, which could be co-provided with commercial banks and pension funds.

Non-Asian countries would also only hold 25 percent of the AIIB's shareholding, lower than their stakes at the founding of the ADB, he said. (Additional Reporting by Dominique Patton and Kevin Yao; Editing by Paul Tait and Alex Richardson)
http://www.huffingtonpost.com/2015/03/22/asia-development-bank_n_6918960.html

[Demeter]

31. I can hear the teeth-grinding from here.

I sincerely doubt that the IMF is happy about this, because I expect Greece will be the first customer.

[mother earth]

32. Asian Infrastructure Investment Bank, AIIB, necessary for reform of the internat'l monetary system?

Published on Mar 19, 2015

Eswar Prasad, a senior fellow at the Brookings Institution and a former IMF official in China, said the creation of the Asian Infrastructure Investment Bank, or AIIB, is necessary for speeding up the reform of the international monetary system.

[mother earth]

33. RT: UK shift to China & AIIB 'extremely worrying for Washington' - Liam Halligan

Published on Mar 16, 2015


Watch the full episode here: http://bit.ly/1MFyXzC

Liam Halligan, editor at large of Business New Europe and Telegraph columnist, talks to Going Underground host Afshin Rattansi about the Asian Infrastructure Investment Bank. He explains it is a rival to not only the IMF but also to the Asia Development Bank, which is Japanese-led. This is extremely threatening to the US as the BRIC countries wield a massive amount of power. There is a difference in the way that America and Britain see China, with the UK seeing them as a trading partner rather than a challenge. It is a symbolic move for Britain to back the AIIB, taking a step away from Washington towards a current that the US sees as a 'major irritant.' And he feels there is a growing argument that Britain's future lies not in the West, with a failing Eurozone, but in a thriving Asian economy.