STOCK MARKET WATCH -- Monday, 7 October 2013

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Monday, 7 October 2013[font color=black][/font]

SMW for 4 October 2013

AT THE CLOSING BELL ON 4 October 2013
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Dow Jones 15,072.58 +76.10 (0.51%)
S&P 500 1,690.50 +11.84 (0.71%)
Nasdaq 3,807.75 +33.41 (0.89%)


[font color=red]10 Year 2.64% +0.01 (0.38%)
[font color=green]30 Year 3.72% -0.01 (-0.27%) [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.
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.








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

[Demeter]

1. In the interests of mental stability

I going to post as if there were a future and a direction for our economy....other than down the drain. If we ignore the idiots in DC and just go about our business, maybe they will go away?

[Demeter]

2. Trick or Treat (cute cartoon from Luckovich)

http://assets.amuniversal.com/d3d7c13010a3013128af001dd8b71c47

[Demeter]

3. The Fascists are Coming! The Fascists are Coming! (the fascists are here already)

COMPENDIUM ON THE LOSS OF OUR CIVIL LIBERTIES AND CONSTITUTIONAL RIGHTS

We Live Under a Total Surveillance State in America -- Can We Prevent It from Evolving into a Full-Blown Police State? By Fred Branfman

http://admin.alternet.org/activism/we-live-under-total-surveillance-state-america-can-we-prevent-it-evolving-full-blown-police?akid=10971.227380.DMFr-i&rd=1&src=newsletter900814&t=4

For those alarmed by the steady growth of lawless, violent and authoritarian U.S. Executive power for the last 50 years, the events of the past few months have been exciting. The emergence of a de facto coalition of progressives and conservatives opposing the National Defense Authorization Act law giving the Executive the right to unilaterally detain or execute American citizens without a trial, and NSA mass surveillance of phone and Internet data, has been unprecedented, and offers the first hope in 70 years that Executive power can be curbed

The most important development has been the public and congressional reaction to President Obama's proposal to strike Syria. A huge majority of the American people opposed even a limited military action by the Executive Branch. Reading the polls, the President decided to seek congressional authorization for a limited military action. For the first time in living memory, Congress clearly opposed him. It is too soon to say what this will mean for the future, but the implications clearly extend beyond just this particular strike or President.

The main arena besides the Middle East where the issue of the Executive Branch vs. Congress and the American people will play out in coming months will concern attempts to limit not only Executive surveillance of innocent Americans, but its other assaults on the very foundation of democracy itself.

The fundamental issue involved amidst the ongoing cascade of revelations about NSA wrongdoing is this: what must be done to roll back the Executive Branch's creation of a surveillance state, which is just one more major economic crisis or 9/11—as even centrists like Bob Woodward and Tom Friedman warn—from becoming a police-state.

Most of the focus until now has been on trying to absorb the dimensions of the surveillance state we have suddenly learned we are living in since June 6 . But it is now time to focus on the actions needed to end its assaults on democracy...

Chris Hedges | The Sparks of Rebellion''
'
http://truth-out.org/opinion/item/19127-the-sparks-of-rebellion

...It is not the poor who make revolutions. It is those who conclude that they will not be able, as they once expected, to rise economically and socially. This consciousness is part of the self-knowledge of service workers and fast food workers. It is grasped by the swelling population of college graduates caught in a vise of low-paying jobs and obscene amounts of debt. These two groups, once united, will be our primary engines of revolt. Much of the urban poor has been crippled and in many cases broken by a rewriting of laws, especially drug laws, that has permitted courts, probation officers, parole boards and police to randomly seize poor people of color, especially African-American men, without just cause and lock them in cages for years. In many of our most impoverished urban centers—our internal colonies, as Malcolm X called them—mobilization, at least at first, will be difficult. The urban poor are already in chains. These chains are being readied for the rest of us. “The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, beg in the streets or steal bread,” W.E.B. Du Bois commented acidly....

GOP’s massive fraud: The shutdown isn’t really a shutdown! By David Sirota

http://www.salon.com/2013/10/06/gops_massive_fraud_the_shutdown_isnt_really_a_shutdown/

Sure, some parts of the government have stopped. But what about the drug war, NSA spying and the war machine? If a government shutdown genuinely shut the entire government down, you might be able to trace a few silver linings from an otherwise bad situation. Military conflicts might end (or at least be temporarily suspended), the destructive drug war might grind to a halt, mass surveillance might be put on hold and congressional legislators might be financially punished for their malicious behavior. But a government shutdown is mostly just a shutdown of good things — stuff like Head Start and food assistance to low-income moms and kids. Indeed, because of the way shutdowns are structured, the only silver lining from a budget stalemate is that you might get to hear a few curse words and see some nudity on television.

Of course, there is an insidious method to the madness of government shutdowns. In general, the dividing line between what gets shut down and what doesn’t is a similar dividing line between what America’s political culture typically venerates as The State and what that culture lambasts as The Government. Consider what will not be shut down:

The State’s war machine is largely exempted from the shutdown. Sure, the Armed Forces’ football season is in jeopardy. But our wars will press on unabated and many military paychecks — including to private contractors — will continue to be issued, even as other federal workers are furloughed.

Many key parts of The State’s surveillance apparatus are exempted from the shutdown. That’s not to say the shutdown affects nothing at the NSA. The agency cannot, for instance, respond to the public’s Freedom of Information Act requests (which is convenient for the NSA). And some of its employees are, in fact, furloughed. But a lot of the spying will still go on.

Despite its failures and rampant waste, much of the Drug War is exempted from the shutdown. So are many of The State’s other police-related activities.

The government shutdown does not affect the Internal Revenue Service’s ability to collect taxes. It only means you can’t get your tax questions answered.

The lawmakers who orchestrated the government shutdown are exempted from the government shutdown. Yes, they will still be getting handsomely remunerated, without having to worry that they might lose their paychecks like other federal employees.

So, in sum, major portions of The State — aka the Military-Industrial Complex, the Police State, the revenue-generating apparatus of the IRS and professional politicians in Washington — are somewhat exempted from the effects of the shutdown. Meanwhile, The Government — aka the Safety Net, the Regulators and the Inspectors — gets hit hard. At a practical level, this institutionalized double standard creates incentives for government shutdowns — at least on the political right. That’s because while conservatives loathe The Government, they love The State...

[Demeter]

4. THE DECLINE AND FALL OF RETIREMENT COMPENDIUM

Pension-Fund Looters Get Tax Breaks, Too By Matt Taibbi

http://www.rollingstone.com/politics/blogs/taibblog/pension-fund-looters-get-tax-breaks-too-20131004

A few weeks ago, I wrote a feature on pension reform in states like Rhode Island for Rolling Stone. Since the piece was sharply critical of alternative investments like hedge funds, I expected a heated response, and got one right away. In fact, a series of raving/chest-thumping emails from one Manhattan Institute hedge fund billionaire appeared in my email inbox about four and a half seconds after the piece went live on the Rolling Stone website. This colorful personage calmed down eventually, though, and I figured a more sophisticated, for-public-consumption response would come from those quarters later on. It finally showed up this week in GoLocalProv, when Aaron Henn, an "opinion-leading urban affairs analyst" who appears in striking tie-and-folded-arms pose in his column photo, wrote a piece in defense of the Rhode Island Treasurer profiled in the piece called "Matt Taibbi's Deceptive Hatchet Job on Gina Raimondo."

Henn discloses up top that he's written in the past for the Manhattan Institute (again, a think-tank created by hedge funds to further industry objectives), so there's that. I'm not going to go through his article line-by-line, because this dispute is surely already becoming tiresome to many, but there are one or two points in it worth responding to. For one, Henn complained that I didn't mention in my article that Raimondo is a Democrat. Through this omission, he says, I was trying to "obscure the severity of America's municipal pension crisis by portraying reform efforts as driven by right-wing ideology." Well, it is right-wing ideology, for sure. Ayn Rand herself would have loved the idea of unilaterally imposing cuts to the "unsustainable" benefits of parasitic workers. But that doesn't mean it hasn't been advanced by Democratic Party politicians. That's something I have no problem admitting.

Anyone who covers the finance sector knows Democrats over the years have been in bed with Wall Street every bit as much as Republicans. In some ways, the finance industry is actually closer, especially on a cultural level, to the Democrats (many prominent financiers, former Goldman chief Bob Rubin being a great example, are social liberals). This dates back to the Nineties, when two of the signature deregulatory moves that led to the financial crisis – the final repeal of the Glass-Steagall Act and the Commodity Futures Modernization Act deregulating derivatives – were pushed by the Clinton administration and its ballyhooed Rubin/Summers economic advisory team, famously lauded on the cover of Time as the "Committee to Save the World." (Even back then, politicians were casting Wall-Street friendly reforms as technocratic decisions designed to save regular people from financial ruin.)

More recently, I've written many times about the failure of Democratic Party politicians like Barack Obama to do anything about the outrageous carried interest tax break, under which hedge fund billionaires like the ones manning the board of the Manhattan Institute and making millions managing the pensions of states like Rhode Island pay a maximum personal tax rate of 15 percent. In fact, not only have Democrats not done anything about that outrage, there have been many prominent ones – like for instance Cory Booker and Bill Clinton, two politicians who both benefitted from finance-sector largesse in their respective careers – who stood up and defiantly took bullets for the industry when Obama offered highly muted criticisms of Mitt Romney's finance-sector past last summer...

Taibbi's Latest Expose: How Teachers, Cops and Firemen Are Getting Their Pensions Fleeced at Lightning Speed

http://www.alternet.org/corporate-accountability-and-workplace/taibbi-his-latest-expose-how-wall-street-hedge-funds-are?akid=10978.227380.8d0E-H&rd=1&src=newsletter901960&t=7


In his (PREVIOUS) latest article for Rolling Stone, Matt Taibbi reports that Wall Street firms are now making millions in profits off of public pension funds nationwide. "Essentially it is a wealth transfer from teachers, cops and firemen to billionaire hedge funders," Taibbi says. "Pension funds are one of the last great, unguarded piles of money in this country and there are going to be all sort of operators that are trying to get their hands on that money." http://www.rollingstone.com/politics/news/looting-the-pension-funds-20130926

INTERVIEW AND TRANSCRIPT AT LINK: SAMPLE

MATT TAIBBI: The primary focus of my piece, there were a couple of things. Number one, how did these funds come to be broke the first place? I think everyone realizes that states are in fiscal crises or having trouble paying out their obligations to workers. One of the reasons is that at least 14 states have not been making their annual required contributions to the pension fund for years and years and years. So essentially, they have been illegally borrowing from these pension funds, sometimes going back decades. Another focus of the piece was the solution that a lot of sort of Wall Street funded think tanks are coming up with now is to get higher returns by putting these funds into alternative investments like hedge funds. In a lot of cases what I’m finding is that the fees that states are paying for these new hedge funds and these new types of alternatives investments are actually roughly equal to the cuts that they are taking from workers. Like in the state of Rhode Island, for instance, they have frozen the cost of living adjustment and the frozen cola roughly equals the fees that they’re paying to hedge funds in that state. So essentially it is a wealth transfer from teachers, cops, and firemen to billionaire hedge-funders.

How 401(k)s Rewarded the Rich and Turned the Rest of Us into Big Losers By Lynn Parramore

http://truth-out.org/opinion/item/19093-how-401ks-rewarded-the-rich-and-turned-the-rest-of-us-into-big-losers

It was a bad idea from the get-go but new research shows that America’s 401(k) revolution has left us even worse off than we thought. Here’s a look at how we got into this mess and where it will take us if we don’t wise up.

The Dumbest Retirement Policy in the World

Thirty years ago, as laissez-faire fanaticism took hold of America, misguided policymakers decided that do-it-yourself retirement plans, otherwise known as 401(k)s, would magically secure our financial future in the face of gyrating markets, economic crises, unpredictable life events, stagnant wages and rampant job insecurity. It was an extraordinary shift in thinking about public policy: Instead of having predictable streams of income from traditional pensions, ordinary people with little financial expertise would suddenly transform themselves into financial gurus, putting money aside and managing complicated investments in tax-deferred accounts.

There were red flags along the way for our 401(k)s. They were originally supposed to supplement pensions but clever corporate cost-cutters decided that voluntary individual accounts would replace them. Big difference! Meanwhile, throughout the 1990s, the national savings rate fell. Real wages dropped. As Helaine Olen details in her book Pound Foolish, Americans started borrowing against retirement plans to pay the mortgage or send the kids to college. The media was basically out to lunch and politicians went on claiming the nonsense that individual retirement accounts would encourage savings and turn us all into professional money managers. The stock market would bring us double-digit returns. Whoopie!

Reality check: In 2007, the financial crisis destroyed America’s retirement fantasy. Jobs evaporated or were downsized. The stock market took a nosedive. Millions of Americans who had worked hard, straining to sock away a portion of their salary for 401(k)s, watched helplessly as a black cloud formed over their golden years. In October 2008, the Congressional Budget Office revealed that Americans had lost $2 trillion in just 15 months — money that will likely never be recovered. Not long after, President Obama betrayed the public by turning away from the jobs crisis to create a deficit commission whose leaders had the stunning lack of foresight to advise cutting Social Security at a time when the retirement train wreck was quickly picking up steam.

Today, the balance in our retirement accounts falls wildly short of what we need to keep us from destitution in old age, much less to secure a comfortable existence. According to the Vanguard Group, in 2012, the average account balance in our 401(k)s was $86,212 — and that number is skewed by high earners at the top. The amount experts say we need? About $1 million or more, depending on how much you make now...

Secret Ballot Initiative Would Slash Retirement Benefits for Public Employees

http://www.alternet.org/corporate-accountability-and-workplace/secret-ballot-initiative-would-slash-retirement-benefits?akid=11014.227380.vmxaIt&rd=1&src=newsletter905956&t=19

In a move to slash the retirement benefits of public employees in California, a group of mostly conservative policy advocates has been working behind the scenes on a possible 2014 ballot initiative. A copy of the still-secret draft initiative, which could dramatically impact the lives of hundreds of thousands of Californians and send a signal nationwide, has been obtained by Frying Pan News. (See the document’s text following this article or click here.)

If enacted, the proposed law would allow the state and local governments to cut back retirement benefits for current employees for the years of work they perform after the changes go into effect. Previous efforts to curb retirement benefits for public employees have largely focused on newly hired workers, but the initiative would shrink pensions for workers who are currently on the job.

“This initiative defines that a government employee’s ‘vested rights’ only applies to pension and retiree healthcare benefits earned for service already rendered, and explicitly empowers government employers and the voters to amend pension and retiree healthcare benefits for an employee’s future years of service,” the private draft states.

In other words, current state and municipal workers’ retirement benefits will only be partially guaranteed by the number of years they have already worked; from the time the initiative becomes law, the accrual of those benefits will be drastically curtailed...

Roth IRAs: To convert or not to convert?


http://www.marketwatch.com/story/roth-iras-to-convert-or-not-to-convert-2013-10-05-17103010?siteid=YAHOOB

Advisers suggest that most folks should have traditional and Roth IRAs. Having both those kinds of accounts will give you the flexibility to withdraw money in the most tax-efficient way when you’re in retirement.

But does there come an age at which converting your traditional IRA into a Roth IRA might not make sense? Consider the case of couple I recently met. The wife, 64, and husband, 68, are just entering retirement. He converted some of his traditional IRA into a Roth IRA last year and is now wondering, given their ages, how much longer it makes sense to continue that process. “Is there some conventional wisdom on this?” he asked.

Well, yes, there’s conventional wisdom. But you might as well disregard it, say experts.

To answer the question of whether it makes sense to do a Roth IRA conversion you must ask yourself three questions, do some number crunching, and do a little crystal ball gazing.

“There are an absurd number of Roth conversion calculators out there to help people make these decisions, many of which have a lot of merit,” said Jeffrey Levine, CPA, an IRA technical consultant with Ed Slott and Co. and a MarketWatch Retirementor.

But when Levine consults with clients about Roth IRA conversions, he typically focuses on three key questions:

What do you think your future tax rate will be? “The answer should generally be higher than the current tax rate to make sense,” he said.

Where will you get the money to pay for the conversion? The answer should generally be from non-retirement account funds, Levine said.

When will you need the money? CONTINUES....
'

[Demeter]

5. America Has Become a "Cheater-Take-All" Nation By William K. Black

http://www.alternet.org/economy/fraud-and-american-economy?akid=11014.227380.vmxaIt&rd=1&src=newsletter905956&t=5&paging=off&current_page=1#bookmark

Tyler Cowen’s new book Average is Over: Powering America Beyond the Age of the Great Stagnation warns that inequality will only get worse as a "hyper-meritocracy" of smart, energetic people at the top commanding machines and data speed ahead and the lazy, not-very-bright folks at the bottom fall further behind. One thing seems to be left out of the discussion: those hyper-meritocrats are led by criminal morons. Cowen’s embrace of Social Darwinism assumes that the winners have a selective advantage that arises from “merit” – which Cowen conflates with the ability to create wealth. This is passing strange as we are still suffering from an orgy of wealth destruction led by the “winners.” The people who grew wealthiest were often the people most responsible for the largest destruction of wealth in history. That it is an anti-meritocratic system. We do not live in a “winner-take-all” nation. We increasingly live in a “cheater-take-all” system. What Cowen has missed is the famous (but nearly famous enough) warning sounded by George Akerlof and Paul Romer in 1993 in their classic article “Looting: The Economic Underworld of Bankruptcy for Profit.”

“Many economists still do not understand that a combination of circumstances in the 1980s made it very easy to loot a bank with little risk of prosecution. Once this is clear, it becomes obvious that high-risk strategies that would pay off only in some states of the world were only for the timid. Why abuse the system to pursue a gamble that might pay off when you can exploit a sure thing with little risk of prosecution?” (Akerlof & Romer 1993: 4-5).

The result of these perverse incentives is the epidemics of accounting control fraud that drive our recurrent, intensifying financial crises. In the savings and loan debacle, for example:

“The typical large failure grew at an extremely rapid rate, achieving high concentrations of assets in risky ventures…. Every accounting trick available was used…. Evidence of fraud was invariably present as was the ability of the operators to ‘milk’ the organization” (NCFIRRE 1993).

The large Enron-era frauds were all accounting control frauds. Worse, when cheaters prosper, market forces become perverse because of the “Gresham’s dynamic" in which bad ethics drives good ethics out of the markets and professions. George Akerlof explained this in his most famous article on “Lemons” in 1970.

“Dishonest dealings tend to drive honest dealings out of the market. The cost of dishonesty, therefore, lies not only in the amount by which the purchaser is cheated; the cost also must include the loss incurred from driving legitimate business out of existence.”

Akerlof was not the first expert to understand the dynamic.

“The Lilliputians look upon fraud as a greater crime than theft. For, they allege, care and vigilance, with a very common understanding, can protect a man’s goods from thieves, but honesty hath no fence against superior cunning. . . where fraud is permitted or connived at, or hath no law to punish it, the honest dealer is always undone, and the knave gets the advantage” (Swift, J. Gulliver’s Travels: 1726).

MORE

[xchrom]

6. Markets Tumbling All Around The World — Economy Set To Slow — Debt Ceiling Crisis Grows

http://www.businessinsider.com/morning-markets-october-7-2013-10

Now Boehner's rhetoric, to some extent, might be just red meat for his right-wing base, but the market doesn't like this kind of language.

US futures are set to open down to the tune of 1%.

And it's not just in the US. Japan fell 1.2%. Germany is off 1.1%. France is off 1.2%. Basically, global selloff.

Meanwhile, even before the debt ceiling is hit, the economic impact starts to build, as Bank of America has slashed its GDP forecast for both this quarter and the next one.



Read more: http://www.businessinsider.com/morning-markets-october-7-2013-10#ixzz2h2Bcfo6j

[grantcart]

10. finally. If we see 5% evaporate in the next 48 hours Boehner will cave.

[DemReadingDU]

11. It depends on the perception who is being blamed

IMO, Republicans blame Democrats, Democrats blame Republicans. Both sides want to be the 'winner' to setup seats for the next election.

[Demeter]

21. It may take a week to get 5%

The amount of moola they are willing to sacrifice to keep the market elevated is amazing.

[grantcart]

24. Once it starts selling the profit takers will run for the exits.

[xchrom]

7. Now Even China Is Lecturing Us About The Debt Ceiling Crisis {large image}

http://www.businessinsider.com/china-tells-us-to-raise-debt-ceiling-2013-10

BEIJING (Reuters) - China urged Washington on Monday to take decisive steps to avoid a debt crisis and ensure the safety of Chinese investments, as a deadlocked U.S. Congress confronted a looming deadline to increase the nation's borrowing power or risk default.
China, the U.S. government's largest creditor, is "naturally concerned about developments in the U.S. fiscal cliff", Vice Finance Minister Zhu Guangyao said in the Chinese government's first public response to the Oct 17 deadline in the United States for raising the debt ceiling.

"The United States is totally clear about China's concerns about the fiscal cliff," Zhu told reporters in Beijing, adding that Washington and Beijing had been in touch over the issue.

"We ask that the United States earnestly takes steps to resolve in a timely way before October 17 the political (issues) around the debt ceiling and prevent a U.S. debt default to ensure safety of Chinese investments in the United States and the global economic recovery," Zhu said.



Read more: http://www.businessinsider.com/china-tells-us-to-raise-debt-ceiling-2013-10#ixzz2h2CXjO7Q

[xchrom]

8. The World Bank Just Cut Its Growth Forecasts For China

http://www.businessinsider.com/world-bank-cuts-china-forecast-2013-10

SINGAPORE (Reuters) - The World Bank lowered its 2013 and 2014 economic growth forecasts for China and most of developing East Asia on Monday, citing slower growth in the world's most populous nation as well as weaker commodity prices that have hurt exports and investments in countries such as Indonesia.

"Developing East Asia is expanding at a slower pace as China shifts from an export-oriented economy and focuses on domestic demand," the World Bank said in its latest East Asia Pacific Economic Update report.

"Growth in larger middle-income countries including Indonesia, Malaysia, and Thailand is also softening in light of lower investment, lower global commodity prices and lower-than-expected growth of exports," it added.

The Washington-based development bank now expects developing East Asia to expand by 7.1 percent this year and by 7.2 percent in 2014, down from its April estimate of 7.8 percent and 7.6 percent, respectively.



Read more: http://www.businessinsider.com/world-bank-cuts-china-forecast-2013-10#ixzz2h2DtU1QV

[xchrom]

9. MORGAN STANLEY ECONOMIST: If We Breach The Debt Ceiling, Jack Lew Must Decide Which Law To Break

http://www.businessinsider.com/morgan-stanley-economist-if-we-breach-the-debt-ceiling-jack-lew-must-decide-which-law-to-break-2013-10

In a column for DealBook, which is adapted from one of his notes to clients, he explains the choice facing Treasury Secretary Jack Lew:

If the Treasury is unwilling to stretch the definition of extraordinary measures, on the day that the Federal Reserve predicts that the Treasury will run out of cash in its account and the Treasury is bound by the debt ceiling, it suspends all payments and awaits instructions from the Treasury. As a result, the government’s principal economic officials will face the prospect of violating one of these three laws:

1. The Second Liberty Bond Act of 1917 that establishes the debt ceiling;

2. The Federal Reserve Act that prohibits the Fed from lending directly to the Treasury; or,

3. The 14th Amendment of the Constitution that holds that the debt of the United States government, lawfully issued, will not be questioned.



Read more: http://www.businessinsider.com/morgan-stanley-economist-if-we-breach-the-debt-ceiling-jack-lew-must-decide-which-law-to-break-2013-10#ixzz2h2FUPAbY

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12. How San Francisco’s new entrepreneurial culture is changing the country

http://www.newyorker.com/reporting/2013/10/14/131014fa_fact_heller


Collectives like the Sub bring together the arts, “mindful living,” and tech startups. “When you’re trying to make a name for yourself as a seed investor,” Johnny Hwin says, “the name of the game is differentiation.” Photograph by Pari Dukovic

T in San Francisco, is to stand at the garage door of a small repair shop in the iffy section of the Mission District and dial his cell phone until it stops ringing into voice mail and the call goes through. This takes a while, sometimes, because Hwin silences his phone and forgets about it. In the meantime, there’s a lot going on at the corner—commuters edging by with messenger bags, shirtless men in dire straits wandering past. After half an hour, maybe a lot sooner, Hwin will call you back and tell you to stay right where you are, because he’s just leaving his place. It’s unclear from which direction he is coming, or how far, and so you might meander toward a nearby mural, called “Diversity in Progress” (it depicts a blooming tree beside a guy in a sombrero), or perhaps toward a pentagon-shaped house squatting among Victorians like the lost piece of a Lego set. At this point, Hwin will call again to say that he cannot see you. When you finally fall into his sight line, you might get a high five and a low-key welcome (“Hey, man”) before being shuttled through a gate and up a dingy flight of stairs illuminated by a snarl of Christmas lights. This is an art-and-tech collective called the Sub, where Hwin has been since 2009. Today, it’s part of a network of places where the new mode of American success is being borne out.

Hwin is twenty-eight, but could be younger. He has a blissed-out grin and an impish dusting of freckles. His hair is buzzed on the sides but topped with choppy bangs, a rocker coif that makes it look as if a wad of hair just landed on his head from a great height. He often wears a miniature harmonica around his neck, over a black T-shirt, to underscore his musical affinities. For several years now, he has been working as a musician, a tech entrepreneur, and an investor in other people’s startups. His two-person band, Cathedrals, just released a début single and is producing an album in the coming months. At the moment, he and a friend are managing investments of up to two hundred and fifty thousand dollars in private companies.

The Sub has no doorbell or real street address, and its space had been an auto-repair facility until some plywood walls made it a place where people—certain people, anyway—might spend their days. Hwin, who moved in four years and two business ventures ago, now has space in a structure that he calls “the doll house.” It is a precarious-looking loft of two stacked rooms done up with paint and fake flowers to resemble a fairy-tale cottage. The doll house is the most comfortable of the Sub’s five spaces (one guy hangs out in an old elevator shaft), but comfort is not the venue’s premier selling point.

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13. The Barefoot Mayor: Local Hero Takes on Sicilian Corruption

http://www.spiegel.de/international/europe/new-mayor-of-messina-takes-on-corruption-and-the-mafia-in-sicily-a-925725.html


The new mayor of Messina is a man of the people. The tireless nonpartisan is known to go barefoot through the city. And in the land of Berlusconi, he is fighting against corruption, organized crime and widespread disenchantment with politics.

Men with coarse features and shaved heads are pulling a heavy cart through the streets of Messina. The men, barefoot with tattoos on their upper arms, are sweating as they shout, again and again: "Viva Maria!"

By tradition, the men who carry the Madonna are dockworkers, ex-convicts and henchmen with the Sicilian Mafia, and these men look the part. They hope for redemption from the Virgin Mother for crimes ranging from extortion to drug dealing and murder. Along the side of the road, law-abiding bystanders hand their small children up onto the cart to be blessed.

La Vara, or the procession of the Madonna, is Sicily's most important festival. It's been celebrated for about 500 years, complete with fireworks and sweet cannoli. La Vara is also seen as an arena for local bigwigs to show off their clout. On the day of the festival, those who are in charge here, the church and the Mafia, are always in the front rows. But everything is different this year. This year, the new mayor pulls the cart, with the help of a prominent Mafioso, but the mayor doesn't kiss the mobster's hand. Instead, he jumps onto the cart, setting off a ripple of whispers below, because this is something a mayor has never dared to do. Then they begin to shout, again and again, "Renato! Renato!"

Mayor Renato Accorinti often walks around barefoot, and the day of the festival is no exception. He is wearing a T-shirt from Addio Pizzo, an anti-Mafia movement, imprinted with the words: "A people that pays no protection money is a free people." At last year's procession, Addio Pizzo activists handed out flyers against the Sicilian Cosa Nostra and the Calabrian 'Ndrangheta and were chased away.

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14. Greek budget sees end to six-year recession next year

http://www.reuters.com/article/2013/10/07/us-greece-budget-idUSBRE9960BW20131007

(Reuters) - Greece will emerge from six years of recession next year, a draft budget forecast on Monday, signaling the country is past the worst of a crippling debt crisis that nearly broke Europe's single currency.

Twice bailed-out Athens also confirmed it would post a budget surplus before interest payments this year for the first time in over a decade, and its battered economy won a vote of confidence from billionaire U.S. investor John Paulson.

The positive outlook marks a sharp reversal in fortunes for a nation that had become Europe's problem child, lurching from one crisis to the next as it tottered close to bankruptcy and exasperated its international partners with broken promises.

Analysts cautioned that despite the signs of economic stabilization Greece remained hooked on aid and that further debt relief was inevitable to bring down a level of indebtedness set to top 175 percent of gross domestic product this year.

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15. U.S. Congress enters crucial week in budget, debt limit battles

http://www.reuters.com/article/2013/10/07/us-usa-fiscal-idUSBRE98N11220131007

Reuters) - As the U.S. government moved into the second week of a shutdown on Monday with no end in sight, a deadlocked U.S. Congress also confronted an October 17 deadline to increase the nation's borrowing power or risk default.

Republican House of Representatives Speaker John Boehner vowed not to raise the U.S. debt ceiling without a "serious conversation" about what is driving the debt, while Democrats said it was irresponsible and reckless to raise the possibility of a U.S. default.

The last big confrontation over the debt ceiling, in August 2011, ended with an 11th-hour agreement under pressure from shaken markets and warnings of an economic catastrophe if there was a default.

A similar last-minute resolution remained a distinct possibility this time as well.

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16. U.S. firms urge Washington not to rush through landmark trade deal

http://www.reuters.com/article/2013/10/07/us-asia-trade-idUSBRE99600G20131007

(Reuters) - U.S. multinationals have warned Washington not to compromise and weaken a landmark 12-nation Asia-Pacific free trade pact in order to complete the deal by the end of this year.

After three years of talks, President Barack Obama's administration is making a last push to finalize the proposed Trans-Pacific Partnership (TPP) that would establish a free-trade bloc stretching from Vietnam to Chile.

The ambitious agreement would encompass 800 million people, about a third of world trade and nearly 40 percent of the global economy.

Obama had hoped to personally iron out the deal with other leaders at the Asia-Pacific Economic Cooperation (APEC) summit in Indonesia this week, but was forced to cancel at the last minute because of the U.S. government shutdown.

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17. Occupy’s Union Bank Embraces Billionaires in Profit Hunt

http://www.bloomberg.com/news/2013-10-07/occupy-s-union-bank-embraces-billionaires-in-profit-hunt.html

The alarm blaring in the New York headquarters of Amalgamated Bank, where the Democratic National Committee and Occupy Wall Street are clients, didn’t bother the two pinstriped executives sitting still with legs crossed.

“You smell the smoke,” Chief Executive Officer Ed Grebow told Chief Financial Officer Bill Houlihan last month, “then we’ll do something.”

Their firm has seen worse. The nation’s largest union-owned bank had almost been ruined by soured deals from Long Island City to Las Vegas when it agreed in 2011 to sell a 40 percent stake to billionaires Wilbur L. Ross and Ron Burkle.

After a rescue by investors each rich enough to foot the Occupational Safety & Health Administration’s $535 million budget, the lender founded 90 years ago by garment workers is putting profit first. The $100 million from WL Ross & Co. and Burkle’s Los Angeles-based Yucaipa Cos. helped the bank earn $3.9 million in 2012, trim bad loans and end a two-year-old Federal Deposit Insurance Corp. consent order in June.

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18. New American Economy Leaves Behind World Consumer

http://www.bloomberg.com/news/2013-10-06/new-american-economy-leaves-behind-world-consumer-of-last-resort.html

The rising American economy isn’t lifting all boats -- and may even sink some.

As the U.S. looks set to accelerate, economists from Bank of America Corp. to Morgan Stanley predict it will provide less oomph abroad than it once did, partly because of changes wrought by the financial crisis and recession. The new-look America is focused on greater demand and production at home and taps more of its own energy, paring the need to buy overseas in a trend reflected by the smallest current-account deficit since 1999.

A healthier U.S. even could come at the expense of emerging markets if it turns into more of a competitor than consumer by boosting manufacturing. Developing countries also risk being hurt once the Federal Reserve withdraws its monetary stimulus, driving their cost of borrowing up and their currencies down against a resurgent dollar.

“There are signs that U.S. pulling power may not be as strong as experienced in recent years,” said Gustavo Reis, a senior international economist at Bank of America in New York. “If we want to see stronger global growth, we need the U.S. to grow but others to rebound, too.”

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19. Algerians Cry Currency as Euro Black-Market Thrives

http://www.bloomberg.com/news/2013-10-06/algerians-amass-black-market-euros-as-arab-spring-drives-demand.html

Across the street from the parliament, courthouse and main police station in central Algiers is the country’s biggest illegal market for foreign exchange.

“Currency, currency!” Nadir, 28, shouts out to passing cars from his spot on the curb of Port Said Square in the Algerian capital. “Come here for your currency!” He’s among dozens of money changers milling around the gardens of the sunbaked esplanade overlooking the Mediterranean, chatting on mobile phones and counting crisp dinar notes. Last week, their going rate was a record 150 dinars ($1.84) per euro, almost 40 percent more than the official price.

Underlying the increased demand for black-market money is the concern regional conflagration may spread. Revolts in nearby countries have left President Abdelaziz Bouteflika as North Africa’s longest-serving leader, while reviving memories of Algeria’s own civil war in the 1990s. His government has ramped up spending to ward off unrest, helping drive inflation to a 15-year high last year, and pushing Algerians into the currency and real-estate markets as they seek to shield savings.

“To protect themselves against inflation, and therefore the devaluation of the dinar, Algerians are investing in property, gold and foreign currencies,” Abderrahmane Mebtoul, a professor of economics at the University of Algiers, said in an interview. “It is a way of looking for security.”

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20. Greg Palast: The Golden Dawn Murder Case, Larry Summers and the New Fascism

http://truth-out.org/news/item/19213-the-golden-dawn-murder-case-larry-summers-and-the-new-fascism

To my friends on the Greek left: It's sickening to watch you cheer the arrest of Golden Dawn parliamentarians. Mark my words: You are next.

Listen up:

My investigation reveals that behind the banning of Golden Dawn, besides the usual European distaste for democracy, is something far more sinister: The ruling parties are distracting the public from their own involvement in the crime.

The rise in violence and hate crimes is no surprise. The official unemployment rate in Greece is 28 percent, and over 60 percent among young men. No wonder desperate youths are wrapping batons in Greek flags and beating immigrants: When people are pressed to the wall, they hunt for their tormentors - and too often find their fellow victims to blame.

Economic devastation breeds fascism. In the 1930s, the hungry and angry sought relief in hyper-patriotism, racism and pogroms. In the 1980s Reagan recession in the United States, when factories shut down in the Midwest, the hopeless unemployed joined right-wing skinhead cults and went on a killing rampage - beginning with the murder of Jewish journalist Alan Berg and ending with the bombing of a government building in Oklahoma, killing 168.

[Demeter]

22. That was enlightening....and sickening

I wondered who wanted to pull the rug out from under Greece...it was a crime of opportunity.

[Demeter]

23. The Markets are REALLY NOT Happy