STOCK MARKET WATCH -- Friday, 1 November 2013

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Friday, 1 November 2013[font color=black][/font]

SMW for 31 October 2013

AT THE CLOSING BELL ON 31 October 2013
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Dow Jones 15,545.75 -73.01 (-0.47%)
S&P 500 1,756.54 -6.77 (-0.38%)
Nasdaq 3,919.71 -10.91 (-0.28%)


[font color=red]10 Year 2.55% +0.05 (2.00%)
30 Year 3.64% +0.03 (0.83%) [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. Dear GOP

From Edward Fitzgerald's translation of the poem The Rubáiyát of Omar Khayyam, 1859:

The Moving Finger writes; and, having writ,
Moves on: nor all thy Piety nor Wit
Shall lure it back to cancel half a Line,
Nor all thy Tears wash out a Word of it.

[Demeter]

2. Yes, due to native Polish stubbornness, or perhaps administrative oversight

I am still alive, all appearances to the contrary. And lo and behold, it is a Weekend!
whatever shall we do with it?
suggestions?



We could try for some practical steps to simplicity....

[Demeter]

3. Bubbles aren't even lasting a whole day anymore.

[Demeter]

4. In Fed and Out, Many Now Think Inflation Helps

http://www.nytimes.com/2013/10/27/business/economy/in-fed-and-out-many-now-think-inflation-helps.html

Inflation is widely reviled as a kind of tax on modern life, but as Federal Reserve policy makers prepare to meet this week, there is growing concern inside and outside the Fed that inflation is not rising fast enough. Some economists say more inflation is just what the American economy needs to escape from a half-decade of sluggish growth and high unemployment.

The Fed has worked for decades to suppress inflation, but economists, including Janet Yellen, President Obama’s nominee to lead the Fed starting next year, have long argued that a little inflation is particularly valuable when the economy is weak. Rising prices help companies increase profits; rising wages help borrowers repay debts. Inflation also encourages people and businesses to borrow money and spend it more quickly. The school board in Anchorage, Alaska, for example, is counting on inflation to keep a lid on teachers’ wages. Retailers including Costco and Walmart are hoping for higher inflation to increase profits. The federal government expects inflation to ease the burden of its debts. Yet by one measure, inflation rose at an annual pace of 1.2 percent in August, just above the lowest pace on record.

“Weighed against the political, social and economic risks of continued slow growth after a once-in-a-century financial crisis, a sustained burst of moderate inflation is not something to worry about,” Kenneth S. Rogoff, a Harvard economist, wrote recently. “It should be embraced.”

The Fed, in a break from its historic focus on suppressing inflation, has tried since the financial crisis to keep prices rising about 2 percent a year. Some Fed officials cite the slower pace of inflation as a reason, alongside reducing unemployment, to continue the central bank’s stimulus campaign. Critics, including Professor Rogoff, say the Fed is being much too meek. He says that inflation should be pushed as high as 6 percent a year for a few years, a rate not seen since the early 1980s. And he compared the Fed’s caution to not swinging hard enough at a golf ball in a sand trap. “You need to hit it more firmly to get it up onto the grass,” he said. “As long as you’re in the sand trap, tapping it around is not enough.” All this talk has prompted dismay among economists who see little benefit in inflation, and who warn that the Fed could lose control of prices as the economy recovers. As inflation accelerates, economists agree that any benefits can be quickly outstripped by the disruptive consequences of people rushing to spend money as soon as possible. Rising inflation also punishes people living on fixed incomes, and it discourages lending and long-term investments, imposing an enduring restraint on economic growth even if the inflation subsides.

“The spectacle of American central bankers trying to press the inflation rate higher in the aftermath of the 2008 crisis is virtually without precedent,” Alan Greenspan, the former Fed chairman, wrote in a new book, “The Map and the Territory.” He said the effort could end in double-digit inflation.

SHUT UP, GREENSPAN

THIS SUMMARY PROVES THAT ECONOMISTS KNOW NOTHING

[Warpy]

58. 100% of the economic policy decisions from the 70s until now

have been geared to stopping the inflation built into any fiat currency by depressing wages.

It worked as jobs were sent offshore to make consumer goods but anything that was produced here like health care and education and food continued to inflate in price no matter what.

It has to be obvious to all but the dimwitted and rock headed Greenspan that starving labor has killed the goose that laid all the golden eggs in the 50s and 60s.

The social cost has been horrendous, mostly paid by the Boomers that the far right are trying defraud of their Social Security.

Starting any inflationary period with the Fed as leader is a very bad idea and one which will further stifle a depressed economy. The place to start is with wages and the place to start there is the minimum wage. It needs to be doubled. Interest rates need to be kept low in the short term to allow business to expand to meet the new demand from a wage that isn't insanely low.

These silly academics discount labor as anything but an unfortunate cost of doing business and something that must be controlled and paid as little as possible. They just haven't yet realized that not only does labor produce goods and services, they provide the demand for them. And without demand, there are few profits to be made.

Without profits, institutional investors are lured into entering the derivatives casino. We saw where that led in 2008. It will happen again because they opposed all legislation to make sure it didn't happen again.

Maybe when it does, they'll finally get the point about labor saving their asses.

[Demeter]

59. Thank you for proving my point with such a good summary

There is only micro economics...all the rest is theft.

[Demeter]

5. U.S. House passes bill to delay fiduciary rules at SEC, Labor Dept

http://news.yahoo.com/u-house-passes-bill-delay-fiduciary-rules-sec-223336477--sector.html

The U.S. House of Representatives passed a controversial bill on Tuesday that would delay two government regulators from adopting rules requiring stock brokers and retirement account financial advisers to put their customers' interests ahead of their own. The bill, which was approved in a 254-166 vote, has virtually no chance of becoming law, after the White House late Monday threatened to veto the measure. Its passage, however, marks yet another symbolic effort by Republicans to express their discontent over the sweeping new regulations that stem from the 2010 Dodd-Frank Wall Street reform law. The bill is one of two measures before the House this week that would amend the Dodd-Frank law. On Wednesday, the House is also expected to pass a bill with some bipartisan support that would loosen a requirement for banks to spin off their risky derivative trading desks into separate legal entities.

Although the White House has cautioned against passage of the derivatives bill, it stopped short of a veto threat.

MORE BLATHER

[Demeter]

6. Analysis: On healthcare, spying, questions on what Obama knew and when

NOT A HELL OF A LOT, AND STILL DOESN'T, IMO

http://news.yahoo.com/analysis-healthcare-spying-questions-obama-knew-004823388.html

To his critics, President Barack Obama often has seemed to be conveniently distant when trouble has hit his administration.

But on Tuesday, Obama was hit with a public-relations crisis that struck at the core of his domestic and foreign policy - one that raised questions about whether he had misled Americans on his signature healthcare overhaul, and whether he really was unaware of the U.S. government's alleged spying on its allies. It was a dramatic twist for the Democratic president, who was widely seen as outflanking Republicans during the budget battles that led to a partial government shutdown and a near-default by the U.S. government this month.

Until this week, most of the discussion in Washington on the "Obamacare" health insurance program focused on its clumsy rollout, as symbolized by a balky website that is frustrating uninsured Americans' efforts to enroll in the program. But several media reports on Tuesday raised questions about whether the administration was completely truthful in selling the program to Americans four years ago, after Obama was first elected president. The latest flap dates to a pledge that Obama made in 2009 about the healthcare initiative that remains the biggest achievement of his nearly five years in office.

"If you like your healthcare plan, you'll be able to keep your healthcare plan, period," he told the American Medical Association in Chicago on June 15, 2009, a mantra he has repeated regularly - including during his 2012 re-election, when Republicans were saying that the law would force millions of Americans to lose their insurance.

"No one will take it away, no matter what," Obama has said.

But as potentially millions of Americans are learning now, the pledge came with some caveats. Those who buy their own insurance on the open market and who have policies that don't meet minimum standards of the Affordable Care Act are likely to have their policies canceled and replaced with higher-cost alternatives, industry analysts said on Tuesday. The scenario could affect a relatively small percentage of Americans, but nevertheless could involve hundreds of thousands of people who have had inexpensive policies with few benefits, analysts said. White House spokesman Jay Carney said that the administration has always said that some healthcare plans would not meet the new requirements, which require that coverage include emergency services, maternity care, prescription drugs and other popular features. Carney argued that these Americans would end up with better insurance coverage because they have been in a "Wild West" part of the insurance market that was under-regulated.

Republican critics pounced on the White House's defense, saying that Obama had misrepresented the healthcare law for years. They also chided the administration for saying Obama had been surprised by the depth of the glitches on HealthCare.gov, the federal government's online insurance exchange...

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


Even TV comedian Jon Stewart of Comedy Central's "The Daily Show," who typically saves his sharpest jabs for Republicans, is making light of what he suggests is the president's curious disengagement from anything controversial.

"If the president is unaware that we were spying on our allies, who gave the go-ahead to spy on our allies?" Stewart said this week during a segment called, "Wait, wait ... Don't tell him."

[Demeter]

7. The President Wants You to Get Rich on Obamacare By ADAM DAVIDSON

http://www.nytimes.com/2013/11/03/magazine/the-president-wants-you-to-get-rich-on-obamacare.html?pagewanted=print


... During the past year, anxiety about the onset of Obamacare has created a chill in some parts of the economy. While large health care businesses — insurance companies, for instance, and hospital chains — have poured significant resources into preparing for millions of new customers, countless investors have appeared spooked by the perpetual threats to repeal, or at least revise, the law. According to Thomson Reuters, private equity investment, usually the lifeblood for entrepreneurialism, has dropped by an astonishing 65 percent in the health care sector this year.

Scully has been trying to assuage these worries, but the nervous questions keep coming at him. Before he even began his speech, one attendee said he feared that only three million new patients, far fewer than estimated, would be signing up for insurance. “No way,” Scully said. “Way more — way more. At least 15 million, maybe 20 million. The Democrats have a huge incentive to make this work.” Another asked if Scully was worried about Congressional repeal. “It’s just not going to happen,” he said. “Don’t pay attention to Rush Limbaugh.” When Scully finally began his speech, he noted that the prevailing narrative among Republicans — assuming that many in the room were, like him, Republican — was incorrect. “It’s not a government takeover of medicine,” he told the crowd. “It’s the privatization of health care.” In fact, Obamacare, he said, was largely based on past Republican initiatives. “If you took George H. W. Bush’s health plan and removed the label, you’d think it was Obamacare.”

Scully then segued to his main point, one he has been making in similarly handsome dining rooms across the country: No matter what investors thought about Obamacare politically — and surely many there did not think much of it — the law was going to make some people very rich. The Affordable Care Act, he said, wasn’t simply a law that mandated insurance for the uninsured. Instead, it would fundamentally transform the basic business model of medicine. With the right understanding of the industry, private-sector markets and bureaucratic rules, savvy investors could help underwrite innovative companies specifically designed to profit from the law. Billions could flow from Washington to Wall Street, indeed.

Scully, who has spent the last 30-some years oscillating between government and the private sector, is hoping to be his own best proof of the Obamacare gold mine. As a principal health policy adviser under President George H. W. Bush, he helped formulate many of those past Republican initiatives — like the shift to private-insurance programs — that Obamacare has put into law. Under George W. Bush, he ran the Centers for Medicare and Medicaid Services and oversaw a host of proto-Obamacare reforms, like Medicare Part D, which introduced competition into the government-supported health care market. After leaving C.M.S. in 2004, Scully began working simultaneously at Welsh, Carson, Anderson & Stowe, a leading health care private equity firm, and Alston & Bird, a law firm and health care lobbying organization. When the Affordable Care Act became law in 2010, he found himself in the rare position of being a lobbyist, private equity executive and former government health care official with access to a serious amount of capital. During the past three years, as other Republicans have tried to overturn Obamacare, Scully searched for a way to make a killing from it....

TANSY, YOU HAVE THAT STAMP HANDY?

[Demeter]

8. Nixon Proposed Today’s Affordable Care Act By Robert Reich

http://admin.alternet.org/personal-health/nixon-proposed-todays-affordable-care-act?akid=11094.227380.Aib7AT&rd=1&src=newsletter916829&t=16


It's easy to forget amidst all of the conservative handwringing that this is the kind of plan GOP has always wanted...In February 1974, Republican President Richard Nixon proposed, in essence, today’s Affordable Care Act. Under Nixon’s plan all but the smallest employers would provide insurance to their workers or pay a penalty, an expanded Medicaid-type program would insure the poor, and subsidies would be provided to low-income individuals and small employers. Sound familiar? Private insurers were delighted with the Nixon plan but Democrats preferred a system based on Social Security and Medicare, and the two sides failed to agree. Thirty years later a Republican governor, Mitt Romney, made Nixon’s plan the law in Massachusetts. Private insurers couldn’t have been happier although many Democrats in the state had hoped for a public system.

When today’s Republicans rage against the individual mandate in the Affordable Care Act, it’s useful to recall this was their idea as well. In 1989, Stuart M. Butler of the conservative Heritage Foundation came up with a plan that would “mandate all households to obtain adequate insurance.” Insurance companies loved Butler’s plan so much it found its way into several bills introduced by Republican lawmakers in 1993. Among the supporters were senators Orrin Hatch, R-Utah, and Charles Grassley, R-Iowa (who now oppose the mandate under the Affordable Care Act). Newt Gingrich, who became Speaker of the House in 1995, was also a big proponent. Romney’s heathcare plan in Massachusetts included the same mandate to purchase private insurance. “We got the idea of an individual mandate from [Newt Gingrich], and [Newt] got it from the Heritage Foundation,” said Romney, who thought the mandate “essential for bringing the health care costs down for everyone and getting everyone the health insurance they need.”

Now that the essential Republican plan for healthcare is being implemented nationally, health insurance companies are jubilant. Last week, after the giant insurer Wellpoint raised its earnings estimates, CEO Joseph Swedish pointed to “the long-term membership growth opportunity through exchanges.” Other major health plans are equally bullish. “The emergence of public exchanges, private exchanges, Medicaid expansions … have the potential to create new opportunities for us to grow and serve in new ways,” UnitedHealth Group CEO Stephen J. Hemsley effused.

So why are today’s Republicans so upset with an Act they designed and their patrons adore? Because it’s the signature achievement of the Obama administration.

There’s a deep irony to all this. Had Democrats stuck to the original Democratic vision and built comprehensive health insurance on Social Security and Medicare, it would have been cheaper, simpler, and more widely accepted by the public. And Republicans would be hollering anyway...

[Demeter]

9. DHS, NSA Threaten to Sue Man for Selling "Department of Homeland Stupidity" T-Shirts. Coffee Mugs

http://www.alternet.org/dhs-and-nsa-threaten-sue-man-selling-department-homeland-stupidity-t-shirts-and-coffee-mugs?akid=11095.227380.NQSSCf&rd=1&src=newsletter917241&t=12

Feds are trying to shut down novelty t-shirt salesman over slogans like "The NSA: The only part of government that actually listens."




The Department of Homeland Security and National Security Agency threatened to sue a novelty store owner who sells "Department of Homeland Stupidity" coffee cups and T-shirts with the slogan: "The NSA: The only part of government that actually listens."

In response, Dan McCall sued the NSA and DHS on constitutional grounds, in Federal Court.

McCall operates the website LibertyManiacs.com. He has (nonparty) Zazzle.com -which prints images provided by customers onto products - print his images onto the items he sells. McCall has a "virtual storefront" on the Zazzle website, and his own website redirects traffic to Zazzle "so that people wishing to express their own opinions by purchasing and displaying these items may easily do so," McCall says in the complaint. But in 2011, the DHS and NSA sent a cease-and-desist order to Zazzle, claiming that McCall's parody images violated laws against the use, mutilation, alteration or impersonation of government seals. Both agencies threatened to take legal action against Zazzle if it did not remove the offending products from its website, McCall says in his lawsuit.

"In response to the threatening communications from NSA and DHS raising intellectual property claims, Zazzle removed the NSA Spying Parody, the NSA Listens Parody, and the Homeland Stupidity Parody from McCall's Zazzle store," McCall says in the complaint.

McCall still displays the items on his own website, next to the words: "Get the T-shirts the NSA & DHS Don't Want You to Wear!"

The products are no longer available through Zazzle, but are still being sold through CafePress, another online store, according to McCall's libertymaniacs.com site. McCall says he has been selling his parody items for years. One of his designs bears the NSA's official seal with the words "Spying on You Since 1952" below it. Another modifies the NSA logo to state: "Peeping While You're Sleeping," with the slogan: "The NSA: The only part of government that actually listens."A third design replaces the name of the DHS in its altered official seal with the name "Department of Homeland Stupidity."

In his 8-page lawsuit, McCall claims that his "use of images of the NSA and DHS seals, whether unaltered but in combination with critical text, or altered in parodic form, did not create any likelihood of confusion about the source or sponsorship of the materials on which they were available to be printed. No reasonable viewer is likely to believe that any of the materials is affiliated with or sponsored by defendants. Nor were the seals affixed to the items to be sold with any fraudulent intent." McCall claims his images make fair use of the NSA and DHS seals "to identify federal government agencies as the subject of criticism," and are protected by the First Amendment. And he claims it's unconstitutional for the government to forbid him from displaying and selling his parodies to "customers who want to display the items to express their own criticisms of NSA and DHS."

He seeks declaratory judgment.

He is represented by Paul Alan Levy with the Public Citizen Litigation Group.

The NSA and DHS did not immediately respond to requests for comment.

Presumably, however, the NSA has the requests on record.

[jtuck004]

10. >Presumably, however, the NSA has the requests on record.< LOL n/t

[xchrom]

11. China Has Soured On Brazil

http://www.businessinsider.com/chinese-investors-have-soured-on-brazil-projects-are-melting-away-2013-11

SAO PAULO (Reuters) - For Chinese investors, Brazil is no longer the promised land.
After making a big push into the South American giant in search of raw materials such as iron ore, as well as a promising market for their consumer goods, Chinese executives have grown frustrated with stagnant economic growth, heavy costs and what they see as a political and popular backlash against their presence.

As a result, Chinese investment is falling, and as much as two-thirds of the roughly $70 billion in projects announced since 2007 is either on hold or has been canceled, according to recent studies and interviews with Chinese and Brazilian officials.

The unexpected decline, which investors and analysts say has little hope of reversing itself anytime soon, will deprive Brazil's struggling economy of what once seemed like a sure-fire source of growth for years to come.



Read more: http://www.businessinsider.com/chinese-investors-have-soured-on-brazil-projects-are-melting-away-2013-11#ixzz2jOSDRk00

[Demeter]

14. Having Beaten Off the Gringos, Brazil isn't likely to fall to Chinese Blandishments or Bribes

I'm beginning to think all the brains in this hemisphere dribbled south....or at least, all the democracy.

[xchrom]

18. !

[xchrom]

12. High Home Ownership Is Strongly Linked To High Unemployment [STUDY]

http://www.businessinsider.com/high-home-ownership-is-strongly-linked-to-high-unemployment-2013-11

LONDON (Reuters) - High levels of home ownership are strongly linked to subsequent rises in unemployment because labor mobility becomes reduced, according to new research.
Using data going back to 1950 across all U.S. states except Alaska and Hawaii, Warwick University economics professor Andrew Oswald finds that the lag from ownership levels to unemployment rates can take up to five years to show up.

But he said the linkage, established using data on millions of randomly sampled Americans, was extraordinarily robust.

Doubling home ownership in a state can lead to more than a doubling of the jobless rate.



Read more: http://www.businessinsider.com/high-home-ownership-is-strongly-linked-to-high-unemployment-2013-11#ixzz2jOT7w1JZ

[Demeter]

15. On the other hand, it's hard to support democracy when you're constantly on the move

Good government NEEDS a settled people. It's the only way memory in the population survives, to keep the crooks out of business.

And if they can move the factories to China, they can move them back to Detroit, and Camden, and wherever the workers WANT to live.


WHAT A LOAD OF BS.

PS: BUSINESS INSIDER: CORRELATION IS NOT CAUSATION

[xchrom]

17. indeed. it's jobs first -- and as another duer pointed out -- many households have 2 people

in the workforce.

because 1 loses their job doesn't mean the other can pull up stakes and go off searching for work else where.

[jtuck004]

57. Or is it because the way we typically choose to increase home ownership is through

excessive financing, which makes a lot of money for banks and mortgage cos and drains it away from investment in business and infrastructure, in training , etc. which, in their scenario of lag time, shows up a few years later as less jobs?

[Demeter]

60. Making people constantly move for jobs churns the housing markets

generating lots and LOTS of skim for the finance people....

[jtuck004]

61. Sure, which is where we are today. And as a rental nation, the wealth goes

to the property owners, banks, etc.

Well, like the pres said, "My administration is the only thing between you and the pitchforks". People might argue about the others, but that's one promise he kept.

[xchrom]

13. Right Now, The Global Economy Is Looking Surprisingly Strong

http://www.businessinsider.com/october-global-economic-data-2013-11

We're part-way through PMI Day, when reports come out for various countries showing the health of their manufacturing industries.
Sam Ro has been cataloging the numbers here. And so far: things are looking pretty good!

The Asian economies really seem to be cranking, a fact corroborated by a very strong trade report, which is seen as a global bellweather.

China had one of its best reports in months.

And the UK just came out with a very solid October manufacturing number.



Read more: http://www.businessinsider.com/october-global-economic-data-2013-11#ixzz2jOXYm5aS

[Demeter]

16. And as we know, Numbers Never Lie

Of course, governments lie in their teeth...esp. China, Britain, anywhere this is to their advantage...it's called propaganda.

[Fuddnik]

21. The numbers themselves are lies.

So much bullshit in the CPI, GNP, .......

All designed to make the current Administration look good, or not so bad.

[xchrom]

19. Asian Markets Aren't Too Impressed

http://www.businessinsider.com/asian-markets-november-1-2013-2013-10

China, South Korea, and much of developing Asia delivered economic stats that reflected accelerating growth in the region.
But the markets in Asia are mixed.

Japan's Nikkei is down 0.4%.

Korea's Kospi is up 0.2%.

Australia's S&P/ASX is down 0.2%.

Hong Kong's Hang Seng is flat.

China's Shanghai Composite is up 0.2%.



Read more: http://www.businessinsider.com/asian-markets-november-1-2013-2013-10#ixzz2jOlX34gN

[Demeter]

20. How Alan Greenspan Destroyed America By Dean Baker

http://www.alternet.org/how-alan-greenspan-destroyed-america?akid=11087.227380.53HK_U&rd=1&src=newsletter916138&t=14



The former Fed chair is promoting his new book. He should admit his role in the housing crisis, not insult our intelligence...

Alan Greenspan will go down in history as the person most responsible for the enormous economic damage caused by the housing bubble and the subsequent collapse of the market. The United States is still down almost 9m jobs from its trend path. We are losing close to $1tn a year in potential output, with cumulative losses to date approaching $5tn. These numbers correspond to millions of dreams ruined. Families who struggled to save enough to buy a home lost it when house prices plunged or they lost their jobs. Many older workers lose their job with little hope of ever finding another one, even though they are ill-prepared for retirement; young people getting out of school are facing the worst job market since the Great Depression, while buried in student loan debt. The horror story could have easily been prevented had there been intelligent life at the Federal Reserve Board in the years when the housing bubble was growing to ever more dangerous proportions (2002-2006). But the Fed did nothing to curb the bubble. Arguably, it even acted to foster its growth with Greenspan cheering the development of exotic mortgages and completely ignoring its regulatory responsibilities.

Most people who had this incredible infamy attached to their name would have the decency to find a large rock to hide behind; but not Alan Greenspan. He apparently believes that he has not punished us enough. Greenspan has a new book which he is now hawking on radio and television shows everywhere. The book, which I have not read, is ostensibly Greenspan's wisdom about the economy and economics. But he also tells us that his problem as Fed chair was that he just didn't know about the flood of junk mortgages that was fueling the unprecedented rise in house prices during the bubble years. He has used this ignorance to explain his lack of action – or even concern – about the risks posed by the bubble. Greenspan's "I didn't know" excuse is so absurd as to be painful. The explosion of exotic mortgages in the bubble years was hardly a secret. It was frequently talked about in the media and showed up in a wide variety of data sources, including those produced by the Fed. In fact, there were widespread jokes at the time about "liar loans" or "Ninja loans". The latter being an acronym for the phrase, "no income, no job, no assets". The fact that banks were issuing fraudulent mortgages by the millions, and that the Wall Street crew was securitizing them as fast as they could get them, was not top secret information available only to those with special security clearance. This was the economy in the years 2002-2006.

It was impossible to look at the economy in these years and not see the role of the housing bubble and the tsunami of bad mortgages that fueled it. The run-up in house prices led to a near record pace of construction. Typically housing construction is around 4.5% of GDP. It peaked at 6.5% in 2005. Greenspan didn't notice? Who did he think was going to live in all these units, the building of which had created record vacancy rates as early as 2003? And he didn't notice that the spike in house prices had led to a surge in consumption pushing saving rates to nearly zero? He actually co-authored several pieces on exactly this topic with another Fed economist. Between the 100% predictable collapse of residential construction and the plunge in consumption that would follow the loss of the housing wealth that was driving it, we were looking at a loss of more than $1tn in annual demand. What did Greenspan think would fill this gap, purchases of Ayn Rand's books? Greenspan had all the information that he could have possibly needed to spot the housing bubble and to know its collapse would be really bad news for the economy. More than anyone else in the country he was in a position to stop the growth of the bubble.

Suppose that, instead of extolling the wonders of adjustable rate mortgages, Greenspan used his public addresses to warn people that they were buying into an overpriced housing market; and he warned investors that the subprime mortgage backed securities they were buying were filled with fraudulent mortgages. Suppose further that he used the Fed's research staff to document these facts. Greenspan could have used the regulatory powers of the Fed to crack down on the bad mortgages being issued by the banks under the Fed's jurisdiction, as his fellow governor Edward Gramlich urged. And, he could have arranged to have a meeting with other federal and state regulators to see what they were doing to prevent mortgage fraud in the financial institutions under their jurisdictions as well. Those are the actions that we had a right to expect from a Fed chair faced with the growth of a dangerous asset bubble. That is what Alan Greenspan would have done if he had been earning his salary. Instead, he did nothing. He cheered on the bubble until it burst and then he said it wasn't his fault.

This man has nothing to tell the country about the economy and the media is not doing its job to imply otherwise. If Greenspan doesn't have the decency to keep himself out of public view after all the damage he has done to the country, then the media should do it for him. The only thing he has to say that would be newsworthy is that he's sorry.

[Demeter]

22. Obamacare: The Biggest Insurance Scam in History By Kevin Zeese and Margaret Flowers

MUST READ!

http://truth-out.org/opinion/item/19692-obamacare-the-biggest-insurance-scam-in-history

The Affordable Care Act (ACA), also called "Obamacare," may be the biggest insurance scam in history. The industries that profit from our current health care system wrote the legislation, heavily influenced the regulations and have received waivers exempting them from provisions in the law. This has all been done to protect and enhance their profits.

In the meantime, the health care crisis continues. Fewer people, even those with health insurance, can afford the health care they need because of out-of-pocket costs. The ACA continues that trend by pushing skimpy health plans with low coverage and restricted networks.

This is what happens in a market-based system of health care. People get only the amount of health care they can afford, rather than what they need. The ACA takes our failed market-based system to a whole new level by forcing the uninsured to purchase private health plans and using the government to sell and subsidize them.

Sadly, most Americans are being manipulated into supporting the ACA and do not even know they are being bamboozled. That is how scams work. Even after the con is completed, victims do not know they have been manipulated and ripped off. They may even feel good about being scammed, thinking they made a deal when they really had their bank accounts picked. But it is the insurance companies that are the realizing windfall profits from the Obamacare con even as it falters.

AND THE DETAILS FOLLOW...FOR PAGES

[Tansy_Gold]

24. And this is what SMWers have known for 3+ years n/t

[Demeter]

25. Good Morning, Tansy!

Kid has called in sick, so I have a whole morning off...whatever shall I do with myself?

[Fuddnik]

35. Get a job hippie!

[Demeter]

26. Think I should post this in Good Reads?

[Roland99]

30. Ayup...

and as much as I've tried to defend the ACA against right-wing attacks, I know that it's a far cry from what we really need (Single Payer) and that the costs are unnecessarily too high for premiums.

Nearly $500/mo for just myself and my wife for a Bronze plan in my county. Nearly $100/mo LESS if I lived in Tampa.

Now, you tell me, is that fair (using one of Obama's favorite words)?


I can get a MUCH better policy thru my employer (lower co-pays, much lower deductibles, slightly lower premiums) as they cover half the premium cost. But, that's still well over $400/mo just for insurance premiums for two healthy adults.

Madness.

[DemReadingDU]

28. We should have Medicare for all

Or begin with lowering the age to receive Medicare to 55, and lowering the age group every year until everyone is covered. The Medicare system is already in place. The new ACA system is costing taxpayers gazillions of our money to setup, and gazillions more money for out of pocket expenses.

If people don't like Medicare, they can go to a private health insurance and pay them for a policy. But Medicare for all should be first.

[Roland99]

31. the old H.R. 676

http://www.pnhp.org/publications/united-states-national-health-care-act-hr-676


I miss Kucinich....

[Fuddnik]

36. A lot of us miss Kucinich.

My wife is only working so that I have health insurance. She's already got Medicare.

I checked on the exchanges, and found out her health plan is cheaper. She has to pay for my insurance. Hers is covered.

Obama is the biggest scam artist in history. There are a few benefits to ACA, but other than that, it's nothing but a big subsidy to the insurance industry.

Under H.R. 676, there would be a minimal tax on everyone, but no deductibles or co-pays. And the tax would be much lower than any health insurance plan out there. But, we'll never see it in our lifetimes.

Kucinich-Snowden 2016!

[Roland99]

38. I would pay just under $200/mo for my entire family under H.R. 676

and like you said, NO co-pays, NO deductible, PLUS vision/dental.

[DemReadingDU]

44. There are always taxdollars for war and bailing out banks

But we can't have national healthcare.

[Tansy_Gold]

32. Since you afford me this wonderful opportunity

I should point out that Medicare isn't free.

Basic Medicare costs at least $105/month for a single individual. Prescription plans (only available through private insurance companies) start at around $25/month for a single individual. This is even after you've paid into the system via FICA taxes your entire working life.

And Medicare has deductibles and limits and doesn't cover everything. And while it is possible to opt out and buy private insurance that's better, those who don't buy other insurance and still opt out will eventually pay a penalty in the form of higher Medicare premiums.

There are some subsidies available through the various individual state programs/Medicaid to help lower income individuals but they have to be applied for and are not available to everyone everywhere.

What this all comes down to, of course, is that we have an entire system that is totally broken because by design it provides benefits to those who don't need them and denies benefits to those who do. How fucked up is that?

[DemReadingDU]

41. I'm going thru the Medicare process now.

My main pet peeve is having to sign up for the Part D for prescriptions, appx $25 per month. And I don't have any prescriptions.

But if I don't sign up, then assessed a penalty that is added to the monthly premium when a prescription is needed. The penalty amounts to 1% fee of the monthly amount multiplied by the number of months that you don't have the Part D. Aaargh

http://www.medicare.gov/part-d/costs/penalty/part-d-late-enrollment-penalty.html


While Medicare has it's faults, the system is already in place. It seems a waste of taxpayer money to have an entirely new system designed for Obamacare, except the insurance companies appear to benefit more.

Healthcare, sickcare, in this country is fucked up. Period.

[Tansy_Gold]

62. Exactly, exactly

I'm in the same position -- turned 65 in October so now on Medicare, which is better than what I was on before, which was nothing. My prescriptions run less than $10/month right now.

And I understand the idea of everyone paying into the system so everyone can use it even if some pay more and others use more. That's the whole basis of socialism and I'm fine with that.

Which makes your whole point even more relevant -- we already have everyone who works paying into Medicare as soon as they start working. So why in the name of St. Jude (patron of lost causes) are we setting up another whole system for "young people" to voluntarily-on-pain-of-penalty opt into that they probably aren't going to opt into until it's too late (and they're hit with penalties)? Why not just jack up the Medicare portion of the FICA contribution by 1%, levy it on ALL income, and then add a 5% employer surtax (5% of the employer's Medicare contribution) for employers of more than 50 employees (regardless of hours worked or wages paid) for those employers who don't provide health insurance for their employees?

I mean, I know WHY all this is going on -- it's entirely to protect the for-profit insurance industry and the for-profit hospitals and the for-profit drug companies and so on.

Which takes us back to the first point.

ARGH.

[Demeter]

23. I'm surprised the Boss got it

[xchrom]

27. How to Make Money for Nothing Like Wall Street

http://www.theatlantic.com/business/archive/2013/10/how-to-make-money-for-nothing-like-wall-street/280825/

***SNIP

But even with these financial shock absorbers, there are still lots of clever-and-probably-legal-but-ethically-dubious ways to game CDS. Here are the two most devious.

1. Buy CDS on a bond, and then bribe the borrower to temporarily default. This is like taking out insurance on your neighbor's car and bribing him to get in an accident. You get the insurance, and then you kick some money back to him to upgrade his car.

Sound far-fetched? It's not. It's essentially what a unit of the Blackstone Group did with the Spanish gaming operator, Codere SA. First, Blackstone bought insurance on Codere’s bonds, so it stood to make a nice bit of money if Codere missed an interest payment. But how do you make a company miss an interest payment? Well, Blackstone took over one of Codere's revolving loans, as a hostage, and told the gaming company: "We'll force you to pay back this entire revolving loan unless you kindly miss the next interest payment on your bonds." It was a clever ransom. And guess what? The clever ransom worked. The interest payment came late. Blackstone made $15.6 million from its CDS. And as for Codere, they turned out fine, too. Blackstone agreed to restructure its bonds, and reward the company for good behavior with another $48 million loan.

2. Sell so many CDS on a bond that you can pay to keep it from defaulting. This is like selling insurance to as many people as possible on a car that was obviously falling apart — and then paying to fix it before it could get in an accident.

Now, imagine some crappy bonds. Some really crappy bonds. You know they're crappy. I know they're crappy. And Wall Street definitely knows they're crappy. They're so crappy that everybody wants to buy, and nobody wants to sell CDS on them.

[Roland99]

29. Oct. ISM manufacturing index edges up to 56.4%

and Oil nears $95/bbl

Gas should be at or under $3/gal soon. It's about $3.17 here, I think.

[Tansy_Gold]

33. Hey!

[Roland99]

34. Hey, Tansy!

Been a while since I've been up here regularly.

Esp in the last month. Spent 3 weeks in the UK and the time difference alone precluded posting and flaky internet precluded even lurking!

Headed back for another 2 weeks tomorrow then I'm mostly home for the next 2 months! Woo hoo!


Been thinking lately about who would end up running next year. It's odd that we're a year out from election day and there isn't really any candidate on either side who's even trying to make a serious run.

[Demeter]

37. Ted Cruz is serious---serious as a heart attack

but on the democratic side....only Hillary of Mount Never-Rest.

[Roland99]

39. Hillary won't make it. At least I HOPE she doesn't

We don't need *another* Blue Dog/DLCer/Third Way/Corporatist "so-called liberal"

[DemReadingDU]

47. Yesterday our gas jumped from $3.09 to $3.39

SW Ohio

[Roland99]

49. Yikes

and reformulated gas is gone now, eh?

[Demeter]

54. Monopolies don't need an excuse

just a friend or several hundred...in the appropriate places.

[Demeter]

40. Tech calls for more NSA checks CORPS. CAN THE NSA?

http://www.politico.com/story/2013/10/tech-nsa-checks-99202.html

Silicon Valley has stood firm in its call for more government transparency about Internet surveillance requests — but now the industry is asking for more checks on the NSA’s authority.

A coalition of major tech firms called for new, if vague, privacy protections and oversight reforms in a letter Thursday to House and Senate Judiciary sponsors of Congress’s most sweeping surveillance reform bill yet. The letter was sent one day after a new report from The Washington Post alleged that the NSA has infiltrated the communications links between data centers owned by Google and Yahoo.

“Transparency is a critical first step to an informed public debate, but it is clear that more needs to be done,” Apple, Google, Facebook, Yahoo, Microsoft and America Online wrote. “Our companies believe that government surveillance practices should also be reformed to include substantial enhancements to privacy protections and appropriate oversight and accountability mechanisms for those programs.”

The firms, which have been at the heart of the private-sector push for more freedom to shed sunlight on the kinds of data requests they get, offered applause for the sponsors of the USA Freedom Act, which Sen. Patrick Leahy (D-Vt.) and Rep. Jim Sensenbrenner (R-Wis.) introduced Tuesday along with more than 80 co-sponsors. It’s a reflection that tech firms, which found themselves on the defensive after the first leaks from Edward Snowden, are now playing more offense in a climate where major revelations over the NSA’s snooping powers seem to be the norm. An industry source said the proximity of Thursday’s letter to the Post report was coincidental, but Wednesday’s story still prompted a reaction, at least from Google, that entered new territory. It was Mountain View’s top lawyer’s “outrage” that made the headlines Wednesday evening, but it was his contention that the revelation “underscores the need for urgent reform” that held the most weight yet from an industry that has been publicly focused on increased government disclosures...


I SUPPOSE WE SHOULD BE GRATEFUL THAT OUR LEADING "CITIZENS" ARE FINDING SOME NEED FOR GOVERNMENT RESTRAINT...

WHEN THEY OUGHT TO BE CALLING FOR A TOTAL SHUTDOWN AND DISMANTLING OF THE NSA, CIA, AND THE OTHER 22 OR SO SPY AGENCIES WHO CANNOT DISTINGUISH BETWEEN FRIENDS, ENEMIES, TREATIES AND CONSTITUTIONAL RIGHTS...

[Demeter]

42. CAN YOU HEAR ME NOW?

“The NSA has finally done something so egregious that the U.S. Internet industry can do nothing but respond with demands for reform of the law to protect their systems and their users,” said Kevin Bankston, who’s helped spearhead the Valley’s message to D.C. while at the Center for Democracy and Technology and is now headed to the New America Foundation.

[DemReadingDU]

51. I can't imagine the NSA tightening up security

Why is that huge data center being built in Utah?
http://en.wikipedia.org/wiki/Utah_Data_Center


and now Google is constructing mystery barges
http://www.usatoday.com/story/news/nation/2013/10/30/coast-guard-visits-mysterious-google-barge/3318347/

[Demeter]

43. IRS hamstrung on collecting health law penalties

http://www.usatoday.com/story/news/nation/2013/10/29/irs-hamstrung-on-collecting-health-law-penalties/3310355/

Congress banned the IRS from using any of its usual techniques to force people to pay the penalty for failing to obtain health insurance.

WELL, THAT'S ALL RIGHT, THEN. (HOW DO YOU LIKE MY JON STEWART IMITATION?)

The Internal Revenue Service probably will bark at you if you fail to obtain health insurance next year, but the agency won't have much bite. On this issue, Congress pulled the watchdog's teeth. The Affordable Care Act declares that most Americans will face a penalty if they're uninsured, starting in 2014. But experts predict the government will have a tough time forcing people to pay up. The IRS could deduct the penalty amount from any tax refund you're due. But what if you're not due a tax refund?

"They might send you a sternly worded letter," said Andy Grewal, a University of Iowa law professor who specializes in tax issues. And if you toss the IRS' hectoring note into the recycling bin, you should brace yourself for, um, another sternly worded letter. Much has been made about the fact that the penalty for failing to obtain health insurance next year is set at just $95 or 1 percent of a person's income. (That amount is set to rise substantially in subsequent years, but it will remain less than the premiums on many insurance policies.) However, relatively few people know that the Affordable Care Act hamstrings the government's ability to collect the penalties.

The IRS, which is in charge of enforcing compliance with the new insurance requirement, is accustomed to carrying big sticks. The first step it usually takes against tax scofflaws is to file public liens against them. Such a lien means the IRS has first dibs on any money you acquire, Grewal said.

"It puts a cloud over all your assets," he said. "If there's a public record that the IRS is after you, no one's going to lend you money."

That means no mortgage, no car loan, no credit cards — until you settle up with Uncle Sam.

Grewal said liens are usually enough to bring tax deadbeats to heel. If not, the IRS can seize assets, including your car or your house. And in extreme cases, if you willfully refuse to pay taxes, authorities can charge you criminally, put you on trial and send you to prison.

But when it passed the Affordable Care Act in 2010, Congress banned the IRS from using any of its usual techniques to force people to pay the penalty for failing to obtain health insurance.

Alice Helle, a Des Moines lawyer who has been working on Affordable Care Act issues, speculated that members of Congress had political motives for disarming the IRS on this issue.

"I think they thought, 'We're not going to throw people in jail or put a lien on their house for not having coverage,'" she said.


DAMN RIGHT THEY AREN'T!


MORE AMUSEMENT AT LINK

[Demeter]

45. U.S. Accuses Germany of Causing Instability By SARAH WHEATON

http://www.nytimes.com/2013/10/31/business/international/us-accuses-germany-of-causing-instability.html

BY EXPORTING TOO MUCH (LIKE THEIR UNEMPLOYMENT, INFLATION, ETC)

The United States Treasury singled out Germany for criticism in a report released on Wednesday that said Berlin’s reliance on exports was holding back its struggling partners in the European Union.

The criticism echoes longstanding complaints from European economists and international banks. But it was notable because it was included in an unusual forum: a semiannual report that usually focuses on currency manipulation. The timing may reflect the United States’ wish to influence German economic policy as Chancellor Angela Merkel forms her new government after recent elections.

The document, the Report to Congress on International Economic and Exchange Rate Policies, outlines the practices of America’s top trading partners over the first half of 2013, concluding that none “met the standard of manipulating the rate of exchange between their currency and the United States dollar” in order to gain an unfair trade advantage.

But it noted, as it often does, that China’s currency, the renminbi, is not appreciating “as fast or by as much as needed.” The report said that Chinese efforts to intervene in foreign exchange markets seem to have again escalated as concerns about the worldwide economy recede.

Yet Germany was a focus of particular — and unusual — scolding from the Obama administration, which said that Berlin’s “anemic pace of domestic demand growth and dependence on exports have hampered rebalancing” and hurt its ailing European Union partners. For decades, Germany’s manufacturers have produced more than its residents demand, sending more of its relatively low-cost goods into the international market than what it imports. Weaker economies like those in Spain, Portugal and Greece struggle to compete.

[Demeter]

46. Germany Seethes at US Economic Criticism

http://www.spiegel.de/international/germany/germany-defends-trade-surplus-after-critical-us-treasury-report-a-931126.html

A day after a US Treasury Department report bluntly denounced Germany's economic model, accusing it of hampering the euro zone recovery and hurting global growth, Germany called the conclusions "incomprehensible" and challenged the US to "analyze its own economic situation."

The Treasury's semiannual currency report criticized Germany's overreliance on exports, a high current-account surplus and weak domestic demand. These factors "have hampered rebalancing at a time when many other euro-area countries have been under severe pressure," the report concluded, citing budget tightening in the euro-zone periphery. "The net result has been a deflationary bias for the euro area, as well as for the world economy."

The German Economics Ministry responded in a statement with equally harsh words, saying that Germany's surplus is "a sign of the competitiveness of the German economy and global demand for quality products from Germany."


IT'S NOT A BUG, IT'S A FEATURE!

[Demeter]

48. Merkel, SPD agree on transaction tax in coalition talks

http://www.reuters.com/article/2013/10/28/idUSL5N0II3IR20131028

Angela Merkel's conservatives and the Social Democrats (SPD) said they had agreed in coalition talks on Monday to push for a financial transaction tax but needed to consult further on the key issue of a European banking union.

The parties started negotiating policy compromises last week with the goal of having a new "grand coalition" government in place by Christmas.

Germany's European partners will be watching the negotiations closely, hoping for a swift deal that allows the bloc to meet looming deadlines for its ambitious banking union.

The parties' working group charged with coming up with compromises on European policies held its first meeting on Monday but achieved clear consensus only on the transaction tax, which both parties had previously championed.

Leading negotiators for both camps said they needed to continue discussing details of a European banking union and how the euro zone should fight its debt crisis...

[Demeter]

56. US abused spirit of SWIFT Agreement, parliamentarian says

http://www.dw.de/us-abused-spirit-of-swift-agreement-parliamentarian-says/a-17179607

The EU parliament has suspended an accord on sharing banking data with the US. Intended to fight terrorism and organized crime, there are allegations the NSA used the deal to spy on Europeans, says MEP Birgit Sippel....

[Demeter]

50. The new American capitalism: Rise of the distorporation

WHEN EVEN THE ECONOMIST TAKES NOTE, YOU'VE GOT A REAL PROBLEM

http://www.economist.com/news/briefing/21588379-mutation-way-companies-are-financed-and-managed-will-change-distribution

A mutation in the way companies are financed and managed will change the distribution of the wealth they create

AT THE beginning of the 1980s capital was flooding into the American oil and gas industry. Apache Corporation, an erstwhile conglomerate spanning steel, dude-ranching and car sales, sought to tap into the flow in a novel way. It wrapped a bunch of private oil and gas assets into a new ownership structure that was akin to a partnership but was publicly listed. It was a useful idea—until steep declines in tax rates and energy prices put the Apache Petroleum Company to rest in 1987.

This time round the master limited partnership (MLP) structure which Apache pioneered is no longer just a footnote. In the 2000s such companies allowed the capital-intensive energy industry to attract vital funds even during a devastating financial crisis. Kinder Morgan, a complex entity built around interlocking MLPs, has an enterprise value (its market capitalisation plus its debt) of $109 billion. The collective market capitalisation of MLPs recently passed that of Exxon Mobil, the most highly valued energy company on the New York Stock Exchange.

The new popularity of the MLP is part of a larger shift in the way businesses structure themselves that is changing how American capitalism works. The essence is a move towards types of firm which retain very little of their earnings: “pass-through” companies which every year pay out more or less as much as they take in. Many of the standard rules that corporations which retain their earnings have to follow when dealing with shareholders do not apply to such firms. And, crucially, so long as they distribute their earnings such set-ups can largely avoid corporate tax. Mindful of that last point, the American government has in the past restricted the use of such structures. But these restrictions have eased, and more and more businesses are now twisting themselves into forms that allow them to qualify as pass-throughs. The corporation is becoming the distorporation. Collectively, distorporations such as the MLPs have a valuation on American markets in excess of $1 trillion. They represent 9% of the number of listed companies and in 2012 they paid out 10% of the dividends; but they took in 28% of the equity raised. And these statistics underplay the true scale of the shift. Structures like MLPs are used to house the management of big private-equity companies, thus sitting atop industrial empires of much greater worth. Among all firms, in 2008 pass-through structures accounted for 23% of companies and 63% of profits, according to the latest data available from the Internal Revenue Service (IRS). Widely cited research by Rodney Chrisman, a professor at Liberty University School of Law, says such businesses account for more than two-thirds of new companies.

The shift to the distorporation comes at the expense of the “C” corporation, the formal name for the familiar limited-liability joint-stock structure that emerged a century ago (see chart 1 AT THE LINK). The newer structures still protect investors from liability. But the requirement for partnerships to pass through their money blocks the accumulation of earnings. In C corporations retained earnings can be used to fund investment and growth, assuring persistence. Without them, pass-through businesses have to be far more intertwined with investors. Staying alive means routinely inhaling capital, as well as exhaling...


CALL IT BY ITS REAL NAME: CRONYISM

[Demeter]

52. Large companies find ways to a zero tax rate

http://www.usatoday.com/story/money/business/2013/10/23/big-companies-pay-no-taxes/2480281/

Despite widespread groans about the recent disclosure that Apple is finding ways to cut its federal tax bill, an analysis shows the computer giant is one of scores of corporations largely dodging the taxman.

A surprising number of companies in the Standard & Poor's 500, 57, have found ways to pay effective tax rates of zero, according to a USA TODAY analysis of data from S&P Capital IQ.

The effective tax rate is a popular measure used by investors to compare how much companies pay in tax relative to profit...

YADA, YADA, YADA....BUSINESS AS USUAL, ON STEROIDS

[Roland99]

53. Trading in Nasdaq Options Market halted

http://www.marketwatch.com/story/trading-in-nasdaq-options-market-halted-2013-11-01?link=MW_home_latest_news

Trading in the Nasdaq Options Market has been halted Friday since 10:36:57 a.m. Eastern, Nasdaq said in a statement. The status update follows an earlier notice from Nasdaq that the exchange is investigating an issue sending "unsolicited outs" over Financial Information Exchange

Overall, markets turning downward (AIG reported disappointing earnings)

Oil now under $95/bbl.

[Demeter]

55. Oh, Really!

something rotten in the state of the "free markets"?