STOCK MARKET WATCH -- Monday, 5 May 2014

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Monday, 5 May 2014[font color=black][/font]

SMW for 2 May 2014

AT THE CLOSING BELL ON 2 May 2014
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Dow Jones 16,512.89 -45.98 (-0.28%)
S&P 500 1,881.14 -2.54 (-0.13%)
Nasdaq 4,123.90 -4.00 (0.00%)


[font color=green]10 Year 2.58% -0.09 (-3.37%)
30 Year 3.36% -0.06 (-1.75%) [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.
02/06/14 Matthew Martoma convicted of insider trading while at hedge fund SAC (Stephen A. Cohen) Capital Advisors. Expected sentence 7-10 years.
03/24/14 Annette Bongiorno, Bernard Madoff's secretary; Daniel Bonventre, director of operations for investments; JoAnn Crupi, an account manager; and Jerome O'Hara and George Perez, both computer programmers convicted of conspiracy to defraud clients, securities fraud, and falsifying the books and records.








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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. India now world's 3rd largest economy, behind just US, China

http://www.financialexpress.com/news/india-now-worlds-third-largest-economy-in-terms-of-purchasing-power-parity/1245626

World Bank: India 'went from 10th largest economy in 2005 to 3rd largest in 2011'

India is now the world's third largest economy in terms of purchasing power parity, ahead of Japan and behind the US and China which hold the top two spots. This was revealed by the 2011 round of the World Bank's International Comparison Program (ICP) released on Tuesday.

"The United States remained the world’s largest economy, but it was closely followed by China when measured using PPPs. India was now the world’s third largest economy, moving ahead of Japan," the report said. (Read report)

It highlighted the fact that the largest economies were not the richest, as shown in the ranking of GDP per capita. The middle-income economies with large economies also had large populations, setting the stage for continued growth, it added.

[Demeter]

2. Why India Will Soon Outpace China

http://www.zerohedge.com/contributed/2014-05-04/why-india-will-soon-outpace-china

This post was originally published at Asia Confidential:
http://asiaconf.com/2014/05/04/india-will-soon-outpace-china/



On the face of it, the title of this article will seem absurd to many. While China's economic growth has slowed, it's still running at a brisk 7.4% annual rate. Moreover, the Chinese government seems to be successfully slowing credit in order to rein in a burgeoning debt issue. And it's implementing a plethora of reforms which should propel the next phase of growth. Meanwhile, India's a mess. This fiscal year's GDP will be below 5% and near decade lows, government and corporate debt is high, the current account deficit has been out of control until recently, inflation reached double-digits late last year, business confidence and investment are at extreme lows and corruption remains rampant. Dig a little deeper though and the picture doesn't appear as favourable for China's economic prospects vis-a-vis India's. First, it's highly probable that China's GDP growth rate is slowing much more than the fraudulent figures put out by the government (I'm not picking on China here as many governments are guilty of this). Second, credit tightening in China will almost certainly take years rather than months given the boom which preceded it. Third, Chinese economic reform will be a drag on growth in the near-term, as can already be evidenced by the crackdown on corruption and its impact on retail consumption. On the flip side, there are many signs that India's economy may have bottomed. The current account deficit has significantly eased, the currency has stabilised, inflation has substantially pulled back and corporate earnings are improving. With inflation down, interest rates will soon be cut, which may prove the catalyst for the next investment cycle. The election of a new, economically-friendly government should ensure an acceleration in investment and improved productivity. There are other positive developments which augur well for India too. For instance, there's an ongoing boom in the agricultural sector with rising investment and wages. This has resulted in India becoming a net food exporter - an important development given the country's dependence on agriculture. For a long time, India's decentralised, often chaotic economic model has been seen as inferior to China's authoritarian, top-down model. A reappraisal of that view may soon be in order.

How India became a mess

Morgan Stanley's Ruchir Sharma has noted that India seems to go through cycles of economic crisis and reform every decade or so. In 1991, a balance of payments crisis preceded widespread economic deregulation which is credited for driving the rapid economic growth of the following two decades. In the early 2000s, another crisis resulted in further deregulation and privatisation of key industries. Here we are about ten years later and there are economic troubles again. GDP growth has slipped below 5%. Inflation peaked in double digits before marginally declining of late. The fiscal and current account deficits have widened sharply. The government is again largely to blame for the problems. The ruling Congress Party fell into the trap of thinking that economic growth in the high single digits during 2003-2007 was perfectly natural. But it was just the result of reforms from prior governments. In response to the 2008 crisis, the ruling party initiated a large stimulus package. This worked for a time as the economy recovered faster than most other emerging markets. But combined with large-scale subsidies to bribe rural voters, to the tune of 2.3% of GDP, inflation soon lurched out of control. A lack of reform driven by infighting in the Congress Party and a judicial crackdown on political corruption didn't help. Foreign investors and bond rating agencies became increasingly nervous about India. In 2012, the ratings agencies threatened to downgrade the country's sovereign rating to junk status. Mid last-year, the rupee tanked as foreign investors grew concerned about the current account deficit following hints of QE tapering at that time. These events were enough to spark the government into action. It's since liberalised foreign investment in retail and airlines. It's also started to cut back on energy and agricultural subsidies. More recently, the new central bank governor hiked interest rates to stabilise the currency and tame inflation.

Signs the economy has bottomed

There are a number of signs though that India's economy may have bottomed and better times lay ahead:

1) The current account deficit (CAD) has eased significantly. The last quarter saw the lowest CAD number in five years due to improved exports and lower gold imports. Bank of America Merrill Lynch forecast India's CAD will be 2% this fiscal year compared with 5% in 2013.



2) Inflation has pulled back. Due to lower food prices, WPI inflation is at its lowest level in more than four years.



3) The rupee has stabilised. Interest rate hikes and the declining CAD have helped.

4) Corporate earnings seem to be improving. The earnings revision ratio has been rising for the past eight months. Yes, it's still not great but at least it's heading in the right direction.
India earnings revision cycle

5) Nomura's composite leading index for India suggests growth is bottoming out.
India - nomura leading indicator

The key to an economic recovery though is business investment. There are tentative signs that this may be set to turn around:

Business confidence, while low, has improved of late in anticipation of a new government coming into power.

Regulatory constraints for new projects should be eased post election. A Cabinet Committee on Investments has already started to reduce bottlenecks, but this should soon accelerate.

Higher interest rates are forcing Indian companies to reduce leverage by shedding assets. The process of decreasing debt, particularly among infrastructure companies, is necessary for businesses to be in a position to accelerate investment.

MUCH MORE...AND A HYMN TO DECENTRALIZATION

[Demeter]

3. Almost 3 Times As Many People DROPPED OUT of Labor Force As Joined It

http://www.zerohedge.com/contributed/2014-05-03/almost-3-times-many-people-dropped-out-labor-force-joined-it



The New York Times' Neil Irwin gives a balanced view of the new jobs numbers:

Rarely does a monthly report on the United States job market look so terrific on the surface while being so disappointing underneath.
***
Employers added a whopping 288,000 jobs, the most in two years.
***
The number of people in the labor force fell by a whopping 806,000, wiping out the February and March gains and a bit of January as well. The labor force participation rate fell by 0.4 percentage points to 62.8 percent, returning to its December level.

And the number of people reporting they were unemployed fell by 733,000, which sounds good on its surface, but paired with the similar-sized decline in the labor force points to job seekers giving up looking rather than finding new employment.

In other words, 288,000 jobs were created, but 806,000 fell out of the labor force and gave up looking for work altogether. So 2.8 times as many people dropped out as found jobs.

As CBS notes:

The unemployment rate dropped to 6.3 percent in April from 6.7 percent in March, the lowest it has been since September 2008 when it was 6.1 percent. The sharp drop, though, occurred because the number of people working or seeking work fell. The Bureau of Labor Statistics does not count people not looking for a job as unemployed.
***
The amount (not seasonally adjusted) of Americans not in the labor force in April rose to 92,594,000, almost 1 million more than the previous month.

The number of women not in the labor force has risen to an all-time high. there was a loss of jobs in the 25-54 age group, And - in 20% of American families - no one works.

Despite what you may have heard, the huge numbers of people dropping out of the labor force can't be attributed to retiring baby boomers.In reality, throwing money at the big banks has led to a “jobless recovery” – a permanent destruction of jobs – which is a redistribution of wealth from the little guy to the big boys. (And see this.)

And most of the new jobs being created are low-wage or temporary jobs.

[Demeter]

4. We Spent $3.2 Trillion… and Haven't Put a DENT in REAL Unemployment

http://www.zerohedge.com/contributed/2014-05-04/we-spent-32-trillion%E2%80%A6-and-havent-put-dent-real-unemployment



The financial media are gaga over the alleged great jobs numbers from last week....We’ve been over this saga many times. The methodology for calculating jobs gains is not even close to accurate. The unemployment rate is now a marketing gimmick rather than an accurate economic metric. Indeed, here are some staggering statistics that indicate just how messed up the US economy is right now.



· The labor participation rate is the lowest since 1978.

· There are over 90 million Americans without a job right now.

· An incredible 20% of all American families do not have a single member who is employed.

· There are over 47 million Americans on food stamps.



There is simply no way to spin these numbers. The US Federal Reserve has spent over $3.2 trillion and generated virtually no real job growth (accounting for population growth). See for yourself:





When you account for how the potential labor pool has grown, the number of employed Americans has gone almost nowhere but down since the 2008 recession “ended.”

At the end of the day, spending money doesn’t create real job growth. An employer only hires someone if they believe that the person’s output will have a net benefit for the firm (meaning the money the person’s output brings in is larger than the money the firm pays them for their work). That’s what creates a sustainable job. Spending money just to create some position where a person sits at work 50% of the time doing nothing is of no real long-term value to the economy, the person, or the firm.

In simple terms, the great attempt to prop up the US economy through spending and printing money is at an end. The world takes a long time to catch on to these changes, but the shift has already begun. It’s now just a matter of time before stocks figure it out.

WHY SHOULD THEY? THEY GOT THEIRS. LET THE INFLATION STAY IN PAPER ASSETS...GOD HELP US IF IT GOES INTO COMMODITIES...

[Demeter]

5. US Economy Is A House Of Cards By Paul Craig Roberts

http://www.informationclearinghouse.info/article38378.htm

The US economy is a house of cards. Every aspect of it is fraudulent, and the illusion of recovery is created with fraudulent statistics.

American capitalism itself is an illusion. All financial markets are rigged. Massive liquidity poured into financial markets by the Federal Reserve’s Quantitative Easing inflates stock and bond prices and drives interest rates, which are supposed to be a measure of the cost of capital, to zero or negative, with the implication that capital is so abundant that its cost is zero and can be had for free. Large enterprises, such as mega-banks and auto manufacturers, that go bankrupt are not permitted to fail. Instead, public debt and money creation are used to cover private losses and keep corporations “too big to fail” afloat at the expense not of shareholders but of people who do not own the shares of the corporations.

Profits are no longer a measure that social welfare is being served by capitalism’s efficient use of resources when profits are achieved by substituting cheaper foreign labor for domestic labor, with resultant decline in consumer purchasing power and rise in income and wealth inequality. In the 21st century, the era of jobs offshoring, the US has experienced an unprecedented explosion in income and wealth inequality. I have made reference to this hard evidence of the failure of capitalism to provide for the social welfare in the traditional economic sense in my book, The Failure of Laissez Faire Capitalism, and Thomas Piketty’s just published book, Capital in the 21st Century, has brought an alarming picture of reality to insouciant economists, such as Paul Krugman. As worrisome as Piketty’s picture is of inequality, I agree with Michael Hudson that the situation is worse than Piketty describes. http://michael-hudson.com/2014/04/pikettys-wealth-gap-wake-up/

Capitalism has been transformed by powerful private interests whose control over governments, courts, and regulatory agencies has turned capitalism into a looting mechanism. Wall Street no longer performs any positive function. Wall Street is a looting mechanism, a deadweight loss to society. Wall Street makes profits by front-running trades with fast computers, by selling fraudulent financial instruments that it is betting against as investment grade securities, by leveraging equity to unprecedented heights, making bets that cannot be covered, and by rigging all commodity markets. The Federal Reserve and the US Treasury’s “Plunge Protection Team” aid the looting by supporting the stock market with purchases of stock futures, and protect the dollar from the extraordinary money-printing by selling naked shorts into the Comex gold futures market.

The US economy no longer is based on education, hard work, free market prices and the accountability that real free markets impose. Instead, the US economy is based on manipulation of prices, speculative control of commodities, support of the dollar by Washington’s puppet states, manipulated and falsified official statistics, propaganda from the financial media, and inertia by countries, such as Russia and China, who are directly harmed, both economically and politically, by the dollar payments system. As the governments in most of the rest of the world are incompetent, Washington’s incompetence doesn’t stand out, and this is Washington’s salvation. But it is not a salvation for Americans who live under Washington’s rule. As all statistical evidence makes completely clear, the share of income and wealth going to the bulk of the US population is declining. This decline means the end of the consumer market that has been the mainstay of the US economy. Now that the mega-rich have even more disproportionate shares of the income and wealth, what happens to an economy based on selling imports and off-shored production of goods and services to a domestic consumer market? How do the vast majority of Americans purchase more when their incomes have not grown for years and have even declined and they are too impoverished to borrow more from banks that won’t lend?

The America in which I grew up was self-sufficient. Foreign trade was a small part of the economy. When I was Assistant Secretary of the Treasury, the US still had a trade surplus except for oil. Offshoring of America’s jobs had not begun, and US earnings on its foreign investments exceeded foreign earnings on US investments. Therefore, America’s earnings abroad covered its energy deficit in its balance of trade....


Americans are an amazingly insouciant people. By now any other people would have burnt Wall Street to the ground.


Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest books are, The Failure of Laissez Faire Capitalism and How America Was Lost. http://www.paulcraigroberts.org/

[Demeter]

6. In Bed with Wall Street: The Conspiracy Crippling Our Global Economy

http://www.zerohedge.com/contributed/2014-05-04/bed-wall-street



In Bed with Wall Street: The Conspiracy Crippling Our Global Economy is a great read for those seeking to understand our financial system's failures and the reasons the global economy ceases to function properly. Larry Doyle highlights the shenanigans of FINRA (Financial Industry Regulatory Authority), the uneven-to-nonexistent oversight by the SEC, the corrupt culture of Wall Street, and the Street's self-serving entanglement with the government.

While readable and enjoyable, Larry's new book could serve as a comprehensive treatise detailing the failure of self-regulation and systemic conflicts of interest. The revolving door between the financial industry and its regulators, whether in self-regulatory agencies such as FINRA or in government, promotes capture and corruption. Unfair practices such as extra-legal taxpayer bailouts, failures to prosecute, High Frequency Trading (HFT), and "permissible" insider trading are symptoms we see every day. ILENE

Excerpt (pp 160-164)

The behavior of selected individuals and institutions needs to be exposed and properly adjudicated if capitalism is to exorcise the cronyism that was core to the fraud. James K. Galbraith, the chair in government and business relations at the University of Texas at Austin, understood this. Galbraith addressed the Senate Judiciary Committee’s Subcommittee on Crime in mid-2010 and laid out the shortcomings behind and the fallout from our economic crisis. His exquisitely detailed testimony skewered his own profession, the study of economic theory, for its failure to properly delve into and understand systemic financial frauds. In point of fact, leading into the current crisis, Wall Street curried favor with academics by paying them to produce research supportive of practices and market developments central to the perpetuation of fraud.

Galbraith methodically detailed the manner in which a control fraud—when a trusted person in a position of responsibility subverts the system/company for personal gain—develops, flourishes,perpetuates, and ultimately fails. The failure of the fraud, though, belies the fact that many of the perpetrators walk away filthy rich. The fraud itself and the injustice running throughout the system are predicated on a failure of the rule of law in mandating and upholding legal contracts. These failures have been propagated by our government, regulators, ratings agencies, a wide array of financial institutions, and individual citizens as well. As frauds go unpunished and moral hazards propagate, our nation has seemingly become inured to the growth of other frauds and moral hazards.

We have seen evidence of this dynamic in areas like union-dominated pension schemes and personal consumer behaviors, including the intentional nonpayment of debts with the expectation of not being penalized. Just as banks were bailed out, an unhealthy “bail me out too” mentality has taken hold in our nation. What is the result? The abuse of capitalism persists unabated under the guise that every criticism threatens to tear down the economy, and every measure of support for our economy is prioritized over upholding our legal system and embracing a sense of moral decency.

Galbraith harkened back to a period in our nation’s history when a sense of decency and meaningful justice for all was central to our national fabric: “Some fraud is inevitable, but in a functioning system it must be rare. It must be considered—and rightly—a minor problem. If fraud—or even the perception of fraud—comes to dominate the system, then there is no foundation for a market in the securities. They become trash. And more deeply, so do the institutions responsible for creating, rating and selling them. Including, so long as it fails to respond with appropriate force, the legal system itself.”

Galbraith understands and shared that no amount of support provided by the Federal Reserve or any other governmental or private entity can disguise the inestimable price borne by our society from a deeply buried yet unpunished control fraud. The monetary valueassociated with this price pales in comparison to the national decline in trust felt by a citizenry disgusted by those who have continually failed to uphold the rule of law: “In this situation, let me suggest, the country faces an existential threat. Either the legal system must do its work. Or the market system cannot be restored. There must be a thorough, transparent, effective, radical cleaning of the financial sector and also of those public officials who failed the public trust. The financiers must be made to feel, in their bones, the power of the law. And the public, which lives by the law, must see very clearly and unambiguously that this is the case.”

Galbraith would have impressed Pecora. Yet Congress and the Department of Justice have largely failed to act upon Galbraith’s recommendations. Galbraith was not the only one directing the FCIC and Congress to act. While the FCIC was engaged in what ultimately looked like shadowboxing, others with extensive background in exposing shady financial dealings were also speaking out and impelling Congress to look hard at FINRA, most notably, the longstanding proponents of transparency at the Project on Government oversight (POGO).

Well-positioned in Washington and with unquestioned credibility, POGO delivered Congress a detailed road map of FINRA, outlining numerous concerns in a February 2010 letter to the House Committee on Financial Services, the House Committee on oversight and Government reform, the Senate Committee on Banking, Housing, & Urban affairs, and the Senate Committee on Finance:

FINRA has attempted to expand its authority despite its abysmal track record. In scaling a bar held barely inches off the ground, “FINRA Chairman and CEO Richard Ketchum testified that FINRA should be given the authority tooversee investment advisers in addition to Securities brokerage firms. In an attempt to justify this expanded authority, Ketchum argued that FINRA has a ‘strong track record in our examination and enforcement oversight.’”
Regulators awarded executives outrageous compensation packages, even during the height of the crisis. “Tax documents show that in 2008—a year in which FINRA also lost $568 million in its investment portfolio—the organization’s 20 senior executives received nearly $30 million in salaries and bonuses.”
FINRA failed to warn the public about ARS.
The incestuous relationship between FINRA and the Securities Industry, as exemplified in the complaints brought on behalf of Amerivet Securities, Standard Investment Chartered, and Benchmark Financial, and in the well-oiled revolving door between FINRA and a host of industry-related firms.
Investors and taxpayers have been forced to foot the bill for regulatory ineptness or malfeasance. The direct and indirect costs of which are incalculable given the trillions of dollars in bailouts and the pain caused by our ongoing economic crisis.
It is now time to challenge the government’s reliance on SROs. Given the inherent conflicts of interest in the financial self-regulatory model, one is hard pressed to accept the efficacy of just such a system, and as such, “POGO calls on Congress to consider vastly curtailing the power of SROs.”

With all of those land-mines within FINRA, to think that the FCIC totally overlooked this organization speaks volumes as to how deeply the commission really cared about looking for the root causes of our economic crisis.

One would think these four major congressional committees would have to weigh in with some sort of opinion on such a detailed appeal as that put forth by POGO. But with the bulk of the issues within POGO’s letter still unresolved and the crisis enduring, the American public is left wondering if POGO’s letter was even read by those atop Capitol Hill. POGO’s Michael Smallberg informed me, “No one from the committees responded to our 2010 letter. But we did hear from a number of investors, shareholders, reporters, and Securities brokers who told us about a host of problems at FINRA.”

Of course, most of the American public has little understanding or appreciation for the impact a massively conflicted financial self-regulatory model has upon their lives. That said, one would hope and expect that our elected representatives sitting on committees charged with financial oversight would be well versed in the issues relating to this topic. Do not be so sure. Smallberg works deeply within these spheres and offered a stinging rebuke of some on the aforementioned committees in stating that he “suspects there are some committee members who have never even heard of FINRA.” That assessment is certainly disappointing but not overly surprising given the general lack of meaningful financial intelligence displayed by congressional members in a variety of Wall Street related hearings.

http://www.amazon.com/gp/product/1137278722/ref=as_li_tf_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=1137278722&linkCode=as2&tag=ileneca-20

[Demeter]

7. Top 10 Bad Excuses for Not Quitting That Job You Hate

http://www.alternet.org/labor/top-10-bad-excuses-not-quitting-job-you-hate?akid=11761.227380.MebMBV&rd=1&src=newsletter987223&t=24&paging=off&current_page=1#bookmark

...If you're unhappy at work, I'm sure that the thought "Man, I really should quit!" crosses your mind occasionally.

So why don't you?

Even if you long desperately to get away from your horrible workplace, annoying co-workers or abusive managers, you may hesitate to actually do anything about it, because right on the heels of that impulse come a lot of other thoughts that hold you back from quitting. These excuses may sound like the voice of sanity, offering perfectly good reasons why it is in fact better to stay and endure that bad job just a little longer, but look a little closer and they may not really hold up. What they do instead is keep you trapped in a job that is slowly but surely wearing you down. Here are 10 of the most common bad excuses for staying in a bad job. Have you ever used any of them?

#1: "Things might get better."
That jerk manager might be promoted out of there. That annoying co-worker could quit. That mound of overwork could suddenly disappear. On the other hand, nothing might change. Or things might actually get worse. If you've already done your best to improve your work situation and nothing's happened, just waiting around for things to improve by themselves makes very little sense.

#2: "My boss is such a jerk but if I quit now, he wins."
Who cares. This is not about winning or losing, this is your life. Move on, already.

#3: "I'm not a quitter."
Guess what these somewhat successful people have in common: Larry Page, Sergey Brin, Tiger Woods, Reese Witherspoon, John McEnroe and John Steinbeck? Yep, they all dropped out of Stanford. The old saying that "Winners never quit and quitters never win" is just plain wrong and leaving a bad job is often the best option.

#4: "Quitting will look bad on my CV and I'll never get another job."
Well not if you stay in your current job while it slowly grinds you down, you won't! In fact, the longer you stay in a bad job, the more it robs you of the energy, optimism, self-confidence and motivation you need to find something better. Move on while you still can.

#5: "If I quit I'll lose my salary, status, company car, the recognition of my peers, etc."
Yes, quitting a job carries a price and that makes it scary. We all know this intimately. But few ever ask this question: What is the price of staying in a job that makes you unhappy? That price can be very high. It can ruin your work life but also your marriage, your family life, your health, your self-esteem and your sanity. Not all at once, but a little bit every day.

#6: "Everywhere else is just as bad."
That's just nonsense. There are plenty of great workplaces in every industry.

#7: "I've invested so much in this job already."
You may have sacrificed a lot of time, energy and dignity already in attempts to make things better. This will make it more difficult for you to call it quits. It reminds me of how Nigerian email scammers sucker in their victims. At first it's a small fee of just a few dollars but if you pay that, the amounts grow and grow. At each step the victim is reluctant to stop because that would mean losing all the money he's spent so far. Quit anyway. Staying on is just throwing good time after bad.

#8: "I'll lose my health insurance."
This is a particular concern for U.S. workers and I have a lot of sympathy for this argument. Where I live (Denmark) everybody gets free health care regardless of their employment situation so I can't imagine the leverage this must give employers. Fortunately for Americans, Obamacare is making it easier to obtain health care regardless of your employment situation and according to experts, this will help reduce "job lock,” i.e. "when people stay in jobs they dislike, or don't want, solely to keep their health coverage." Also: Ask yourself what good job-related health insurance is, if the job is actually making you sick — which bad jobs can absolutely do.

#9: "My job pays very well."
I have zero sympathy for this argument. I don't care how well your job pays; if it makes you unhappy it's not worth it. Quite the contrary, if you make a lot of money now, use that financial security to quit and find a job that'll make you happy. Also, finding a job you like will boost your performance (happy employees are more productive) potentially leading to more promotions and a higher salary.

#10: "My family depends on me."
I get that. But maybe it would actually be better for your spouse and children if you got a good job, so you didn't come home from work every day tired, irritable, stressed or frustrated.

THE ONLY EXCUSE HE DIDN'T COVER: I CAN'T FIND ANYTHING ELSE TO PAY THE BILLS...

[Tansy_Gold]

10. You posted this for my benefit, didn't you

Oh, and your own. That last line especially.

[Demeter]

11. You're welcome

Also, for the unintentional humor of advocating a job switch in a Depression...

Not that I won't keep looking, mind you, but I'm not leaping until I can guaranty a soft landing.

[Ghost Dog]

56. I had to do it, or similar, nearly 3 years ago. Left a wealthy partner

with whom I had a deal to share, and work together, she reneged on.

Landing rocky but a landing all right. And: FREEDOM! NEW FRIENDS! NEW PROJECTS! NEW FUTURE!!!

[Demeter]

8. The Hedge Fund That Ate Chicago By Les Leopold

There's a battle royale raging in Chicago. It pits hedge funds, the Chicago financial exchanges, real estate interests and Mayor Rahm Emanuel on the one side, against public employee unions and community groups on the other. At issue is whether public employee pension benefits should be slashed. Mayor Emanuel claims that, "If we make no reforms at all across our pension funds, we would have to raise City property taxes by 150%.... Businesses and families would flee, not just from our city but from our state." By 2017, he claims the city will have to pay $2.4 billion a year into the pension fund. The public employee unions and community activists contend that city's fiscal problems could be solved easily through a small sales tax on financial trades on the Chicago Mercantile Exchange and the Chicago Board Options Exchange. The outcome may determine the health and well-being of pension funds as well as public services all across the country.

Wall Street buys a Mayor?

When Rahm Emanuel worked as a presidential assistant in the Clinton administration, he earned $118,000 a year. After he left his White House job in 1998, he got a raise, making over $18 million in the next two and a half years working for the "boutique" investment banking firm of Wasserstein Perella. Emanuel had no previous banking experience.

Ken Griffin, the CEO of the Chicago-based Citadel hedge fund and "his wife Anne Dias Griffin, donated more than $200,000 to Mayor Emanuel’s campaign for Mayor in 2011," report David Sirota and Ben Joravsky in Pandodaily. "Griffin describes the mayor as his 'good friend'. Other Citadel employees have donated about $178,000 to Emanuel’s campaign."

The 45-year-old Griffin's income for 2013 was $900 million (or about $492,632 an hour).

Apparently a good deal of his income comes from high-frequency trading (see my summary) that runs through the two Chicago financial exchanges. "His Citadel LLC returned more than 300 percent in a fund started as a high-frequency strategy," according to Bloomberg News.

Griffin, alone, could fund all of Chicago's pension liabilities for the current year (estimated at $692 million) and still have $208 million left to scrap by on. Yet Griffin is terribly worried that the mayor is being too soft on retirees. He "castigated Chicago and Illinois politicians for not making 'tough choices,' blaming Democrats who control city, county and state government for not fixing pension, education and crime problems," reports Crain's.

Mayor's Payback?

"On March 5," report Sirota and Joravsky, "Chicago’s city council overwhelmingly voted to approve Mayor Rahm Emanuel’s proposal to divert $55 million of taxpayer resources into a new privately run hotel in the city’s south loop." The Marriot was selected to run "one of America’s largest hotels next to America’s largest convention center—and doing so with massive taxpayer subsidies, but without having to pay to construct the hotel and without having to pay property taxes." As luck would have it, Griffin is likely to make a great deal of money on this deal: "In the months before the development deal was announced, Griffin’s hedge fund was buying up large blocs of Marriott stock." What a coincidence!

Why Does a Millionaire Mayor and a Billionaire Hedge Fund CEO Team Up to Attack Public Pensions?

Because that's where the money is, and lots of it. Mayors and governors want to reduce pension fund contributions so that they can continue to lavish tax breaks and subsidies on their corporate patrons and still balance their budgets. In Chicago, the yearly cost of those corporate tax subsidies is already higher than the yearly costs of Chicago's pension fund outlays, according to an analysis by Goods Jobs First. Hedge funds and other financial firms join the attack, and perhaps instigate it in the first place, because they want the lucrative business of advising and investing all those pension dollars. In New Jersey, Governor Christie's administration awarded a $300 million pension management contract to a controversial hedge fund thatalso is major contributor to Christie's re-election campaign.

The Wall Street-trained treasurer of Rhode Island, Gina Raimondo, rammed through severe cuts to public pension funds, while her hedge fund allies lined up at the trough. As Matt Taibbi reports, Rhode Island's "strategy for saving money involved handing more than $1 billion—14 percent of the state fund—to hedge funds, including a trio of well-known New York-based funds: Dan Loeb's Third Point Capital was given $66 million, Ken Garschina's Mason Capital got $64 million and $70 million went to Paul Singer's Elliott Management."

The amazing irony is there would be no talk of a pension "crisis" at all were it not for the fact that Wall Street crashed the economy. The hedge funds that covet pension fund reform and pension fund contracts were full partners in the reckless gambling spree that took down the economy and destroyed 8 million jobs in a matter of months. As economist Dean Baker shows the pension shortfall is primarily the result of the 2007-'08 crash in the financial markets. "If pension funds had earned returns just equal to the interest rate on 30-year Treasury bonds in the three years since 2007, their assets would be more than $850 billion greater than they are today." The lesson learned should be this: If you use hedge funds to run your pension funds, you'll get fleeced come the next crisis.

Why Are the Financialists Getting Away With It?

Rahm Emanuel, Chris Christie and hundreds of other politicians are able to attack public pension funds with impunity because defined benefit pensions in the private sector are an endangered species. One demagogic question is all they need to ask and they ask it again and again:

"Why should you pay taxes for public employee benefits that you don't have?"

Such an attack only works because Wall Street already has systematically destroyed private sector defined benefit pension funds—which are funds that provide retirees with a set payment for life (and sometimes beyond for spouses). Employers can reduce their costs by switching from defined benefit pensions to defined contribution 401ks. Better yet they might be able to eliminate the employer contributions altogether. Employees usually benefit more from defined benefit pensions and are very reluctant to see them altered. (For more about defined pension funds see here.)

As the chart below demonstrates less than 15 percent of private sector employees now have defined benefit pension programs, down from nearly 40% in 1979. Meanwhile, 401ks have grown from 16% to over 42%. This didn't happen by accident.

MORE

Les Leopold is the director of the Labor Institute. His most recent book is "How to Make a Million Dollars an Hour: Why Hedge Funds Get Away with Siphoning of America's Wealth (Wiley, 2013)." His next book project will focus on why the richest country on earth is so poor.

http://www.alternet.org/economy/meet-hedge-fund-ate-chicago?akid=11761.227380.MebMBV&rd=1&src=newsletter987223&t=18&paging=off&current_page=1#bookmark

[Demeter]

9. Gardening for Climate Change By JAMES BARILLA

http://www.nytimes.com/2014/05/04/opinion/sunday/gardening-for-climate-change.html

COLUMBIA, S.C. — THIS past winter was a tough one in our backyard. Where we live, about a hundred miles inland from the South Carolina coast, winter is normally a good time to make changes, like the swath of turf I removed from our front yard this year and replaced with perennial flowers and small tufts of native grass. But what is normal now in the garden? One week I’m sweating, the bees are buzzing, buds are breaking; the next, the birdbath is frozen and there’s snow on the ground. Time and again, I found myself translating ominous weather reports into frantic activity. With night falling and my headlamp illuminating specks of wind-driven sleet, I climbed a ladder to bundle frost cloth around fruit trees in bloom, then heaped pine straw mulch over tender sprigs of new growth on our native rabbiteye blueberries, trying to save our garden from the polar vortex. One frigid evening, I fell into a kind of horticultural despair. What’s the point? I harrumphed, stepping down from my ladder. Anything worth saving will survive on its own.

How do we garden in a time of climate change? It seemed to me that everything I knew about gardening, and much of what I enjoyed, was based on a set of assumptions about the climate. But it’s different now. We have to figure out how to garden with the new seasons, such as they are. Extreme gardening for an extreme climate. I’m just beginning to figure out the practical implications of this adaptive approach, but the point seems pretty clear to me: keeping things alive that won’t make it otherwise. Climate change is going to force us to work hard at something Homo sapiens has never been very good at: keeping other species around.

An urban garden like my family’s is a good place to start. It’s the kind of place that already bears little resemblance to what might have existed before humans came along. Nearby parking lots absorb heat, while buildings cast shade, moderating temperature swings. Water flows along curbs and down drains. Even the soil is different; concrete sidewalks neutralize acidity, encouraging plants that wouldn’t grow here otherwise. New communities of species arise in these conditions. One study conducted in Davis, Calif., found that 29 of 32 native butterflies in that city breed on nonnative plants. Thirteen of these butterfly species have no native host plants in the city; they persist there because nonnative plants support them. If we are seeking lessons about ecological resilience in a time of deep and unsettling change, the place to look is right outside our door. In this microenvironment, extreme gardening means making the yard hospitable for as many species as possible, without worrying so much about whether they originally belonged here or not. I used to think that tearing out turf and making room for native species like purple coneflower and switchgrass was the best thing I could do. But things aren’t that simple anymore. It doesn’t make sense to think in terms of native and nonnative when the local weather vacillates so abruptly. A resilient garden is a diverse garden....Creating a resilient garden means paying attention to the life histories of individual species and how they interact with others in the community. What benefits, like nectar or shelter, do they provide? Are they likely to crowd out other species? What kind of help do they need from us to withstand wild fluctuations in temperature? A gardener who asks these kinds of questions mixes things up, leaving some parts of the yard untouched while weeding and enriching the soil in others...Fostering this localized diversity doesn’t mean ignoring what is happening outside our own neighborhood. In fact, we can shape our yards to help address these bigger issues. There’s a hot, sandy patch in front of our house that I’ve reserved for introducing sandhill milkweed, a favorite host for monarch butterflies as they migrate across our state. I feel a special affinity for monarchs, since they’re being hammered by extreme weather. Three times in the last decade, unusually heavy rain and deep frost have hit populations of monarchs wintering in the high-altitude conifer forests of Mexico, wiping out 50 to 80 percent of the flocks...

MORE THOUGHTFUL RUMINATION AT LINK

[Demeter]

12. JP Morgan to eurozone periphery: “Get rid of your pinko, anti-fascist constitutions” June 2013

http://blogs.euobserver.com/phillips/2013/06/07/jp-morgan-to-eurozone-periphery-get-rid-of-your-pinko-anti-fascist-constitutions/

At times, I do marvel how antiseptic, bland even, that the language of the most wretchedly villainous documents can be... the European economic research team with JP Morgan, the global financial giant, put out a 16-page paper on the state of play of euro area adjustment. This involved a totting up of what work has been done so far and what work has yet to be done in terms of sovereign, household and bank deleveraging; structural reform (reducing labour costs, making it easier to fire workers, privatisation, deregulation, liberalising ‘protected’ industries, etc.); and national political reform. The takeaway in the small amount of coverage that I’ve seen of the paper was that its authors say the eurozone is about halfway through its period of adjustment, so austerity is still likely to be a feature of the landscape “for a very extended period.” The bankers’ analysis probably otherwise received little attention because it is a bit ‘dog bites man‘: Big Bank Predicts Many More Years of Austerity. It’s not really as if anyone was expecting austerity to disappear any time soon, however much EU-IMF programme countries have been offered a relaxation of debt reduction commitments in return for ramping up the pace of structural adjustment.

The lack of coverage is a bit of a shame, because it’s the first public document I’ve come across where the authors are frank that the problem is not just a question of fiscal rectitude and boosting competitiveness, but that there is also an excess of democracy in some European countries that needs to be trimmed.

“In the early days of the crisis, it was thought that these national legacy problems were largely economic: over-levered sovereigns, banks and households, internal real exchange rate misalignments, and structural rigidities. But, over time it has become clear that there are also national legacy problems of a political nature. The constitutions and political settlements in the southern periphery, put in place in the aftermath of the fall of fascism, have a number of features which appear to be unsuited to further integration in the region. When German politicians and policymakers talk of a decade-long process of adjustment, they likely have in mind the need for both economic and political reform.” (Emphasis added)

Yes, you read that right. It’s in dry, banker-ese, but the authors have basically said that the laws and constitutions of southern Europe are a bit too lefty, a product of their having been written by anti-fascists. These “deep-seated political problems in the periphery,” say authors David Mackie, Malcolm Barr and friends, “in our view, need to change if EMU is going to function properly in the long run.” You think I’m perhaps exaggerating a smidge? They go into more detail in a section describing this “journey of national political reform”:

“The political systems in the periphery were established in the aftermath of dictatorship, and were defined by that experience. Constitutions tend to show a strong socialist influence, reflecting the political strength that left-wing parties gained after the defeat of fascism.”

All this is a load of historical horse-lasagna anyway. Italy for example never went through a process akin to Germany’s denazification, and in Spain, the democratising king, Juan Carlos, played a major role in the transition. Only in Greece and Portugal were there popular socialist insurrections that resulted in or contributed to the overthrow of the regimes: the Athens Polytechnic Uprising played a key role in the Metapolitefsi or ‘polity change’ (although much, much more than the crushed student protests were involved here, including a failed coup d’etat and the Turkish invasion of Cyprus), and in Portugal a proper left-wing rebellion, the Revolução dos Cravos or Carnation Revolution, brought down the Estado Novo regime. Although it is true in the case of the latter three countries that their late-in-the-day construction of welfare states in the 70s and 80s was largely carried out by social democratic forces, the architects of the Italian post-war state were the Christian Democrats, who dominated government for 50 years.

“Political systems around the periphery typically display several of the following features: weak executives; weak central states relative to regions; constitutional protection of labour rights; consensus building systems which foster political clientalism; and the right to protest if unwelcome changes are made to the political status quo. The shortcomings of this political legacy have been revealed by the crisis. Countries around the periphery have only been partially successful in producing fiscal and economic reform agendas, with governments constrained by constitutions (Portugal), powerful regions (Spain), and the rise of populist parties (Italy and Greece).”

Let’s parse that paragraph, shall we? Weak executives means strong legislatures. That should be a good thing, no? Let us remember that it is the parliament that is sovereign. The executive in a democracy is supposed to be the body that merely carries out the bidding of the legislature. There is a reason why liberal democracy opted for parliaments and not a system of elected kings.

Oh, and we want strong central states. None of this local democracy nonsense, please.

JP Morgan, and presumably the EU powerbrokers they are ventriloquising for, finally are being honest with us: they want to do away with constitutional labour rights protections and the right to protest. And there has to be some way to prevent people electing the wrong parties.

Thankfully though, the authors note, “There is a growing recognition of the extent of this problem, both in the core and in the periphery. Change is beginning to take place.” In particular, they highlight how Spain has begun “to address some of the contradictions of the post-Franco settlement” and rein in the regions. But other than that, sadly, the process of de-democratization (okay – I’m calling it that. They call it “the process of political reform”) has “barely begun”. Well, the JP Morgan paper may have been written in English, but there is a venerable Spanish phrase that that all good anti-fascists right across the eurozone periphery know and is probably the simplest and best response to such provocation: ¡No pasarán!

[Demeter]

13. The JP Morgan vision for Europe ALSO JUNE 2013

http://anotherangryvoice.blogspot.com/2013/06/the-jp-morgan-plan-for-europe.html


In May 2013 the US financial giant JP Morgan released a progress report outlining their take on what they call the "Eurozone Adjustment". The standout passage of this document can be found on page 12, where they explain what they think is wrong with Europe (quoted below). Note there is absolutely no mention of financial instability caused by countless recklessly over-leveraged financial institutions gambling on crap like Spanish property, Irish bank bonds and Greek sovereign debt, and absolutely no talk of financial sector reform either. The JP Morgan narrative adheres very closely to the Great Neoliberal Lie technique, where the real causes of the financial crisis are played down or ignored completely in favour of the misleading narrative that social welfare spending caused the crisis. Here's the section in question:

"The political systems in the periphery [of the Eurozone] were established in the aftermath of dictatorship, and were defined by that experience. Constitutions tend to show a strong socialist influence, reflecting the political strength that left wing parties gained after the defeat of fascism. Political systems around the periphery typically display several of the following features: weak executives; weak central states relative to regions; constitutional protection of labor rights; consensus building systems which foster political clientalism; and the right to protest if unwelcome changes are made to the political status quo. The shortcomings of this political legacy have been revealed by the crisis. Countries around the periphery have only been partially successful in producing fiscal and economic reform agendas, with governments constrained by constitutions (Portugal), powerful regions (Spain), and the rise of populist parties (Italy and Greece)."

So, the problems that JP Morgan have identified in Europe are strong legislatures (or "weak executives" as they put it) strong regional representation, protected labour rights, strong constitutions and political systems that rely in part upon consensus building instead of dictatorship. They also identify the rise of democratic populist parties and the public right to political protest as major impediments to their "Eurozone Adjustment" objectives. JP Morgan make it absolutely clear that they would like to see European states remodeled with much more powerful, dictatorial and centralised executives, they want to see the destruction of labour rights and they are certainly not keen to allow populist anti-austerity parties or public protest to get in the way of this agenda. Essentially what this document demonstrates is that JP Morgan see the decline of European fascism since the 1940s and its replacement with mixed-economy social democracies as a great disappointment, that they are determined to steer Europe back towards fascism and that they are intent on using the financial sector meltdown as an excuse to use the utterly false Great Neoliberal Lie narrative to justify this pro-fascist agenda.

The motivation for a major financial organisation like JP Morgan to promote the fascistic remodeling of Europe should be absolutely obvious. States administered by powerful centralised and dictatorial executives are far more easily influenced by corporate interests than governments constrained by strong legislatures, fair judicial systems, strong regional representation, robust organised labour and popular freedom of protest, all enshrined by a durable constitution. To put it more simply, a state with a centralised and dictatorial government is far more malleable than a state in which the government must balance the interests of corporate interests with those of organised labour, regional interests and the public at large. If labour rights are eroded, local government weakened and the right to popular protest is curtailed, the enforcement of corporate interests becomes much easier. All the corporations need do is financially coerce (or economically straitjacket) the centralised executive branch of government in order to gain almost complete power over whole national economies.

Returning to the quoted section of the JP Morgan report, we can clearly see that they do not like consensus building governments that abide by their constitutions and protect civil liberties, in fact they disparage this kind of co-operative approach as "clientalism" (sic; err I believe they meant clientelism).

In reality, the general concept of clientelism isn't the problem to JP Morgan at all. The problem is that under the social democratic model, government "clientelism" towards corporate interests is curtailed. The corporate lobby don't want the states of Europe to function as the clients of the general public through strong local democratic government (and the checks and balances offered by a robust legislature), through strong labour organisation, or through the liberty to protest. JP Morgan seem to want the states of Europe to act as exclusive clients of the corporatist agenda. Perhaps Nazi propaganda minister Joseph Goebells would be proud to know that his big lie technique is still being used to defend fascism to this day.

In effect, the JP Morgan complaint isn't about clientelism at all, it is a complaint of "wrong-clientelism". It is a complaint that in their view, the states of Europe must not be allowed to act as the client of the public by allowing citizens involvement in economic policy making (through democratic processes, strong labour representation or liberty to protest) because this kind of public interference acts as an impediment to their beloved corporate agenda. JP Morgan would prefer to see the states of Europe act exclusively in the interests of the corporate lobby, and imposing illiberal, anti-democratic or even fascistic socio-economic reforms is an agenda they seem to fully endorse. It is absolutely obvious why corporate interests like JP Morgan would dearly love to see the rights to to protest and organise labour severely curtailed. By pushing for the the dismantlement of the means of resistance, they can minimalise and marginalise social opposition to the corporatist agenda they wish to see enforced by these corporate client states, no matter how socially or economically harmful or unpopular the corporatist agenda may be to the state in question.

Just in case you think it sounds utterly far fetched that an American financial institution may be attempting to undermine democracy and liberty in Europe in order to impose fascistic regimes more favourable to their commercial interests, just consider the history of JP Morgan themselves. Not only did JP Morgan actively invest in Nazi industry (through the automotive company Opel and other subsidiaries) well into the Second World War, they were also compensated for their losses by the American taxpayer when they were forced to divest (several other American corporations such as Standard Oil maintained their investments in Nazi Germany for several years after the US joined the war against Germany!). Chase Bank (which merged with JP Morgan in 2000) were one of Wall Street's most enthusiastic investors in the Nazi economy, even providing direct assistance to Hitler's Nazi regime in the late 1930s. Chase and JP Morgan were the only two American banks which stayed open in France during the Nazi occupation there. JP Morgan has a proven history of collaboration with fascist regimes in Europe. If JP Morgan supported and profited from the rise of the Nazi party in Germany, and suffered no adverse financial consequences for it (even getting a US taxpayer funded tax rebate to cover their losses when they were forced to divest their Nazi assets and first dibs to reacquire their Nazi assets after the war was over), is it any surprise that they favour the imposition of an illiberal and fascistic political agenda on the states of Europe once again?

Since I've strayed onto the topic of the Second World War, I'll finish with a quote often attributed to one of the fascist dictators that JP Morgan seem to be getting nostalgic about; Benito Mussolini.

"Fascism should more appropriately be called Corporatism because it is a merger of state and corporate power."

AFTER ALL, THANKS TO ST. RONNIE OF REAGAN, THEY'VE ALREADY CAPTURED THE USA...THE FORMER FOE OF NAZISM....

[Demeter]

14. How the Allied multinationals supplied Nazi Germany throughout World War II

THIS NEXT POST COULD BE A BOOK...I WILL LIST CHAPTER HEADINGS AND REFER YOU TO THE ORIGINAL SOURCE

http://libcom.org/library/allied-multinationals-supply-nazi-germany-world-war-2


The following excerpts thoroughly document how capitalists really acted during the Second World War. Behind the patriotic propaganda that encouraged the working class to slaughter each other in the interests of competing national interests, international capital quietly kept the commodity circuits flowing and profits growing across all borders.

Trading with the Enemy - war means business as usual for international capital.

Excerpts from "Trading With the Enemy: An Exposé of The Nazi-American Money-Plot 1933-1949" by Charles Higham; (Charles Higham is the son of a former UK MP and Cabinet member) & "The Coca Cola Company under the Nazis" by Eleanor Jones and Florian Ritzmann



We begin with some excerpts from "Trading With the Enemy: An Exposé of The Nazi-American Money-Plot 1933-1949" by Charles Higham; Hale, London, 1983.

This is followed by "The Coca Cola Company under the Nazis" by Eleanor Jones and Florian Ritzmann; From the "Coca Cola Goes to War" website; http://xroads.virginia.edu/%7ECLASS/coke/coke.html
=====================

From the "Trading With the Enemy" cover blurb;

"Here is the extraordinary true story of the American businessmen and government officials who dealt with the Nazis for profit or through conviction throughout the Second World War: Ford. Standard Oil, Chase Bank and members of the State Department were among those who shared in the spoils. Meticulously documented and dispassionately told, this is an alarming story. At its centre is 'The Fraternity', an influential international group associated with the Rockefeller or Morgan banks and linked by the ideology of Business as Usual.

Higham starts with an account of the Bank for International Settlements in Basel, Switzerland - a Nazi-controlled bank presided over by an American, Thomas H. McKittrick, even in 1944. While Americans were dying in the war, McKittrick sat down with his German, Japanese, Italian, British and American executive staff to discuss the gold bars that had been sent to the Bank earlier that year by the Nazi government for use by its leaders after the war. This was gold that had been looted from the banks of Austria, Belgium, and Czechoslovakia or melted down from teeth fillings, eyeglass frames, and wedding rings of millions of murdered Jews.

But that is only one of the cases detailed in this book. We have Standard Oil shipping enemy fuel through Switzerland for the Nazi occupation forces in France; Ford trucks transporting German troops; I.T.T. helping supply the rocket bombs that marauded much of London ; and I.T.T. building the Focke-Wulfs that dropped those bombs. Long and shocking is the list of diplomats and businessmen alike who had their own ways of profiting from the war."
==============

Preface to the book TRADING WITH THE ENEMY: An Exposé of The Nazi-American Money-Plot 1933-1949 by Charles Higham; Hale, London, 1983.
Preface

It would be comforting to believe that the financial Establishment of the United States and the leaders of American industry were united in a common purpose following the Day of Infamy, the Japanese attack on Pearl Harbor on December 7, 1941. Certainly, the American public was assured that Big Business along with all of the officials of government ceased from the moment the war began to have any dealings whatsoever with the enemy. That assurance sustained the morale of millions of Americans who bore arms in World War II and their kinfolk who stayed at home and suffered the anguish of separation.

But the heartbreaking truth is that a number of financial and industrial figures of World War II and several members of the government served the cause of money before the cause of patriotism. While aiding the United States' war effort, they also aided Nazi Germany's.

I first came across this fact in 1978 when I was declassifying documents in the course of writing a biography that dealt with motion picture star Errol Flynn's Nazi associations. In the National Archives Diplomatic Records Room I found numerous cross-references to prominent figures who, I had always assumed, were entirely committed to the American cause, yet who had been marked down for suspected subversive activities.

I had heard over the years about a general agreement of certain major figures of American, British, and German commerce to continue their relations and associations after Pearl Harbor. I had also heard that certain figures of the warring governments had arranged to assist in this. But I had never seen any documentary evidence of it. Now, pieces of information began to surface. I started to locate documents and have them declassified under the Freedom of Information Act—a painfully slow and exhausting process that lasted two and a half years. What I found out was very disturbing.

I had been born to a patriotic British family. My father had raised the first battalions of volunteers against Germany in World War I, and had built the Star and Garter Hospital at Richmond, Surrey, for ex-servicemen. He had been knighted by King George V for his services to the Crown and had been a member of Parliament and a Cabinet member. I feel a strong sense of loyalty to Britain, as well as to my adopted country, the United States of America. Moreover, I am part Jewish. Auschwitz is a word stamped on my heart forever.

It thus came as a severe shock to learn that several of the greatest American corporate leaders were in league with Nazi corporations before and after Pearl Harbor, including I.G. Farben, the colossal Nazi industrial trust that created Auschwitz. Those leaders interlocked through an association I have dubbed The Fraternity. Each of these business leaders was entangled with the others through interlocking directorates or financial sources. All were represented internationally by the National City Bank or by the Chase National Bank and by the Nazi attorneys Gerhardt Westrick and Dr. Heinrich Albert. All had connections to that crucial Nazi economist, Emil Puhl, of Hitler's Reichsbank and the Bank for International Settlements.

The tycoons were linked by an ideology: the ideology of Business as Usual. Bound by identical reactionary ideas, the members sought a common future in fascist domination, regardless of which world leader might further that ambition.

Several members not only sought a continuing alliance of interests for the duration of World War II but supported the idea of a negotiated peace with Germany that would bar any reorganization of Europe along liberal lines. It would leave as its residue a police state that would place The Fraternity in postwar possession of financial, industrial, and political autonomy. When it was clear that Germany was losing the war the businessmen became notably more "loyal." Then, when war was over, the survivors pushed into Germany, protected their assets, restored Nazi friends to high office, helped provoke the Cold War, and insured the permanent future of The Fraternity.

From the outset I realized that in researching the subject I would have to carve through an ice cream mountain of public relations. I searched in vain through books about the corporations and their histories to find any reference to questionable activities in World War II. It was clear that the authors of those volumes, granted the cooperation of the businesses concerned, predictably backed off from disclosing anything that would be revealing. To this day the bulk of Americans do not suspect The Fraternity. The government smothered everything, during and even (inexcusably) after the war. What would have happened if millions of American and British people, struggling with coupons and lines at the gas stations, had learned that in 1942 Standard Oil of New Jersey managers shipped the enemy's fuel through neutral Switzerland and that the enemy was shipping Allied fuel? Suppose the public had discovered that the Chase Bank in Nazi-occupied Paris after Pearl Harbor was doing millions of dollars' worth of business with the enemy with the full knowledge of the head office in Manhattan? Or that Ford trucks were being built for the German occupation troops in France with authorization from Dearborn, Michigan? Or that Colonel Sosthenes Behn, the head of the international American telephone conglomerate ITT, flew from New York to Madrid tot Berne during the war to help improve Hitler's communications systems and improve the robot bombs that devastated London? Or that ITT built the Focke-Wulfs that dropped bombs on British and American troops? Or that crucial ball bearings were shipped to Nazi-associated customers in Latin America with the collusion of the vice-chairman of the U.S. War Production Board in partnership with Göring's cousin in Philadelphia when American forces were desperately short of them? Or that such arrangements were known about in Washington and either sanctioned or deliberately ignored?

For the government did sanction dubious transactions—both before and after Pearl Harbor. A presidential edict, issued six days after December 7, 1941, actually set up the legislation whereby licensing arrangements for trading with the enemy could officially be granted. Often during the years after Pearl Harbor the government permitted such trading. For example, ITT was allowed to continue its relations with the Axis and Japan until 1945, even though that conglomerate was regarded as an official instrument of United States Intelligence. No attempt was made to prevent Ford from retaining its interests for the Germans in Occupied France, nor were the Chase Bank or the Morgan Bank expressly forbidden to keep open their branches in Occupied Paris. It is indicated that the Reichsbank and Nazi Ministry of Economics made promises to certain U.S. corporate leaders that their properties would not be injured after the Führer was victorious. Thus, the bosses of the multinationals as we know them today had a six-spot on every side of the dice cube. Whichever side won the war, the powers that really ran nations would not be adversely affected.

And it is important to consider the size of American investments in Nazi Germany at the time of Pearl Harbor. These amounted to an estimated total of $475 million. Standard Oil of New Jersey had $120 million invested there; General Motors had $35 million; ITT had $30 million; and Ford had $17.5 million. Though it would have been more patriotic to have allowed Nazi Germany to confiscate these companies for the duration—to nationalize them or to absorb them into Hermann Göring's industrial empire—it was clearly more practical to insure them protection from seizure by allowing them to remain in special holding companies, the money accumulating until war's end. It is interesting that whereas there is no evidence of any serious attempt by Roosevelt to impeach the guilty in the United States, there is evidence that Hitler strove to punish certain German Fraternity associates on the grounds of treason to the Nazi state. Indeed, in the case of ITT, perhaps the most flagrant of the corporations in its outright dealings with the enemy, Hitler and his postmaster general, the venerable Wilhelm Ohnesorge, strove to impound the German end of the business. But even they were powerless in such a situation: the Gestapo leader of counterintelligence, Walter Schellenberg, was a prominent director and shareholder of ITT by arrangement with New York—and even Hitler dared not cross the Gestapo.

As for Roosevelt, the Sphinx still keeps his secrets. That supreme politician held all of the forces of collusion and betrayal in balance, publicly praising those executives whom he knew to be questionable. Before Pearl Harbor, he allowed such egregious executives as James D. Mooney of General Motors and William Rhodes Davis of the Davis Oil Company to enjoy pleasant tête-à-têtes with Hitler and Göring, while maintaining a careful record of what they were doing. During the war, J. Edgar Hoover, Adolf A. Berle, Henry Morgenthau, and Harold Ickes kept the President fully advised of all internal and external transgressions. With great skill, he never let the executives concerned know that he was on to them. By using the corporate leaders for his own war purposes as dollar-a-year men, keeping an eye on them and allowing them to indulge, under license or not, in their international tradings, he at once made winning the war a certainty and kept the public from knowing what it should not know.

Because of the secrecy with which the matter has been blanketed, researching it presented me with a nightmare that preceded the greater nightmare of discovery. I embarked upon a voyage that resembled nothing so much as a descent into poisoned waters in a diving bell.

Why did even the loyal figures of the American government allow these transactions to continue after Pearl Harbor? A logical deduction would be that not to have done so would have involved public disclosure: the procedure of legally disconnecting these alliances under the antitrust laws would have resulted in a public scandal that would have drastically affected public morale, caused widespread strikes, and perhaps provoked mutinies in the armed services. Moreover, as some corporate executives were never tired of reminding the government, their trial and imprisonment would have made it impossible for the corporate boards to help the American war effort. Therefore, the government was powerless to intervene. After 1945, the Cold War, which the executives had done so much to provoke, made it even more necessary that the truth of The Fraternity agreements should not be revealed.

I began with the conveniently multinational Bank for International Settlements in Basle, Switzerland. The activities of this anomalous institution in wartime are contained in Treasury Secretary Henry Morgenthau's official diaries at the Roosevelt Memorial Library at Hyde Park, New York. Other details are contained in reports by the estimable Lauchlin Currie, of Roosevelt's White House Economics Staff, whom I interviewed at length by telephone at his home in Bogotá, Colombia, to which city he had been banished, his citizenship stripped from him in 1956 for exposing American-Nazi connections. Another source lay in reports by the late Orvis Schmidt of Treasury Foreign Funds Control. German records were a useful source: Emil Puhl, vice-president and real power of the Reichsbank, a most crucial figure in The Fraternity's dealings, had sent reports to his nominal superior, Dr. Walther Funk, from Switzerland to Berlin late in the war.

I turned to the matter of the Rockefeller-controlled Chase National Bank, which had conducted its business for the Nazi High Command in Paris until the war's end. Evidently realizing that future historians might want to examine the highly secret Chase Bank files, Morgenthau had left subtle cross-references at Hyde Park that could lead future investigators to Treasury itself. I asked Ralph V. Korp of Treasury for access to the sealed Chase boxes, which had been under lock and key since 1945. Under the Freedom of Information Act, Mr. Korp obtained permission from his superiors to unseal the boxes and to declassify the large number of documents contained therein.

From the Chase Bank it was a natural progression to Standard Oil of New Jersey, the chief jewel in the crown of the Rockefeller empire. Records of Standard's dealings with the Axis were contained in the Records Rooms of the Diplomatic Branch of the National Archives were specially declassified. There, too, I found records of Sterling Products, General Aniline and Film, and William Rhodes Davis, whose FBI files were also most revealing. Documents on ITT and RCA were declassified. After waiting out the better part of the year, I was able to obtain them from the National Archives. Classified SKF Industries files are held in the Suitland, Maryland, annex of the Archives. General Motors matters are covered in the James D. Mooney public access collection of Georgetown University, Washington, D.C. The unpublished post–Pear Harbor diaries of Harold Ickes were invaluable; they are to be found in the manuscript room of the Library of Congress.

The most elusive files were those on Ford in Occupied France. I could find no reference to them in the Treasury documentary listings. I knew that a Treasury team had investigated the company. I wondered if any member of the team could be alive.

Something jolted my memory. I remembered that a book entitled The Devil's Chemists had appeared after World War II, written by Josiah DuBois, an attorney who had been part of the Treasury team at Nuremberg. The book was a harrowing account of the trial of the executives of I.G. Farben, the Nazi industrial trust, that showed Farben's links to Wall Street.

I reread the book's pages, looking for a clue. In it DuBois mentioned that he came from Camden, New Jersey. I decided to call information in the Camden area because I had a theory that, embittered by his experience in Germany and Washington, DeBois might have returned to live there after the war. It was only a hunch, but it paid off. In fact, it turned out that DuBois had gone back to his family law firm in Camden. I wrote to him, asking if he had records of the Ford matter. I figured that these might have been so important that he would have been given personal custody of them; that Secretary Morgenthau might not even have risked leaving them at Treasury.

DuBois replied that he believed he still had the documents, including the letters of Edsel Ford to his managers in Nazi-occupied France after Pearl Harbor, authorizing improvements in automobile and truck supplies to the Germans. After several weeks, DuBois wrote to say that he had searched his attic to no avail. The documents were missing. However, he would keep looking.

He was admitted to a hospital where he underwent major surgery. Although enfeebled, he returned to the attic and began searching again. Compelled by a desire to disclose the truth, he pursued his task whenever he could find the strength. At last, when he was about to give up hope, he uncovered the documents.

However, he explained that the main files was so incendiary that he would not send it by mail or even by messenger—I was at liberty to examine it in his office. I was faced with a new dilemma. Since I was expecting delivery of an important set of documents, I couldn't risk an absence from my house for a prolonged journey to the East. I said I would call him back.

I knew that Rutgers University was close to DuBois's offices. I called the Law department and asked for a student researcher. Within an hour I received a call from a young man who needed work. I contacted DuBois's secretary and arranged for the student to copy the documents of the premises. He did so; I sent an air courier to his home to pick them up. As I read the documents, the last details of the puzzle fell into place.

I have tried to write this book as dispassionately as possible, without attempting a moral commentary, and without, of course, intending implication of present corporations and their executive boards. It will be claimed that the people in this book, since they are dead, cannot answer and therefore should not be criticized. To that I would reply: Millions died in World War II. They, too, cannot answer.

==============

Excerpts from; Third World Traveller website; www.thirdworldtraveler.com
Excerpted from the book "Trading with the Enemy - The Nazi - American Money Plot 1933-1949" by Charles Higham.

A Bank for All Reasons


The Chase Nazi Account


The Secrets of Standard Oil


The Mexican Connection


The Telephone Plot


The Car Connection


The Fraternity Runs for Cover

p210
The Nuremberg Trials successfully buried the truth of The Fraternity connections. Schacht, who was more privy to the financial connections than most German leaders, gave an extraordinary performance, mocking, hectoring, and pouring contempt upon his chief prosecutor-Biddle's predecessor, Robert H. Jackson. Charged with engineering the war when he had only wanted to serve the neutralist policies of Fraternity associates, he was understandably acquitted. Had he chosen to do so, he could have stripped bare the details of the conspiracy, but only once in his entire cross-examination, when he admitted to complicity in the shipment to Berlin of the Austrian gold did he indicate any knowledge of such matters. Never in those days on the witness stand was he asked about the Bank for International Settlements or Thomas H. McKittrick. Not even in his memoirs was there an inkling of what he knew.

Conveniently for The Fraternity, Goring and Himmler committed suicide, carrying with them the secrets that Charles Bedaux, William Rhodes Davis, William Weiss of Sterling, and William S. Farish had carried to their graves. James V. Forrestal also ended his life by suicide. In 1949 he hanged himself from the window of the Bethesda Naval Hospital in Washington, D.C., where he was suffering from advanced paranoid schizophrenia. Newspapers reported him screaming that the Jews and the communists were crawling on the floor of his room seeking to destroy him.

The rest of the conspirators lived out full life-spans.

p223
Those who had opposed The Fraternity were not so fortunate. In 1948 the House Un-American Activities Committee, in one of its l unbridled smear campaigns, named Morgenthau's trusted associates Harry Dexter White and Lauchlin Currie as communist agents. Based on the uncorroborated testimony of one Elizabeth Bentley, a self-confessed Soviet spy who was turning state's evidence, the Morgenthau Treasury administration was smeared in the eyes of the public. White and Currie, those deeply loyal enemies of fascism, those investigators of the Bank for International Settlements, of Standard, the Chase, the National City Bank, the Morgans, William Rhodes Davis, the Texas Company, ITT, RCA, SKF, GAF, Ford, and General Motors, were effectively destroyed by the hearings. Currie disappeared into Colombia, his U.S. citizenship canceled in 1956, and White died of a heart attack on August 16, 1948, aged fifty-six, after returning home from an investigative session. While the surviving Fraternity figures flourished again, helping to form the texture of postwar technology, those who had dared to expose them were finished. The Fraternity leaders who had died could sleep comfortably in their graves - their dark purpose accomplished.
===============

From the "Coca Cola Goes to War" website; http://xroads.virginia.edu/%7ECLASS/coke/coke.html

The Coca Cola Company under the Nazis
(Eleanor Jones and Florian Ritzmann)


AT LAST, HISTORY IS BEING UNCOVERED...AND THE ONLY REASON IT WAS COVERED UP WAS BECAUSE CRIMES WERE COMMITTED AS A MATTER OF COURSE. LIKE RONALD REAGAN'S REGIME, IT WAS "BUSINESS AS USUAL".

GO READ THE WHOLE THING! THEN READ THE SOURCE BOOKS...THEN TELL THE WORLD!

[Demeter]

15. The Un-funnies continue

[Demeter]

16. White House opens door to tolls on interstate highways, removing long-standing prohibition

I WONDER WHO OBAMA IS PAYING OFF THIS TIME?

http://www.washingtonpost.com/local/trafficandcommuting/white-house-opens-door-to-tolls-on-interstate-highways-removing-long-standing-prohibition/2014/04/29/5d2b9f30-cfac-11e3-b812-0c92213941f4_story.html



With pressure mounting to avert a transportation funding crisis this summer, the Obama administration Tuesday opened the door for states to collect tolls on interstate highways to raise revenue for roadway repairs.

The proposal, contained in a four-year, $302 billion White House transportation bill, would reverse a long-standing federal prohibition on most interstate tolling.

Though some older segments of the network — notably the Pennsylvania and New Jersey turnpikes and Interstate 95 in Maryland and Interstate 495 in Virginia — are toll roads, most of the 46,876-mile system has been toll-free.

“We believe that this is an area where the states have to make their own decisions,” said Transportation Secretary Anthony Foxx. “We want to open the aperture, if you will, to allow more states to choose to make broader use of tolling, to have that option available.”

The question of how to pay to repair roadways and transit systems built in the heady era of post-World War II expansion is demanding center stage this spring, with projections that traditional funding can no longer meet the need. That source, the Highway Trust Fund, relies on the 18.4-cent federal gas tax, which has eroded steadily as vehicles have become more energy efficient....

FROM THE COMMENTARY:

LisaMaire
4/30/2014 8:16 AM EST

You would do this foolish thing rather than to force the rich people to pay their taxes? Trillions of dollars those thieves have hidden overseas to avoid paying the taxes all the rest of us have to pay. Throw a few of these thugs in jail and we will start having enough money to pay for basics.

It is disgraceful what the rich and their corporations have done to this country!

[DemReadingDU]

52. If interstates start charging tolls

Find other highways to drive on (unless the interstates are the only roads to travel)

[Fuddnik]

53. He's getting ready to join the Poppy, Dubya, Clinton Cartel.

Turn over the highways to Sovereign Wealth Funds, like his buddy Rahm did with parking in Czechago, and he can join the filthy rich, Ex-Presidents Club.

[Demeter]

17. BOJ projects inflation exceeding 2 percent, keeps bullish view intact

http://www.reuters.com/article/2014/04/30/us-japan-economy-boj-idUSBREA3T02E20140430

The Bank of Japan projected for the first time on Wednesday that inflation will exceed 2 percent roughly two years from now, underscoring its conviction that a sustained end to deflation is on the horizon without additional stimulus. Governor Haruhiko Kuroda maintained his optimism on the outlook, saying that he saw no delay in the timing for meeting the bank's inflation target. Kuroda noted that the economic impact of a sales tax increase this month appeared limited so far. But he quickly added the BOJ is ready to expand stimulus further if risks threaten achievement of the price target.

"The slump after the April tax hike is within expectations and so far, household spending is sustaining momentum," Kuroda told a news conference after a BOJ policy meeting.

"As a whole, we're making steady progress. But we're still halfway through meeting the target, so we'll closely monitor the situation and make adjustments when necessary," he said.

As widely expected, the BOJ earlier in the day maintained its pledge to increase base money, its key policy gauge, at an annual pace of 60 trillion to 70 trillion yen ($588-$686 billion). In fresh projections laid out in a twice-yearly report, the BOJ said consumer inflation will likely reach 2 percent around the next fiscal year beginning in April 2015, and be sustained in a "stable manner" as the economic recovery continues...

THAT MAKES NO SENSE WHATSOEVER...SEEK TO INCREASE INFLATION SO THAT EVERYTHING ELSE GETS BETTER....WHEN THE FUNDAMENTALS BET FIXED, INFLATION IS THE RESULT, NOT THE DRIVER!

[Demeter]

18. U.S. SEC chair to Congress: 'The markets are not rigged'

JUST AS NIXON WILL BE FOREVER ASSOCIATED WITH THE PHRASE: "I AM NOT A CROOK", SO TOO WILL Mary Jo White HAVE WRITTEN ON HER OBITS...

http://uk.reuters.com/article/2014/04/29/sec-highspeed-trading-idUKL2N0NL0ZA20140429

U.S. Securities and Exchange Commission Chair Mary Jo White flatly rejected claims that retail investors are being fleeced by high-frequency traders who can use their speed to jump ahead with buy and sell orders that fetch better prices.

"The markets are not rigged," White told a U.S. House of Representatives panel on Tuesday, in response to a blunt question from New Jersey Republican Congressman Scott Garrett.

"The U.S. markets are the strongest and most reliable in the world," she added.

White's comments to the House Financial Services Committee mark the first time she has directly responded to allegations in Michael Lewis' new book "Flash Boys: A Wall Street Revolt" since its publication about a month ago. In the book, Lewis claims that high-speed traders are engaged in a form of front-running, in which the firms are able to quickly identify an investor's desire to buy a stock, rush to buy it first and then sell it back at a higher price. The book has since prompted the FBI, the SEC, the U.S. attorney general and the New York state attorney general to disclose they are investigating potential abuses by high-speed traders.

White reiterated on Tuesday that her agency's investigators are actively pursuing probes into high-speed traders and dark pools, or anonymous trading venues. But she also sought to dispel the notion that using high-speed technologies to trade ahead of others using stock quotes disseminated on public data feeds could meet the legal definition of "unlawful insider trading."

"There is some confusion about that," she said.

YES, MARY JO, THE CONFUSION IS ON YOUR PART, HOWEVER...MORE AT LINK

[Demeter]

30. SEC’s Berman Says Critics Like Schneiderman Misjudge Regulator

http://www.bloomberg.com/news/2014-05-02/sec-s-berman-says-critics-like-schneiderman-misjudge-regulator.html

Gregg Berman of the Securities and Exchange Commission has a message for those doubting that the regulator understands the U.S. stock market in the era of light-speed trading: You’re wrong.

Berman, one of the SEC’s top advisers on high-frequency firms, dark pools and other elements of computerized markets, is facing pressure to respond to claims his agency has failed to police exchanges and has permitted speed traders to put other investors at a disadvantage. Other authorities, including New York Attorney General Eric Schneiderman, have announced their own probes into the issue.

In remarks today at an Options Industry Conference near Austin, Texas, Berman aimed a rebuttal at critics and “maybe an attorney general” who might think “regulators are very behind the times and can’t keep up with market participants.”

Berman noted that the agency has a new surveillance system, known as Midas, that collects price data from all U.S. exchanges and that helps the SEC evaluate practices such as co-location, in which traders cut trading times by placing computers inside an exchange, and proprietary feeds, or streams of data send to clients faster than to public sources. The agency can’t be both ignorant of market behavior and have access to such expansive data.

“One of those statements has to be wrong,” Berman said. “Those both can’t be true at the same time.”

THIS GUY NEEDS A COURSE IN LOGIC...MORE AT LINK

[Demeter]

31. SEC Fires First Shots Since ‘Flash Boys’ With NYSE Fine

http://www.bloomberg.com/news/2014-05-01/sec-says-nyse-rules-were-shoddy-as-exchange-fined-4-5-million.html

The New York Stock Exchange’s $4.5 million penalty for oversight violations represents the Securities and Exchange Commission’s first salvo since Michael Lewis reignited scrutiny of market structure...MORE


I GUESS THE HEAT IS ON...NOW, HOW TO KEEP IT ON....AFTER ALL, IT'S AN ELECTION YEAR.

[Demeter]

32. National Stock Exchange Files With SEC to Halt Operations

http://www.bloomberg.com/news/2014-05-02/national-stock-exchange-files-with-sec-to-halt-operations.html

The National Stock Exchange, an equity trading venue with about 0.2 percent of U.S. volume, has filed with the Securities and Exchange Commission to cease operations on May 30, according to its website.

Closing the market, also known as NSX, would cut the number of public stock exchanges in the U.S. to 11, and would come one month after CBOE Stock Exchange closed. That venue, which is partially owned by CBOE Holdings (CBOE) Inc., owns NSX.

“The exchange is taking this action following a decision by the board of directors of CBSX to cease trading activity on NSX, if the NSX’s trading volume does not materially increase or a purchaser does not emerge,” NSX said in an informational circular today.

David Harris, chief executive officer of NSX in Jersey City, New Jersey, confirmed the filing, saying by phone that it was “a step in the process towards preparing to cease operations, even as we grow our business and seek new owners.”

MORE


NSX’s closing would leave just one public exchange, Chicago Stock Exchange Inc., that isn’t owned BY Bats, Nasdaq OMX Group Inc. or IntercontinentalExchange Group Inc.

SOUNDS LIKE A CONSOLIDATION TO ME...

[Demeter]

19. Federal Reserve Board Met; Exit Strategy Under Discussion

http://www.bloomberg.com/news/2014-04-30/federal-reserve-board-met-in-sign-exit-strategy-under-discussion.html

Federal Reserve Board members convened APRIL 29 amid indications they may be re-starting discussions on an exit strategy from record monetary stimulus. The Fed Board of Governors filed a public meeting notice yesterday to discuss “medium-term policy issues” with the Federal Open Market Committee, the policy-making body that includes regional Fed bank presidents as well as governors. The announcement is significant because government sunshine laws require such notices when a board is prepared to vote or discuss something directly related to their policy authority.

One item under the board’s sole authority is the payment of interest on excess bank reserves, and a joint meeting with the FOMC is a sign that officials may be pondering how to use that tool as they prepare to raise interest rates sometime in 2015, said Lou Crandall, chief economist at Wrightson ICAP LLC. One possible reason for the public notice was “they wanted to discuss the board’s view on the excess reserve rate,” said Crandall. “All the regional bank presidents have been discussing this stuff for weeks.”

Fed spokeswoman Michelle Smith declined to comment. Whatever FOMC members discussed will be in the minutes published three weeks from now.

With a possible rise in the Fed’s benchmark interest rate a little more than a year away, according to rates on federal funds futures contracts, the Fed hasn’t said how its policy tools will work in concert to manage short-term interest rates. The benchmark rate has been close to zero for more than five years. In addition to the interest rate on excess reserves, the tools also include the reverse repo facility, which drains excess cash out of the financial system. The reverse repo rate is under the authority of the FOMC, while the IOER rate is set by the Board of Governors. Yesterday’s discussions aren’t a sign that the FOMC is preparing to raise interest rates any time soon. Still, it isn’t too early to have such talks, given that the Fed’s exit strategy will be complex with the Fed’s balance sheet at $4.3 trillion.

[Demeter]

24. Treasury Trims Some Debt Auctions as U.S. Deficit Shrinks

http://www.bloomberg.com/news/2014-04-30/treasury-cuts-sales-of-two-three-year-notes-as-deficit-shrinks.html

The U.S. Treasury Department said it will trim the size of two- and three-year note auctions starting this quarter as a shrinking budget deficit gives the government scope to reduce borrowing.

Three-year note sales will decline to $29 billion in May, $28 billion in June and $27 billion in July, from the current level of $30 billion, a Treasury official told reporters in Washington today. Auctions of two-year notes will drop to $31 billion in May, $30 billion in June and $29 billion in July, from $32 billion, the official said.

“Deficits keep coming down and that makes the Treasury cut the coupon issuances,” said Ira Jersey, an interest-rate strategist at Credit Suisse Group AG in New York. “Better tax receipts are helping lower the deficit, so Treasury doesn’t need to issue as many bonds.”

The nation’s budget deficit will narrow to $492 billion this year, about a third of its 2009 record level of $1.4 trillion, the Congressional Budget Office said on April 14. Next year, the gap will decline further, to $469 billion, the nonpartisan agency said...Matthew Rutherford, the Treasury’s assistant secretary for financial markets, said in a press conference that tax receipts around the April 15 filing deadline have been “pretty strong” compared with a year ago...MORE

[Demeter]

20. Russian firms turn to Asia for finance as Western funds demur

GLOBALISM IS A TWO-EDGED SWORD

http://www.reuters.com/article/2014/04/30/us-russia-asia-bonds-insight-idUSBREA3T0AD20140430

Russian companies shut out of Western markets as a result of the Ukraine crisis are scouting the possibility of raising cash via Chinese or Singapore bonds instead, even if a large scale funding switch to Asia is likely to be a tall order...Asian investors, eyeing the risks associated with Western sanctions, could prove a hard sell.

Usually prolific borrowers, Russian firms' bond and loan issuance this year has languished as lenders fear getting caught up in U.S. and EU sanctions imposed on Russian individuals in retaliation for Moscow's annexation of Crimea and support for separatists in eastern Ukraine. But with $150 billion or so owed in debt payments this year, the scramble for funds is driving firms to Asia, a region with cash-rich investors and governments that are less critical of the Kremlin's actions.

"We may see some developments in Asia in exotic currencies such as the 'dim sum' market or in Singapore dollars. We are seeing Russian issuers expressing interest in those segments of the market," said Cecile Camilli, managing director for CEEMEA debt capital markets at Societe Generale.

'Dim sum' bonds refers to debt denominated in China's yuan but sold outside China, most commonly in Hong Kong...One Hong Kong banker told Reuters that a dim sum bond will soon be issued by an unnamed Russian bank, adding that several other Russian firms had approached his bank with an eye on that particular market. So far, Russia's Asian borrowing remains modest. It includes just over $1 billion worth of yuan bonds since 2004, and just shy of that amount in Singapore dollars, according to data from Thomson Reuters. There have been 11 issues in total, the data shows.

PUSH EAST

The push for Eastern finance is part of a broader plan to diversify Russia's economy away from Europe and towards Asia....

MORE

[Demeter]

22. Shell puts new Russian projects on hold after seizure of Crimea

http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/10799753/Shell-puts-new-Russian-projects-on-hold-after-seizure-of-Crimea.html


Finance chief says there won't be any new investments in the short term in Russia as oil giant takes $2.6bn charge on its refining arm... Royal Dutch Shell has ruled out starting any new projects in Russia over the short-term following Vladimir Putin’s seizure of Crimea.

Simon Henry, chief financial officer, said the oil giant was yet to see “anything that impacts our current business” in Russia, where the company is a partner of state-backed Gazprom for the Sakhalin 2 liquefied natural gas operation. He also defended the decision of Shell chief executive Ben van Beurden to meet the Russian president earlier this month at the 20th anniversary of Sakhalin’s opening. But, in a remark Shell later clarified, Mr Henry added: “I don’t think we will be jumping into new investments in the short-term.”

Shell sources stressed that did not imply the company, which has a 27pc stake in the Sakhalin project, had got cold feet on investing in a third production train at the plant...MORE

[Demeter]

28. U.S. banks' Russian exposure falls during first quarter

http://uk.reuters.com/article/2014/05/02/banking-russia-idUKL2N0NO1VG20140502

Big U.S. banks reported lower exposure to Russia in the first quarter, as Western nations imposed sanctions on some of the country's citizens and businesses in response to its seizure of Ukraine's Crimean peninsula.

During the first quarter, Bank of America Corp cut its net exposure to Russia by 22 percent to $5.2 billion, most of which was in the form of loans to Russian energy companies and banks, the company said in a Thursday filing with the U.S. Securities and Exchange Commission.

"The situation remains fluid with potential for further escalation of geopolitical tensions, increased severity of sanctions against Russian interests, and possible Russian counter-sanctions," the second largest U.S. bank said in its filing.

JPMorgan Chase & Co's exposure to Russia declined by 13 percent to $4.7 billion, placing it outside the company's list of its top 20 country exposures, the bank said on Friday in a quarterly filing with the SEC.

Citigroup Inc's exposure to Russia declined by 8.7 percent to $9.4 billion during the three months through the end of March, according to a Friday quarterly filing with the SEC. In the same period, the Russian ruble depreciated 8.3 percent against the U.S. dollar and an index of Russian stocks fell 9 percent, Citigroup said.

The International Monetary Fund on Wednesday slashed its forecast for Russia's 2014 GDP growth from 1.3 percent to 0.2 percent, citing Ukraine-related sanctions as a risk factor.

JPMorgan said it was closely monitoring the impact of any current and future sanctions as well as possible contagion effects or potential credit downgrades that could influence other parts of the bank's business.

U.S. President Barack Obama and German Chancellor Angela Merkel warned on Friday of additional sanctions against Russia if it interferes with Ukraine's planned May 25 elections.

[Demeter]

21. IMF approves $17 billion bailout package for Ukraine

http://www.dw.de/imf-approves-17-billion-bailout-package-for-ukraine/a-17604795



The IMF has approved a $17 billion (12 billion euro) bailout package for Ukraine to help the country's ailing economy. Russia, meanwhile, has said it "will not rush to anything stupid" in response to Western pressure... MORE

[xchrom]

23. Portugal needs no more loans, says PM Passos Coelho

http://www.bbc.com/news/business-27278983

Portugal's prime minister has said the country will exit its three-year 78bn euros (£64bn) bailout on 17 May without needing a standby line of credit.

The loan had been granted in May 2011 by the European Union and the International Monetary Fund.

Since then Portugal has stuck to the tough measures required by the bailout.

"The government had decided to exit the assistance programme without turning to any kind of precautionary programme," Passos Coelho told national television.

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25. EU raises its growth forecast for 2014

http://www.bbc.com/news/business-27283155

The European Commission has raised its growth forecast for the EU, saying that "the recovery has taken hold".

The 26 nations of the EU are forecast to grow by 1.6% for 2014, a touch higher than the forecast of 1.5% made in late February.

The growth forecast for the 18-nation eurozone remains at 1.2% for 2014.

The Commission expects the jobs market to continue to improve, forecasting EU unemployment will fall to 10.1% this year. In March, the rate was 10.5%.

[xchrom]

26. Indonesia posts slowest GDP growth since 2009

http://www.bbc.com/news/business-27280988

Indonesia has posted its slowest pace of economic growth since 2009, which may put pressure on the government ahead of July's presidential elections.

Southeast Asia's biggest economy expanded by 5.2% in first three months of the year, which was below the median forecast for 5.6% growth.

The weaker-than-expected data follows a series of aggressive interest rate hikes by the country's central bank.

Indonesia's economy has also been impacted by slowing foreign investment.

[Demeter]

27. Norway picks Citi as custodian of wealth fund over JPMorgan

http://in.reuters.com/article/2014/05/04/banking-citigroup-jpmorgan-chase-norway-idINL2N0NQ0F520140504

Norway picked Citigroup over rival U.S. bank JPMorgan Chase & Co Inc as custodian of its sovereign oil wealth fund, the world's biggest at $865 billion, the Financial Times reported on Sunday...The award of a seven-year contract is set to be announced this week, the paper said.

Citi, the fourth-largest custodian in the world with about $14.5 trillion in assets under custody and sub-custody, last year combined its investor services unit - which includes custody - with its trading business, the paper said. JPMorgan, with more than $20 trillion in assets under custody, is among the top three globally with State Street Corp and Bank of New York Mellon Corp, took similar steps almost two years ago, the paper said.

JPMorgan has been hiring staff and investing hundreds of millions of dollars annually in the custodian business in the past few years, the paper said. While the loss of Norway's oil fund as a client is a disappointment, the bank hopes to win at least two similar- sized mandates in the near future, people familiar with the business told the Financial Times...

SOMEHOW, I DON'T THINK IT WILL MAKE MUCH DIFFERENCE FOR NORWAY--THEY'LL BE SCREWED BY EITHER BANK

[Demeter]

29. Regulators lack data to probe shadow banking sector

http://www.reuters.com/article/2014/05/02/us-regulations-shadowbanks-idUSBREA410EM20140502

Shining a light on the murky $70 trillion world of "shadow banking" is proving tricky for regulators handicapped by too little data and under pressure to boost economic growth, and this means risks may be escaping proper scrutiny. Shadow banking, a term which annoys the sector because of its pejorative connotation, ranges from money market funds and repurchase agreements to special investment vehicles, hedge funds and securities lending They handle credit like banks but are not as heavily regulated and policymakers worry that as tougher rules hit lenders, risk taking will migrate to the complex web of shadow banking and stoke the next crisis. The sector is growing, up by $5 trillion in 2012 with an increase in China causing regulators there to intervene.

Leaders of the G20 economies called for a crackdown on shadow banks in 2009 during the last financial crisis but five years on, regulators freely admit they are still not sure how the vast sector actually works.

"In general we don't fully understand how the financial system functions and I don't think you can unless you have the data you need," said David Wright, secretary general of the International Organisation of Securities Commissions, a global umbrella group of national market watchdogs.

"I think we have a long way to go to fully understand all the connectivities and subtleties of the financial system," Wright told the Reuters Regulation Summit.

In contrast to earlier political enthusiasm, cooler regulatory heads are increasingly loathe to rush in hard and fast rules.

"We need to become better in identifying risks in securities markets but that is less about more regulation, and more about supervision of the non-banking sector," Steven Maijoor, chairman of the EU's European Securities and Markets Authority, told the summit.

Regulators say analysis is still in its infancy without the basic data, and there is a need to stay neutral on whether shadow banking is good or bad or a mix of the two.

"Should everyone be regulated in the same way as banks? It's not clear to me that should be the case. We need to understand what it's about," a European financial supervisor said.

Maijoor said it will take years to plug the data gap. Banking supervisors have gathered data on lenders for decades but still failed to spot the financial crisis coming. Efforts by the EU and the United States market regulators to record just derivatives trades are patchy, with a single global snapshot of risk still far from possible. Creating a cohesive set of global numbers for securities lending and borrowing, repos, money market funds and other parts of the shadow banking sector is an even more daunting task.

Meanwhile, Mark Carney, the Bank of England governor who heads the G20's Financial Stability Board, wants shadow banking rules largely completed by the next G20 summit in November.

I SENSE A RE-RUN ON THE MARKETS...

[Demeter]

33. U.S. Will Lightly Enforce Tax Rule for Many Foreign Banks

http://www.bloomberg.com/news/2014-05-02/u-s-will-lightly-enforce-tax-rule-for-many-foreign-banks.html

The U.S. Treasury Department is pledging two years of light enforcement of new tax rules for overseas banks -- as long as the banks make a good-faith effort to comply.

Banks that are working to get their systems ready to implement the Foreign Account Tax Compliance Act won’t face stiff enforcement and 30 percent withholding taxes until 2016. Those that aren’t trying to comply could face consequences starting on July 1, the Treasury Department said today.

“Today’s notice outlines several measures to help institutions comply with FATCA in a timely manner,” Robert Stack, the Treasury Department’s deputy assistant secretary for international tax affairs, said in a statement. “This notice will enhance our insight into accounts held overseas by U.S citizens, furthering the goal of narrowing the tax gap and cracking down on tax evasion.”

The announcement is part of an effort by the U.S. government to prepare for the start of FATCA, a law passed by Congress in 2010 designed to prevent U.S. citizens from avoiding taxes by using foreign bank accounts. Under the law, many payments from the U.S. to other countries are subject to 30 percent withholding. The penalty is waived if the banks provide information about U.S. account holders.

Deutsche Bank

The law has prompted some banks to refuse Americans’ accounts and increased complexity for U.S. citizens living abroad. Today, Deutsche Bank AG told U.S. citizens that they must close accounts in Belgium.

The Treasury announcement stops short of acceding to industry groups’ requests to delay implementation. The U.S. has negotiated agreements with more than 50 jurisdictions to allow an exchange of information between governments or between foreign banks and the U.S. government. Among the countries that have reached agreements are Canada, Germany, France, Australia, Switzerland and the U.K. Negotiations with other countries are continuing. The U.S. recently stopped FATCA talks with Russia, potentially subjecting cross-border transactions to the 30 percent penalty starting on July 1 if nothing changes.

The Treasury Department announced two other technical changes today. One makes it easier for foreign banks and other companies to set up procedures for cross-border transactions and one helps foreign banks in jurisdictions with local laws that prevent them from complying.

TREASURY AND THE NSA...AN UNBEATABLE COMBINATION

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34. STOCKS DOWN ON WORRIES ABOUT CHINA, UKRAINE

http://hosted.ap.org/dynamic/stories/W/WORLD_MARKETS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-05-05-07-35-08

FRANKFURT, Germany (AP) -- Global stock markets mostly fell Monday amid worries over the crisis in Ukraine and after a survey showed Chinese manufacturing shrank in April for the fourth month in a row.

The threat of further sanctions against Russia from the U.S. and the European Union has periodically unsettled markets over the past few weeks, although so far the measures have targeted individuals and not entire Russian industries. Worries over the Chinese economy, the world's No. 2, have also been one of the main drivers across markets this year.

"Financial markets begin the week, clouded by concerns over the situation in Ukraine, and a slightly deeper-than-previously-estimated contraction in China's manufacturing sector," said Jennifer Lee, an analyst at BMO Capital Markets.

In Europe, Germany's DAX fell 1.35 percent to 9426.9 while France's CAC 40 was off 1.1 percent at 4408.29 after a weekend full of disquieting news from the conflict between Ukrainian security forces and pro-Russian separatists. Separatists stormed a police station in the town of Odessa and freed dozens of allies jailed after clashes that left more than 40 dead. British stock markets were closed for a public holiday.

[xchrom]

35. CHINA REFUSES VIETNAM'S CALL TO STOP OIL DRILLING

http://hosted.ap.org/dynamic/stories/A/AS_VIETNAM_CHINA_DISPUTED_SEA?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-05-05-07-03-43

HANOI, Vietnam (AP) -- Vietnam demanded China stop oil drilling operations in a disputed patch of the South China Sea, saying on Monday that Beijing's decision to deploy a deep sea rig over the weekend was illegal.

China dismissed the objections, saying the activity was being carried out in its territorial waters.

Beijing's increasingly assertive territorial claims to the waters, which are thought to have large oil and gas deposits beneath them, have angered Vietnam, the Philippines and other claimants. The region is widely seen as a potential area of conflict.

Last week, President Barack Obama signed a new defense pact with the Philippines aimed at reassuring Asian allies of American backing as they wrangle with Beijing's growing economic and military might.

[xchrom]

36. EU EXPECTS RECOVERY TO LOWER UNEMPLOYMENT FASTER

http://hosted.ap.org/dynamic/stories/E/EU_EUROPE_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-05-05-07-21-40

BRUSSELS (AP) -- The ongoing economic recovery across Europe should help unemployment fall faster than previously expected, according to a new EU forecast released Monday.

In its spring forecast, the EU's executive Commission said the economic recovery is spreading across the 28-country bloc and that should help reduce the ranks of the 25.7 million unemployed.

Among the 18 EU countries sharing the euro currency, the Commission expects unemployment to drop to 11.8 percent this year and 11.4 percent in 2015. Those predictions are lower than those it made in February, when it foresaw unemployment at 12 percent this year and 11.7 percent next.

"The recovery is gaining traction," said Siim Kallas, the EU Commissioner in charge of economic affairs. "Importantly, the employment situation has started improving."

[Demeter]

37. U.S. Firms With Irish Addresses Get Tax Breaks Derided as ‘Blarney’

http://www.bloomberg.com/news/2014-05-04/u-s-firms-with-irish-addresses-criticized-for-the-moves.html



...Pfizer Inc., the largest U.S. drugmaker, said it’s seeking a British address, a move that might save more than $1 billion a year in U.S. taxes. Pfizer is the biggest company yet to follow a growing trend. At least 15 publicly traded U.S. companies have taken steps to reincorporate abroad in the past two years. Most of their CEOs didn’t leave. Just the tax bills did.

“In the normal, common sense way of looking at things, that’s a lot of blarney,” said Robert McIntyre, director of Citizens for Tax Justice, a Washington-based advocacy group that says corporations don’t pay enough. “They want to have all the joys of being American and none of the burdens.”

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

Bermuda Shift

Dennis Kozlowski, who shifted Tyco International Ltd.’s address to Bermuda when he was CEO in 1997, said Congress should focus on revamping the tax code to make U.S. companies more competitive, rather than penalizing moves like his.

“If your counterpart has a tax advantage and you don’t, that makes competing that much more difficult,” Kozlowski said in a telephone interview last week. “The entire tax code needs to be looked at to keep the U.S. competitive.”

For the past 20 years, Congress and the Internal Revenue Service have repeatedly targeted the practice, which tax experts call inversion. Each rulemaking effort has made inversions more difficult though not impossible. Nowadays, most companies use an exception to a 2004 anti-inversion law that allows them to take a foreign address during the course of a merger with a non-U.S. partner that’s at least 25 percent of their market value.

Highest Rate

Congressional leaders now say they want to address inversion as part of broader tax-code changes. The U.S. corporate income tax rate of 35 percent is the highest among developed countries, and lawmakers in both parties advocate lowering it.

“The last few weeks have presented a textbook for why tax reform is so important,” Senator Ron Wyden, an Oregon Democrat and chairman of the tax-writing Finance Committee, told reporters last week.

With the two parties deadlocked over how to proceed on a tax revision, however, any change probably won’t occur this year, leaving a window for Pfizer and others considering a move. Some Democrats are proposing narrow anti-inversion rules that have gotten little support in Congress. The Obama administration unveiled a plan in March to curtail future inversions that it estimates would prevent $17 billion from escaping the U.S. Treasury over the next decade. Democratic lawmakers including Jeanne Shaheen, a New Hampshire senator, have submitted bills to tax corporations based on where their managers work, rather than where they’re incorporated. Those have gone nowhere. One concern with that idea is that companies might respond by moving their CEOs abroad...

PERSONALLY, I DON'T HAVE A PROBLEM WITH THAT. THEY WOULD BE LESS LIKELY TO INTERFERE IN POLITICS, AND THEIR ASSETS COULD BE SEIZED MORE EASILY...GET THEM OUT OF THE COUNTRY, AND I THINK WE HAVE A WAY TO GET THE COUNTRY BACK.


U.S. Roots

At least 31 publicly traded companies with U.S. roots and executive offices in the U.S. are incorporated overseas, according to an informal tally by Bloomberg News. They’re listed on U.S. exchanges including the New York Stock Exchange. Almost all obtained their foreign address through an inversion, rather than by initially incorporating overseas.

MORE

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38. Barclays, Credit Suisse Battle Banker Exodus, Legal Woes

http://www.bloomberg.com/news/2014-05-05/barclays-credit-suisse-battle-banker-exodus-legal-woes.html

Barclays Plc (BARC), Credit Suisse Group AG and UBS AG (UBSN) will confront questions this week about key banker departures, legal challenges and their efforts to boost profitability.

Barclays last week lost three top bankers in the U.S. and Asia before a May 8 strategy announcement that will probably include shrinking the London-based firm’s investment bank. Credit Suisse, which holds a shareholder meeting May 9, is facing potential U.S. criminal charges over its role in helping Americans avoid paying taxes, people familiar with the matter said last week. UBS AG, meeting investors tomorrow, is falling short of profit goals, according to analysts’ estimates.

Europe’s top banks are under heightened scrutiny from shareholders, regulators and legal authorities after they’ve already lost market share in some investment banking businesses to U.S. competitors. Meanwhile key areas of Wall Street revenue are under pressure: JPMorgan Chase & Co. (JPM), the biggest U.S. bank, said last week that it expects trading revenue to drop about 20 percent this quarter from a year ago.

“Whether you’re European or in the U.S., what you’re facing is a declining trading environment,” said Charles Peabody, an analyst at Portales Partners LLC in New York. “So where you gain share is on the investment banking side, especially underwriting, and the U.S. banks have been doing that.”

[Demeter]

39. Comparative Military Dominance and the End of American Hegemony by Ian Welsh

http://www.ianwelsh.net/comparative-military-dominance-and-the-end-of-american-hegemony/


It’s said, too often, that the US military is the most powerful the world has ever seen. To be sure, that’s true in the sense of sheer destructive power, but it’s not true in terms of relative dominance. The most dominant army in history, compared to its peer competitors, in my opinion, was likely the Mongols. (The Germans studied Mongol campaigns when created blitzkrieg doctrine.) The Mongols did not lose a war until they ran up against the Mamlukes, who defeated them by copying them, with a horse archer army of their own. Mongol armies moved faster than WWII tank armies, coordinated multiple armies across hundreds of miles, arriving at the same time at pre-chosen points. Their tactics in battle tended to inflict disproportionate casualties. A large part of Mongol dominance was genius-level leadership. I can’t think of any major historical figure who was better at picking subordinates than Genghis Khan: not only was he never betrayed by any of his generals, his administrators were brilliant, and his generals were almost all, themselves, great generals.

More than that, the Mongols did not rely on battlefield supremacy alone. Genghis Khan used traders as spies, and before he invaded anyone, he knew who within that country was unhappy and ready to rebel as well as who the enemies of that nation were. Any internal or external weaknesses were exploited. After cities were captured, if they had resisted, he rounded up the men and used them as the first wave in the next city assault. His genocidal activities were terrible (though a reading of the actions of many of his foes shows him no worse than them, just more effective), but they were militarily sound: he did not leave large, hostile, unpacified populations in his rear. The Mongols also often brought enemy military units into their own ranks, reorganized them, and retained their loyalty. Mongol armies, even in Genghis Khan’s time, were made up more of non-Mongols than Mongols. Even so, the Mongols won battles against forces who outnumbered them regularly: they were not a horde at the beginning, but were fighting more populous countries with larger armies. The key weakness of the Mongols was, in fact, Genghis Khan. His particular genius at choosing brilliant subordinates and earning their loyalty was not shared by any of his heirs. When the last general Genghis picked himself, Subotai, dies, there are not more great Mongol generals. Nonetheless, the Mongol successor states wound up controlling the largest chunk of the world before the British Empire, and unlike the British, conquered the core civilized parts of the world: China, Persia; indeed, virtually all of continental Asia. Europe was only saved by the death of the Genghis Khans (I remain unconvinced by arguments that the fragmented, easily played against each other, backwards Europeans would have been able to stop Subotai short of the Channel.)

Note further that the Mongols were able to rule those they conquered. They were able to create law and order; to put down rebellions, and so on. The US army is a blunt instrument, incapable of winning what its masters want it to win (Iraq, Afghanistan); and it hasn’t been tested in main battle against a peer foe in a long time (China/Russians/Europeans). Theoretical overwhelming power is all very nice, but lets see how that fleet with its big, clumsy, exposed aircraft carriers (for example) does against someone like China who has been specifically gearing to destroy it, rather than against tribesmen or 3rd rate powers (Saddam’s Iraq) which had no means of fighting it. A military must be judged by what it can do. The American military can destroy countries, it can blitz countries, but it can’t hold them. Dominant? Sure. Most dominant in history? No. And we’ll see what happens to its dominance when it is really tested.

Osama bin Laden had a thesis: his theory was that the Americans could be defeated if they could be convinced to occupy a Muslim country where they could actually be fought. He was right. Which General or Military Theorist today will turn out to have had the theory that the US military can be defeated in conventional non-occupation war, which was right? Is it a Chinese theorist? We’ll find out. All periods of military dominance end. The Mongols did, the British did, the Romans did, the Greeks did, and so on. The question is just when, and how.

[Demeter]

40. Help Elizabeth Warren Change Wall Street and Pass the 21st Century Glass-Steagall Act

https://action.citizen.org/p/dia/action3/common/public/?action_KEY=12481



Senator Elizabeth Warren has introduced a bill that would make the biggest banks simpler and smaller and once again end the public subsidy to Wall Street speculation.

By requiring banks to focus on lending to the real economy, the 21st Century Glass-Steagall Act would point the way toward a financial system that better serves consumers, small businesses and the nation as a whole.
Petition to Congress


We urge you to co-sponsor and work for passage of the 21st-Century Glass Steagall Act. Like its New Deal-era namesake, this bill would erect a wall between traditional banks and the risky world of investment banks and hedge funds.

More than five years after the financial crisis, the biggest banks are bigger than ever, and still engaged in large-scale financial speculation. Not enough has been done to end their "Heads I win, tails the public loses" practices. This legislation would make banks less massive and complex, and curtail their ability to use government guarantees to fuel Wall Street speculation. It would be a big step toward ending the era of banks that are Too Big to Fail – and jail, manage, or regulate.

We ask you to do all you can to get this crucial legislation enacted.

SIGN PETITION AT LINK!

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41. China Manufacturing Gauge Signals Risk of Deeper Slowdown

http://www.bloomberg.com/news/2014-05-04/china-manufacturing-gauge-shows-risk-of-deeper-economic-slowdown.html

China’s manufacturing contracted for a fourth month in April, according to a private survey that missed estimates and sent stocks in the region lower on concern the economy’s slowdown is deepening.

A purchasing managers’ index was at 48.1, HSBC Holdings Plc and Markit Economics said in a statement today. That compared with a 48.4 median estimate from analysts surveyed by Bloomberg News, a preliminary reading of 48.3 and March’s 48. Numbers below 50 indicate contraction.

Hong Kong stocks extended declines on the report, which suggests Communist Party leaders have to do more to set a floor under economic growth after property construction plunged last quarter and expansion cooled. Gross domestic product is projected to increase 7.3 percent this year as the government reins in credit, according to a Bloomberg survey, compared with an official target of about 7.5 percent.

“There is no substantial improvement in terms of momentum,” said Ding Shuang, senior China economist at Citigroup Inc. in Hong Kong. The property-market slowdown is having “certainly some impact” on manufacturing, said Ding, who previously worked at the People’s Bank of China and International Monetary Fund.

[Demeter]

42. DOJ May Charge Two Banks with Criminal Acts, But Not Hold Them Criminally Accountable

Too Big to Jail Continues: MARK KARLIN, EDITOR OF BUZZFLASH AT TRUTHOUT

In a recent breathlessly written "we have the inside scoop" article, The New York Times would have you believe that the Department of Justice (DOJ) is finally getting serious about filing criminal charges against a couple of banks. Technically, the Times may prove to be right, but on a practical level, the actions it is predicting would be more of the same kid-glove treatment of too-big-to-fail banks we’ve seen in the past. As BuzzFlash at Truthout noted in commentaries last year, Attorney General Holder has officially stated his concern that prosecuting the largest banks would have adverse affects on our economy. As The New York Times reports about the possibility of looming criminal charges against two foreign banks (emphasis on foreign - Credit Suisse and BNP Paribas, not US):

Federal prosecutors are nearing criminal charges against some of the world’s biggest banks, according to lawyers briefed on the matter, a development that could produce the first guilty plea from a major bank in more than two decades.

In doing so, prosecutors are confronting the popular belief that Wall Street institutions have grown so important to the economy that they cannot be charged. A lack of criminal prosecutions of banks and their leaders fueled a public outcry over the perception that Wall Street giants are “too big to jail.”

Addressing those concerns, prosecutors in Washington and New York have met with regulators about how to criminally punish banks without putting them out of business and damaging the economy, interviews with lawyers and records reviewed by The New York Times show.

That last paragraph is devastatingly revealing. The Department of Justice might make an agreement with banks in which they would plead guilty to criminal activity without, it appears, holding them criminally responsible beyond fines and perhaps some temporary restrictions. In short, it appears to be more a public relations stunt from the DOJ than actual criminal prosecution (except for the technical labeling of the offense).

Why would this be an accurate interpretation? There are many reasons, but two main ones will suffice: 1) The DOJ cannot put a bank in jail, so the criminal charges, if agreed upon by the banks, would still mean that the banks are too big to jail; and 2) the banks will only be officially held criminally responsible for certain actions if regulators assure the DOJ that the banks that engaged in illegal activity will not lose their charters (licenses) to do business in the US. The second condition of any criminal charge was confirmed in The New York Times's Dealbook section story:

Federal guidelines require prosecutors to weigh the broader economic consequences of charging corporations

With the investigation into BNP, the lawyers briefed on the matter said, prosecutors met in April with the bank’s American regulators: the Federal Reserve Bank of New York and Benjamin M. Lawsky, New York’s top financial regulator. The prosecutors who attended the meeting and are leading the investigation —Preet Bharara, the United States attorney in Manhattan; David O’Neil, the head of the Justice Department’s criminal division in Washington; and Cyrus Vance Jr., the Manhattan district attorney — left largely reassured.

During the meeting at the New York Fed’s headquarters in Lower Manhattan, the lawyers said, Mr. Lawsky said he planned to impose steep penalties against BNP and its employees but would not revoke the bank’s license. The prosecutors secured similar assurances from the New York Fed, the lawyers said, though the Fed’s board in Washington must still approve the decision about BNP, which has not been accused of any wrongdoing.

MORE...The reality is, if the NYT article is accurate in its forecast, no one will go to jail and no bank will lose its ability to continue operating.

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43. Russia Knows Europe Sanctions Ineffective With Tax Havens

http://www.bloomberg.com/news/2014-05-05/russia-knows-europe-sanctions-ineffective-with-tax-havens.html


Two years ago, a Dutch law firm prepared a pitch in Moscow to Russian businesses: come to the Netherlands and we can help you avoid taxes and keep your assets safe.

“You can rely on our legal system!” the firm, Buren van Velzen Guelen, said in a slide presentation.

Such appeals have worked on a grand scale. Russia’s biggest oil, gas, mining and retail companies -- including some run by billionaires close to President Vladimir Putin -- have moved tens of billions of corporate assets to the Netherlands and other European countries often used for tax avoidance and capital flight, such as Luxembourg, Cyprus, Switzerland and Ireland. The firms include OAO Rosneft (ROSN), OAO Gazprom, OAO Lukoil and Geneva-headquartered Gunvor Group Ltd., which was co-founded by a Putin associate now under U.S. sanctions.

As a result, a handful of European tax havens may hold the key to pressuring Russia to pull back from Ukraine. The extensive use of foreign subsidiaries by Russia’s richest businessmen exposes their assets to sanctions. Yet capitalizing on this vulnerability requires help from countries that rely economically on Russian capital flight and have traditionally protected investors against foreign laws.

[Demeter]

54. The Banksters would have to be out of their minds

They've already been pushed to the brink by the US over US citizen tax dodgers.

If the US govt. has enough power to force banksters into betraying their Russian clientele, then they might as well hold a fire sale, because they will be going out of business shortly.

Russia and India and China have enough people and enough money to build a banking system that freezes out the EU and the US and the UK. And I will be cheering them on, because evil and abuse of power must be opposed.

[Demeter]

44. Keen: We need bubbles or bastards to grow

http://www.macrobusiness.com.au/2014/05/keen-we-need-bubbles-or-bastards-to-grow/

Steve Keen has joined the Modern Monetary Theorists today in asking whether or not we need a surplus at Business Spectator:

…the correct analogy for the government is not that it is like a business (or like a household), but that it is like a bank. Private banks and the government can both create money by their activities; banks by lending, and governments by running deficits. If we insist that the government actually takes money out of the economy every year by running a surplus, then the other has to compensate to make up for it, or the money supply will evaporate.

He goes on to describe how public and private debt have waxed and waned in a counter-correlated fashion over the past few years so that Western economies can grow:

Australia avoided a recession during the crisis because private debt continued to grow, but even so the same pattern is evident. Falling government debt was possible from 1993 till 2008 because private debt grew enormously (and financed a housing bubble as it did). Then from 2008 onwards, a rising level of government debt countered slower growth in private debt.



Which would you prefer: a world in which monetary growth depends solely on asset price bubbles financed by private lending, or one in which monetary growth also comes from government spending on welfare and public infrastructure?

Neither, thanks. The former for obvious reasons, the latter for the reason that the pollies won’t make good choices. They give the money away as pork.

Fortunately there is a third choice. In simplifying his argument, Keen does not mention the third sector that makes up GDP in the MMT universe: the external sector. So long as we run a current account deficit we are reliant upon either public or private debt to grow. But not if we turn ourselves into an export powerhouse with an external sector surplus. Then we can grow without either bubbles or bastards.

[xchrom]

45. Hedge Funds Cut Gold Bets to 11-Week Low on U.S. Growth

http://www.bloomberg.com/news/2014-05-04/hedge-funds-cut-gold-bets-to-11-week-low-on-u-s-growth.html

Speculators are the least bullish on gold in 2 1/2 months on mounting confidence that U.S. economic growth is accelerating out of its winter retreat.

Money managers cut their net-long position in bullion to the smallest since mid-February during the week ended April 29. Wagers tumbled 25 percent last month, the most since November, and investors cut their holdings in exchange-traded products backed by the metal to the lowest since 2009.

Futures fell 5.7 percent from a six-month high in March as the American economy bounces back from the harshest winter in three decades. Hiring in the U.S. rose in April by the most since January 2012, while household purchases in March capped the biggest gain since August 2009, the government said last week. The Federal Reserve cut monthly bond buying by almost half since November and said April 30 it will keep paring stimulus.

“Because of the better longer-term economic outlook, some investors don’t want to own gold,” Donald Selkin, who helps manage about $3 billion of assets as chief market strategist at National Securities Corp. in New York, said May 2. “A lot of people think the Fed will keep tightening and they’ll raise rates sooner than later.”

[xchrom]

46. Fed’s Fisher Says Economy Strengthening as Payrolls Rise

http://www.bloomberg.com/news/2014-05-04/fed-s-fisher-says-economy-strengthening-as-payrolls-rise.html

The U.S. economy is “moving in the right direction” and “getting stronger” as private-sector payrolls increase, said Richard Fisher, president of the Federal Reserve Bank of Dallas.

“The private sector is beginning to hire,” said Fisher, a voting member of the central bank’s policy committee, said today on the Fox News program ’’Sunday Morning Futures.’’ “We’d like to see that continue and, in fact, increase.”

Employers added 288,000 jobs in April, the biggest monthly gain in two years, the Labor Department reported May 2. At the same time, more than 800,000 people abandoned the labor force and the share of working-age Americans in a job or looking for one fell to a 36-year low.

“We’re continuing to see job creation,” and people who want jobs “will start looking for work, join the workforce, be hired, as business expands in the United States,” Fisher said.

[xchrom]

47. Spain Leads Bond Rally With Yields Falling to Records

http://www.bloomberg.com/news/2014-05-03/spain-leads-bond-rally-with-yields-falling-to-records.html

The government bonds of Spain, Italy and Ireland rose this week, pushing the nations’ 10-year yields to record lows, as improving economic data and the prospects of additional European Central Bank stimulus buoyed demand.

Benchmark German 10-year bunds climbed for a second week, with yields falling to the least in 11 months, before the ECB governing council meet in Brussels next week. A report yesterday showed euro-area manufacturing grew in April at the fastest pace in three months.

“We’re still in a world where investors are starved of return,” said John Wraith, a fixed-income strategist at Bank of America Corp. in London. “People are still happy to diversify their holdings and buy bonds that not so long ago they would have shied away from. The slightly better data helps reassure people that finally some of these weaker countries are turning a corner.”

Spain’s 10-year yield fell nine basis points this week, or 0.09 percentage point, to 2.98 percent at 5 p.m. London time yesterday after dropping to 2.971 percent, the lowest since Bloomberg began compiling the data in 1993. The 3.8 percent bond maturing in April 2024 rose 0.765, or 7.65 euros per 1,000-euro ($1,386) face amount, to 107.025.

[xchrom]

48. Philippines, U.S. begin war games focusing on maritime threats

http://uk.reuters.com/article/2014/05/05/uk-philippines-usa-idUKKBN0DL0FO20140505

(Reuters) - Thousands of Philippine and U.S. soldiers began annual war games on Monday, the first under a new security pact with the United States, focusing on maritime security in the face of China's growing naval presence in the disputed South China Sea.

The joint exercises "Balikatan" (shoulder-to-shoulder) would test the combat readiness of the two oldest allies in this part of the world to respond to any maritime threats, including piracy and humanitarian assistance and disaster response.

The new security pact was signed last week just hours before U.S. President Barack Obama visited. Obama said the agreement was a testament to Washington's "pivot" to Asia and was an "ironclad" commitment to defend the Philippines.

The Philippines has territorial disputes with China over the South China Sea, which is said to be rich in energy deposits and carries about $5 billion in ship-borne trade every year. The Spratlys in the South China Sea are also claimed by Brunei, Malaysia, Taiwan and Vietnam.

[xchrom]

49. Japan meets most EU conditions for more trade talks -document

http://uk.reuters.com/article/2014/05/05/uk-eu-japan-trade-idUKKBN0DL0K620140505

(Reuters) - The European Union is broadly satisfied with Japan's progress in opening up its markets in talks towards an ambitious free-trade deal and will likely approve the continuation of negotiations later this month.

According to an EU document and people briefed on the issue, Japan has complied with, or was in the process of complying with, the majority of its commitments in sectors ranging from organic food to textiles.

EU trade negotiators were told to pull the plug on talks, which began in April 2013, after a year if Japan did not show sufficient willingness to bring down barriers to European exports.

"Japan has demonstrated it is as serious as any other of our trading partners," said one person close to the issue who declined to be identified. "We should allow talks to continue. If we push Japan too far, we will lose their confidence."

[xchrom]

50. German car sales fall for first time in five months

http://uk.reuters.com/article/2014/05/05/uk-germany-autos-idUKKBN0DL0HB20140505

(Reuters) - Sales of new cars in Germany, Europe's biggest auto market, declined 3.6 percent in April, the first drop for five months, in a sign that a recent recovery in demand remains fragile.

German passenger car registrations dipped to 274,097 in April, the Department of Motor Vehicles (KBA) said on Monday.

The drop stands in contrast to France and Italy, where April car sales rose 5.8 and 1.9 percent respectively.

Peter Fuss, German autos expert at Ernst & Young, said there were various factors at play. "One of them is the fact that Easter was in April and not in March. But on the whole it means that the market is still volatile and not as stable as some people would like."

[DemReadingDU]

51. Target's Chairman and CEO out in wake of breach

5/5/14 Target's Chairman and CEO out in wake of breach
Target CEO Gregg Steinhafel resigns as fallout from massive data breach continues

Target's massive data breach has now cost the company's CEO his job.

Target announced Monday that Chairman, President and CEO Gregg Steinhafel is out nearly five months after the retailer disclosed the breach, which has hurt its reputation among customers and has derailed its business.

The nation's third-largest retailer said Steinhafel, a 35-year veteran of the company and CEO since 2008, has agreed to step down, effective immediately. He also resigned from the board of directors.

A company spokesman declined to give specifics on when the decision was reached.

The departure suggests the company is trying to start with a clean slate as it wrestles with the fallout from hackers' theft of credit and debit card information on tens of millions of customers. The company's sales, profit and stock price have all suffered since the breach was disclosed.

Target, based in Minneapolis, said Chief Financial Officer John Mulligan has been appointed interim president and CEO. Roxanne S. Austin, a member of Target's board, has been named as interim nonexecutive chair of the board. Both will serve in those roles until permanent replacements are named.

more...
http://finance.yahoo.com/news/targets-chairman-ceo-wake-breach-120219844.html

[Demeter]

55. I hope the fairies get hernias