Economy
Related: About this forumSTOCK MARKET WATCH -- Thursday, 21 June 012
[font size=3]STOCK MARKET WATCH, Thursday, 21 June 2012[font color=black][/font]
SMW for 20 June 2012
AT THE CLOSING BELL ON 20 June 2012
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Dow Jones 12,824.39 -12.94 (-0.10%)
S&P 500 1,355.69 -2.29 (-0.17%)
[font color=green]Nasdaq 2,930.45 +0.69 (0.02%)
[font color=black]10 Year 1.65% 0.00 (0.00%)
[font color=green]30 Year 2.73% -0.04 (-1.44%) [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
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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
[/center][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
6/14/12 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.
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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]
kickysnana
(3,908 posts)Demeter
(85,373 posts)The Federal Reserve extended Operation Twist - a plan to sell short-term bonds while purchasing longer-term securities - in order to support the slowing US economic recovery, but refrained from a more aggressive plan to ease monetary policy.
At the conclusion of a two-day meeting in Washington, the Federal Open Market Committee which sets interest rates offered a bleaker picture of the US economy than it had at its last gathering two months ago. In particular, the improvement in the labour market seen earlier this year has weakened, and financial stress associated with the eurozone debt crisis has worsened.
Read more >>
http://link.ft.com/r/2SRI11/HY2N4J/DXJ2Y/7A9HS3/XHRO6I/82/t?a1=2012&a2=6&a3=20
THIS WILL ENSURE THAT THE PUBLIC CONTINUES TO TWIST IN THE WIND, WHILE THE BANKSTERS WRING THEM DRY...
LOOKS LIKE THE JAPANESE STOCK MARKET IS HAPPY ABOUT IT...
Demeter
(85,373 posts)The Federal Reserve the nation's central bank will end its two-day meeting on Wednesday by offering its assessment of the economy, and then declaring its latest plan for making things better. Investors all over the world will be waiting to hear just how weak or not the Fed thinks the U.S. economy is. And they will be watching to see whether the bankers plan to continue trying to stimulate growth by extending two controversial programs, one known as Operation Twist, and the other as quantitative easing.
Some economists believe those programs have encouraged lending and held down interest rates firmly enough to prop up the economy during an unusually hard time. But others say the Fed already has gone too far in pushing down rates while infusing money into the banking system. They argue that Fed actions are too aggressive and will set the stage for a surge of inflation in the not-distant future. Many economists are predicting Fed policymakers will continue intervening to depress long-term rates rather than reversing course. That's because a new economic slowdown may be taking hold, especially one tied to the financial crisis in Europe, according to these experts. "The Fed will show its concern that the economy continues to underperform," said Paul Edelstein, U.S. economist for IHS Global Insight, a forecasting firm. While he does not expect the Fed to unveil any dramatic new programs, he does assume it will extend current efforts "aimed at pressing down on long-term yields."
Unfortunately, understanding exactly what the Fed is planning is never easy. The bankers often speak a language the rest of us have never heard. Today at 2:15 EDT, Fed Chairman Ben Bernanke will hold a press conference to try to better explain what the bankers are trying to do. To follow along better, listeners should be familiar with three key terms: monetary policy, Operation Twist and QE3. Here are the definitions and pronunciations so that you can practice using the terms in conversations, should you find yourself sitting next to an economist.
Monetary Policy
The economy is greatly influenced by two sets of policies, one dealing with fiscal issues and the other with monetary matters. Fiscal policy involves government taxes and spending and it's set by Congress. Monetary policy involves money and the banking system, and it's set by the Fed. Once Fed officials determine what their monetary policy ought to be, they implement it by manipulating the amount of money in the banking system. The steps they take set the direction for interest rates, which in turn can influence inflation and employment levels. Under Bernanke's leadership, the current policymakers have said they want U.S. inflation to run at about 2 percent a year. At the same time, they want interest rates to be pushed down and held steady at low levels to help businesses expand and consumers to buy homes and cars. Critics say that when the Fed acts too aggressively to boost lending either by squeezing down interest rates or expanding the supply of money it sets the stage for a big burst of inflation. Also, many retirees are discouraged by the extremely low interest rates they have been getting on their savings. A recent Wells Fargo/Gallup poll found that 1 in 3 investors says low rates have forced him to delay retirement. But Fed supporters say low-interest-rate efforts have allowed the economy to dodge a full-blown depression, while helping ensure that U.S. banks are among the world's strongest. To make its monetary-policy decisions, the Fed holds eight scheduled meetings a year. Typically, the gatherings last two days and conclude with an announcement about any policy changes. The central bank's overarching goal is to keep the U.S. economy growing at a steady, sustainable pace with low inflation and robust job creation.
Operation Twist
Fed policymakers are worried the U.S. economy is still failing to create enough jobs. They especially would like to see the housing market strengthen and construction employment perk up. To help with that, they have been trying to keep interest rates low so that more homebuyers could qualify for mortgages. Last fall, the Fed set out to push down on mortgage rates by launching "Operation Twist," a strategy wherein the Fed would sell $400 billion worth of its own shorter-term bonds and use those proceeds to purchase longer-term bonds. That's a twist that helps screw down long-term rates, such as those on mortgages. Economists expect the Fed to extend the expiring "operation," and keep "twistin' the night away."
QE3
This term refers to a Fed strategy that effectively adds money to the economy and encourages lending. The Q stands for "quantitative"; the E stands for "easing" (pumping more cash into the banking system). And the 3 may stand for "Hail Mary," because the Fed has already tried this quantitative easing strategy twice. The central bank's goal is to encourage lending. If businesses could borrow more, they could afford to hire workers and buy new equipment. To get more cash moving through the economy, the Fed injects a predetermined "quantity" of money into banks. When banks have an expanded pool of cash available, they can send it back out in the form of loans. Critics say banks have failed to boost their lending as much as they should have, given the extraordinary help from the Fed.
Demeter
(85,373 posts)The Federal Reserve on Wednesday sharply lowered its economic growth forecasts through 2014 and projected that unemployment could remain above 8% through next year.
The central bank released the new forecasts ahead of Chairman Ben S. Bernanke's quarterly news conference. Earlier, the Federal Open Market Committee voted to extend a program designed to lower long-term interest rates as it tries to respond to slowing growth in the U.S. and around world...Growth in total economic output this year will be between 1.9% and 2.4%, much lower than the range of 2.4% to 2.9% the Fed projected in April. Growth will pick up in 2013, but the Fed's central tendency forecast is for 2.2% to 2.8% annual growth in gross domestic product, below the 2.7% to 3.1% forecast the central bank made in April. Not until 2014 would annual growth top 3%, the Fed said. Annualized growth was 1.9% in the first quarter of this year.
The unemployment rate will be 8% to 8.2% in 2012, the Fed projected, little changed from May's rate of 8.2%. The Fed had forecast in April that unemployment this year would be 7.8% to 8%. Unemployment is forecast to be between 7.5% and 8% in 2013, higher than the 7.3% to 7.7% range forecast in April.
The Fed lowered its projection for inflation as the U.S. economic recovery has slowed. Inflation this year will range from 1.2% to 1.7%, down from the 1.9% to 2% projected in April.
Demeter
(85,373 posts)The leaders of three Greek political parties committed to keeping the country in the euro and pushing ahead with its 174bn bailout have agreed to form a coalition government.
Antonis Samaras, whose centre-right New Democracy party narrowly claimed first place in Sundays election, is expected to become prime minister.
After two days of talks with the leaders of the PanHellenic Socialist Movement and the Democratic Left splinter group, Mr Samaras was due to meet the Greek president on Wednesday afternoon to tell him he had secured a deal to form a government.
Read more >>
http://link.ft.com/r/5F39HH/ORWHMJ/WH2F8/7A9HSR/4CL7CH/82/t?a1=2012&a2=6&a3=20
NEXT TIME, FOR SURE!
Demeter
(85,373 posts)Mikhail Fridman, the Russian billionaire, has been meeting institutional investors in London to canvas support for his plan to buy half of BPs stake in TNK-BP, its Russian joint venture, according to people familiar with the matter
Read more >>
http://link.ft.com/r/H60H77/2O345W/SUO9T/TUAMB8/C40Y9M/CM/t?a1=2012&a2=6&a3=20
Demeter
(85,373 posts)The Cern particle physics research laboratory is set to become a major hedge fund investor, as it seeks bigger returns for its $4bn pension scheme
Read more >>
http://link.ft.com/r/19JYUU/4CUXOQ/52KB7/4CI1EF/SPEHBH/T3/t?a1=2012&a2=6&a3=20
OMFG!
PROVING ONCE AGAIN THAT PHYSICISTS ARE VERY DANGEROUS, OUT OF TOUCH WITH THE WORLD PEOPLE...
Demeter
(85,373 posts)US lawmakers and regulators have attacked London as a source of financial crises and promised tougher cross-border rules in the wake of $2B of trading losses at the UK unit of JPMorgan Chase.
GENSLER OVER AT CTFC IS TALKING ABOUT CUTTING OFF THE BAILOUTS AT THE BORDER, SO THAT THE us ISN'T SAVING THE UK'S SUBSIDIARIES OF US BANKS (GOOD LUCK FIGURING THAT OUT!) WHILE JAMIE DIMON IS SEEKING TO KEEP US REGULATIONS OFF THE UK END OF THE BUSINESS....
JUST THINK, A GREAT GLOBAL LOOPHOLE, AND BOTH THE UK AND THE US MAY ACTUALLY CLOSE IT DOWN!
AND THEN IT'S PONIES AND GUMDROPS FOR EVERYONE...AND THE END OF TBTF?
Demeter
(85,373 posts)Warren Buffetts company wins partial victory on portfolio of mortgage debt after criticising role of ResCaps parent Ally Financial in insolvency
Read more >>
http://link.ft.com/r/QM42II/NJ41JZ/LSLXF/PF0KCR/WTJHPC/D5/t?a1=2012&a2=6&a3=20
Demeter
(85,373 posts)Great news for customers who had their money stolen by Wall Street! No need to worry about its return, now they can sell their claims at a discount to -- Wall Street! Perhaps we can get rid of the FDIC and cumbersome banking regulation and let people auction off their looted savings deposits and CD's when the Bankers lose their money by gambling on derivatives. And as for education, well, children do have a lot of time and energy that might be better utilized in manual labor by privatizing schools in the model of privatized prisons, and dedicate them to learning through work. Free market! Assymetry of information! Predatory finance! Innovation! It's got something for everyone -- well, everyone that counts, that is.
MF Global clients get chance to auction claims
By Tracy Alloway in New York
June 19, 2012
Former customers of MF Global will have the chance to auction off their claims, giving them another opportunity to recoup money from the failed broker-dealer.
SecondMarket, a trading platform for bankruptcy claims and other specialised investments, on Tuesday began an auction process for MF Global customers wishing to sell their recovery rights in the company once run by Jon Corzine, a former Goldman Sachs chief executive.
MF Global collapsed in October, leaving $1.6bn worth of missing customer funds and triggering a series of complicated and continued cross-border bankruptcy proceedings. Clients of the failed broker-dealer who are owed money can choose to sell their claims to the bankruptcy estate in an effort to recoup their funds earlier.
Such claim trading is common after big bankruptcies, such as Lehman Brothers 2008 collapse or Hostess Brands early 2012 filing. (Note that NO Customer Accounts had to be auctioned off at less than par in these cases - Jesse)
Buyers including hedge funds and some large investment banks are essentially punting on the ultimate recovery values of the claims.
MF Global claims already trade on SecondMarket, but the new auction system is meant to make it easier for sellers to find buyers. Former MF Global customers will be able list their claims for sale on a centralised platform, and potential buyers will be able to conduct due diligence and then make their bids....
This has to be considered with the other headline that was released about the same time by Gary Anderson at The Business Insider: Did Dimon and JP Morgan Steal MF Global Funds? Chris Whalen Thinks So.
Of course we still do not know who did it yet, but there is no doubt that the money, and some precious metal and Treasury bond assets held on account, were stolen. And it is an old axiom 'that Caesar's wife must be above suspicion.' And in this case, she is at least caught outdoors in her nightie.
Perhaps it is just an overdeveloped sense of justice, but I find this to be particularly repugnant. Wall Street is taking advantage of people's fears of not receiving their money back in the face of a blatant theft by some undisclosed financial parties, and of course an overwhelming show of legal force and slick maneuvering in the bankruptcy process by JPM.
Especially when those fears have been created by some of the very institutions that stand to further benefit from the lack of justice in how this is being handled by their bought and paid for regulators and politicians.
Demeter
(85,373 posts)The Senate overwhelmingly rejected a bid to preserve some $4.5 billion in food stamps funding, as part of the massive farm bill, on Tuesday. The amendment to keep that spending in the Supplemental Nutrition Assistance Program, offered by Sen. Kirsten Gillibrand (D-N.Y.), failed 33 to 66. Sixty votes were needed to pass. Gillibrand had hoped to prevent food aid cuts in the $969 billion bill by trimming the guaranteed profit for crop insurance companies from 14 to 12 percent and by lowering payments for crop insurers from $1.3 billion to $825 million.
"We all here in this chamber take the ability to feed our children for granted. That is not the case for too many families in America," Gillibrand said just before the vote. "Put yourselves for just a moment in their shoes. Imagine being a parent who cannot feed your children the food they need to grow. It's beneath this body to cut food assistance for those who are struggling the most among us."
The cuts target the so-called heat-and-eat initiative in which 14 states automatically make families eligible for more food aid if they receive even $1 in help paying their utility bills. The Congressional Budget Office estimated the decrease would amount to about $90 a month for an affected family, representing a quarter of its food budget.
"Half of the food stamp beneficiaries are children, 17 percent are seniors, and unfortunately now 1.5 million households are veteran households that are receiving food stamps," Gillibrand said, referring not just to heat-and-eat participants, but the broader population of food stamp recipients.
.....................................................................................................................................
Congress has grown increasingly concerned about spending for the food stamp program. Some 26 million Americans received the aid in 2007, while more than 44 million received it last year, at a cost of $76 billion. The Congressional Budget Office estimated recently that demand will continue to grow through 2014 in the wake of the recession.
The House has proposed even steeper cuts. The 2013 budget resolution passed by the lower chamber calls for $134 billion in cuts over 10 years. The House Agriculture Committee's version of the farm bill would slash $33 billion over 10 years.
JUST NOT CONCERNED ENOUGH DO ACTUALLY DO ANYTHING FOR THE DESTITUTE....EXCEPT TAKE THE FOOD FROM THEIR MOUTHS....
bread_and_roses
(6,335 posts)I was shocked because I had misread a headline yesterday - thought it said the Senate blocked the CUTS - !
Something stinks about this - I am pretty familiar with NY's "welfare" programs, both from years in human services and also knowing people who receive aid - and I never heard of this $1 heating checks being sent out? Not that it couldn't happen - the regulations are labyrinthine, near incomprehensible, and believe me designed to keep as many people as possible from getting much of anything, but I can imagine oddities occurring. But in general not much of anything is what people get, despite the constant wails from the troglodytes of "our tax dollars" being used to let lazy good-for-nothings live high on the hog on "welfare."
And what's this "guaranteed profit" for the crop insurers? GUARANTEED PROFIT? Exactly what all our oh-so-Randian, Social Security for me/nothing for thee "Free Marketeers" want.
I am no great fan of Gillenbrand, who is like most of them entirely too enamoured of Our Corporate Masters and I feel quite sure does nothing without the approval of Friend-of-Banksters Schumer, but she did the right thing in this case.
I intend to call her office, both to thank her for it and to suggest that they have someone look into this $1 "heating check" claim that makes such a good sound-bite. Although as I said nothing is impossible, I would not be surprised to find out it's another attack-on-the-poor distortion.
corkhead
(6,119 posts)from a SMW lurker who appreciates this daily OP
Stop in any time!
Tansy_Gold
(17,858 posts)We appreciate YOU!
corkhead
(6,119 posts)Next time I will bring the
Demeter
(85,373 posts)Now I know why price of gas at the most expensive gas station in town dropped 20 cents yesterday.
It must be the end of the world as we know it.
Demeter
(85,373 posts)Crude-oil futures fell sharply in electronic trading Thursday, extending the heavy losses of the previous session, after weak Chinese data raised further concerns about demand trends. Dashed hopes of more aggressive monetary-policy action from the U.S. Federal Reserve on Wednesday also played a role in the decline for oil, analysts said.
Benchmark U.S. crude oil for August delivery dipped 0.7%, or 58 cents, to $80.83 a barrel in electronic trading during European market hours. On Wednesday, oil dropped $2.23, or 2.7%, to end at $81.90 a barrel on the New York Mercantile Exchange, the lowest close for a front-month contract since Oct. 5, as investors fretted about supply data. A report from the Energy Information Administration showed crude supplies rose by 2.9 million barrels in the week ended June 15. That contrasted with expectations of a decline of 600,000 barrels for the week, according to analysts polled by Platts.
Data out Thursday showed Chinas manufacturing sector contracting further, as HSBC said the initial, or flash, version of its manufacturing purchasing managers index, or PMI, had hit a seven-month low in the current month. Full story: Chinas PMI weakens...MORE
Loge23
(3,922 posts)...and that's not fair to pigs.
What became of the $4.50+ gal price?
Someone made a ton of money off that little surge and sooner, rather than later, they will be back for more.
I'm sure most of you recognize the patten by now. Jack up the price every so often and monitor the "fever" until it becomes critical.
Then, slowly bring the price down to just a little higher than it was before the surge.
This has been going on for years now and we'll take it like the nice, trusting, compliant lemmings that we are.
Oh, and aren't those "occupiers" cute? Why can't they take a bath like the rest of us? Wow! $3.19 today!
Demeter
(85,373 posts)Last edited Thu Jun 21, 2012, 11:51 AM - Edit history (1)
Long answer: all the world is wising up to the banksters multiple frauds.
Demeter
(85,373 posts)Shell, Statoil and BP account for nearly $1bn of the total paid for drilling rights in a sign of the regions attractiveness for development
Read more >>
http://link.ft.com/r/DHGUVV/EX0RVF/K91WR/HYLATA/GDA9H9/AZ/t?a1=2012&a2=6&a3=21
DemReadingDU
(16,000 posts)Fuddnik
(8,846 posts)Which is unusual, because we're usually higher than most people.
Roland99
(53,342 posts)$3.10 is the cheapest I saw a few days ago but not at places I'd buy! $3.15 otherwise.
Fuddnik
(8,846 posts)Hopefully it will happen before next week-end.
I only fill up once a month, but it will be nice.
Demeter
(85,373 posts)Demeter
(85,373 posts)Stock index futures pointed to a lower open on Wall Street on Thursday, with futures for the S&P 500 down 0.3 percent, Dow Jones futures off 0.4 percent and Nasdaq 100 futures 0.4 percent lower at 0707 GMT.
European equities fell around 0.5 percent in early trade <.STOXX50E> and stocks also sold off in Asia <.MIAPJ0000PUS>, dented by weak Chinese data and disappointment over the extent of stimulus announced by the U.S. Federal Reserve.
The Federal Reserve on Wednesday delivered another round of monetary stimulus and said it was ready to do even more to help a U.S. economic recovery that looks increasingly fragile, but stopped short of announcing a third round of quantitative easing which some investors had been hoping for. Wall Street's top bond firms still see a 50 percent chance of more QE.
AND THE BEAT GOES ON...
Demeter
(85,373 posts)The Federal Reserve on Wednesday delivered another round of monetary stimulus and said it was ready to do even more to help an increasingly fragile economic recovery. The central bank expanded its "Operation Twist" by $267 billion, meaning it will sell that amount of short-term securities to buy longer-term ones to keep long-term borrowing costs down. The program, which was due to expire this month, will now run through the end of the year.
Fed Chairman Ben Bernanke, speaking at a news conference after a two-day policy meeting, said the central bank was concerned Europe's prolonged debt crisis was dampening economic activity and employment.
"If we are not seeing sustained improvement in the labor market that would require additional action," he said. "We still do have considerable scope to do more and we are prepared to do more."
...A number of economists said the Fed was likely to eventually launch a more aggressive program to buy bonds outright. It has already purchased $2.3 trillion in debt in two earlier bouts of so-called quantitative easing.
"The burden of proof may now be on the incoming data to prove that a third round of large-scale asset purchases may not be necessary," said Millan Mulraine, economic strategist at TD Securities in New York.
xchrom
(108,903 posts)Demeter
(85,373 posts)http://www.npr.org/blogs/thetwo-way/2012/06/20/155451822/some-zoo-animals-drown-because-of-flooding-in-minnesota?ft=1&f=1001
Minnesota is seing the worst flooding in decades. Heavy flooding in Duluth caused the evacuations of homes and also caused the death 11 zoo animals at the Superior Zoo in Duluth.
Minnesota Public Radio reports that two seals escaped from their exhibits. MPR reports:
"The zoo's polar bear, Berlin, also escaped from her exhibit area, but Susan Wolniakowski, the zoo's director of guest services, said that 'rumors that the polar bear was out and wandering Duluth' were incorrect.
"'She did not get very far before the zookeepers found her and she was able to be tranquilized,' she said. 'She is also safe and secure and in her holding area.'
"Zoo officials are still trying to determine if other animals escaped or died in the flood, but they have not been able to reach all of the exhibits.
"'The middle of the zoo is a pond,' said zoo spokesperson Keely Johnson, who estimates that about two-thirds of the zoo remains submerged in flood waters as of noon Wednesday."
Eleven barnyard animals died. They were "just kind of swept away in the flood," Johnson told MPR.
Duluth police spokesman Jim Hansen told Reuters that the last time he had seen something like this was in 1972.
Reuters reports that the danger is not over. Five to 9 inches of rain have already fallen and a flash flood warning was "in effect for Duluth, a Lake Superior port city, and other parts of the area until 10:30 p.m. local time."
xchrom
(108,903 posts)would it hurt to spread it out a little?
xchrom
(108,903 posts)TO REBOOT the Greek economy, first check the system hardware is up to date. The parliament and civil service of the "pro-Euro" government that could be formed this week needs an overhaul of its technology if it is to have any chance of transforming the country's fortunes.
"What Greece needs is significant support, not just financial, but technical," says Vassilis Monastiriotis, an economist at the London School of Economics' Hellenic Observatory. "We still don't have computerisation for systems such as tax collection."
Greece needs a technological and organisational "big bang" to computerise and connect all 14 ministries so they can begin recording data and statistics. Monastiriotis says the Organisation for Economic Co-operation and Development warned last year that without such a boost, the government would be powerless to transform Greece into the modern state demanded by its creditors.
*** this is really the whole article -- so they didn't talk cost.
which i'm imagining isn't cheap.
Demeter
(85,373 posts)Amid all the rhetoric and posturing that have accompanied every twist and turn of the great housing bust and the ensuing slow, stuttering recovery of the United States economy, a comment made last week by new Fannie Mae CEO Tim Mayopoulos to the Wall Street Journal might have seemed consequential only to the most wired-in housing wonk. From my perspective, I dont believe we need principal reduction to modify loans and make modifications work for homeowners, Mr. Mayopoulos said...you can make a good case that for all practical purposes Mayopoulous works for the federal government; and yet, his position on principal reduction is at direct odds with President Obamas. Thats a big deal. The collapse of the housing sector precipitated the economic crash. Fixing it is crucial to enabling a sustainable recovery. And yet, despite years of effort, in the all-important domain of housing finance, the White House has proven itself unable to execute its agenda.
Principal reduction (or, as it is sometimes more coarsely known, cramdown) allows homeowners who are underwater on their mortgage i.e., they owe more to the bank than their home is worth to get real relief and avoid possible foreclosure. Simply put, the owner of the mortgage agrees to write down the amount owed by the borrower, so the mortgage shrinks in size to match what the house can be sold for.
One out of every five Americans with a mortgage owes more than their home is worth thats 10.7 million mortgage holders with a total negative equity of $700 billion. When youre underwater on your mortgage, it is very difficult to refinance. Many housing activists joined relatively recently by the White House have long believed that the best way the government can end the housing crisis and ease mass economic hardship would be to convince or force mortgage-owners to grant large-scale principal reduction to millions of underwater homeowners.
Estimates vary widely on the economic impact of principal reduction, but an aggressive effort to ease the burden of negative equity by Fannie Mae could affect millions of homeowners. Fannie Mae is the largest owner of mortgages in the United States. Along with its sibling mortgage giant, Freddie Mac, it accounts for about half of all the mortgages in the U. S. a massive amount of loans worth around $5 trillion. Which means Tim Mayopoulos opinion carries serious weight. If he steered Fannie Mae in the direction of principal reduction he could help bring an end to the ongoing foreclosure nightmare and spur a true housing sector recovery. But right off the bat, Mayopoulos made clear that principal reduction is not on his to-do list.
AND THERE'S SO MUCH MORE...
Demeter
(85,373 posts)...For almost a year now, the Obama Administration has been extremely concerned about the goings on in Europe. The official line from the White House is that the US is in a moderate but sustainable recovery which risks being derailed because of the European sovereign debt crisis. Last year, I noted eerie parallels between Obamas view and the view of Herbert Hoover in 1930 before the bank runs began after the failure of Credit Anstalt in 1931.
Recently, the Obama Administration has been pushing forcefully both to get Europe to change tack toward growth and in getting out the message that the slowdown in the US is due to whats happening in Europe. And while I agree that Europes policy responses have made things considerably worse, I dont believe what is happening in Europe actually is the reason the US recovery has stalled. Michael Hudson makes some good points as to why, pointing to the continuing overindebtedness of US households due to the Obama Administrations prioritisation of bank bailouts over the real economy in 2009 and 2010. Id probably be a little less critical of Obama rhetorically on this score than Hudson, but only a little.
And lets be clear, its not just the US and Europe that are seeing a deceleration in growth. It is global. I call it a global or synchronised global growth slowdown....I would submit then that the problem is the debt. This is true right across the developed economies. Until the debt is reduced, global growth will be slow and that makes economies susceptible to recession. As much as the President wants to deflect attention toward the disaster building in Europe, he should admit to himself that more needs to be done on household debts, incomes and jobs. A banking-centric policy response has caught up with us and well just have to see if we can ride this one out.
P.S. As always I should remind you that I am mostly concerned with private debt because it is high levels of private debt that cause the secular deleveraging waves that lead to major financial crises.
Demeter
(85,373 posts)For-sale homes in California are sparse, even in areas with high foreclosure rates. It has led to buyers like Jennifer Bryant, who is willing to throw money at just about anyone willing to sell her a house. Since February, Bryant has made 35 offers on homes in Riverside, only to be elbowed out by other bids. With few houses available and many bidders chasing these properties, she feels she has, at most, an hour to consider each house.
"Some of these houses that I've offered on, I haven't even actually seen," she says. "If my husband can't go by it, I'll just make an offer on it. If I haven't seen pictures of it, I'll just make the offer on it."
Bryant spends lunch breaks by the fountain in front of the medical center where she works. Using her phone, she looks at the day's new listings...Bryant sometimes offers more than the asking price, even getting up in the middle of the night to check more listings. She says she's desperate to leave her tiny rental, which has no air conditioning and costs more than a mortgage.
The cruel irony for Bryant is that she sees vacant homes everywhere, from her drive to work to a neighboring home where she resides. But vacant does not mean available. The house may still be in the process of foreclosure. Paul Herrera, government affairs director for the Inland Valleys Association of Realtors in Riverside, says there are 40 percent fewer homes on the market compared with last year, and sales volume is up. Herrera says homebuyers like Bryant are often losing to a growing field of investors, often backed by Wall Street, who are willing to pay cash.
"Cash is always king in this sort of situation," he says.
MORE ABOUT THE INVESTORS AT LINK
Demeter
(85,373 posts)At a time when the federal government and law enforcement has failed to provide solutions for homeowners in crisis, the Occupy Homes movement is critical... Nick Espinosa, a promising young grassroots organizer from Minneapolis, has been working with Occupy Homes Minnesota, one node in a growing network of homeowners, housing justice activists, and occupiers organizing to stop foreclosures and evictions and to hold banks accountable. Nick was at Netroots to speak on a panel about the growing Occupy Homes movement, and eager to talk about a local campaign that had earned a lot of attention recently: the Cruz family's fight for their home in South Minneapolis. In 2011, the Cruzes mortgage lender PNC Bank failed to withdraw an online payment, and then punished the family for the bank's own mistake, demanding an entire extra month's payment as a penalty fee. Like so many working families, the Cruzes were operating month-to-month and suddenly owed more than they could afford. Before they knew it, they were another American family, among millions, facing foreclosure.
Nick was among the 23 Occupy Homes MN supporters of the Cruzes who had recently been arrested over the course of a weeklong vigorous nonviolent defense against five separate eviction raids by the Minneapolis Police and Hennepin County Sheriff's Department. The tenacity and perseverance of Nick and his cohorts got a lot of attentionfrom the city, from PNC Bank as well as Freddie Mac, the servicers of the Cruzes loan, and from activists across the countryand he was eager to keep a spotlight on the case.
...While there are no guarantees for the Cruzes or anyone else fighting foreclosure, we've seen time and again that when people fight backand communities stand with them in solidaritythey can win.
MORE
xchrom
(108,903 posts)Ben Bernanke has told Congress of risks to the US financial system caused by the eurozone crisis. Photograph: J Scott Applewhite/AP
12:30pm ET: The Fed is about to release the latest statement from the Federal Open Markets Committee (FOMC), which sets interest rates and makes decisions about the United States' money supply.
There has been a lot for the committee to digest since their last statement in April when Fed chairman Ben Bernanke and his crew last outlined their views on the US economy. Europe's economic woes have entered a darker phase, there are worries about Spain's position in the union now that dwarf earlier concerns about Greece. Closer to home the recovery in the US jobs market has slowed dramatically.
None of this is good news and investors are betting the Fed will act. Earlier this month Bernanke told Congress: "The situation in Europe poses significant risks to the US financial system and economy and must be monitored closely." He said there was scope for the Fed to act if necessary.
Most economists are betting on a plan called Operation Twist, which the Fed tried last summer. Operation Twist is a Fed bond-buying programme that aims to lower rates on mortgages and other loans and was first tried in the '60s and named after the Chubby Checker song.
Demeter
(85,373 posts)One of the biggest banks in the world wants the president's favorite banker muzzled. The banker, Robert Wolf, a top UBS executive in New York, is among President Obama's leading fund-raisers, building more than $500,000 for his re-election so far this year. A regular presence at big campaign fund-raisers, Mr. Wolf, who is 50, golfs and vacations with Mr. Obama and is known for e-mailing friends photos of himself with the president. While such a close relationship might have been envied by other bankers in 2008, when much of Wall Street was infatuated with Mr. Obama and donated heavily to his presidential bid, it has been making other UBS executives uneasy of late. The president's relationship with financial executives has been decidedly chilly after some critical comments about bankers and the administration's push on financial regulation...With media reports pointing out that one of the bank's top executives is also one of the Obama campaign's top bundlers - a word that one UBS executive said "makes people's hair stand on end" inside the bank - the Swiss banking giant has decided to take an unusual step. The bank's powerful group executive board in Zurich recently presented Mr. Wolf with an edict directing him to report all his media inquiries to the firm's press office. Since then, most of the requests to speak to Mr. Wolf have been rejected, according to people briefed on the situation, resulting in a much dimmer limelight for Mr. Wolf. The move to muzzle Mr. Wolf is unlikely on its own to hinder his ability to raise money, even if he may have to do it more quietly than before. Mr. Obama is raising far less on Wall Street than he did in 2008, and Mitt Romney is enlisting a number of big donors there.
Yet the contretemps within UBS may be more about office politics than national politics. After a series of setbacks, including a $2 billion loss blamed on a rogue trader in London, the bank is struggling to turn itself around. Several executives, most notably Robert McCann, have been jockeying for a bigger role in running the bank. Mr. McCann was elevated recently, while Mr. Wolf lost some responsibilities. Mr. McCann, 54, who is chief executive of UBS in the Americas, and Mr. Wolf, who is chairman of the Americas, do not get along, according to people inside the bank.
Largely through his relationship with the president, Mr. Wolf has become the public face of UBS in the United States, even though Mr. McCann, a former Merrill Lynch executive, now outranks him. "This stuff is right out of the movie 'Mean Girls' but it involves grown men," said one person with knowledge of the bickering who declined to be identified commenting on an internal matter. Mr. McCann's anger over Mr. Wolf's public image has been brewing for months. In late March, the executive fired off an e-mail to a number of people at UBS discussing what responsibilities Mr. Wolf should have. Recipients were surprised to find details of Mr. Wolf's compensation at the bottom of the message. The e-mail showed that the executive made a base salary of $900,000, according to people who viewed it. It is not clear whether his overall compensation was included in the e-mail, but the banker makes more than $5 million a year, according to several people briefed on the matter.
The tension within the bank boiled over after Mr. Wolf found himself profiled in a number of media reports. The Wall Street Journal in April called him "A 'Fat Cat' with the President's Ear." A few weeks later Mr. Wolf was presented with an e-mail reminding him of the firm's policy on media relations, which his bosses thought he had violated. That document contained specific language outlining what was expected of his relationship with the media. "You will clear any and all communications with the press as far in advance as possible," the directive to Mr. Wolf read. "With respect to activities outside UBS you will, on a best-efforts basis, keep corporate communications informed." A UBS spokeswoman, Karina Byrne, said, "All employees of UBS are subject to specific guidelines when speaking to the media." Through Ms. Byrne, Mr. Wolf and Mr. McCann declined to comment....
MORE
Demeter
(85,373 posts)As Americans watched their nest eggs sink during the Great Recession, many wondered whether they would ever be able to retire. Come this fall, millions of workers who invest in 401(k)s will learn their plans are probably worth even less than they thought.
"Fees take away from the accumulated savings of your lifetime," says Mary Beth Franklin, a contributing editor at InvestmentNews.
As of July 1, the Labor Department will require 401(k) plan providers to clearly disclose how much in fees they're charging on those retirement savings. Plan participants will be see those fees detailed in their third-quarter statements, which will arrive around Thanksgiving, Franklin tells Morning Edition co-host Renee Montagne.
Fees can range from 1.08 percent (for plans with more than $100 million in assets) to 1.90 percent (for those with less than $10 million in assets), according to a report from the Government Accountability Office. Plans with fewer than 100 members which comprise 88 percent of plans averaged about 1.30 percent in fees...MORE
mother earth
(6,002 posts)bread_and_roses
(6,335 posts)Great to see some new faces
mother earth
(6,002 posts)been lurking for some time. I salute the incredible DU'ers who keep these daily threads alive and brimming with essential info, a daily dose of reality, must reading.
Tansy_Gold
(17,858 posts)Demeter
(85,373 posts)Demeter
(85,373 posts)..more than $200 million in advertising spending by an array of conservative groups, from the U.S. Chamber of Commerce ($27 million) to Karl Roves Crossroads GPS ($18 million), which includes the billionaire Sheldon Adelson among its donors, and the American Action Network ($9 million), founded by Fred V. Malek, an investor and prominent Republican fund-raiser. In all, about $235 million has been spent on ads attacking the law since its passage in March 2010, according to a recent survey by Kantar Medias Campaign Media Analysis Group.
Only $69 million has been spent on advertising supporting it. Just $700,000 of that comes from the Obama campaign, and none of its ads mentioning the law are currently being broadcast, said Elizabeth Wilner, vice president of the Campaign Media Analysis Group. It explains, in a nutshell, why polling shows attitudes about the law to be at best mixed, she said.
On the other side, the 60 Plus Association, a conservative lobbying group for older Americans, has targeted Democratic senators up for re-election with about $10 million in ads warning that under the law, unaccountable bureaucrats will be able to ration care. A number of Republican candidates have also condemned the law in campaign ads. Ron Gould, who is running in Arizonas Fourth Congressional District, released an ad this month in which he blasts a copy of the law to bits with a shotgun.
In contrast, most advertising spending in support of the law has come from the Department of Health and Human Services. Appearing mostly on national and cable networks, the agencys ads are bland, explaining aspects of the law...
WHAT ISN'T BEING SAID HERE IS THAT THIS EXTREMELY COMPLICATED, EXPENSIVE AND GENERALLY USELESS OR HARMFUL LAW CANNOT BE JUSTIFIED BY ANY AMOUNT OF LIPSTICK...THAT IS WHY ADVERTISING FAILS.
Demeter
(85,373 posts)...a new AP-GfK survey shows WHAT the American people think should happen if ObamaCare is invalidated by the Supreme Court:
19% said "leave the health care system as it is," and 77% said "start work on a new health care reform bill."
That's not surprising when you think about it. Of the 40-60% of Americans who express opposition to "ObamaCare" in one form or another, probably a fourth oppose it because it's not single payer, and half the rest support all the individual components of ACA but either don't understand it, don't trust the government to implement it correctly, and/or have bought some of the big lies about it like the "death panel" smear.
That's why I'd bet quite a few Republican pols secretly hope the Court leaves ObamaCare alone. Aside from giving them a hobgoblin to rattle, that development would avoid the fateful day when the public begins to understand ACA more accurately, and Republicans have to (a) figure out what kind of health care reforms they can support as a party now that they've demonized so much of their own past thinking (i.e., the individual mandate), and (b) get some real scrutiny for such shabby "reforms" as interstate health insurance sales, which sound fine until you think hard for a few moments about how they'd actually work.
xchrom
(108,903 posts)Four years of a financial crisis, recession and deep unemployment clearly have not left Americans without belief in a higher power. We have no one to blame but ourselves for the fact that our choice of a higher power is Federal Reserve Chairman Ben Bernanke.
There have been fewer sadder spectacles than the calm, academic Bernanke explaining to a room of incredulous reporters why the Fed did not take more extreme action to "save" the economy and goose the markets. With Europe in a crisis and the US Congress flailing uselessly in an election year, the Federal Reserve, led by Bernanke, chose the path of least effort: to keep trading in short-term Treasury bonds for longer-term ones. That stimulus, called Operation Twist, has two goals: to keep US mortgage rates low, and to convince investors to trade in their safe, stable, long-term Treasury bonds and buy other bonds, like those of companies or banks, instead.
Four years ago, the idea of the US Federal Reserve actually buying anything, in the market, would have been an extraordinary occurrence. The Fed's main job, for decades, was to either raise interest rates, lower them, or give them a reassuring pat. But since 2008, the Fed has become not just a central bank but an active trader, buyer and investor both competing with and helping veteran investors buy and sell Treasury bonds and mortgage-backed securities.
In response to one of a series of churlishly toned questions asking why the Federal Reserve isn't doing more to save the market now, Bernanke gently pointed out that the bank had cut interest rates all the way up until 2008 then started operating with "nonstandard monetary tools" like buying up Treasury and mortgage bonds. The Fed never would have done that before, Bernanke implied. Indeed, the list of Fed stimulus measures since Bear Stearns failed would fill up pages of description. Translation: do more? What do you want blood?
Tansy_Gold
(17,858 posts)Nor enough of them to express how little pity I have for this piece of garbage.
xchrom
(108,903 posts)Demeter
(85,373 posts)xchrom
(108,903 posts)LONDON (AP) -- Global markets fell Thursday after the Federal Reserve balked at providing major new stimulus to the U.S. economy, while key surveys showed manufacturing activity continued to contract in both China and Europe, raising concern over the outlook for the world economy.
At the end of a two-day policy meeting Wednesday, the Fed said it was extending a program called Operation Twist, under which the Fed swaps short-term bonds for longer-term ones to help keep long-term interest rates low.
But analysts said the program's extension might not provide much benefit. Businesses and consumers who aren't borrowing now aren't that likely to change their minds just because rates dropped a little more.
Stan Shamu of IG Markets in Melbourne said in a market commentary that investors were "disappointed" that the Fed had not chosen to embark on a third major round of bond purchases, known as quantitative easing.
Demeter
(85,373 posts)Government hopes to raise 10bn this year by asset sales and to save 5bn euros by spending cuts but this might not be enough to offset need to raise taxes
Read more >>
http://link.ft.com/r/LVA6WW/IIAUE2/PNGIU/16K3DU/5VTMNP/B7/t?a1=2012&a2=6&a3=21
Tansy_Gold
(17,858 posts)Than raise taxes.
And of course those who are paying such low taxes are the only ones able to buy the national assets. Since many of those assets will generate revenue, the holders of those assets will be able to control the government and effectively prevent any increase in their own taxes.
Good morning, feudalism!
Demeter
(85,373 posts)Bank sells majority of position in credit derivatives index that brought losses of $2bn as it nears the date when it is due to provide an update
Read more >>
http://link.ft.com/r/DHGUVV/EX0RVF/K91WR/HYLATA/16P2YU/AZ/t?a1=2012&a2=6&a3=21
Demeter
(85,373 posts)The Golden Rule of government, Whoever has the gold makes the rules, was on full display in Washington over the past week as JP Morgans Jamie Dimon appeared at hearings held in both the Senate and the House to answer questions about the banks recently reported trading loss. I am in full agreement with the argument that it is actually none of the governments business when the shareholders of a private bank lose money due to the bad decisions of management, as long as the loss was incurred legally and does not threaten the integrity of the financial system. However, the Congressmen and Senators missed an excellent opportunity to ask Mr. Dimon about any number of financial scandals (Madoff, Jefferson County, robo-signing, etc.) in which JP Morgan Chase has been involved, including the on-going MF Global scandal.
In our representative democracy, where Senators and Congressmen are supposed to serve the public interest, not the interests of big campaign bundlers, it is sad to report that not one member of Congress had the courage to ask Jamie Dimon the following questions:
1. It is reassuring to hear that JP Morgan has more than enough of its own capital to cover the trading losses that triggered this hearing. But suppose for the moment that under some circumstances the size of the loss were to grow to a substantially larger amount than you now anticipate. If you didnt have enough capital to cover the loss, would you ever consider taking money from your customers accounts to cover the losses? That would be illegal, wouldnt it? Permit me to ask your one more not-so hypothetical question: If you were standing in the lobby of a JP Morgan Chase branch, and you saw through the window that one of your customers was robbing the candy store across the street, and the customer then ran into your bank with a bag of cash, would you let that guy pay off his car loan with the cash in his bag? Isnt that in essence exactly what happened last October with your customer, MF Global? According to the very detailed report released on June 6 by Trustee Giddens, the infamous transfer of $175 million from MF Global to your bank on October 28 to pay off an overdraft was a transfer entirely between JP Morgan accounts: from the segregated customer trust account to the MF Global Treasury house account to a JP Morgan London account. All of these moves were completelytransparent on your blotter. Your own employees, Donna Dellosso and Barry Zubrow, witnessed those transfers and were so concerned about them that they immediately requested a letter from Jon Corzine and Laurie Ferber, basically stating that they were not stealing customer money. You never got that letter, but kept the money anyway. Werent you concerned about receiving stolen property, and potentially being an accessory to the looting of customer accounts? Did you call the CFTC or SEC to report your suspicions?
{Mr. Dimon told the Senate Banking Committee that his bank received verbal assurances that the transfer was legitimate; however the Giddens report directly contradicts this see page 134: MFs in-house attorney, Dennis Klenja, advised that he made no assurances of any kind to JPM.} JP Morgan was MFs primary banker. You knew that they were scrambling to come up with cash to stay alive, day-by-day, hour-by-hour. Did you really think that they suddenly found a couple of hundred million dollars of excess cash in the segregated account? Or did you watch them steal customer money from a JP Morgan account, and then ask for the letter as a CYA in case they got caught?
2. Last month, your bank returned approximately $168 million in funds to the MF Global estate, money that you had been holding for over 7 months. Mr. Giddens believes that JP Morgan is still holding on to money that rightfully belongs to MF Global, and stated in his report that he will be suing you if no agreement to return the money is reached within 60 days. Are you aware of that? Can you tell us here today how much MF Global money is still being held by your bank? Do you have systems and controls in place to identify what money belongs to you and what money belongs to your customers? Millions of people have custodial accounts at JP Morgan for their retirement funds or their childrens education. Should they be worried about their funds being commingled with the banks own funds? It seems that JP Morgan has a habit of commingling its own funds with customer segregated funds. Werent you fined 33 million pounds in the UK last year for failing to properly segregate 23 billion dollars in client assets? That improper commingling took place over a period of 7 years, correct? And isnt it true that in April of this year the CFTC ordered you to pay a fine of $20 million to settle charges that JP Morgan mishandled segregated customer funds at Lehman Brothers between November 2006 and September 2008? The CFTC also stated that after Lehman Brothers filed for bankruptcy, JP Morgan improperly declined to release customer segregated funds linked to commodity accounts. Is that your modus operandi, Mr. Dimon, when a customer of the bank seems headed for bankruptcy: to grab onto as much cash and collateral as possible, and then only release it after being sued or ordered to return it by regulators?
3. MF Global had many subsidiaries scattered throughout the world, but effectively operated as one company
under one management. Were you surprised by the fact that in bankruptcy, MF Global was treated as two entities, with the Holding Company allowed to continue operating under Chapter 11, led by the very same executives who had blown up the company? Did your attorneys (either in-house or outside counsel) ever meet with MF Global executives and/or attorneys to discuss or plan the structuring of the bankruptcy? As a result of the Chapter 11, you were able to continue trading with MF Global, and were involved in a sizable transaction involving European sovereign debt in early November; is that correct? According to Mr. Giddens report and news articles published by the Wall Street Journal, over $14 billion in MF Global fixed income positions were liquidated by the London Clearing House at below-market prices, resulting in substantial profits for the buyers. JP Morgan bought some of those bonds, along with the George Soros Family Trust, is that correct? And JP Morgan is one of the owners of the London Clearing House, is that also correct? Did you use your influence at the LCH to increase margin requirements for MF Global? At the time when those transactions took place, it was already an established fact that over $1 billion was missing from customer segregated accounts, and you were certainly aware that customer money had been repo-ed to support those sovereign bond positions. So didnt it seem probable to you that you were dealing in stolen property, sometimes referred to as fencing or money laundering? How much money did you make from those bond purchases?
In his report, Mr. Giddens stated that because these transactions took place at the LCH, the Trustee has not had full transparency into these transactions or the amounts that might be owed to MF Global customers. Given that JP Morgan is a co-owner of the LCH, perhaps you could ask them to provide some transparency on those transactions to Mr. Giddens. Dont you agree, Mr. Dimon? In another transaction that took place two weeks after JP Morgan was placed on the bankruptcy committee, you purchased MF Globals ownership share in the London Metals Exchange (LME). That stake is now worth $103 million, a gain of over 150% in 7 months. Here again, JP Morgan is making a huge profit from dealings in the remaining assets of MF Global, while customers who had segregated custodial deposits in your bank await the return of their missing $1.6 billion. Does that seem right to you, Mr. Dimon? Dont customers have priority under the law for recovery of their stolen money?
4. When did you first become aware that MF Global was at risk of going under, Mr. Dimon? And which of the following choices best describes your reaction; was it:
A) As a custodial bank, we have a legal and fiduciary duty to our customers. How can we make sure that their deposits are protected?
or was it:
B) Holy Crap! Those guys owe us over a BILLION dollars. What can we do to make sure we get our money back?
AND THERE'S STILL MORE QUESTIONS, INCLUDING A "BONUS" QUESTION ON BONUSES....
Demeter
(85,373 posts)Lets talk privatization...In the dreary world of the real, privatization means turning over a government function to the private sector. It has such a long history that its a wonder we still have any public sector left. The Ancient Greeks did it. The Han dynasty did it....I have been thinking about this a lot, mainly because of a recent series of Times articles by Sam Dolnick, which examine the wondrous outcome of a pioneering effort by the State of New Jersey to privatize some of its prison functions, particularly a halfway house program for people on the way in or out of the criminal justice system. The program costs about half as much per inmate as a regular jail. This may be in part because the prisoners keep escaping. More than 5,000 have run, walked or wandered off since 2005. That placed a sometimes tragic burden on the victims of the crimes the escapees later committed, but it must have definitely reduced upkeep. Perhaps you could call it inmate self-privatization...
In honor of the campaign season, maybe this is a good time to point out some examples of privatization disasters. Texas tried to turn eligibility screening for social services over to a private company, creating all sorts of messes until it gave up the experiment. The most apocryphal story involved a privately run call center that told applicants to send their documentation to a number that turned out to be the fax at a warehouse in Seattle.
The hottest new wrinkle for private companies eager to tap into public school funding is charter cyberschools. A study at the University of Colorados National Education Policy Center found that only about a quarter met federal standards for academic progress.
Here in New York, we have been experiencing a long-running privatization adventure in which an attempt to streamline employee timekeeping that was supposed to have cost the city $63 million wound up with a slightly unsleek tab of $700 million...John Donahue, the faculty chairman of the masters in public policy program at Harvard, says the best candidates for privatization are functions where performance is relatively easy to evaluate, like construction or food services. On the worst-case end, he points to having mercenaries run your war for you, which we know something about, given the fact that our military effort in Iraq and Afghanistan sometimes involves more people working for private contractors than actual members of the military.
THE REST IS BILGE
Demeter
(85,373 posts)In the 19th century, robber barons started their own private universities when they were not satisfied with those already available. But Leland Stanford never assumed his university should be run like his railroad empire. Andrew Carnegie did not design his institute in Pittsburgh to resemble his steel company. The University of Chicago, John D. Rockefellers dream come true, assumed neither his stern Baptist values nor his monopolistic strategies. Thats because for all their faults, Stanford, Carnegie, and Rockefeller knew what they didnt know.
In the 21st century, robber barons try to usurp control of established public universities to impose their will via comical management jargon and massive application of ego and hubris. At least thats whats been happening at one of the oldest public universities in the United StatesThomas Jeffersons dream come true, the University of Virginia.
On Thursday night, a hedge fund billionaire, self-styled intellectual, radical moderate, philanthropist, former Goldman Sachs partner, and general bon vivant named Peter Kiernan resigned abruptly from the foundation board of the Darden School of Business at the University of Virginia. He had embarrassed himself by writing an email claiming to have engineered the dismissal of the university president, Teresa Sullivan, ousted by a surprise vote a few days earlier.
The events at UVA raise important questions about the future of higher education, the soul of the academic project, and the way we fund important public services...
MORE
Roland99
(53,342 posts)Roland99
(53,342 posts)* June U.S. flash manufacturing PMI 52.9
* June U.S. manufacturing PMI at 11-mo low
Roland99
(53,342 posts)* Four-week claims average rises 3,500 to 386,250
* U.S. weekly jobless claims drop 2,000 to 387,000
* Continuing claims unchanged at 3.30 million
* Four-week average at highest level since December
Roland99
(53,342 posts)* 30-year mortgage rate hits record low of 3.66%
* Median prices jump 7.9% to $182,600
* Highest median home sales price since June 2010
* May U.S. existing home sales fall 1.5% to 4.55 mln
* Forecast: May existing home sales 4.6 mln
Roland99
(53,342 posts)* June Philly Fed weakest since August 2011
* June Philly Fed well below consensus 0.0
* U.S. June Philly Fed index -16.6 vs. -5.8 in May
* June Philly Fed prices paid -2.8 vs. 5.0 in May
* June Philly Fed new orders -18.8 vs. -1.2 in May
DemReadingDU
(16,000 posts)6/21/12 Big Bank Downgrade By Moody's Imminent
Even as Moody is now about a week late on its Spanish bank downgrade where the banks are rated higher than the sovereign (which obviously is kept in check to prevent yields on bonds from soaring even more), here comes the next wholesale bank downgrade:
Moody's expected to announce ratings downgrade for UK banks this evening - Sky Sources
Exclusive: Big news - I'm told Moody's will announce downgrades of some of world's biggest banks, incl in UK, after US mkts close tonight. - Sky's Mark Kleinman
more...
http://www.zerohedge.com/news/uk-banks-downgrade-moodys-imminent
Tansy_Gold
(17,858 posts)Nyah nyah nyah.
and
Demeter
(85,373 posts)The fiasco that is playing out in the natural gas industry doesnt happen often in a free market, and when it does happen, its usually shortand brutal for all involved: namely, prices that are way below production costs. In most industries, hedging strategies might get market participants through the period, while unhedged production, a money-losing activity, gets slashed. If it lasts long enough, it causes a shakeout where less efficient or poorly capitalized producers, and their investors, get wiped out. Its all part of the capitalist system that weeds out weaker elements through occasional sweeps of creative destruction. As shortages crop up on the horizon, prices return to sustainable levels, and occasionally spike to once again unsustainable levels. For the survivors, or for lucky new entrants, the next step in the cycle has begun.
Alas, thanks to the Feds zero-interest-rate policy and the trillions it has handed over to its cronies since late 2008, the sweeps of creative destruction have broken down. Instead, boundless sums of money have been searching for a place to go, and theyre chasing yield when there is none, and so theyre taking risks, any kind of risks, in their vain battle to come out ahead. The result is a stunning misallocation of capital to the tune of tens of billions of dollars to an economic activitydrilling for dry natural gasthat has been highly unprofitable for years. Its where money has gone to die. Whats left is debt, and wells that will never produce enough to make their investors whole. For that whole debacle, read.... Capital Destruction in Natural Gas.
But the money has dried up. And drilling for natural gas is collapsing. Last week, there were only 562 rigs drilling for dry natural gasthe lowest number since September 1999. A dizzying downward trajectory:
?__SQUARESPACE_CACHEVERSION=1340234369610
Producers, if at all possible, are switching to drilling for oil and natural gas liquids (priced like oil), still a profitable activity. Thus, capital is now being channeled to where it can make money. Drilling for dry natural gas will continue to decline as the long delayed sweep of creative destruction is scouring the industry. The largest producer, ExxonMobil, given its monumental size and worldwide focus on oil, will weather the fallout just fine. But the second largest producer, Chesapeake Energy, is struggling. Its trying to dump assets to raise cash to deal with its mountain of decomposing debt. Other producers that havent diversified away from dry natural gas are in a similar quandary. And at current prices, its going to be bloody.
At $2.53 per million Btu at the Henry Hub, the price of natural gas is up 33% from the April low of $1.90 per million Btua number not seen in a decade. But even if it doubled, it would still be below the cost of production. And if it tripled, it might still be below the cost of production for most producers. Thats how mispriced the commodity has become.
BUT WAIT! THERE'S MORE!
westerebus
(2,976 posts)Roland99
(53,342 posts)Demeter
(85,373 posts)A mixed blessing, to be sure.
westerebus
(2,976 posts)I saw coco futures down last night and said: self, the baby, the water and the tub are out the door...
Roland99
(53,342 posts)Nasdaq 2,895 -35 -1.21%
S&P 500 1,343 -13 -0.96%
GlobalDow 1,806 -18 -1.01%
Gold 1,571 -45 -2.75%
Oil 79.49 -1.96 -2.41% [/font]
Roland99
(53,342 posts)Nasdaq 2,882 -49 -1.66%
S&P 500 1,336 -20 -1.48%
GlobalDow 1,801 -23 -1.26%
Gold 1,575 -41 -2.51%
Oil 79.52 -1.93 -2.37% [/font]
Roland99
(53,342 posts)Roland99
(53,342 posts)Demeter
(85,373 posts)I've been waiting for that for over a year.
Smells like a real panic, this time.
xchrom
(108,903 posts)For a long time, the German economic powerhouse seemed immune to the effects of the European debt crisis. In recent weeks, however, economic indicators have begun to suggest that dark clouds may be gathering over Germany.
The latest bad news came on Thursday. New figures showed that Germany's private sector shrank in June for the second month in a row, and manufacturing activity hit a three-year low.
The purchasing managers' index compiled by the research institute Markit based on a survey of 1,000 firms fell by 0.8 points to 48.5 percent -- the lowest figure since June 2009, and below the 50-point mark which is considered to separate growth from contraction. The index for the whole of the euro zone was 46, the same as last month and the lowest level in three years.
Markit's Tim Moore said in a statement that there seems to be "a deepening consensus among German businesses that the euro area turbulence has already damaged their growth prospects for the latter half of 2012." Business outlook in the service sector fell sharply from 55.9 in May to 47.0, the biggest drop in the survey's 15-year history.
kickysnana
(3,908 posts)Roland99
(53,342 posts)westerebus
(2,976 posts)Nas is gettin hammered // sp down 2%
Demeter
(85,373 posts)90+ is only news when it gets to NY and DC...meanwhile, I'm melting, melting....
Fuddnik
(8,846 posts)They keep promising more rain. Big rain, but all I keep seeing are sprinkles.
Roland99
(53,342 posts)westerebus
(2,976 posts)What could possibly go wrong?
I was in Costco this afternoon and I noticed healthy reductions on large screen HDTVs. I don't own one myself, but I thought, if they are clearing inventory now, the wealth effect is done for at this point. Are we back to the foreboding mode on the corporate level? Well tech sold today which will put the Asian market under pressure. I'm thinking it's not the Euro we have to worry about this weekend, Mr Yen is due for a house call.
Roland99
(53,342 posts)HDTVs come out with new models usually in late spring thru summer...a bit after the latest round of digital cameras, it seems (Canon's new ones having come out in late March - early April)
westerebus
(2,976 posts)That is why your engineer's pragmatism is much in demand.
I just enjoy the running commentary of possibilities that my mind provides.
The unknown unknowns.
Demeter
(85,373 posts).....
The market has been behaving oddly all week, said David Kelly, chief market strategist at J.P. Morgan Funds, who notes that equities failed to bounce on Monday after Greek elections yielded hoped-for results, and that the market seemingly did not like Wednesdays move by the Fed, even though the Fed did as expected.
To me the most important thing is the U.S. economy is not very vulnerable to recession right now, regardless of what the Fed does or doesnt do, and earnings should be reasonably okay, Kelly said.
Kelly also played down the significance of Spanish bank audits.
The issues in Europe are not and have never been can you save Spanish banks, but can European leaders get together to restart their economy, and I dont think that question is being addressed today.
MEANING JPMORGAN LOST THE REINS OF POWER?
Demeter
(85,373 posts)Fifteen of the biggest global banks were downgraded by Moodys Investors Service on Thursday, adding to pressure on their borrowing costs and triggering multi-billion dollar collateral calls.
Morgan Stanley, seen as the most vulnerable, escaped the three-notch downgrade that Moodys had threatened but saw its rating cut from A2 to Baa1, three notches above junk.
Stock markets fell as anticipation of the downgrades, which came after US markets closed, added to fears over the global economy. Shares in Bank of America, Citigroup and RBS fell by more than 3 per cent by the closing bell. The S& P 500 closed down 2.2 per cent at 1,325.51.
Read more >>
http://link.ft.com/r/6NPSBB/NJ48V4/XBAN6/4CI1QS/NJXTIO/E4/t?a1=2012&a2=6&a3=21
Demeter
(85,373 posts)Thunderstorms!
Fuddnik
(8,846 posts)I was just getting ready to walk out the door for a tea-bagger candidate forum, which none of the actual candidateswill attend except a friend of mine, who is running as a "No Party Affiliation".
So much for that idea. If I walk out the door, I'll get drowned.
Demeter
(85,373 posts)Roland99
(53,342 posts)kickysnana
(3,908 posts)https://www.facebook.com/photo.php?fbid=10150931258709121&set=a.153791524120.111572.100298764120&type=1&ref=nf
Hope you can see these. I never figured out how do to photos on DU3 or I forgot how.
tclambert
(11,085 posts)Oh! I just got that his horse poops money! Ha!
Fuddnik
(8,846 posts)Nah, that's probably reserved for some Mormon missionary, who'll give it back.
wilsonbooks
(972 posts)"Oracle co-founder and billionaire Larry Ellison is buying the Hawaiian island of Lana'i, the sixth-largest island in the U.S. archipelago. Hawaii Gov. Neil Abercrombie confirmed in a written statement that the current landowner filed a transfer application with the state's Public Utilities commission Wednesday to sell its 98 percent share of the 141-square-mile island to Ellison."