STOCK MARKET WATCH -- Wednesday, 30 January 2013

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Wednesday, 30 January 2013[font color=black][/font]

SMW for 29 January 2013

AT THE CLOSING BELL ON 29 January 2013
[center][font color=green]
Dow Jones 13,954.42 +72.49 (0.52%)
S&P 500 1,507.84 +7.66 (0.51%)
[font color=red]Nasdaq 3,153.66 -0.64 (-0.02%)


[font color=red]10 Year 2.00% +0.04 (2.04%)
30 Year 3.18% +0.04 (1.27%) [font color=black]


[center][/font]

[HR width=85%]

[font size=2]Market Conditions During Trading Hours[/font]
[center]


[/center]

[font size=2]Euro, Yen, Loonie, Silver and Gold[center]

[/center]

[center]

[/center]

[HR width=95%]

[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
[center]
Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
[/center]

[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
[center]
The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
[/center]

[font color=black][font size=2]Handy Links - Essential Reading:[/font][/font]
[center]
Matt Taibi: Secret and Lies of the Bailout


[/center]

[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
[center]
LegitGov
Open Government
Earmark Database
USA spending.gov
[/center]

[font color=black][font size=2]Handy Links - Videos:[/font][/font]
[center]
Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
[/center]

[div]
[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.



[HR width=95%]


[center]
[HR width=95%]
[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]

[Tansy_Gold]

1. Thanks for the 'toon to Playinghardball

Posted earlier today in GD, has about 200 recs now, and I grabbed it for those of us who rarely venture out of our comfort zone.

[Demeter]

2. Note the the readers: a Living Wage is at least $20/ Hr

More, if no benefits are included. I for one, am not making anywhere near that. But I have no debt.

[Warpy]

3. No debt is a really big deal. It's why buying that house

in your 30s and hoping you can stay in it until it's paid off is the big gamble that pays off when you retire if all you have is Social Security. You can actually survive on Social Security if all you owe on your home are the yearly taxes.

But congratulations! I know what it takes to live debt free because that's how I did it, too. Yeah, it hurt while I was watching my co workers take European vacations on credit cards. However, I can sleep at night and now they can't.

[Tansy_Gold]

4. Debt free is the only way I can make it

And it was one of the most important long-term-strategy lessons I impressed on my kids, along with the value of sweat equity.

[Warpy]

5. I was lucky, my parents were Depression teenagers

and managed to instill a lifelong allergy to debt in me, the only exception being a 30 year fixed rate mortgage.

I did take out two used car loans in this town and paid them off early to establish my credit here to get that mortgage.

I only had a credit card for 2 years, during and shortly after my move from Boston to NM. When they started to charge junk fees on top of that 18 3/4% interest, they became too steep for me and I canceled.

[DemReadingDU]

6. Debt free too

But our taxes are high, the insurance is high, gas is high, food is high. If it weren't for a pension, we wouldn't be able to live in this nice neighborhood on just social security.

[Warpy]

7. I moved to a cheap area

where housing, heating and cooling costs were pretty much rock bottom.

I'll always miss Boston, but there's no way I could have owned anything there and paid the taxes on it on Social Security even if I'd managed to pay the place off.

[AnneD]

44. ITA....

We did not start improving our bottom line until we: chop up our credit cards, started an emergency fund (1,000 at first-it took 6 months), paid off our debts smallest to largest. We did go back in debt but have been paying extra on everything in order to pay them off quickly.

Any loan we took, if we took at all, we took it for the shortest time. I have also considered a well stocked pantry the same as an emergency savings account. This last month, when we spent more than expected on moving, I did not have to dip into the emergency fund. I just didn't buy groceries last month other than oranges, apples, tomatoes, carrots, celery and bell peppers-less than $15 and no eating out. The month's grocery money paid for the move.

At this point we are building assets. We are going to take out a mortgage for a house but with a big down payment and short terms. We still have the option of buying land and doing our containers. We are very flexible and have options. We intend to retire with a paid for house, pensions, and the ability to be self sufficient.

We are fortunate that we have jobs that pay a living wage, but during the time we were deepest in debt, I was working 2 full time jobs (that lasted 6 months) and hubby was working overtime like crazy. It was a hard time but worth it. At least we could work our way out. I pity those that do not have that option.

It is so important that we teach financial literacy in this country. I learned from the school of hard knocks but I have tried to impart this wisdom to my daughter. I guess it a good sign that she does consult me on financial issues. I have checked my daughter's SO out and he has the same good head on his shoulders. The greatest gift you can give your kids is financial literacy.

[Demeter]

8. "Just because you're paranoid..."

...doesn't mean they aren't out to get you.

[Demeter]

9. Jupiter ends 4 months of retrograde

Yippee.

[tclambert]

21. In that Dilbert, the company lawyer has a knife.

Speaking of psychopathic salespeople, I just watched "Glengary Glen Ross," an old movie about real estate salesmen (no women in the cast). Those guys lied their asses off every time they talked to a prospective customer. It's the film where Alec Baldwin gives an epic sales motivation speech to the crew--"Always Be Closing." "First place wins a Cadillac! You want to know what second place gets? Steak knives. And third place, YOU'RE FIRED!"

He does a great parody of that speech on SNL where he's an elf from the home office brought in to motivate some of Santa's elves.

[Fuddnik]

45. That film is more real than most people can imagine.

I was in sales for a while, when laid off back in the '80s. There is enormous pressure to produce all the time. I've seen whole regional offices fired at once.

It's a one stop close. You don't get a second shot. You have to go into the home with the attitude, that they're either going to buy right now, or they're going to throw me out of the house. But, I'm not leaving until then.

I got into a big fight with corporate one day, where they were trying to send a female, into the worst projects in Cleveland to sell someone a $20k swimming pool. I finally convince them that they were putting her in a life-threatening situation. Then they wanted me to run the lead. Ain't no way.

[Demeter]

10. The real euro crisis is just starting: Unemployment is near society’s breaking point

http://www.marketwatch.com/story/the-real-euro-crisis-is-just-starting-2013-01-30?siteid=YAHOOB

...After three years of almost perpetual crisis, 2013 opened in a surprisingly optimistic mood. Leaders of the battered single currency have started to declare that the war is over — and that they have won.

“I think we can say that the existential threat against the euro has essentially been overcome,” the European Commission President José Manuel Barroso proclaimed in a speech in Lisbon earlier this month. The euro crisis is “behind us,” argued French President Francois Hollande just before Christmas. “The most acute phase of the crisis appears to be definitely over,” insisted Italian Prime Minister Mario Monti.

In fairness, there is some evidence for that optimistic view. Bond yields have stabilized, and in Italy and Spain they have fallen significantly. Stock markets are rising and so is the currency. Business confidence is ticking up. There hasn’t been a late-night summit for months, and all those pictures of a worried Christine Lagarde huddling with an exhausted Angela Merkel have been banished from the front pages.

There is a snag, however. In reality, the real euro crisis is only just starting. It began as simply a financial crisis. The second phase, however, will be an economic and social crisis, and that will be a lot harder to solve...When the euro crisis erupted, first in Greece, and then in Ireland and Portugal, it was essentially a collapse in confidence in the markets. Bond investors who had been persuaded that Greek paper was as solid as German paper realized they had made a terrible mistake, just as they had when they believed lending to sub-prime mortgage borrowers was no more risky then lending to people with good jobs and plenty of money. Peripheral euro-zone governments found that they could no longer borrow except at prohibitive rates. Pretty soon the banking systems were in trouble as well, because if you don’t want to lend to a government, you certainly don’t want to lend to the banks that rely on them. Before long, they all needed to be bailed out.But a financial and banking crisis is relatively easy to fix. All you have to do is print some money and it goes away. We learned that in 2008 and 2009. Indeed, all the European Central Bank has had to do is promise to print a lot of money, and shovel some cash to the banks through the back door, and it fixed the problem. Or so it seems. Bond yields have come back down again. The yield on the 10-year Italian bond has dropped from more than 6% at the peak of the crisis last year to only 4.1% now. The Spanish 10-year yield is down from 7.5% last summer to 5.1% now. The drop in Greek yields has been even more spectacular: from 37% last year to slightly over 10% now.

Problem solved? Unfortunately not. As we also learned in 2008 and 2009, while you can fix a financial crisis simply enough, an economic crisis is much tougher. And that has only just started. There are two big issues. The peripheral countries were always uncompetitive against their neighbors in northern Europe. On top of that, there are deep cuts in government spending as part of the austerity packages demanded as the price of staying within the single currency. And, to make things even worse, even with the lower bond yields of recent weeks, capital is still a lot more expensive for companies in peripheral Europe than it is in Germany. That makes it a lot more expensive for them to invest...

[Demeter]

11. Europe stocks steady ahead of U.S. Fed call

http://www.marketwatch.com/story/europe-stocks-steady-ahead-of-us-fed-call-2013-01-30?siteid=YAHOOB

European stock markets on Wednesday traded close to the flat line, as investors remained cautious ahead of a keenly watched announcement from the U.S. Federal Reserve and U.S. growth data...Investors trained their attention on the U.S. Federal Reserve, due to conclude a two-day policy-setting meeting later in the day.

The central bank was widely expected to maintain its aggressive easing strategy and keep buying bonds to the tune of $85 billion a month. A statement is expected at 7:15 p.m. London time, or 2:15 p.m. U.S. Eastern. See: Fed to press ahead with bond buying

At 1:30 p.m. Eastern time, the Commerce Department will release its estimate for U.S. gross domestic product in the fourth quarter. See: What GDP means to stock trading this week

[Demeter]

12. Euro surges to 14-month high, Fed decision awaited

http://news.yahoo.com/asian-shares-gain-global-recovery-outlook-eyes-fed-034542268--finance.html

...The Fed is expected to maintain asset buying at $85 billion a month when it concludes its meeting later and retain its commitment to hold interest rates near zero until unemployment falls to at least 6.5 percent.

European economic confidence data for January at 1000 GMT, ECB crisis loan repayments and Italy's sale of five and 10-year bonds will absorb most of investors' attention before then, as they look for further evidence of a pick-up in the region.
Share markets in London, Paris and Frankfurt opened little changed ahead of the data, leaving all eyes on a rally by the euro as it broke above $1.35 for the first time since December 2011.

Alongside the recent rebound in confidence in the euro zone, one of the drivers behind the recent spike has been the eagerness of banks to repay the crisis loans they took from the European Central Bank just over a year ago.

"It (the euro rise) is just a carry on with the current trend, risk is pretty healthy and equities are doing well," said Bank of Tokyo Mitsubishi strategist Derek Halpenny.
"The danger is European policymakers allow a spike (in euro and market rates) as a result of a removal of one of the principle support measures ... With the Fed and the BOJ still easing the euro is clearly the path of least resistance."...MORE

[Demeter]

13. November home prices tick down, Case-Shiller says

http://www.marketwatch.com/story/november-home-prices-tick-down-case-shiller-says-2013-01-29?siteid=YAHOOB

U.S. home prices declined in November on seasonal weakness, with 10 of 20 major cities seeing lower prices, according to the S&P/Case-Shiller home-price index released Tuesday...The S&P/Case-Shiller 20-city composite posted a non-seasonally adjusted 0.1% decrease in November following a 0.2% decline in October. After seasonal adjustments, the 20-city home-price index rose 0.6% in November.

“Winter is usually a weak period for housing, which explains why we now see about half the cities with falling month-to-month prices compared to 20 out of 20 seeing rising prices last summer,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.

Despite the recent decline, prices were 5.5% higher than during the same period in the prior year, for the strongest year-over-year growth since August 2006. For November, there were year-over-year price gains in 19 of 20 cities; New York was the only city with a lower year-over-year result.

“Housing is clearly recovering,” Blitzer said, noting positive trends for new- and existing-home sales. However, prices remain 30% below a bubble peak in 2006, according to Case-Shiller data.

[Demeter]

23. U.S. New-Home Sales Drop Blemishes Best Year Since 2009

http://www.bloomberg.com/news/2013-01-25/sales-of-new-u-s-homes-decrease-to-end-first-year-of-rebound.html

Purchases of new U.S. homes unexpectedly decreased in December, a blemish as the industry wrapped up its best year since 2009 to emerge as a bright spot for the economy.

The 7.3 percent drop in December sales to a 369,000 annual pace followed the prior month’s 398,000 rate that was faster than previously estimated, Commerce Department figures showed today in Washington. Builders sold 367,000 homes in 2012, the most in three years and the first annual increase in seven.

Mortgage rates near record lows, improved job prospects and a rising number of households should keep stoking demand and benefit builders such as Lennar Corp. (LEN) and KB Home. (KBH) Combined sales of new and previously owned properties last year rose 9.9 percent, the biggest annual gain since 1998 and an indication residential real estate is helping drive growth.
“2013 will show more of an increase in prices and more positive sales activity and housing starts,” said Anika Khan, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, a unit of the biggest U.S. mortgage lender. “We expect to see residential investment adding to growth despite a very sluggish overall pace of economic growth.”

WHATEVER

[Demeter]

14. Obama's Parting Gift to Hillary Clinton

http://www.businessweek.com/articles/2013-01-28/obamas-parting-gift-to-hillary-clinton#r=hpt-ls

Last week campaign disclosure reports revealed that Hillary Clinton had finally retired the debt from her 2008 presidential campaign—with a little help from the guy who beat her, Barack Obama. Clinton’s debt once totaled more than $20 million, although it had dwindled to about $250,000 by last year. That’s when a team of top Obama donors decided to surprise Clinton, and thank her for her loyal service, by raising enough money to pay off her bills. As secretary of state, she was forbidden from political fundraising.

According to a person involved in the effort who did not want to be named talking about internal fundraising strategy, the effort was launched last April by Steve Spinner, a California finance chairman for the Obama campaign; Jane Stetson, the former Democratic National Committee finance chairwoman; and Henry Munoz, the incoming DNC finance chairman. The challenge was tougher than it may appear, since it required a particular kind of donor. In order not to run afoul of campaign finance laws, the Obama team had to find people who had not already given Clinton the 2008 maximum primary donation of $2,300 or maxed out their total federal candidate donations during the 2012 cycle ($46,200). And of course, those people also had to be warmly disposed toward Clinton and still have plenty of free cash on hand.

The team found them by assigning an intern to comb through the records at OpenSecrets.org and see who still had room to give. In the end, it took the checkbooks of about 120 people and several months to retire the debt—I’m told the last check arrived in early July. And as it turned out, the Obama folks substantially overshot the mark. Clinton’s campaign, which has not yet formally been shut down, now shows a surplus of about $205,000.

AND THAT, LADIES AND GENTLEMEN, IS WHY HILLARY WILL RETIRE AND NOT RUN AGAIN...

[Demeter]

15. America Is Turning Into One Big Prison for People in Debt

http://www.alternet.org/economy/america-turning-one-big-prison-people-debt?akid=9989.227380.2jXOHD&rd=1&src=newsletter785633&t=13&paging=off

...In 2013, you can’t actually be jailed for not paying your bills, but ingenious corporations, collection agencies, cops, courts, and lawyers have devised ways to insure that debt “delinquents” will end up in jail anyway. With one-third of the states now allowing the jailing of debtors (without necessarily calling it that), it looks ever more like a trend in the making. Will Americans tolerate this, or might there emerge a politics of resistance to debt, as has happened more than once in a past that shouldn’t be forgotten?

The World of Debtor’s Prisons

Imprisonment for debt was a commonplace in colonial America and the early republic, and wasn’t abolished in most states until the 1830s or 1840s, in some cases not until after the Civil War. Today, we think of it as a peculiar and heartless way of punishing the poor -- and it was. But it was more than that.

Some of the richest, most esteemed members of society also ended up there, men like Robert Morris, who helped finance the American Revolution and ran the Treasury under the Articles of Confederation; John Pintard, a stock-broker, state legislator, and founder of the New York Historical Society; William Duer, graduate of Eton, powerful merchant and speculator, assistant secretary in the Treasury Department of the new federal government, and master of a Hudson River manse; a Pennsylvania Supreme Court judge; army generals; and other notables. Whether rich or poor, you were there for a long stretch, even for life, unless you could figure out some way of discharging your debts. That, however, is where the similarity between wealthy and impoverished debtors ended... debtors prisons were segregated by class. If your debts were large enough and your social connections weighty enough (the two tended to go together) you lived comfortably. You were supplied with good food and well-appointed living quarters, as well as books and other pleasures, including on occasion manicurists and prostitutes. Robert Morris entertained George Washington for dinner in his “cell.” Once released, he resumed his career as the new nation’s richest man. Before John Pintard moved to New Gaol, he redecorated his cell, had it repainted and upholstered, and shipped in two mahogany writing desks.

Meanwhile, the mass of petty debtors housed in the same institution survived, if at all, amid squalor, filth, and disease. They were often shackled, and lacked heat, clean water, adequate food, or often food of any kind. (You usually had to have the money to buy your own food, clothing, and fuel.) Debtors in these prisons frequently found themselves quite literally dying of debt. And you could end up in such circumstances for trivial sums. Of the 1,162 jailed debtors in New York City in 1787, 716 owed less than twenty shillings or one pound. A third of Philadelphia’s inmates in 1817 were there for owing less than $5, and debtors in the city’s prisons outnumbered violent criminals by 5:1. In Boston, 15% of them were women. Shaming was more the point of punishment than anything else...However much the poor organized and protested, it was the rich who got debt relief first. Today, we assume that debts can be discharged through bankruptcy (although even now that option is either severely restricted or denied to certain classes of less favored debt delinquents like college students). Although the newly adopted U.S. Constitution opened the door to a national bankruptcy law, Congress didn’t walk through it until 1800, even though many, including the well-off, had been lobbying for it. ...When Congress finally passed the Bankruptcy Act, those in the privileged quarters at New Gaol threw a party. Down below, however, life continued in its squalid way, since the new law only applied to people who had sizable debts. If you owed too little, you stayed in jail...

US HISTORY OF PRIVATE DEBT--GOOD READ

[Demeter]

16. Court backs Iceland over failed bank's debts

http://www.reuters.com/article/2013/01/28/iceland-icesave-idUSL5N0AX5GK20130128

Iceland won a court ruling on Monday allowing it to repay billions of euros on its own terms to Britain and the Netherlands for bailing out depositors in a failed Icelandic bank.

Iceland has said it will fully repay both countries, but through a gradual process as it runs down the assets of failed bank Landsbanki, which collapsed in 2008 leaving depositors of its Icesave online accounts stranded.

Britain and the Netherlands stepped in to repay savers, but it sparked a political row and the two countries sought court backing to say Iceland had failed to repay the money within time limits set by a European directive for deposit guarantee schemes.

A European court dismissed the case on Monday....MORE

[Demeter]

17. Goldman Sachs Raises $1 Billion Selling Stake in ICBC (RAT LEAVES SINKING SHIP?)

http://www.bloomberg.com/news/2013-01-28/goldman-sachs-seeks-1-billion-in-icbc-stake-sale-terms-show.html

Goldman Sachs Group Inc. (GS) raised $1 billion from selling a stake in Industrial & Commercial Bank of China Ltd. after the world’s largest lender by market value rose almost 50 percent from last year’s low.

The company sold 1.35 billion shares at HK$5.77 each, 3 percent lower than the Chinese lender’s HK$5.95 (1398) closing price in Hong Kong yesterday, the New York-based bank said. Goldman Sachs has no immediate plans to sell more stock, Edward Naylor, a Hong Kong-based spokesman, said.

Investing in local lenders in China is reaping bigger profits for foreign banks than operating their own franchises in the world’s second-largest banking market. The Western firms’ gains on those stakes are set to exceed their investments, with more than $20 billion in holdings remaining even after they recouped about $24 billion. Shares of ICBC, which is headed for its seventh year of record profit, fell.

“The sale may mark an end to the recent rally in Chinese bank shares because it does reflect a neutral, if not pessimistic view, of their valuations and ability to sustain profit growth,” said Chen Xingyu, a Shanghai-based analyst at Phillip Securities Pte. “Goldman can put the proceeds from the ICBC sale to better use.”

The Wall Street firm is selling down an investment first made in January 2006 when Goldman Sachs and client funds it manages agreed to invest $2.58 billion in Beijing-based ICBC. The U.S. bank and the funds offloaded ICBC shares at least four times before the latest sale, data compiled by Bloomberg show...

[Demeter]

18. FERC Staff Recommends Pursuing Penalty On Barclays

http://online.wsj.com/article/SB10001424127887324329204578271843934406624.html?mod=dist_smartbrief

Staff at the Federal Energy Regulatory Commission on Tuesday dismissed Barclays defense against the agency's charges of electricity-market manipulation and recommended that the commission levy fines of about $470 million against the bank. The staff also said the commission should send the matter to federal court, setting up a face-off before a judge over a case that has been continuing since 2008. The proposed penalty would be the largest in FERC's history. The commission's five-member governing board will now decide whether to move forward with the charges.

FERC made the charges public last fall, and the bank has said since then that it believes its trading was legitimate. Barclays filed a lengthy response to the allegations in which it said the agency had not made a sufficient case. The FERC staff said Tuesday that the bank's response failed to explain why the trades in question, made between 2006 and 2008, didn't violate rules against market manipulation.

Barclays spokesman Mark Lane said Tuesday that FERC "should reject the staff recommendations, decline to assess any penalties, and terminate this matter without any further proceedings."

"If the FERC proceeds, we intend to vigorously defend this matter in federal court," Mr. Lane said in an e-mail.

[Demeter]

19. German govt to agree TO law on high-speed trading

http://www.reuters.com/article/2013/01/27/germany-regulation-idUSL6N0AU8VG20130127

German Chancellor Angela Merkel's centre-right coalition will on Monday decide on changes to a draft law to clamp down on ultra-fast trading on stock exchanges, which it sees as stoking excessive market turbulence....Merkel's government wants to implement regulation requiring traders to register with stock exchange regulators and disclose their algorithms.(!)

It also wants to limit the number of decimal points given in market prices and to prevent traders from requesting pricing information without intending to trade. Other practices like "scalping", which involves using misleading market signals to influence prices, will be classed as misuse.

Once the coalition has agreed on amendments to the draft law with the Bundestag lower house of parliament's finance committee, it will need to be approved by the German parliament. Parliament is expected to approve the changes, as the coalition holds a majority in both the committee and the parliament.

The German government's move to clamp down on speed trading comes as the European Union also plans to tighten regulation on such practices...MORE

[Demeter]

20. Trade Official Says U.S. Wants Deal With Europe

http://dealbook.nytimes.com/2013/01/27/trade-official-says-u-s-wants-deal-with-europe/

DAVOS, Switzerland — America’s top trade negotiator said late on Saturday that President Obama was committed to reaching an agreement to smooth trade with the European Union, but only if it was written in a way that would overcome objections from farm groups and that could win Congressional approval.

In an interview in Davos, Ron Kirk, the United States trade representative, responded to European leaders who in the last week renewed their calls for a United States-Europe deal to dismantle tariffs and other barriers, which they badly want as a way of stimulating their ailing economies.

At the World Economic Forum, Prime Minister David Cameron of Britain and Chancellor Angela Merkel of Germany were among a number of leaders and business people pleading for a pact that would eliminate tariffs as well as regulations that impede trade. Even without changes, the United States and Europe already have the world’s largest trading market.

On both sides of the Atlantic, proponents have expressed frustration about the delaying of an official report by an American-European working group that would set the stage for formal talks. The delay has fed the widespread perception that Mr. Obama does not care much about a trade pact or, for that matter, about Europe in general.

[Demeter]

22. House budget chief: automatic spending cuts "going to happen"

http://www.reuters.com/article/2013/01/27/us-usa-fiscal-ryan-idUSBRE90Q0FN20130127

Automatic spending cuts postponed at the start of the year will go into effect as scheduled in March but "no one" is talking about allowing a U.S. government shutdown, the Republican House of Representatives Budget Committee chairman said on Sunday.

The automatic spending cuts had been delayed by two months as part of the deal to avoid the "fiscal cliff" of tax hikes and deep spending reductions - known as sequestration - that had loomed at the beginning of this month.

"I think the sequester is going to happen," Representative Paul Ryan, chairman of the House budget panel and the party's 2012 vice presidential nominee, told the NBC program "Meet The Press."
..................

"We think these sequesters will happen because the Democrats have opposed our efforts to replace those cuts with others and they've offered no alternative," Ryan said.

MOST EVERYONE ELSE THINKS RYAN IS SENILE, STUPID, OR WORSE....AND NO SUCH THING WILL HAPPEN

[Demeter]

24. HEIGH-HO, HEIGH-HO

It's off to work I go....

Tonight is a paper night. I have a topic for WEE. The weather outside is frightful...

SNAFU!

[Demeter]

25. JPMorgan bet against itself in "Whale" trade

http://uk.reuters.com/article/2013/01/29/uk-usa-jpm-whale-idUKBRE90S14C20130129

There is a new twist in the London Whale trading scandal that cost JPMorgan Chase $6.2 billion in trading losses last year. Some of the firm's own traders bet against the very derivatives positions placed by its chief investment officer, said three people familiar with the matter.

The U.S. Senate Permanent Committee on Investigations, which launched an inquiry into the trading loss last fall, is looking into the how different divisions of the bank wound up on opposite sides of the same trade, said one of the people familiar with the matter. The committee is expected to release a report on its investigation in the next few weeks.

The people familiar with the situation did not comment on the dollar value of the opposing trades placed by JPMorgan Chase & Co's investment bank traders, which was much smaller than the total positions put on by the CIO.

The intra-bank trading was not mentioned in a 129-page report JPMorgan released on January 16, which chronicled some of the bank's risk management failures. The scandal has led to a number of management changes at JPMorgan and has sullied CEO Jamie Dimon's image as a hands-on risk manager...

SO, DID THEY NET LOSS OR NET GAIN?

[Demeter]

26. STORMY WEATHER

http://assets.amuniversal.com/2af2e9804c7a0130127b001dd8b71c47?width=750.0

[xchrom]

27. clifton chenier -- louisiana blues

[xchrom]

28. Incestuous Amplification, Economics Edition by Paul Krugman

http://www.commondreams.org/view/2013/01/30-5


Back during the early days of the Iraq debacle, I learned that the military has a term for how highly dubious ideas become not just accepted, but viewed as certainties. “Incestuous amplification” happen when a closed group of people repeat the same things to each other – and when accepting the group’s preconceptions itself becomes a necessary ticket to being in the in-group. A fundamentally flawed notion – say, that the Germans can’t possibly attack though the Ardennes – becomes part of what everyone knows, where “everyone” means by definition only people who accept the flawed notion.

We saw that in the run-up to Iraq, where perfectly obvious propositions – the case for invading is very weak, the occupation may well be a nightmare – weren’t so much rejected as ruled out of discussion altogether; if you even considered those possibilities, you weren’t a serious person, no matter what your credentials.

Which brings me to the fiscal debate, characterized by the particular form of incestuous amplification Greg Sargent calls the Beltway Deficit Feedback Loop. I’ve already blogged about my Morning Joe appearance and Scarborough’s reaction, which was to insist that almost no mainstream economists share my view that deficit fear is vastly overblown. As Joe Weisenthal points out, the reality is that among those who have expressed views very similar to mine are the chief economist of Goldman Sachs; the former Treasury secretary and head of the National Economic Council; the former deputy chairman of the Federal Reserve; and the economics editor of the Financial Times. The point isn’t that these people are necessarily right (although they are), it is that Scarborough’s attempt at argument through authority is easily refuted by even a casual stroll through recent economic punditry.

But these people aren’t part of the in-group, and if they do make it into the in-group’s conversation at all, it’s only by blurring their message sufficiently that the in-group doesn’t understand it.

[xchrom]

29. Wall Street Banks Seize Opportunity to Profit from Nation's Unemployed

http://www.commondreams.org/headline/2013/01/29-4

'Too Big to Fail' banks including JP Morgan Chase, U.S. Bancorp and Bank of America have seized on an opportunity to profit off the nation's jobless by siphoning millions of dollars in fees from state unemployment programs, according to a new report by the National Consumer Law Center.

Privatizing the task of distributing unemployment benefits, the banks have created a "fee-heavy" check card system. Instead of having payments deposited directly to bank accounts or recieving checks sent in the mail from their state governments, individuals across the nation are increasingly forced to use costly bank issued payment cards that are loaded with a "plethora" of costly fees for the recipient.

The large banks pitched the operation to states as a scheme that would "save millions in overhead costs" but have instead externalized such costs to America's jobless.

[xchrom]

30. hoo-doo lady blues

[xchrom]

31. Spain's recession worsens in the fourth quarter

http://www.bbc.co.uk/news/business-21258272


The downturn in the Spanish economy worsened in the final three months of 2012, as output fell 1.8% from a year earlier, official data has indicated.

Output shrank 0.7% from the previous quarter - the worst performance in Spain since the 2009 global recession.

Spain suffers from uncompetitiveness inside the eurozone, a troubled banking sector, excessive household and company debts, and harsh government austerity.

Prime Minister Mariano Rajoy responded by announcing a new stimulus package.

[xchrom]

32. US housing recovery gains steam

http://www.bbc.co.uk/news/business-21250912

The US housing market rebound gained steam in November, new data suggests.

House prices were 5.5% up on a year ago, according to the widely-watched Case-Shiller index, the fastest rise since the market crash began in 2006.

However, separate data suggested US consumer confidence took an unexpected knock in January, as rises in income and payroll taxes came into effect.

The Conference Board's Consumer Confidence Index fell sharply to 58.6 in the month, from 66.7 in February.

[xchrom]

33. Dreamliner: Japan's airlines say they changed batteries

http://www.bbc.co.uk/news/business-21256486

Japan's two top airlines said they had replaced a number of batteries in the 787 Dreamliners over the past months.

All Nippon Airways said it changed batteries 10 times. Japan Airlines (JAL) said it did so in a "few cases".

Earlier this month, a battery in a JAL 787 plane caught fire, while an All Nippon Airways flight was forced to make an emergency landing because of a battery malfunction.

The issues have resulted in the entire fleet of Boeing 787s being grounded.

[xchrom]

34. New York Fed Study Makes Yesterday's Collapse In Consumer Confidence Even More Scary

http://www.businessinsider.com/a-new-study-that-just-came-out-makes-yesterdays-collapse-in-consumer-confidence-even-more-scary-2013-1



The paper, from Grant Graziani, Wilbert van der Klaauw, and Basit Zafar, at the New York Fed (via WSJ) says that the payroll tax cut in 2011 had a much bigger economic boost than would have been anticipated:

This paper presents new survey evidence on workers’ response to the 2011 payroll tax cuts. While workers intended to spend 10 to 18 percent of their tax-cut income, they reported actually spending 28 to 43 percent of the funds. This is higher than estimates from studies of recent tax cuts, and arguably a consequence of the design of the 2011 tax cuts. The shift to greater consumption than intended is largely unexplained by presentbias or unanticipated shocks, and is likely a consequence of mental accounting. We also use data from a complementary survey to understand the heterogeneous tax-cut response.

Bottom line, the payroll tax cut of 2011 had a surprise positive shock.

Now we see that reversing and at the same time, consumer confidence has fallen.


*** i'm of the opinion that we should never have had the payroll tax break.

[Demeter]

38. Well, Either Roll the Payroll Taxes into the General Income Tax, or Remove the Cap

as it stands right now, soc. security/medicare is the most regressive tax we have.

And OF COURSE giving people more spendable income was an economic boost! People spend money...not banks, not corporations. They have to, to live. And the poorer they are, the faster that money goes.

QE, hoarding wealth in rich men's pockets, and the increase in banking reserves has killed the velocity of money. It's like trying to run a car without oil in the engine.

[xchrom]

40. oh i wanna see the cap removed.

but i guess in my mind -- the pay roll tax was a a contribution by all workers.

[xchrom]

35. WHOA: GDP FALLS -0.1%

http://www.businessinsider.com/us-advance-q4-gdp-2013-1

***more to come

[DemReadingDU]

41. So a rally because gamblers will expect more QE?

[xchrom]

42. US ECONOMY SHRINKS 0.1 PCT., 1ST TIME IN 3 1/2 YEARS

http://hosted.ap.org/dynamic/stories/U/US_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-01-30-09-00-16

WASHINGTON (AP) -- The U.S. economy shrank from October through December for the first time since the recession ended, hurt by the biggest cut in defense spending in 40 years, fewer exports and sluggish growth in company stockpiles. The decline occurred despite faster growth in consumer spending and business investment.

The Commerce Department said Wednesday that the economy contracted at an annual rate of 0.1 percent in the fourth quarter. That's a sharp slowdown from the 3.1 percent growth rate in the July-September quarter and the first contraction since the second quarter of 2009.

Economists said the surprise decrease in the nation's gross domestic product wasn't as bad as it looked. The weakness was primarily the result of one-time factors. Government spending cuts and slower inventory growth subtracted a total of 2.6 percentage points from growth.

Those volatile categories offset a 2.2 percent increase in consumer spending, up from only 1.6 percent in the previous quarter. And business spending on equipment and software rose after shrinking over the summer.

[DemReadingDU]

43. So our 'industrial' economy was based on war

[xchrom]

36. Ford unveils 'spectacular' results in North America amid losses in Europe

http://www.guardian.co.uk/business/2013/jan/29/ford-fourth-quarter-earnings

Ford said that it expects to lose $2bn in Europe this year, while unveiling "spectacular" results in its North American division.

The company earned $1.6bn in the fourth quarter, powered by a record pre-tax operating profit for its North American unit of $1.87bn, an increase of $577m from the fourth quarter of 2011. Ford has now posted a pre-tax operating profit for 14 consecutive quarters.

"North America had spectacular results," said Bob Shanks, the chief financial officer, in an interview with reporters. "Clearly we have a lot of difficult times ahead of us [in Europe]", he said. "We do think it will probably bottom this year and start to go up."

The news comes after Chrysler boss Sergio Marchionne said Europe's leaders were "fundamentally maiming" the car industry by blocking plans to restructure amid the downturn.

[xchrom]

37. The US Justice Department's Libor prosecution of RBS is too little, too late

http://www.guardian.co.uk/commentisfree/2013/jan/29/regulators-useconomy



Most ambitious financial regulators know there is one rule to establishing their names: reel in a really, really big fish on Wall Street, and make them pay, either through convictions, penalties, or sheer humiliation.

The Royal Bank of Scotland is not this fish. Not only is RBS almost entirely unknown to the American populace, but its alleged crime – fixing inter-bank interest rates years ago – has failed to garner any outrage or surprise from consumers, no matter how appalling the offense.

Yet RBS – and the London inter-bank lending rate (Libor) – is the hinge on which US regulators have recently staked both their reputation and enormous governmental prosecutorial resources. The Wall Street Journal is reporting that regulators are pressuring RBS to accept criminal charges in its fixing of Libor, the same way UBS did.

As the Journal points out, it's not clear why "pressure" is necessary. Obviously, outside of Washington's bizarro world, RBS does not need to give its permission to be prosecuted for wrongdoing by the US government.

[xchrom]

39. You Are My Sunshine by Mississippi John Hurt

[Demeter]

46. Who’s to blame for 2013’s currency frenzy? Happier currency traders doesn’t equal healthier economy

http://www.marketwatch.com/story/whos-to-blame-for-2013s-currency-frenzy-2013-01-30?siteid=YAHOOB

Central bankers love stability. Traders love volatility. The tension between them is a mainstay of global financial markets. On that basis, we could say that 2012 was good one for the central bankers and that this year is shaping up as one for the traders — at least in currency markets, where trading activity is up by as much as 50% from a year earlier for the biggest foreign exchange banks.

The world’s most important currencies have broken out of the tight ranges of last year, threatening a return of volatility that’s driving investors and multinational companies to ramp up their hedging activity. That means more business for the traders who execute these people’s orders, but it’s not necessarily good news for the world as a whole. An uncertain outlook for currencies makes it harder to do international business and drives up the cost of hedging.

Interestingly, both the torpor of 2012 and the frenzy of 2013 can be pinned on those very same stability-loving central banks. After overseeing an uneasy peace for many months with their interventionist efforts, they are now inadvertently fomenting a revival in foreign exchange volatility.

Well, to be fair, most people are blaming just one central bank: the Bank of Japan. And even there, real fault lies with Japan’s new Prime Minister, Shinzo Abe, who has ridden roughshod over the BOJ’s independence to jawbone it into a more proactive monetary policy that’s now driving down the yen. The sharp drop in the Japanese currency — 15% against the dollar since mid-September, 18% versus the euro — has disrupted the equilibrium in world exchange rates. To take one example, the South Korean won’s gains versus the yen are making it harder for Samsung and Hyundai to compete with Sony and Honda. Inevitably that results in a weaker won, which is now sliding versus the dollar as traders anticipate the competitive blow to South Korean. That of course means that South Korea’s competitors are under pressure too. So, the Taiwan dollar is falling as well, which in turn means the Thai baht and Singapore dollar are also slipping, and so forth. But for all of Shinzo Abe’s dangerous forays into mercantilist nationalism, Japan is no lone shooter. While its economic doldrums are mostly the culmination of an insufficient strategy for reversing the deflation of the past two decades, its export-dependent economy’s recovery has not been made any easier by the market interventionism that others have adopted in lieu of more effective reforms to encourage economic growth...Whether it’s China’s manipulation of the yuan to perpetuate an outdated export-led economy, the Federal Reserve’s $2.5 trillion in money printing to stabilize the U.S. economy while Washington dithers, or the European Central Bank’s use of bank lending and sovereign bond backstops to battle a crisis that politicians couldn’t overcome, the rest of the world has been intervening prodigiously. And whether intentionally or not, this changes exchange rate dynamics and poses a competitive threat to places like Japan. It’s impossible to say who threw the first stone...

MAYBE NOT, BUT THE FED THREW THE BIGGEST ONE...

[Demeter]

47. Overbought market conditions persist: ‘Overbought’ is not a sell signal; market can go higher

http://www.marketwatch.com/story/overbought-market-conditions-persist-2013-01-30?siteid=YAHOOB

The stock market continues to rise in a slow-motion fashion. The rise has been so uniform, but dampened, that daily extremes have not been reached.

However, more intermediate-term indicators are now overbought. “Overbought” doesn't mean sell, though. In fact, a market can continue to rise strongly during an overbought condition (such as the current one), just as it can fall sharply even though it is “oversold” (witness the fall of 2008, for example). Hence, bulls can enjoy the rise, while potential bears and other sellers must await an actual break of the uptrend before taking action...

A POLITE WAY OF SAYING: THE WHOLE THING'S A SICK JOKE, HANG ONTO YOUR HATS.

[Demeter]

48. There Will Be Blood

http://www.ponziworld.blogspot.com/2013/01/there-will-be-blood.html

Just as we expected, these phony markets are only equipped to levitate higher, they don't do that slow downtrend "thing" anymore.

Just today, we got a glimpse into the future as multiple Italian stocks were halted. It's a binary market - one day stocks are going up for the umpteenth day in a row, the very next day, limit down. And these "circuit breakers" do nothing to restore confidence as they remove liquidity from the markets and force investors to dump other assets to raise cash. Zerohedge pointed to the recent declines in gold as likely being correlated to the Apple collapse.

The real issue is that so many volatility sellers have been selling volatility at low levels that there won't likely be any put option sellers around when the VIX spikes. That's a very similar situation to what happened during the 1987 crash vis-a-vis the "portfolio insurance" product i.e. it did the opposite of what it was intended to do - it accelerated the selling into the decline.

In any case, we are not likely to get too much more of a warning that when things come unglued worldwide, it will be fast and ugly.

AND I SINCERELY HOPE THAT THE 1% BEAR THE BRUNT OF IT ALL

[Demeter]

49. Stocks Up, Economy Down

You can't make this shit up anymore. It used to be that Wall Street spent all of their time lying to us. Now they spend all of their time lying to themselves...Even though the U.S. stock market is at the highest level in four years, we just found out today that fourth quarter GDP was actually negative ! The GDP number missed expectations by over a percent. Economists of course shrugged it off, as due to "one time factors". Same thing in Europe, the UK economy shrank by .3% in the fourth quarter, but the FTSE is at a four year high. German GDP shrank .5%, DAX at five year high...

On a similar note, last night Amazon, the world's largest online retailer missed on the top and bottom line. However, in response, the stock was up 8% (in after hours) on the news, hitting a new all time high. Let's see, Walmart and Dollar Store can't meet expectations anymore and neither can Amazon. Nothing to see here, move along...

Like I've said before. The party is over, and we are all just standing around waiting for Wall Street to realize the lights are on...

And notice how the entire media are only focused solely on what's happening on Wall Street and totally oblivious to the real economy. They are taking their cue from Wall Street to ignore the ever-widening disconnect between reality and fantasy. This will go down as the first time in history that the economy led the stock market down versus the market leading the economy down. First time - EVER.

[Demeter]

50. The New Economics of Trade: Factories on Barges and the Race to the Bottom

http://www.alternet.org/story/64055/the_new_economics_of_trade%3A_factories_on_barges_and_the_race_to_the_bottom

Jack Welch, former CEO of General Electric, captured the new rules of the global economy when he talked of ideally having "every plant you own on a barge."
October 1, 2007 |





The classical theory of comparative advantage has driven US trade policy for the past fifty years. That policy, in combination with technical innovations that have lowered costs of transportation and communication, has opened the global economy. Yet paradoxically, this opening has rendered classical trade theory obsolete. That in turn has left the US economically vulnerable because its trade policy remains stuck in the past and based on ideas that no longer hold. The logic behind classical free trade is that all can benefit when countries specialize in producing those things in which they have comparative advantage. The necessary requirement is that the means of production (capital and technology) are internationally immobile and stuck in each country. That is what globalization has undone.

Several years ago Jack Welch, former CEO of General Electric, captured the new reality when he talked of ideally having "every plant you own on a barge." The economic logic was that factories should float between countries to take advantage of lowest costs, be they due to under-valued exchange rates, low taxes, subsidies, or a surfeit of cheap labor. Globalization has made Welch's barge a reality. However, in doing so it has made capital mobility rather than country comparative advantage the engine of trade. And with that change, "free trade" increasingly trades jobs and promotes downward wage equalization.

The U.S. and European response to Welch's barge has been competitiveness policy that advocates measures such as increased education spending to improve skills; lower corporate tax rates; and investment and R&D incentives. The thinking is increased competitiveness can make Europe and the US more attractive to businesses. Unfortunately, competitiveness policy is not up to the task of anchoring the barge, and it can even be counter-productive. The core problem is corporations are globally mobile. Thus, government can subsidize R&D spending, but the resulting innovations may simply end up in new offshore factories. Moreover, competitiveness policy easily degenerates into a race to the bottom. For instance, if the US cuts corporation taxes, other countries may match to stay competitive. The result is no gain for the US, while profit taxes are lowered and tax burdens shifted on to wages, which widens income inequality. Worse yet, capital mobility prompts countries to adopt unfair policies to increase their relative business attractiveness. These policies include disregard of environmental damage; suppression of labor to keep wages low; direct subsidies; and under-valued exchange rates. All are visible in China, which is the poster-child for such abuses.

A critical consequence of Welch's barge is the creation of a "corporation versus country" divide. Previously, when corporations were nationally based, profit maximization by business contributed to national economic success by ensuring efficient resource use. Today, corporations still maximize profits, but they do so from the standpoint of their global operations. Consequently, what is good for corporations may not be good for country....From an American worker perspective, the global economy has always had abundant supplies of cheap labor. In the past American workers were still able to compete and benefit from trade. The critical difference today is American corporations are taking their capital and technology offshore and equipping low-wage foreign workers. Those investments undermine American workers because that foreign production is intended for the US market...

THE INJUSTICE IS THAT THE CAPITAL CORPORATIONS EXPORT WAS PRODUCED (AND STOLEN) FROM AMERICAN WORKERS, USING MAINLY US NATIONAL RESOURCES AND INFRASTRUCTURE. IT'S NOT THEIRS TO EXPORT, IN OTHER WORDS, YET THE CORPORATIONS HAVE BOUGHT THE GOVERNMENT TO ENABLE THAT THEFT....

*****************************************************************

Thomas Palley is the founder of the Economics for Democratic & Open Societies Project. Read more of his work at www.thomaspalley.com.

[Fuddnik]

51. Now I see why gas jumped $.15 a gallon overnight.

Oil pushing $100 bbl again.

[amandabeech]

52. I could not give a more enthusiastic rec than the one for this post.

I do not go near their stores.

I know that many people can't afford anything more, not that WM's competitors are necessarily better.

Something has gone completely and utterly wrong with this country, and it doesn't seem like our Dem party cares too much about it.

[bread_and_roses]

53. You are so right (n/t)

[amandabeech]

54. Multitudinous cheers for Tansy Gold!

That post is a real DUZY!