STOCK MARKET WATCH -- Wednesday, 5 June 2013

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Wednesday, 5 June 2013[font color=black][/font]

SMW for 4 June 2013

AT THE CLOSING BELL ON 4 June 2013
[center][font color=red]
Dow Jones 15,177.54 -76.49 (-0.50%)
S&P 500 1,631.38 -9.04 (-0.55%)
Nasdaq 3,445.26 -20.11 (-0.58%)


[font color=red]10 Year 2.15% +0.01 (0.47%)
30 Year 3.31% +0.03 (0.91%) [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
Wall Street on Parade
[/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.
02/14/13 Gilbert Lopez, former chief accounting officer of Stanford Financial Group, and former controller Mark Kuhrt sentenced to 20 yrs in prison for their roles in Allen Sanford's $7.2 billion Ponzi scheme.
03/29/13 Michael Sternberg, portfolio mgr at SAC Capital, arrested in NYC, charged with conspiracy and securities fraud. Pled not guilty and freed on $3m bail.
04/04/13 Matthew Marshall Taylor,fmr Goldman Sachs trader arrested, charged by CFTC w/defrauding his employer on $8BN futures bet "by intentionally concealing the true huge size, as well as the risk and potential profits or losses associated."
04/04/13 Matthew Taylor admits guilt, makes plea bargain. Sentencing set for 26 June; faces up to 20 years in prison but will likely only see 3-4 years. Says, "I am truly sorry."
04/11/13 Ex-KPMG LLP partner Scott London charged by federal prosecutors w/passing inside tips to a friend in exchange for cash, jewelry, and concert tickets; expected to plead guilty in May.










[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]

[Demeter]

1. It’s Not a Housing Boom. It’s a Land Grab

http://colorlines.com/archives/2013/05/the_dangerous_new_housing_boom.html

America’s housing industry—for the first time in years—is celebrating... home sales reached a level not seen since before the financial crisis in 2008, and the price of new homes—taken as a sign of the real estate market’s resurgence—reached their highest level in 20 years. Many in the political and financial class are holding up this relatively positive new housing data as proof that the country has reached an economic oasis. And at first blush, the situation can be construed to be positive. The value of the U.S. housing market has climbed back to $16 trillion, exactly where it was before the economic crisis. Home prices and permits for new construction are up by double digits nationwide. But rather than an oasis, these new gains might be an economic mirage. The reality of the current real estate renaissance is that the rich and those on Wall Street are raking in the cash while large segments of the population—especially historically marginalized communities—remain stuck in a downward, alternate housing reality.

Generally, housing recoveries are fueled by millions of Americans with new jobs, higher wages, available credit from banks and overall confidence that things will get better. But the real economy that most people live in day-to-day is too weak for all of that. Jobs are in short supply, wages are at historic lows and credit for middle and working class Americans is tight. With their economic ladder into homeownership taken away, many Americans can no longer participate in the housing market. In their absence, financial firms and rich global jetsetters are snapping up hundreds of millions of dollars of property each week. Just in the last 12 months, Wall Street’s Blackstone Group has raised $8 billlion to buy up homes on Main Street. Following suit, according to The New Republic, JP Morgan Chase—the nation’s largest bank—has organized a fund to purchase 5,000 single-family homes in states with some of the most depressed real estate prices. As I wrote last year, a former Morgan Stanley housing strategist left that bank, organized a billion dollars, and is purchasing up to 10,000 homes with these new resources. Paying above market price and with cash, these firms are setting the pace for the housing market and crowding out non-wealthy Americans who would normally buy. As the Washington Post reports, seven out of 10 home sales in states like Florida are made by these institutional investors. In down-and-out markets like Atlanta, four out of 10 home purchases are made by investors. In markets like New York City, Washington, D.C., and San Francisco the construction of mega-projects for the mega-rich is skewing prices even higher and pushing more Americans to the housing margins. Some apartments in New York’s still-under-construction 432 Park Ave.—which is set to the be the Western Hemisphere’s tallest residential building—sell for almost $100 million. The CEO of one of the city’s largest real estate firms told The New York Times that “there is not enough supply” of $50 million apartments. In some of the most expensive buildings, 351-square-foot studios go for $1.6 million.

But as investors make money hand over fist, many others are frozen out. First time homeownership in the U.S. has fallen by 25 percent. Driven by the foreclosure crisis, homeownership for blacks and Latinos has cratered, leading to the lowest level of wealth on record for these two communities. Housing is the single largest asset for African Americans and Latinos. As The Christian Science Monitor notes, the homeownership gap between whites and blacks is the largest in over fifty years. And as a recent Alliance for a Just Society report detailed, there are now more than 13 million homes underwater and headed toward foreclosure; they are clumped disproportionately in zip codes with majority people of color. The irony of this foreclosure crisis, which was caused by Wall Street’s irresponsible behavior, is that it created the massive supply in homes that those very same financial institutions are now profiting from at a record pace. Having profited first from millions of risky mortgages and eventually taken away the homes that underwrote them, institutional investors are now purchasing those same foreclosed houses at rock bottom prices. That’s why there’s such a gold rush in housing right now. Wall Street is flipping homes into rental properties and then leasing them to the very people they pushed and priced out of the real estate market. Billionaire investor Warren Buffet sums it up this way, “If I had a way of buying a couple-hundred thousand single-family homes, I would load up on them. I could buy them at distressed prices and find renters.”

[Demeter]

2. SEE ALSO: Behind the Rise in House Prices, Wall Street Buyers

http://dealbook.nytimes.com/2013/06/03/behind-the-rise-in-house-prices-wall-street-buyers/

[Demeter]

3. California bill would fine big firms whose workers get Medi-Cal

http://www.latimes.com/business/la-fi-employer-health-fine-20130601,0,2838885,full.story

Proponents say it would eliminate a loophole in the Affordable Care Act that encourages employers to dump hourly workers onto the government dole. Opponents call it a job killer... For years, politicians and labor unions have pilloried Wal-Mart and other large employers for paying workers so little that many qualify for government health insurance at taxpayers' expense. Now critics fear the public will get stuck with an even bigger tab as California and other states expand Medicaid as part of the federal healthcare law. That has California lawmakers taking aim at the world's largest retailer and other big firms. Legislators, backed by unions, consumer groups and doctors, are calling for fines that could reach about $6,000 per full-time employee who ends up on Medi-Cal, the state Medicaid program for the poor and others. They say this would eliminate a loophole in the Affordable Care Act that encourages large retailers and restaurant chains to dump hourly workers onto the government dole because there's currently no penalty for doing so. The outcome of this California battle could have national implications as other cash-strapped states search for ways to shore up safety-net programs that are bound to be stretched by a massive healthcare expansion.

"There are concerns that employers will be gaming this new system and taking less and less responsibility for their workers," said Sonya Schwartz, program director at the National Academy for State Health Policy. "This may make employers think twice."

The state proposal has already cleared key legislative committees. The next hurdle is getting approval from a two-thirds majority of lawmakers in Sacramento. With the idea gaining momentum, retailers and business groups are pushing back. They say California's move would set a dangerous precedent and result in fewer jobs at a time when many people are still struggling to find work.

"It's one of the worst job-killer bills I've seen in my 20 years in Sacramento, and that says a lot," said Bill Dombrowski, chief executive of the California Retailers Assn. "The unions are fixated on Wal-Mart, but that's not the issue here. It's a monster project to implement the Affordable Care Act, and having this thrown on top is not helpful."

It's estimated that an additional 130,000 workers from large firms will go on Medi-Cal in the next few years, part of nearly 1 million Californians overall who are expected to become eligible and enroll in the government program. Already, about 250,000 people from bigger companies receive Medi-Cal, research from UC Berkeley and UCLA shows, and about 44% of them work in retail or restaurants. Beyond Wal-Mart Stores Inc., the proposed penalties could touch nearly 1,800 companies in California that employ more than 500 workers each, ranging from farms to major restaurant chains. Those firms would face fines based on 110% of the average cost of health insurance for every employee who is enrolled in Medi-Cal and works more than eight hours a week. The average annual premium for employee-only coverage was $5,615 in the U.S. last year, according to the Kaiser Family Foundation. The fines would be adjusted based on how many hours an employee works. The bill calls for the employer fines to be used by Medi-Cal to boost payments for doctors and hospitals treating the poorest patients. That helped win the backing of the California Medical Assn., which says taking on these patients is difficult because the state has one of the lowest Medicaid reimbursement rates in the nation.

The federal law imposes a separate penalty if large employers don't offer health insurance to employees who work more than 30 hours a week on average. In response, a growing number of employers are cutting some workers' hours to keep them under that threshold and avoid the expense of providing coverage. Under the federal law, if those workers qualify for subsidies and buy their own coverage in government-run exchanges, the fines on employers can reach $3,000 per worker. But there's no federal penalty if a company's workers become eligible for Medicaid. California and about 30 other states are looking to expand Medicaid eligibility to 138% of the federal poverty level. That would cover individuals earning up to about $16,000 annually or $32,500 for a family of four.

Labor leaders and consumer advocates are putting pressure on lawmakers, urging them to close this "Wal-Mart loophole" to end what they call a taxpayer subsidy for corporate giants. Wal-Mart, which has 250 stores in California, had $17 billion in net income in its last fiscal year.

"There are a lot of responsible employers who provide healthcare coverage and pay middle-class wages," said Sara Flocks, public policy coordinator for the California Labor Federation. "They have to compete against Wal-Mart slashing wages and slashing hours. This is a way to level the playing field."

In 2004, UC Berkeley issued a report that found Wal-Mart workers' dependence on public programs in California, such as Medi-Cal and food stamps, cost taxpayers about $86 million annually. Nationwide, it estimated, the cost of public assistance to Wal-Mart workers could be as much as $2 billion annually.

WALMART PROTESTS....SEE LINK, IF YOU HAVE A STRONG STOMACH

[Demeter]

4. The shocking truth about Obamacare’s rate shock By Ezra Klein

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/06/01/the-shocking-truth-about-obamacares-rate-shock/?wprss=rss_ezra-klein&wpisrc=nl_wonk_b

Imagine you went to Best Buy and found a great deal on a plasma television set. I want to be clear here: You didn’t find a great television set. This television set is actually a bit crummy. The picture is fuzzy. Consumer Reports says it breaks down a lot and it’s expensive to fix. But it’s really cheap. The price tag reads $109. When you take it to the counter, the saleswoman tells you that the set will actually cost you $199. And count yourself lucky, she confides in a conspiratorial whisper. There are customers whom Best Buy won’t sell it to at any price. You ask her which customers those are. The ones who need the TV most, she replies. So here’s the question: Does that television really cost $109?

...this is actually how the individual health-insurance market works. And understanding why is crucial to understanding a lot of what you’re going to read about health reform in the next year...Last week, California released early information on the rates insurers intend to charge on the new insurance marketplaces — known as “exchanges” — that the state is setting up under Obamacare. They were far lower than anyone expected. Where analysts had anticipated average premiums of $400 to $500, insurers were actually charging $200 to $300. “This is a home run for consumers in every region of California,” crowed Peter Lee, director of the state’s exchanges. The Affordable Care Act’s critics saw it differently. Avik Roy, a conservative health writer at Forbes, said Lee was being “misleading” and that “Obamacare, in fact, will increase individual-market premiums in California by as much as 146 percent.” Obamacare, he said, would trigger “rate shock,” the jolt people feel when they see higher rates. That doesn’t sound like a home run at all.

...Here’s the first thing to know: We’re talking about a small fraction of the American health-care system. This isn’t about people on Medicare or Medicaid or employer-based insurance. It’s about people joining Obamacare’s insurance exchanges. That’s people who buy insurance on their own now, as well as some of the uninsured. In 2014, 7 million people, or 2.5 percent of the population, is expected to buy insurance through the exchanges. By 2023, that will rise to 24 million people, or 8 percent. So we’re talking about a small portion of the market. Worse, we’re talking about that small portion of the market all wrong. Roy got his 146 percent by heading to eHealthInsurance.com, running a search for insurance plans in California and comparing the cost of the cheapest plans to the cost of the plans being offered in the exchanges. That’s not just comparing apples to oranges. It’s comparing apples to oranges that the fruit guy may not even let you buy...MORE CONFUSION FOLLOWS

NOW, WOULDN'T UNIVERSAL SINGLE PAYER BE A WHOLE LOT FAIRER, SIMPLER TO OWN, OPERATE AND USE, AND CHEAPER?

[AnneD]

32. At the beginning of the health care 'debate'

Docs and Nurses picketed the WH for universal care. It true Obama negotiation style, this was taken off the table from the beginning.

If it had been REAl health care reform....why didn't you hear the ins.co. complain?

[Demeter]

5. Fiscal Headwinds: Is the Other Shoe About to Drop? By Brian Lucking and Daniel Wilson

http://www.frbsf.org/publications/economics/letter/2013/el2013-16.html?utm_source=mailchimp&utm_medium=email&utm_campaign=economic-letter-2013-06-03

Federal fiscal policy during the recession was abnormally expansionary by historical standards. However, over the past 2½ years it has become unusually contractionary as a result of several deficit reduction measures passed by Congress. During the next three years, we estimate that federal budgetary policy could restrain economic growth by as much as 1 percentage point annually beyond the normal fiscal drag that occurs during recoveries...

The current recovery has been disappointingly weak compared with past U.S. economic recoveries. Researchers and policymakers have pointed to a number of potential causes for this unusual weakness, including contractionary fiscal policy. For example, Federal Reserve Vice Chair Janet Yellen (2013) argues that three tailwinds that typically help drive strong recoveries—investment in housing, consumer confidence, and discretionary fiscal policy—have been absent or turned into headwinds this time.

Changes in fiscal policy have been substantial over the past two years, including passage of the Budget Control Act of 2011, which led to sequestration spending cuts. In addition, temporary payroll tax cuts expired and income tax rates for higher-income taxpayers rose following passage of the American Taxpayer Relief Act of 2012. Two important questions are how much has federal fiscal policy been a drag on growth in the recovery to date and to what extent will it affect growth over the next few years? Moreover, is this fiscal drag unusual or part of the normal pattern in which government spending tends to fall and tax collections tend to rise as economic activity gains momentum?

In this Economic Letter, we examine these questions by estimating what fiscal policy would be if it followed historical patterns in the relationship between fiscal policy and the business cycle. We then compare this historically based estimate with actual fiscal policy during the recession and recovery to date. We also look at government projections of fiscal policy over the next three years to see how these compare with estimates based on the historical norm. Finally, we discuss what these trends in federal fiscal policy imply for economic growth.

MORE

[Demeter]

6. Prisoners of the Euro By ROSS DOUTHAT

http://www.nytimes.com/2013/06/02/opinion/sunday/douthat-prisoners-of-the-euro.html?_r=2&

TO its custodians and admirers, the European Union is the only force standing between its member states and the age-old perils of chauvinism, nationalism and war. That was the pointed message that the Nobel Committee sent last year, when it awarded the union a Peace Prize for its role in “the advancement of peace and reconciliation, democracy and human rights.” And it is the message hammered home relentlessly by the Continent’s politicians, who believe their citizens face a stark choice, in the words of Chancellor Angela Merkel of Germany, between continued integration and a return to “centuries of hatred and blood spill.”

But right now, the E.U. project isn’t advancing democracy, liberalism and human rights. Instead, it is subjecting its weaker member states to an extraordinary test of their resilience, and conducting an increasingly perverse experiment in seeing how much stress liberal norms can bear.

That stress takes the form of mass unemployment unseen in the history of modern Europe, and mass youth unemployment that is worse still. In the Continent’s sick-man economies, the jobless rate for those under 25 now staggers the imagination: over 40 percent in Italy, over 50 percent in Spain, and over 60 percent in Greece.

For these countries, the euro zone is now essentially an economic prison, with Germany as the jailer and the common currency as the bars. No matter what happens, they face a future of stagnation — as aging societies with expensive welfare states whose young people will sit idle for years, unable to find work, build capital or start families. The question is whether they will face ideological upheaval as well. So far, the striking thing about the aftermath of the 2008 financial crisis, both in Europe and the United States, is how successfully the center has held. Power has passed back and forth between left and right, but truly radical movements have found little traction, and political violence has been mercifully rare...

I F YOU DON'T COUNT THE PROTEST, RIOTS, CRIME RATE INCREASES, EMIGRATION AND SUICIDES...

[Demeter]

7. SAC may cut staff, offices as probe pushes investors away

http://news.yahoo.com/sac-may-cut-staff-offices-probe-pushes-investors-231459180.html

Steven A. Cohen's embattled hedge fund SAC Capital Advisors is facing a much tougher and less glamorous future, as outside investors pull the bulk of their money from the firm in the wake of an ongoing insider trading probe. The billionaire trader, who founded SAC in 1992, will have to consider shedding staff, shuttering offices and scaling back some of its trading - something that could cost Wall Street firms hundreds of millions of dollars a year in trading commissions, industry experts said.

An SAC Capital spokesman declined to comment except to confirm that at the moment the firm's assets under management remain about $15 billion.

"There are going to be a lot of tough choices for Steve Cohen to make if he loses the bulk of his outside money, and one of them is probably going to involve trimming his staff," said Daryl Jones, director of research at Hedgeye Risk Management, which lists SAC as one of its clients.

The difficult decisions facing the 56-year-old manager come as outside investors were expected on Monday to redeem between $3 billion and $4 billion from the firm, on top of the $1.7 billion investors asked to get back in the first quarter. The flood of money moving out of SAC Capital comes as the insider trading investigation, now in its sixth year, continues to ensnare more people who once worked for the firm. And while SAC Capital will continue to manage as much as $8 billion of Cohen's own personal fortune after outside investors are paid back by year's end, industry insiders say it's clear he will not need as big an operation as he once had...


99 HEDGE FUNDS OF CROOKS ON THE WALL (STREET)

99 HEDGE FUNDS OF CROOKS,

IF ONE OF THOSE HEDGE FUNDS SHOULD HAPPEN TO FALL

98 HEDGE FUNDS OF CROOKS ON THE WALL

[Demeter]

8. A County in Alabama Strikes a Bankruptcy Deal By MARY WILLIAMS WALSH

http://dealbook.nytimes.com/2013/06/04/a-county-in-alabama-strikes-a-bankruptcy-deal/

Jefferson County, Ala., took a big step toward resolving its historic bankruptcy case on Tuesday, saying it had reached an agreement to refinance most of the debt at the heart of its financial breakdown. The refinancing would save the county hundreds of millions of dollars and position it to emerge from bankruptcy in a matter of months, according to people briefed on the negotiations. But the terms must still be approved by a federal bankruptcy judge, and the county must clear several other hurdles before it can emerge from bankruptcy. Lawyers for the county are scheduled to present details of the agreement in federal bankruptcy court in Birmingham on Wednesday. The deal, according to the people briefed on the negotiations, covers about $2.4 billion of Jefferson County’s total $3.078 billion in sewer debt, which was issued to pay for significant repairs needed to bring the county into compliance with federal clean water laws. The interest due on the sewer debt shot up during the financial turmoil of 2008, and the repayment schedules accelerated sharply, leaving the county unable to pay. The repairs went unfinished as well. The county also had other debt outstanding when it declared bankruptcy, for a total of $4.2 billion, making it the biggest municipal bankruptcy in United States history. Governmental bankruptcies are rare and usually involve small single-purpose authorities and districts, not large, complicated counties with a lot of debt. Experts in public finance have been watching Jefferson County closely to see what kind of legal precedent it will set. Some were concerned that the successful application of Chapter 9 bankruptcy rules to municipal debt could cast a pall over the municipal bond market. Residents of the county, for their part, have worried that they would bear the brunt of the bankruptcy, through lower property values or higher taxes or rates paid for county services.

The refinancing agreement covers debt held by creditors that include JPMorgan Chase, which holds about $1.22 billion of the sewer debt, the biggest block; three bond insurers; and seven hedge funds, according to a term sheet circulated in a meeting of the county commission on Tuesday. The terms call for these creditors to receive about $1.84 billion for the $2.4 billion of debt they now hold. The concessions were weighted most heavily toward JPMorgan, the term sheet said, “to increase the recovery of other sewer creditors." The bank is giving up $842 million, or about 70 percent, of the face value of its debt, according to people briefed on the negotiations. Just before declaring bankruptcy in 2011, the county abruptly rejected a previous package of concessions that called for JPMorgan to give up about $750 million. JPMorgan was widely expected to make big concessions as part of any bankruptcy settlement, because some former officials of the bank were found to have been involved in improprieties in connection with a county debt refinancing in 2002 and 2003. That refinancing involved a complex package of variable-rate bonds and derivatives called interest-rate swaps. A lawsuit by the county against JPMorgan over the improprieties, still active in state court, would be resolved as part of the proposed agreement. In 2009, JPMorgan agreed to forgive all the termination fees the county owed on the swaps, or about $647 million, to settle a complaint from the Securities and Exchange Commission. The bank also paid the county $75 million under the same settlement.

Despite those concessions, residents of Jefferson County have still often complained that they were treated inequitably because several of their elected officials went to prison as a result of the refinancing, while no one from the bank was convicted of a crime. They have railed in particular against the possibility that their sewer rates would go up to allow the county to pay sewer debt that many now see as illegitimate. On Wednesday, the federal bankruptcy judge, Thomas B. Bennett, is also scheduled to hear arguments in a lawsuit arguing that much of the debt was issued in violation of the state Constitution and should be voided, not restructured or repaid. In addition, the Bank of New York Mellon, as trustee for small creditors, has asked Judge Bennett for a full independent review of the sewer system’s finances, as well as what it has called “poor planning, gross incompetence, waste, graft, corruption or fraud in connection with the construction, repair or rehabilitation” of the sewer system since 1997.

The term sheet indicated that the sewer fees for county residents would indeed rise, by 7.41 percent a year for the first four years of the refinancing deal. After that, they could rise by as much as 3.94 percent a year, depending on variables like inflation and new federal clean-water regulations. Still, members of the county commission said the new agreement was significantly better than what they could have won without the bankruptcy filing. The five-member commission approved the terms in a 4-to-1 vote. If the refinancing goes forward, the county’s public creditors on the sewer debt will be offered a choice: either 80 cents for every dollar of sewer debt they now hold, if they relinquish all other claims, or 65 cents on the dollar with the right to pursue their own claims, either against the county or its bond insurers.

98 HEDGE FUNDS OF CROOKS ON THE WALL

98 HEDGE FUNDS OF CROOKS

IF 7 OF THOSE HEDGE FUNDS SHOULD HAPPEN TO FALL

91 HEDGE FUNDS OF CROOKS ON THE WALL

[Demeter]

9. Bank of America $8.5 billion mortgage settlement case opens

http://news.yahoo.com/bank-america-8-5-billion-mortgage-settlement-case-235431653.html

Bank of America Corp's proposed $8.5 billion settlement with investors in mortgage securities that went bad during the financial crisis offers billions more than they are likely to get if they go to trial, a lawyer for the trustee who helped negotiate the deal argued Monday. Matthew Ingber, a lawyer for Bank of New York Mellon, the trustee overseeing the securities, made the case for the deal as a long-awaiting proceeding for approval of the settlement got underway in state court in New York.

Bank of America agreed to the settlement in June 2011 to resolve the claims of investors in bonds issued by mortgage lender Countrywide Financial Corp, which Bank of America bought in 2008. Twenty-two institutional investors, including BlackRock Inc , MetLife Inc and Allianz SE's Pacific Investment Management Co entered into the settlement. American International Group Inc and others have objected, saying the settlement offered them only a fraction of the money they lost.

Bank of New York Mellon, as the trustee, is asking a New York state court to approve the settlement and make it binding on all the investors. In court on Monday, Ingber said Countrywide had a maximum of $4.8 billion in assets to pay a judgment on the claims. If the settlement is not approved, investors probably won't be able to hold Bank of America responsible for misrepresentations made by Countrywide on the quality of the underlying mortgages, he said.

"You may hear a lot from the objectors about what the trustee should have done or could have done or might have done," Ingber told Justice Barbara Kapnick, who must decide whether to approve the deal. "But, your honor, all those coulda, woulda, shoulda are irrelevant if the pot of gold isn't going to be there."

Opening arguments are set to continue on Tuesday, with Texas attorney Kathy Patrick making the case for the institutional investors who support the settlement. The opponents are expected to argue that losses to the trusts might exceed $100 billion. They claim BNY Mellon placed its interests and those of Bank of America above those of bond holders. And they point out BNY Mellon gets trust business from Bank of America. Colorado attorney Dan Reilly, who represents AIG, said last week the proposed deal "offers pennies on the dollar" to the bond holders. A lawyer for the federal home loan banks of Boston, Indianapolis and Chicago is expected to join AIG in an opening statement on behalf of the objectors on Tuesday. Ingber argued Monday that the trustee did not receive any money or a release of claims in the settlement agreement. He told Kapnick the questions she had to answer were whether the trustee entered into the deal in good faith and whether the settlement was reasonable.

"This was an easy call and it was done for all the right reasons," Ingber said. "Approval of this settlement is a win for all investors."

Kapnick has set aside the first two weeks of June to hear the case. She said that because of other cases, she will then recess until July. A ruling could take months after the trial is completed.

91 HEDGE FUNDS OF CROOKS ON THE WALL

91 HEDGE FUNDS OF CROOKS

IF 22 OF THOSE HEDGE FUNDS SHOULD HAPPEN TO FALL

69 HEDGE FUNDS OF CROOKS ON THE WALL

[tclambert]

10. Hmmm. Would you give a loan to an Art History major?

[xchrom]

11. Should We Trust Economists?

http://www.theatlantic.com/business/archive/2013/06/should-we-trust-economists/276497/

Imagine you are the Royal Physician in England some time during the 14th century. The prince is sick, and you've been summoned to help. You call in two experts for advice. The first says: "Use leeches to suck out the evil humors." The second says "No, you must bleed him to get the evil humors out." They start to argue, insulting each other in nasty epistles. "Leech guy is secretly working for the French!" alleges Bleeding Guy. "Bleeding Guy just wants the prince to die because the prince wanted higher taxes on the nobles!" Leech Guy fires back.

What's the right move? Well, in an ideal world, you would go and get 999 patients who have illnesses similar to the prince's and give them all a variety of household substances, such as bread mold. Then you would take careful note of who died and use statistical analysis to figure out which household substances cured disease. Thus, you would discover penicillin and invent modern medicine.

Sadly, this is not what you do, because a) if you proposed it, you would be led off to the dungeons and beheaded b) it's the 14th century and you have no concept of the scientific method and c) you don't really have the right tools for that experiment, anyway. Instead, it's bleeding or leeches. So you take your best guess and you pray you're right.

The economic situation we find ourselves in today is a little bit like the example above. Everyone knows that it's a bad thing when factories sit gathering dust and potential workers sit idle on their couches. But the best "experts" that we have -- academic economists -- are in generally ill repute. Surveys have shown that the public has very little confidence in their predictions. They argue bitterly on op-ed pages and can't seem to agree on the most basic issues. And of course, the recent high-profile debunking of the "90 percent debt-to-GDP danger zone" -- a talking point created by the famous economist duo of Carmen Reinhart and Kenneth Rogoff, and used by many Republican supporters of austerity -- did nothing to help economists' reputations.

[Demeter]

20. Correction: Should We Call Any of These People Economists in the First Place?

Sturgeon's revelation, commonly referred to as Sturgeon's law, is an adage commonly cited as "ninety percent of everything is crap." It is derived from quotations by Theodore Sturgeon, an American science fiction author and critic: while Sturgeon coined another adage that he termed "Sturgeon's law", it is his "revelation" that is usually referred to by that term.

The phrase was derived from Sturgeon's observation that while science fiction was often derided for its low quality by critics, it could be noted that the majority of examples of works in other fields could equally be seen to be of low quality and that science fiction was thus no different in that regard to other art.

[Tansy_Gold]

26. You beat me to the punch line. (sheesh)

Last edited Wed Jun 5, 2013, 12:53 PM - Edit history (1)

(three hours later I see the stupid typo.)

[xchrom]

12. Americans More Secure in Poll as 60% See No Need for Better Job

http://www.bloomberg.com/news/2013-06-05/americans-more-secure-in-poll-as-60-see-no-need-for-better-job.html

Americans are feeling more secure about their own finances with stock and home values rising, even as a growing number say the country is headed down the wrong track, according to a Bloomberg National Poll.

People are more upbeat about a range of financial issues -- job security, retirement savings, home values and household income -- than they were in February, the last time Bloomberg asked the question. Eight measures of financial well-being surveyed show increasing optimism among poll respondents.

“The economy is doing a lot better,” Nancy Bush, 56, of San Francisco, said in a follow-up interview. “I feel very encouraged, and maybe it’s just a gut feeling, but I think we’ve made it through a four- or five-year recovery.”

Four years to the month after the deepest recession since the 1930s ended, many Americans agree, according to the poll, taken May 31-June 3. Large majorities say they don’t expect to draw down their savings or borrow money this year to help make ends meet.


***color me Doubtful.

[Demeter]

21. I doubt even the psychopatic 1%ers would agree with that!

They always need more.

[AnneD]

33. I call bull shit!

People are hanging on to what they have and hoping for the best. You count yourselves among the lucky if you still have a job.

[xchrom]

13. Jefferson County, Creditors Reach Deal to End Bankruptcy

http://www.bloomberg.com/news/2013-06-04/jefferson-county-reaches-deal-with-creditors-on-bankruptcy-exit.html

Jefferson County, Alabama (BEESAL), reached an agreement to pay its largest creditors $1.84 billion, or 60 percent of what they’re owed, as part of a plan to end the biggest U.S. municipal bankruptcy by the end of the year.

JPMorgan Chase & Co (JPM)., seven hedge funds and a group of bond insurers agreed to the deal, Kenneth Klee, an attorney for Jefferson County, said today at a county commission meeting in Birmingham. Together, those parties hold about $2.4 billion, or about 78 percent, of the county’s sewer debt.

JPMorgan (JPM), which holds $1.22 billion of debt, will forgive $842 million. Under the current deal and a previous settlement, the bank will have either paid the county, or given up the right to collect, $1.574 billion dollars.

The settlement ends more than 18 months of bankruptcy court battles between the country and its biggest creditors over how much the jurisdiction can afford to pay on more than $3 billion it borrowed to expand and improve the county’s sewage system.

[xchrom]

14. China hits back at EU wine over solar panel duties

http://uk.reuters.com/article/2013/06/05/uk-china-eu-solar-idUKBRE9540LE20130605


(Reuters) - China hit back at European wine exports on Wednesday in response to the European Union's decision to impose duties on imports of Chinese solar panels, as tensions mounted between two of the world's biggest trading partners.

In a step targeting southern European states such as France and Italy that back the duties but largely sparing north European opponents such as Germany, Beijing said it launched an anti-dumping and anti-subsidy probe into sales of European wine.

The EU will impose duties on imports of Chinese solar panels from Thursday, but dramatically reduced the initial rate after pressure from some large member states led by Berlin in the hope of negotiating a settlement with Beijing.

China's Commerce Ministry said the EU's duties were imposed despite China making great efforts and showing enormous sincerity in trying to resolve the matter through talks.

[xchrom]

15. Latvia gets EU green light for euro zone entry

http://uk.reuters.com/article/2013/06/05/uk-latvia-euro-idUKBRE9540IM20130605


(Reuters) - Latvia has been given the go-ahead to adopt the euro from next year, the prime minister said on Wednesday, crowning the Baltic state's emergence from an economic crisis.

European policymakers hope Latvia's accession as the single currency's 18th member will send a strong signal to investors that, despite its three-year-long sovereign debt crisis, the euro zone is set to grow rather than disintegrate.

Prime Minister Valdis Dombrovskis told a news conference the European Commission said Latvia had met a host of economic conditions to adopt the euro next year.

"Joining the euro zone will foster Latvia's economic growth, for sure," he said.

[Demeter]

22. DON'T DO IT, LATVIA!

[Roland99]

16. US Futures - continuing yesterday's slide

[font color="red"]S&P 500 -0.4%
DOW -0.4%
NASDAQ -0.4% [/font]

[xchrom]

17. Australia's economic growth rate misses forecasts

http://www.bbc.co.uk/news/business-22777890

Australia's growth was lower than forecast in the first three months of the year, as a dip in investment offset gains in exports and consumer spending.

The economy expanded at an annual rate of 2.5% in the January to March quarter. Compared with the previous three months, growth was 0.6%.

Most analysts had forecast an annual growth rate of closer to 2.7%.

Some analysts said that the weaker than expected data was likely to increase calls for a cut in interest rates.

[xchrom]

18. UK services sector in fastest growth since March 2012

http://www.bbc.co.uk/news/business-22781216

The UK's services sector, which accounts for around 75% of the economy, grew at its fastest rate since March 2012, new data suggests.

The Markit/CIPS Services Purchasing Managers' Index (PMI) for the UK rose to 54.9 in May from 52.9 in April.

Any reading above 50 indicates growth in the sector, and Markit said the UK economy had "all cylinders now firing".

It follows encouraging UK PMI manufacturing and construction sector figures earlier this week.

[xchrom]

19. JAPAN PLUNGES AGAIN

http://www.businessinsider.com/morning-markets-june-5-2013-6

It just keeps getting worse in Japan.
After a brief respite, the Nikkei has plunged again.
After being up earlier in the day, the market fell nearly 4% in late going.



Read more: http://www.businessinsider.com/morning-markets-june-5-2013-6#ixzz2VLQPCLCO

[Demeter]

23. In the Dead Zone of Capitalism: Lessons on the Violence of Inequality from Chicago

http://truth-out.org/opinion/item/16738-in-the-dead-zone-of-capitalism-lessons-on-the-violence-of-inequality-from-chicago

...Unlike most Americans, the extravagantly rich are protected from the massive degree of violence produced by poverty, poor health, joblessness, inadequate social provisions, decrepit housing, unsafe neighborhoods, and even environmental disasters. While the superrich also live in an age of precarity due to the free-market economic models they support, they largely escape its consequences through the obscene amount of wealth at their disposal that enables them to buy private solutions to public problems. As Naomi Klein points out, such wealth offers more than economic advantages. It also creates a world in which the penthouse and mansion set protect themselves from the less savory effects of the economic model that made them so wealthy. In the past six years, we have seen the emergence of private firefighters in the United States, hired by insurance companies to offer a ‘concierge’ service to their wealthier clients, as well as the short-lived ‘HelpJet’—a charter airline in Florida that offered five-star evacuation services from hurricane zones (whose ad shamelessly states: ‘No standing in lines, no hassle with crowds, just a first class experience that turns a problem into a vacation).

The corrupt bankers, hedge fund managers, and financial services elite who caused the housing crisis and the economic recession of 2008 have little fear of finding themselves homeless or in debt, a fate suffered by millions of Americans, especially young people. The hedge fund managers who pour millions into charter schools as a first step towards privatizing them don’t worry about draining valuable resources from public schools because their kids only attend the most elite and expensive private schools, and they also get a hefty return from such investments as a generous tax credit. Transferring wealth from the public to the private sector has become a sport rather than a liability - a despicable act of looting the public treasury that is viewed strictly as a financial transaction divorced from any sense of civic duty or ethical consideration. The ultra-rich do not have to worry about being unemployed, even though their search for profits produces austerity policies that put millions out of work. In this instance what emerges is a savage form of casino capitalism along with an army of walking dead zombies who celebrate a narcissistic hyper-individualism that radiates a near sociopathic lack of interest in other people and civic life. For the new financial elite of the second Gilded Age, the challenges of a global world are private, not collective, and can only be addressed by pursuing one’s own desires, financial interests, and security.

The obligations of citizenship and social existence in this brave new world of egregious inequality in which the "top 8% of global earners are drawing 50% of this planet’s income" have been abandoned to the narrow dictates of the private realm, consumerism and an arrested notion of individualism and freedom. In the United States, "the 400 richest people ... have as much wealth as 154 million Americans combined, that’s 50 percent of the entire country[while the top economic 1 percent of the US population now has a record 40 percent of all wealth, and have more wealth than 90 percent of the population combined." It gets worse. Half of the jobs in America "now pay $34,000 or less a year . . . 42% of single-mother families with children under 18 are poor and 20.5 million people have incomes that amount to less than $9,500 a year. That’s half the poverty line, which is currently pegged at $19,090 for a family of three." Moreover, the myth of upward mobility has been replaced by the reality of downward mobility, given that wages for most Americans are stagnant; youth now face a future of low-wage jobs, if not long-term unemployment, and economic and educational opportunities are tied almost exclusively to income and wealth. What the cheerleaders for neoliberalism refuse to acknowledge is that the choices people make are tied to constraints, and "nearly all of the constraints are intimately tied to the material circumstances in which we find ourselves..."

As public visions fall into disrepair, the concept of the public good is eradicated in favor of the narrow, private orbits of self-interest and individual happiness, characterized by an endless search for instant gratification, consumer goods and quick profits. The value of everything from education to health care is measured by how profitable it might be for those who treat such institutions less as a public good than as a source for private gain. There are no ethical dilemmas here, only opportunities for increasing the bottom line and making greed the highest of human values and desires. Such behavior is legitimated by appeals to a competitive philosophy in which everyone is either an enemy to be punished or a resource to be exploited, used, and eventually discarded in the quest for personal and financial success. Citizens have been replaced by consumers, and the search for profits regardless of the social costs has created a society in which the accumulation of capital trumps any concerns about fairness and justice. Snapshots of growing inequality are symptomatic of a society that has divorced itself from any sense of moral and social responsibility. Surely, the recent deaths of hundreds of workers in unsafe factories in Bangladesh speak to how disposable human beings have become under a market-driven system in which the desire for cheap labor by companies such as Wal-Mart, Sears, Disney, and others takes precedence over the health, dignity, and lives of poor workers...

RIGHTEOUS RANT CONTINUES AT LINK

[xchrom]

24. European Markets Are Selling Off

http://www.businessinsider.com/european-markets-are-selling-off-2013-6



In the United States, futures point to an open 0.3% down from yesterday's close.
In Europe, the sell-off is picking up a little more speed.
The biggest loser is the FTSE 100 in London, currently down 1.4%.
France is down 1.2%, Germany is down 0.8%, Italy is down 0.3%, and Spain is down 0.5%.


Read more: http://www.businessinsider.com/european-markets-are-selling-off-2013-6#ixzz2VLhMkPsw

[xchrom]

25. Massive Decline In Labor Costs

http://www.businessinsider.com/massive-decline-in-labor-costs-2013-6

This is definitely a surprise.
Unit Labor Costs fell a stunning 4.3% in Q1, according to the BLS:
Unit labor costs in nonfarm businesses fell 4.3 percent in the first quarter of 2013, the combined effect of a 3.8 percent decrease in hourly compensation and the 0.5 percent increase in productivity. The decline in hourly compensation is the largest in the series, which begins in 1947. However, over the last four quarters hourly compensation increased 2.0 percent and unit labor costs rose 1.1 percent.
This compares unfavorably to expectations of a 0.5% increase.


Read more: http://www.businessinsider.com/massive-decline-in-labor-costs-2013-6#ixzz2VLhp5OjW

[Tansy_Gold]

28. The cost accountant in me is roaring with laughter n/t

[Demeter]

27. STOLEN FROM antigop: WSJ: One of Wall Street's Riskiest Bets Returns (synthetic CDOs)

Here we go again...

http://online.wsj.com/article/SB10001424127887324423904578525701936124838.html

Investors are once again clamoring for a risky investment blamed for helping unleash the financial crisis: the synthetic CDO.

In a sign of how hard Wall Street is trying to satisfy voracious demand for higher returns amid rock-bottom interest rates, J.P. Morgan Chase & Co. and Morgan Stanley bankers in London are moving to assemble so-called synthetic collateralized debt obligations.

CDOs give investors a chance to bet on the creditworthiness of a basket of companies. Basic CDOs pool bonds and offer investors a slice of the pool. Synthetic CDOs pool, instead of the bonds themselves, insurance-like derivative contracts on the bonds.

Like their crisis-era predecessors, the new CDOs would be sliced up into different levels of risk and returns. Investors who want a chance at the highest returns would have to buy the riskiest slice.

While spreading risk in some ways, synthetic CDOs also can multiply the financial damage if companies fall behind on their debt payments...

[xchrom]

29. MISS: US COMPANIES ADD ONLY 135,000 JOBS

http://www.businessinsider.com/may-adp-jobs-report-2013-6

The ADP jobs report is out, and it's a miss.
US companies added only 135,000 jobs in May, which was well below the 165,000 expected by economists.
The April measure was also revised down to +113,000 from a prior reading of +119,000.
"Notably, a gain of 5,000 jobs in the construction industry during May was offset by a decline of 6,000 lost jobs in the manufacturing industry," said ADP's Carlos Rodriguez.



Read more: http://www.businessinsider.com/may-adp-jobs-report-2013-6#ixzz2VLjbAaoy

[xchrom]

30. Apple Is About To Go On A Massive Hiring Spree

http://www.businessinsider.com/apple-is-about-to-go-on-a-massive-hiring-spree-2013-6

SAN FRANCISCO (AP) — Apple expects to expand its Silicon Valley workforce by nearly 50 percent during the next three years, signaling the company's faith in its ability to keep coming up with hit products like the iPhone and iPad.

The projections detailed in a report released Tuesday envision Apple hiring 7,400 more workers at its Cupertino, Calif., headquarters between now and the planned completion of a new office complex in 2016. Apple Inc. now employs about 16,000 people in and around Cupertino, the company's home town for most of its 37-year history. That accounts for about one-fifth of Apple's nearly 73,000 employees worldwide.

Apple submitted the report to Cupertino city officials as part of its effort to win approval to build a new 3.4 million-square-foot campus. Former CEO Steve Jobs likened the proposed campus to a spaceship in his final public appearance four months before he died in October 2011 after a long fight with pancreatic cancer.

Cupertino so far has been largely supportive of Apple's plans for the new headquarters, but city officials are still seeking more information to help inform their final decision on the project.


Read more: http://www.businessinsider.com/apple-is-about-to-go-on-a-massive-hiring-spree-2013-6#ixzz2VLkW7ceg

[xchrom]

31. georgia on my mind -- miss etta

[AnneD]

34. Luv's me...

some Etta. Of course the quintessential Etta song is At Last, but she is very good and under appreciated.

[Roland99]

36. Considering our forecast for the next 36-48hrs, I'm kinda partial to this >>>>

http://www.weather.com/weather/map/interactive/34787?animation=true

And, of course, tomorrow my wife booked a special super low rate night at the Nickelodeon Suites hotel for the kids after school is out (today's the last day but a friend of her oldest's is flying in tonight to stay for a month). We'll be getting "slimed" by Mother Nature instead of lime-green goop!

[Roland99]

35. buh-bye, 15,000

[font color="red"] Dow 14,995 -183 1.20%
Nasdaq 3,409 -36 1.05%
S&P 500 1,613 -18 1.13%
GlobalDow 2,151 -33 1.51%[/font]
Gold 1,400 +3 0.20%
Oil 94.03 +0.71 0.76%

[Warpy]

38. Sic transit glorious money

Hey, it was nice while it lasted. However, my net worth is only a number. What that stuff is generating in income is more important and that income is down a bit thanks to the continued rotten consumer economy and corporate cash hoarding.

[Roland99]

39. Feels like a Friday Dump...down another 50pts

[bread_and_roses]

37. The World Economy Is a Ticking Time Bomb

http://www.commondreams.org/view/2013/06/05-5

The World Economy Is a Ticking Time Bomb

Published on Wednesday, June 5, 2013 by Campaign for America’s Future
The World Economy Is a Ticking Time Bomb (and The Fuse is Burning)
by Richard Eskow

Respected economist John Kay is about to make a public statement which essentially says that the world economy is a ticking time bomb and global markets are a lit fuse.

Kay is a professor at the London School of Economics, a columnist for the Financial Times, and the author of a widely-read report on stock market flaws which was commissioned last year by the British government.

Kay says that the world is “waiting for the next crisis.”

... What is known as a “correction” in financial parlance is better understood by most people as a recession or depression resulting in lost jobs, wealth, health, and security. The lords of finance have been disarmingly frank about this money-making strategy at times.

“We actually benefit from downturns,” JPMorgan Chase CEO Jamie Dimon told investors earlier this year. After the 2008 crisis Dimon told reporters he had explained downturns to his seven-year-old daughter by saying they’re “something that happens every five to seven years.”

[Roland99]

40. it's amazing how long they've managed to keep the entire world economy from completely imploding

and now housing is starting to reinflate another bubble.

Corporate profits are up and cash (over $2.1 Trillion worth) is safely stashed overseas.

Real wages are down, esp. when adjusted for inflation.

Food prices have risen more in the last 5 years than I could have imagined.

Gas seems "cheap" at $2.99/gal ($3.28/gal here)


But, once the Fed stops buying MBS/bonds and stops all forms of QE, interest rates will skyrocket. Prices won't retreat. It won't be pretty. You know Bernanke is hoping for a soft landing. He might land one for himself, personally, but the rest of us will be in traction from injuries sustained upon impact.