STOCK MARKET WATCH -- Monday, 17 June 2013

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Monday, 17 June 2013[font color=black][/font]

SMW for 14 June 2013

AT THE CLOSING BELL ON 14 June 2013
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Dow Jones 15,070.18 -105.90 (-0.70%)
S&P 500 1,626.73 -9.63 (-0.59%)
Nasdaq 3,423.56 -21.81 (-0.63%)


[font color=black]10 Year 2.13% 0.00 (0.00%)
30 Year 3.30% 0.00 (0.00%) [font color=black]


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[font size=2]Market Conditions During Trading Hours[/font]
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[font size=2]Euro, Yen, Loonie, Silver and Gold[center]

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[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
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Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
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[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
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The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
Wall Street on Parade
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[font color=black][font size=2]Handy Links - Essential Reading:[/font][/font]
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Matt Taibi: Secret and Lies of the Bailout


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[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
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LegitGov
Open Government
Earmark Database
USA spending.gov
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[font color=black][font size=2]Handy Links - Videos:[/font][/font]
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Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
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[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison
6/4/12 Matthew Kluger, lawyer, sentenced to 12 years in prison, along with co-conspirator stock trader Garrett Bauer (9 years) and co-conspirator Kenneth Robinson (not yet sentenced) for 17 year insider trading scheme.
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."
8/22/12 Doug Whitman, Whitman Capital LLC hedge fund founder, convicted of insider trading following a trial in which he spent more than two days on the stand telling jurors he was innocent
10/26/12 UPDATE: Former Goldman Sachs director Rajat Gupta sentenced to two years in federal prison. He will, of course, appeal. . .
11/20/12 Hedge fund manager Matthew Martoma charged with insider trading at SAC Capital Advisors, and prosecutors are looking at Martoma's boss, Steven Cohen, for possible involvement.
02/14/13 Gilbert Lopez, former chief accounting officer of Stanford Financial Group, and former controller Mark Kuhrt sentenced to 20 yrs in prison for their roles in Allen Sanford's $7.2 billion Ponzi scheme.
03/29/13 Michael Sternberg, portfolio mgr at SAC Capital, arrested in NYC, charged with conspiracy and securities fraud. Pled not guilty and freed on $3m bail.
04/04/13 Matthew Marshall Taylor,fmr Goldman Sachs trader arrested, charged by CFTC w/defrauding his employer on $8BN futures bet "by intentionally concealing the true huge size, as well as the risk and potential profits or losses associated."
04/04/13 Matthew Taylor admits guilt, makes plea bargain. Sentencing set for 26 June; faces up to 20 years in prison but will likely only see 3-4 years. Says, "I am truly sorry."
04/11/13 Ex-KPMG LLP partner Scott London charged by federal prosecutors w/passing inside tips to a friend in exchange for cash, jewelry, and concert tickets; expected to plead guilty in May.










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[font size=3][font color=red]This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.[/font][/font][/font color=red][font color=black]

[Demeter]

1. I'm speechless

[Hugin]

2. The candles on the crude chart have me that way, too.

Somebody better grab the wheel damn quick.

[Demeter]

3. It's not even subtle oportunism anymore...just smash and grab

It's very hard, being an aggregator and not being affected. Just as bad as being a reporter, trying to keep objectivity...oh, wait, that's so 20th century! We don't do objectivity anymore! Facts are such stupid things, as Reagan said.

We don't report, we propagandize! I'm so naive....

So most of my absence can be attributed to burnout. Some of it purely physical, most of it mental.

[Demeter]

4. The Trade Deal Scam By Dean Baker

http://www.nationofchange.org/trade-deal-scam-1371133307

As part of its overall economic strategy the Obama administration is rushing full speed ahead with two major trade deals. On the one hand it has the Trans-Pacific Partnership, which includes Japan and Australia and several other countries in East Asia and Latin America. On the other side there is an effort to craft a U.S.-EU trade agreement. There are two key facts people should know about these proposed trade deals. First, they are mostly not about trade. Second they are not intended to boost the economy in a way that will help most of us. In fact, it is reasonable to say that these deals will likely be bad news for most people in the United States. Most of the people living in our partner countries are likely to be losers too.

On the first point, traditional trade issues, like the reduction of import tariffs and quotas, are a relatively small part of both deals. This is the case because these barriers have already been sharply reduced or even eliminated over the past three decades. As a result, with a few notable exceptions, there is little room for further reductions in these sorts of barriers. Instead both deals focus on other issues, some of which may reasonably be considered barriers to trade, but many of which are matters of regulation that would ordinarily be left to national, regional, or even local levels of government to set for themselves. One purpose of locking regulatory rules into a trade deal is to push an agenda that favors certain interests (e.g. the large corporations who are at the center of the negotiating process) over the rest of society. Both of these deals are likely to include restrictions on the sorts of health, safety, and environmental regulation that can be imposed by the countries that are parties to the agreements. While many of the regulations that are currently in place in these areas are far from perfect, there is not an obvious case for having them decided at the international level. Suppose a country or region decides that the health risks posed by a particular pesticide are too great and therefore bans its use. If the risks are in fact small, then those imposing the ban will be the primary ones who suffer, presumably in the form of less productive agriculture and higher food prices. Is it necessary to have an international agreement to prevent this sort of “mistake?” As a practical matter, the evidence on such issues will often be ambiguous. For example, does fracking pose a health hazard to the surrounding communities? These agreements could end up taking control of the decision as to whether or not to allow fracking away from the communities who would be most affected.

In addition to limiting local control in many areas these trade deals will almost certainly include provisions that make for stronger and longer copyright and patent protection, especially on prescription drugs. The latter is coming at the urging of the U.S. pharmaceutical industry, which has been a central player in all the trade agreements negotiated over the last quarter century. This is likely to mean much higher drug prices for our trading partners. This is of course the opposite of free trade. Instead of reducing barriers, the drug companies want to increase them, banning competitors from selling the same drugs. The difference in prices can be quite large. Generic drugs, with few exceptions, are cheap to produce. When drugs sell for hundreds or thousands of dollars per prescription it is because patent monopolies allow them to be sold for high prices. If these trade deals result in much higher drug prices for our trading partners, the concern should not just be a moral one about people being unable to afford drugs. The more money people in Vietnam or Malaysia have to pay Pfizer and Merck for their drugs, the less money they will have to spend on other exports from the United States. This means that everyone from manufacturing workers to workers in the tourist sector can expect to see fewer job opportunities because of the copyright and patent protection rules imposed through these trade deals...The drug companies’ efforts to get increased patent protection, along with the computer and entertainment industries efforts to get stronger copyright protection, will have the same effect. Insofar as they can force other countries to pay them more in royalties and licensing fees or directly for their products, these countries will have less money to spend on other goods and services produced in the United States. In other words, the short-change artist in the next stall is not our friend and neither are the pharmaceutical, computer, or entertainment industries. However these industries all have friends in the Obama administration. As a result, these trade deals are likely to give them the protections they want. The public may not have the power to stop the high-powered lobbyists from getting their way on these trade pacts, but it should at least know what is going on. These trade deals are about pulling more money out of their pockets in order to make the rich even richer.

[fasttense]

28. The only good thing that will come from theses corporate deals is that the Supremes will be useless

and I call the TTIP and TPP corporate deals because they are not really about trade. They are about corporations getting the best deals and rights (yes, like people have rights) by squeezing out competition.

But the one good thing is that these deals will make the Supreme court redundant and even a bit obsolete. The Supremes recently ruled that corporations could not patent human genes. But in these corporate deals there will be corporate lawyers rotating in and out from defending corporations into tribunals that rule on law suits or complaints from corporations. Now if these tribunals had been set up already, the patenting of human genes issue would never have made it to the Supremes. Instead a corporation that felt their "rights" to future profits from these patents had been violated would bring a complaint before the corporate lawyer staffed tribunals. See, no longer would corporations have to bribe 9 judges to get what they want in one country. Now all they have to do is bribe a handful of corporate lawyers and get what they want in numerous countries.

So instead of 9 unelected kings of America, we would have 2 to 5 unelected kings of numerous countries. See it's a win - win.

[Demeter]

30. Then Maybe the Dancing Supremes will Take Down these Evil Treaties

to protect their turf.

Or maybe this is where they get their golden handcuffs welded on....

[Demeter]

5. It's High Time We Abolished the Department of Homeland Security By Thom Hartmann

http://www.alternet.org/civil-liberties/thom-hartmann-abolish-homeland-security?akid=10559.227380.1pSAsZ&rd=1&src=newsletter853683&t=4

The surveillance state is even bigger, and scarier, than we thought.

And, as a result, it's time that we broke up the failed national security experiment known as the Department of Homeland Security. Returning to dozens of independent agencies will return internal checks-and-balances to within the Executive branch, and actually make us both safer and less likely to be the victims of government snooping overreach...President Obama - who promised the "most transparent administration ever" - now finds himself and his DHS at the center of yet another civil liberties controversy. That controversy has deepened in the wake of two reports published last night in both the Washington Post and the Guardian that outlined a different NSA snooping program – a data mining initiative code-named "PRISM" – which was created in 2007 during the Bush Administration – is almost certainly the most far-reaching surveillance program ever created. By reaching into the servers of 9 different major U.S. internet companies - including Facebook, Google and Apple - the NSA has access to millions of users' personal data, including emails, chats and videos. Although PRISM is supposed to only be used to gain information about "foreign individuals" suspected of terrorism – the very methods used to access such information inevitably suck up the private data of American citizens...

Ultimately, however, the biggest question here is, "What have we become as a nation?" Because here's the scariest thing of all: PRISM, just like the NSA's phone records collection program, is perfectly legal. Arguably unconstitutional and totalitarian, yes, but, at the moment, legal. PRISM is authorized by the Foreign Intelligence Surveillance Act, and the NSA's metadata sweeps are allowed under the broad guidelines of Section 215 of the PATRIOT Act – both acts of Congress. The frightened little men of the Bush Administration took us into some dark places after 9/11 – but Congress and President Obama have tragically continued these exact same policies. Just this past December, Congress reauthorized an amended version of the FISA act and the President signed it without complaint.

...We need to repeal the Patriot Act altogether and end our obsession with "Homeland Security." Concentration of responsibility becomes concentration of power – and because most of our intelligence and police power has been concentrated in one agency – the DHS - that agency has become way too powerful, with no checks and balances. In effect, it's created an entire surveillance industry around itself, and it's time to shut it down... When the worst abuses of the old East German STASI become the standard policies of what Thomas Jefferson once called "the world's last best hope" – it is time for a change.

Because as Jefferson's fellow founder, Benjamin Franklin said, "those who sacrifice liberty for security deserve neither."

Repeal the PATRIOT Act, dissolve the DHS, and let's return to sanity.

[Demeter]

6. The Absurdity of Calling Edward Snowden a Traitor By Ed Kilgore

http://www.alternet.org/snowden-no-traitor?akid=10567.227380.sUlYVo&rd=1&src=newsletter854356&t=20

...Wonkblog’s Dylan Matthews establishes pretty definitively today why even the most negative construction of Snowden’s behavior falls well outside the definition of “treason,” primarily because the offense, as defined in Article Three, Section Three, of the U.S. Constitution, requires collaboration with an actual wartime enemy of the United States. That’s why there have been no treason prosecutions arising from incidents occurring after World War II. For all the loose talk of pols and pundits, there’s no way Snowden will be prosecuted for treason, notes a New York Times editorial:

Most likely, he will be charged with disclosure of classified information under the Espionage Act, which carries a possible 10-year jail term for each count. Mr. Snowden broke the agreement he made to keep these materials secret. He appeared forthright in confessing to the act and can use his testimony, should he be brought to trial, to make the case that he exposed a serious abuse of power (though, technically, he did not blow the whistle on fraud or criminal activity).

There’s also the possibility, of course, that the U.S. government could reach a plea agreement with Snowden, or even, as many are urging via petition, that he could benefit from some form of executive clemency.

But any way you slice it, he’s no traitor, and if people keep using that term loosely, they might want to address the peculiarly American habit of waging undeclared wars, which makes it very hard to commit treason in any formal sense.

WHEW! I GUESS THAT LET'S US ALL OFF THE HOOK...FOR THE MOMENT!

[Demeter]

7. Daniel Ellsberg: Edward Snowden, Saving Us From the United Stasi of America

http://www.alternet.org/nsa-ellsberg?akid=10553.227380.xneL1F&rd=1&src=newsletter853089&t=4

Snowden's whistleblowing gives us a chance to roll back what is tantamount to an 'executive coup' against the US constitution. In my estimation, there has not been in American history a more important leak than Edward Snowden's release of NSA material – and that definitely includes the Pentagon Papers 40 years ago. Snowden's whistleblowing gives us the possibility to roll back a key part of what has amounted to an "executive coup" against the US constitution.

Since 9/11, there has been, at first secretly but increasingly openly, a revocation of the bill of rights for which this country fought over 200 years ago. In particular, the fourth and fifth amendments of the US constitution, which safeguard citizens from unwarranted intrusion by the government into their private lives, have been virtually suspended.

The government claims it has a court warrant under Fisa – but that unconstitutionally sweeping warrant is from a secret court, shielded from effective oversight, almost totally deferential to executive requests. As Russell Tice, a former National Security Agency analyst, put it: "It is a kangaroo court with a rubber stamp."

For the president then to say that there is judicial oversight is nonsense – as is the alleged oversight function of the intelligence committees in Congress. Not for the first time – as with issues of torture, kidnapping, detention, assassination by drones and death squads –they have shown themselves to be thoroughly co-opted by the agencies they supposedly monitor. They are also black holes for information that the public needs to know... Neither the president nor Congress as a whole may by themselves revoke the fourth amendment – and that's why what Snowden has revealed so far was secret from the American people. ...

MUST READ!

[Demeter]

26. A List Of Millions Of US That Will Be Subject To Detention During Martial Law By Michael Snyder

http://endoftheamericandream.com/archives/main-core-a-list-of-millions-of-americans-that-will-be-subject-to-detention-during-a-national-crisis

Are you on the list? Are you one of the millions of Americans that have been designated a threat to national security by the U.S. government? Will you be subject to detention when martial law is imposed during a major national emergency? As you will see below, there is actually a list that contains the names of at least 8 million Americans known as Main Core that the U.S. intelligence community has been compiling since the 1980s. A recent article on Washington’s Blog quoted a couple of old magazine articles that mentioned this program, and I was intrigued because I didn’t know what it was. So I decided to look into Main Core, and what I found out was absolutely stunning – especially in light of what Edward Snowden has just revealed to the world. It turns out that the U.S. government is not just gathering information on all of us. The truth is that the U.S. government has used this information to create a list of threats to national security that the government would potentially watch, question or even detain during a national crisis. If you have ever been publicly critical of the government, there is a very good chance that you are on that list.

The following is how Wikipedia describes Main Core…

Main Core is the code name of a database maintained since the 1980s by the federal government of the United States. Main Core contains personal and financial data of millions of U.S. citizens believed to be threats to national security. The data, which comes from the NSA, FBI, CIA, and other sources, is collected and stored without warrants or court orders. The database’s name derives from the fact that it contains “copies of the ‘main core’ or essence of each item of intelligence information on Americans produced by the FBI and the other agencies of the U.S. intelligence community.”

It was Christopher Ketchum of Radar Magazine that first reported on the existence of Main Core. At the time, the shocking information that he revealed did not get that much attention. That is quite a shame, because it should have sent shockwaves across the nation…

According to a senior government official who served with high-level security clearances in five administrations, “There exists a database of Americans, who, often for the slightest and most trivial reason, are considered unfriendly, and who, in a time of panic, might be incarcerated. The database can identify and locate perceived ‘enemies of the state’ almost instantaneously.” He and other sources tell Radar that the database is sometimes referred to by the code name Main Core. One knowledgeable source claims that 8 million Americans are now listed in Main Core as potentially suspect. In the event of a national emergency, these people could be subject to everything from heightened surveillance and tracking to direct questioning and possibly even detention.

Of course, federal law is somewhat vague as to what might constitute a “national emergency.” Executive orders issued over the last three decades define it as a “natural disaster, military attack, [or] technological or other emergency,” while Department of Defense documents include eventualities like “riots, acts of violence, insurrections, unlawful obstructions or assemblages, [and] disorder prejudicial to public law and order.” According to one news report, even “national opposition to U.S. military invasion abroad” could be a trigger.

So if that list contained 8 million names all the way back in 2008, how big might it be today?
That is a very frightening thing to think about.

Later on in 2008, Tim Shorrock of Salon.com also reported on Main Core…

Dating back to the 1980s and known to government insiders as “Main Core,” the database reportedly collects and stores — without warrants or court orders — the names and detailed data of Americans considered to be threats to national security. According to several former U.S. government officials with extensive knowledge of intelligence operations, Main Core in its current incarnation apparently contains a vast amount of personal data on Americans, including NSA intercepts of bank and credit card transactions and the results of surveillance efforts by the FBI, the CIA and other agencies. One former intelligence official described Main Core as “an emergency internal security database system” designed for use by the military in the event of a national catastrophe, a suspension of the Constitution or the imposition of martial law.

So why didn’t this information get more attention at the time? Well, if Obama had lost the 2008 election it might have. But Obama won in 2008 and the liberal media assumed that he would end many of the abuses that were happening under Bush. Of course that has not happened at all. In fact, Obama has steadily moved the police state agenda ahead aggressively. Edward Snowden has just made that abundantly clear to the entire world.

After 2008, it is unclear exactly what happened to Main Core. Did it expand, change names, merge with other programs or get superseded by a new program? It appears extremely unlikely that it simply faded away. In light of what we have just learned about NSA snooping, someone should ask our politicians some very hard questions about Main Core. According to Christopher Ketchum, the exact kind of NSA snooping that Edward Snowden has just described was being used to feed data into the Main Core database…

A host of publicly disclosed programs, sources say, now supply data to Main Core. Most notable are the NSA domestic surveillance programs, initiated in the wake of 9/11, typically referred to in press reports as “warrantless wiretapping.” In March, a front-page article in the Wall Street Journal shed further light onto the extraordinarily invasive scope of the NSA efforts: According to the Journal, the government can now electronically monitor “huge volumes of records of domestic e-mails and Internet searches, as well as bank transfers, credit card transactions, travel, and telephone records.” Authorities employ “sophisticated software programs” to sift through the data, searching for “suspicious patterns.” In effect, the program is a mass catalog of the private lives of Americans. And it’s notable that the article hints at the possibility of programs like Main Core. “The [NSA] effort also ties into data from an ad-hoc collection of so-called black programs whose existence is undisclosed,” the Journal reported, quoting unnamed officials. “Many of the programs in various agencies began years before the 9/11 attacks but have since been given greater reach.”

The following information seems to be fair game for collection without a warrant: the e-mail addresses you send to and receive from, and the subject lines of those messages; the phone numbers you dial, the numbers that dial in to your line, and the durations of the calls; the Internet sites you visit and the keywords in your Web searches; the destinations of the airline tickets you buy; the amounts and locations of your ATM withdrawals; and the goods and services you purchase on credit cards. All of this information is archived on government supercomputers and, according to sources, also fed into the Main Core database.

This stuff is absolutely chilling. And there have been hints that such a list still exists today. For example, the testimony of an anonymous government insider that was recently posted on shtfplan.com alluded to such a list…

“We know all this already,” I stated. He looked at me, giving me a look like I’ve never seen, and actually pushed his finger into my chest. “You don’t know jack,” he said, “this is bigger than you can imagine, bigger than anyone can imagine. This administration is collecting names of sources, whistle blowers and their families, names of media sources and everybody they talk to and have talked to, and they already have a huge list. If you’re not working for MSNBC or CNN, you’re probably on that list. If you are a website owner with a brisk readership and a conservative bent, you’re on that list. It’s a political dissident list, not an enemy threat list,” he stated.

What in the world is happening to America? What in the world are we turning into? As I mentioned in a previous article, the NSA gathers 2.1 million gigabytes of data on all of us every single hour. The NSA is currently constructing a 2 billion dollar data center out in Utah to store all of this data. If you are disturbed by all of this, now is the time to stand up and say something. If this crisis blows over and people forget about all of this stuff again, the Big Brother surveillance grid that is being constructed all around us will just continue to grow and continue to become even more oppressive. America is dying right in front of your eyes and time is running out. Please stand up and be counted while you still can.

[xchrom]

8. 77 Years Of Being Wrong About Social Security Just Hasn't Been Enough

http://www.businessinsider.com/77-years-of-being-wrong-about-social-security-just-hasnt-been-enough-2013-6

77 years ago Barron’s magazine wrote the following about Social Security:

“Yes sir, Uncle Sam is going to collect money in the form of social-security taxes and use it to run his business and set aside a ‘reserve’ of his own promises to pay, in order to make it look as though the social-security taxpayers are getting something for their contributions.”

The purpose of the article in 1936 was to scare readers silly about the government’s ability to fund the Social Security program. Of course, there hasn’t been a funding crisis in Social Security, but Barron’s decided to double down this weekend writing:

“From that day to this, Barron’s has tried to explain to readers that Social Security is a scheme worthy of the unlamented Charles Ponzi, who gave his name to the recurring fantasy that a growing fund of investments can pay high returns to early investors by using the deposits made by later investors.
Sooner or later the Ponzi fund runs out of new investors to be suckered. It cannot continue to pay those generous dividends and the fund manager leaves town, commits suicide or goes quietly to prison—unless the government is the fund manager.”


Read more: http://pragcap.com/77-years-of-being-wrong-just-isnt-enough#ixzz2WTUi4zou

[Demeter]

13. What’s Next for Social Security? NYT EDITORIAL

http://www.nytimes.com/2013/06/10/opinion/whats-next-for-social-security.html?_r=1&

The trustees of Social Security recently reported that the retirement system can pay full benefits until 2035, when it will be able to pay about three-fourths of promised benefits. That is not a crisis. It is a manageable problem. The system needs to be restored to long-term health, but policy makers must realize that broad-based benefit cuts are not really a viable option. For most people, the ability to finance a secure retirement has been ruined by stagnating wages, repeated stock market busts, diminished home equity and weakened or nonexistent pensions. Social Security, whose average monthly retirement benefit is $1,268, is pretty much all that is left. Most people age 65 and older get two-thirds to all of their income from Social Security.

And yet, in the deficit-obsessed, anti-tax world of Washington, closing the shortfall in Social Security has come to mean broadly cutting benefits. That would be a mistake. Targeted cuts — like lower payouts for upper-income recipients who live longer and draw larger benefits — could improve the system’s finances and fairness. But those who promote across-the-board cuts are not interested in strengthening the system. They want to reduce the budget deficit. And even though Social Security is not a cause of today’s deficits, they would rather cut benefits than improve the system’s finances by imposing tax increases on higher-income taxpayers or phasing in a modest payroll tax increase over decades.

The focus on benefit cuts also conveniently ignores the fact that benefits are already shrinking. Under current law, benefits are being reduced by the higher retirement age, which has been gradually rising from 65 to 67 for those born in 1960 or later. That translates into lower monthly benefits for those who retire at 65 or fewer years of benefits for those who work until 67. For example, a worker entitled to a $1,000 monthly benefit upon retirement at age 67 will get only $867 if he or she retires at 65. Benefit checks are also being reduced by higher Medicare Part B premiums, which are deducted from Social Security benefits. The premiums are set to rise from 5 percent of benefits, on average, for those retiring in 2002 to 9.5 percent for those retiring in 2030. And if you factor in rising co-payments on health care services, most retirees already face living on less. Taxes further erode benefit payments because the levels at which benefits become taxable — generally, $25,000 for individuals and $32,000 for couples — have never been adjusted for wage growth or inflation. By 2030, more than half of recipients will owe tax on a portion of their benefits, compared with 10 percent when the taxes were first imposed, in 1984.

The upshot is that under current law, Social Security benefits will replace 31 percent of the typical retiree’s preretirement earnings in 2030, compared with 42 percent as recently as 2004, according to the Center for Retirement Research at Boston College. And that includes only the big reductions. Benefits are also smaller because of changes instituted in 1983 that permanently delayed all retirees’ first cost-of-living adjustment for six months. A misguided plan by the Obama administration to cut the COLA as part of a deficit reduction package would add to that cutback. Social Security benefit cuts are already well under way, and they cannot go much further. Reform should balance cuts with tax increases, including raising the level of wages subject to payroll tax. It should also include a plan to create good jobs and foster immigration, bolstering the income and number of workers paying into the system. There are sensible ways to fix Social Security without undermining it as a support against hardship in old age.


IN OTHER WORDS, IT'S PAST TIME TO RAISE BENEFITS!

[xchrom]

14. +1

[xchrom]

9. Markets Are Higher After Major Comeback In Japan

http://www.businessinsider.com/morning-markets-june-17-2013-6

Good morning. It's the start of a big week.
This week in the US we'll see some important economic data, as well as get the latest from the Federal Reserve on Wednesday. This week's Fed meeting is the most anticipated in quite some time, as everyone is wondering whether Bernanke will give any hints about a slowdown or "tapering" of Quantitative Easing.

In the meantime, markets are off to a good start for the bulls.

the sickly Japanese market actually went out on the highs, gaining 2.7%, after starting nearly 1% lower.



Read more: http://www.businessinsider.com/morning-markets-june-17-2013-6#ixzz2WTVQ6MSq

[Demeter]

10. Withdrawal syndrome sparks anxiety for Fed

http://news.yahoo.com/insight-withdrawal-syndrome-sparks-anxiety-fed-110538365.html

When do you take the addict off the methadone?

That's essentially the dilemma facing the U.S. Federal Reserve's 19 policy makers when they meet in Washington this week. Since the height of the financial crisis in 2008, the U.S. economy and everyone with a stake in it have become hooked on the massive amounts of stimulus injected by the U.S. central bank. Now, though, consensus is building among policy makers that the time is nearing to adjust their $85 billion-a-month asset purchase program, dubbed quantitative easing, but divisions remain over just when to start reducing the dosage.

In recent weeks, even the program's most ardent supporters, including Chairman Ben Bernanke, have begun signaling a willingness to dial back the pace of bond buying before too much longer. Meanwhile, those who have never liked it insist the moment has arrived and worry the Fed's grip on markets is weakening the longer the program remains in full force.

"We haven't taken steps in the face of better data to scale it back. So I worry that the markets believe we don't have the capability or willingness to do that," Philadelphia Fed President Charles Plosser told Reuters in a recent interview.

Indeed, the question of the market's faith in the Fed has taken on added urgency in the weeks since Bernanke's May 22 comment that the Fed could reduce the pace of its quantitative easing in the "next few meetings" sparked a global bond and stock selloff that continues to reverberate. It is a delicate balance Bernanke and his colleagues must now strike. Moving too soon risks jarring markets, sending interest rates higher and choking off credit to a sputtering recovery. Still, it is also clear the center of gravity in the debate at the Fed has shifted closer to support for a slimmer program, with Chicago Fed's Charles Evans, centrist John Williams of the San Francisco Fed and dovish Boston Fed chief Eric Rosengren all growing warmer to the idea. Some officials are eager to get away from the steady drip feed markets have come to expect in the hope this will break their habit of relying largely on guidance from the central bank, instead of shifts in the economy, to make their bets...Most of the policy makers wanted evidence of continued progress from the economy before scaling back. The shift in views toward a potential easing in the pace of bond purchases is being driven by this year's sustained jobs growth, which has offered officials heart that the economy will emerge from its current fiscal policy-induced soft patch with a fair amount of vigor. Still, there is widespread agreement that the economy is not ready yet. That means financial market anxiety - and the risk of a damaging spike in bond yields - is likely to build as the subsequent meetings in July and September approach.

A Reuters poll of economists on June 7 found that 42 of 48 expected the central bank to trim purchases before year-end. Of those, 21 said a reduction would likely occur in the third quarter; 19 specified September....MORE SPECULATION AHEAD...


THE REAL QUESTION IS WHEN TO CUT OUT THE CANCER, PURGE THE PARASITES, TAKE THIS FAKE "ECONOMY" OFF LIFE SUPPORT AND EUTHANIZE IT.

AND THROW THE CROOKS IN JAIL.

[xchrom]

11. FITCH: China's Credit Bubble Is Unprecedented In Modern World History

http://www.businessinsider.com/fitch-chinas-credit-bubble-is-a-record-2013-6

China's shadow banking system is out of control and under mounting stress as borrowers struggle to roll over short-term debts, Fitch Ratings has warned.

The agency said the scale of credit was so extreme that the country would find it very hard to grow its way out of the excesses as in past episodes, implying tougher times ahead.

"The credit-driven growth model is clearly falling apart. This could feed into a massive over-capacity problem, and potentially into a Japanese-style deflation," said Charlene Chu, the agency's senior director in Beijing.

"There is no transparency in the shadow banking system, and systemic risk is rising. We have no idea who the borrowers are, who the lenders are, and what the quality of assets is, and this undermines signaling," she told The Daily Telegraph.



Read more: ?key=YXJ0aWNsZT01ZjA3MGRhODljNDY2NzI3NTU5NGIxN2RhYjRmNjY3YyZvd25lcj05NTg4MGQwMzZjNDllMmViMGNmYjM5ZTJjNDk2MDFlZCZub25jZT0xZWNlZDgwMi01Yzc2LTQ0NDktODRjMS04YTk4YjRhNWI1NTImcHVibGlzaGVyPThjMDBmYmVlNjFkNWJjZjBjNjA5MmQ4YjkyZWJiY2Ex#ixzz2WTW4ojMr

[xchrom]

12. CHINA CALLS FOR EXPLANATIONS OF US SURVEILLANCE

http://hosted.ap.org/dynamic/stories/A/AS_CHINA_SURVEILLANCE?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-06-17-07-15-25

BEIJING (AP) -- China on Monday joined calls for Washington to provide explanations following disclosures of National Security Agency programs which collect millions of telephone records and track foreign Internet activity on U.S. networks.

Foreign Ministry spokeswoman Hua Chunying told reporters that Washington needs to heed international concerns expressed since the programs were made public earlier this month by former NSA contractor Edward Snowden.

Officials and lawmakers in Germany and other countries are already pressing Washington for information about the collection of information that might affect their citizens' privacy.

"We think that the United States should regard seriously the concerns and demands of the global community and people from all countries and furnish the global community with a necessary explanation," Hua said at a regularly scheduled briefing.

[Demeter]

15. To Find Out How The Health Law Affects You, Ask The President

OKAY, NOW THAT'S JUST SCARY

http://www.npr.org/blogs/health/2013/06/17/191585207/to-find-out-how-the-health-law-affects-you-ask-the-president?ft=1&f=1001

Call it the Affordable Care Act, call it Obamacare, call it whatever you want — it's coming. And soon. In less than four months people without health insurance will be able to start signing up for coverage that begins Jan. 1.

A lot has been said about the law, most of it not that understandable. So starting now, and continuing occasionally through the summer and fall, we're going to try to fix that.

Let's stipulate right now that there are lots of things about the health law and a matter of . But given that the law has not been repealed after , and that major pieces of the law are about to take effect, we thought it would be helpful to try to explain what's coming as dispassionately as we can...


MY ANXIETY LEVELS WON'T PERMIT ME TO POST ANY MORE...GO READ IT YOURSELF

[Demeter]

21. 7 Ways Obamacare's Surrender to Hospital and Big Pharma Profits May End Up Coming Out of Our Wallets

http://www.alternet.org/affordable-care-act?akid=10559.227380.1pSAsZ&rd=1&src=newsletter853683&t=6

Does the Affordable Care Act have a fatal flaw?

(CAN YOU REDUCE IT TO ONLY ONE FATAL FLAW?)

...it’s time to ask if the decision to put the burden of cutting costs on patients, not corporate healthcare profiteering, is the fatal flaw in the plan....The law’s tepid cost control measures targeted at healthcare spending that is gobbling up an increasing percentage of the economy and pricing more people than ever out of access to care have been widely viewed as the ACA’s biggest pitfall. But from the outset, the Obama administration dismissed the most effective means to reduce costs by

a) refusing to consider a single payer alternative that combines genuine universal coverage not based on ability to pay with global budgeting,

b) rejecting a proposal to authorize the federal government to negotiate bulk purchasing (a concession to the drug companies), and

c) failing to regulate price gouging by hospitals, drug companies, insurers and other healthcare corporations.

Those fateful decisions left only one option for significant reduction of overall health expenditures – saving money in the delivery of care by shifting costs to those who use health services and discouraging them from getting care even if they have insurance. Perhaps that’s not surprising given the decision to craft the ACA in concert with pharmaceutical, insurance, hospital, and Chamber of Commerce lobbyists, and, as recently reported, top Wall Street investment firms and hedge fund executives. Here are several ways the ACA shifts the hardship of cost cutting to those who need care, and promotes delivery models that result in limiting care, even among those with health insurance:

1. What they’re not telling us about the exchanges

The ACA health exchanges are marketplaces set up to enable the uninsured who the law requires to buy private insurance or pay a financial penalty to choose among competing private insurance and qualify for a federal subsidy to cover some of the costs. But premiums, deductibles, co-pays and other fees can run to thousands of dollars. Even in the cheapest plans buyers are expected to pay 40 percent of the cost. Subsides may not make these plans “affordable.” Many younger, healthier people are likely to select the cheapest plan, one outside the exchange with fewer covered services, or just go without coverage entirely and pay the fine. Further, small businesses can buy coverage for employees through the exchanges, but the premium and co-pay subsidies will not cover family dependents, a huge hole that will leave many uncovered. Insurers offering lower rates the first year in hopes of acquiring many new customers are likely to raise rates later, as has occurred in Massachusetts, the model for the ACA. A recent study in the journal Health Affairs found that 38 percent of families buying plans through the Massachusetts exchange reported a financial burden and 45 percent said costs were higher than they had expected.

2. The high cost of taxing health benefits

For the first time, the law will tax health benefits beginning in 2018 through the misnamed “Cadillac tax” a 40 percent excise tax on comprehensive health plans. The inevitable result will be fewer employers offering good health benefits, and far more people pushed into skeletal, high deductible plans with far less coverage and much higher out-of-pocket costs. The New York Times just reported that 17 percent of employers this year are stepping up cost shifting five years before the tax goes into effect.

3. An incentive to employers to cut coverage or full-time jobs

Under the ACA employers with 50 workers or more must offer coverage to full time employees or pay a fine, but not to part-timers. Nurses and other workers are increasingly in battles with employers who are demanding elimination of coverage for part time employees, citing the ACA as their pretext. Regal Entertainment, Papa John’s and other companies are reducing workers’ hours to under 30 per week.

4. The wellness scam

“Wellness” programs that enable businesses to transfer more healthcare costs to workers with “unhealthy” factors like smoking or high blood pressure or cholesterol levels are rapidly spreading, actively encouraged by the ACA which offers premium discounts to participating employees. However, health disorders are as likely to derive from chronic or genetic conditions as “life style choices” and economic factors which have a disproportionate impact on the poor. The cost reductions also fall far short of the hype. The federal government apparently buried a report it mandated for the ACA from the Rand Corporation on wellness programs which showed the overall savings are, at best, modest. The programs make insurance unaffordable for some workers, and "keep the sickest workers from affording the care they need," said Alan Balch, vice president of the Preventive Health Partnership, an alliance of the American Cancer Society, the American Diabetes Association, and the American Heart Association.

5. Self-rationing on the rise

With its weak controls on pricing practices by the insurers and hospitals, and encouraging cost shifting and high deductible plans, the ACA provides no relief for those who postpone needed care because of the high price tag. A survey by the Centers for Disease Control and Prevention just released in early June found that 20 percent of Americans, or 54.2 million people in 2011 said their families had difficulty paying for health care services including physician visits, hospital procedures and medications within the prior 12 months. Among the effects, people delay getting care include less containment for the spread of infectious diseases and more people ending up in emergency rooms. ER visits as the point of entry for patients to needed healthcare have been on a big upswing, a worrisome trend for the increased pain and suffering for patients and the overall health expenditures.

6. New barriers to care

If Massachusetts is the political model of the ACA, the industry model is Kaiser Permanente by combining the roles of insurance company and medical provider with its network of hospitals and clinics. As ACA implementation nears, Kaiser has stepped up practices once associated with the worst abuses of HMOs. These include delaying medical appointments, restricting hospital admissions, and rapid discharge of patients from the hospital care to other settings. These include sending people home where the care burden is placed entirely on family members, or to outpatient facilities or nursing homes that have fewer regulations and fewer, typically lesser skilled, lesser paid staff where the patients receive less care than in hospitals. Other industry giants hope to follow this path, enrolling new members who are required to buy insurance, while they are more directly able to control their expenditures for care and can more easily slash spending. The ACA encourages care cutting practices through several mechanisms, including financial penalties for hospital re-admissions, an incentive to keep people out of the hospital, and rewarding providers who divert patients to outpatient clinics.

7. A tale of the 31 million

More than 48 million people are currently uninsured. A new study in Health Affairs estimates that even after full ACA implementation up to 31 million of those will still be without coverage. That starts with the 14 states and counting who have rejected the expansion of Medicaid, the single most important provision in the ACA for expanding healthcare access, (with the help of the Supreme Court ruling gutting thefederal sanction for opting out). Others will lose their employer-sponsored coverage due to the ACA taxes on employers, the provision excluding dependent coverage for small businesses that enter the health exchanges, and all of those who will still find insurance far too costly to buy, especially in a recession that has never ended for millions of people. Political posturing by those on the right opposed to any reform of our broken healthcare system and the bunker mentality of liberal allies of the Obama administration who for their own partisan reasons tend to gloss over serious flaws in the “legacy” law of the Obama years have obscured the reality that our healthcare crisis is far from over and in desperate need of more systemic overhaul. Studies this year alone show the U.S. ranks last among 17 major industrial nations in life expectancy, but is ahead of the others in first-day infant mortality rates. That will not end with the ACA. Nurses will continue to make the case for joining the community of nations with a genuinely universal national or single payer healthcare system based on individual patient need, not corporate profits.

[xchrom]

16. German wage rises, exports offer hope for euro zone

http://uk.reuters.com/article/2013/06/17/uk-eurozone-economy-idUKBRE95G05J20130617

(Reuters) - German wages rose at their fastest pace in almost four years at the start of 2013 and euro zone exports jumped in April, giving the bloc a basis for a recovery from its long recession.

Nominal hourly labour costs rose 3.9 percent in Germany in the first quarter, the EU's statistics office Eurostat said on Monday, faster than the overall euro zone rate of 1.6 percent. It was Germany's biggest jump since the first three months of 2009.

Higher wages in Europe's largest economy should mean German shoppers have more cash to splash out on Spanish holidays, Italian cars and Portuguese wine, potentially helping depressed southern Europe out of its downturn.

That stands in contrast to the pay cuts and job losses in much of the euro zone that have hurt the bloc because consumer spending makes up about half of the economy.

[Demeter]

24. Hail to the Overlords!

What a disgusting, stupid way to run a world.

[Demeter]

17. Obama Nominates America’s Biggest Walmart Cheerleader as His Chief Economic Adviser

http://www.alternet.org/economy/jason-furman-obama-and-walmart?akid=10559.227380.1pSAsZ&rd=1&src=newsletter853683&t=12

Jason Furman thinks Walmart is a “progressive success story.” .... For Furman, Walmart is nothing short of a miracle for America’s poor and working-class folks. For him, progressives should be cheering the firm: he even wrote a 16-page paper titled, " Wal-Mart: A Progressive Success Story," which was posted on the Center for American Progress website. Here’s a sample of Furmanomics:

“By acting in the interests of its shareholders, Wal-Mart has innovated and expanded competition, resulting in huge benefits for the American middle class and even proportionately larger benefits for moderate-income Americans.”

Furman has championed the company’s low prices as a big boost to lower-income folks, and views Walmart jobs as good opportunities, never mind the low wages. In 2006, Jason Furman wrote a letter to author Barbara Ehrenreich, published on Slate, in which he extolled the Walmart business model:

“A range of studies has found that Wal-Mart's prices are 8 percent to 39 percent below the prices of its competitors. The single most careful economic study, co-authored by the well-respected MIT economist Jerry Hausman, found that grocery sales by Wal-Mart and other big-box stores made consumers better off to the tune of 25 percent of food consumption. That doesn't mean much for those of us in the top fifth of the income distribution—we spend only about 3.5 percent of our income on food at home and, at least in my case, most of that shopping is done at high-priced supermarkets like Whole Foods. But that's a huge savings for households in the bottom quintile, which, on average, spend 26 percent of their income on food. In fact, it is equivalent to a 6.5 percent boost in household income—unless the family lives in New York City or one of the other places that have successfully kept Wal-Mart and its ilk away.”

In Furman’s view, “the US productivity miracle and the emergence of Wal-Mart-style retailing are virtually synonymous.”

For the man who will have President Obama’s ear on vital matters like jobs, the evidence of whether Walmart’s wages and benefits are substandard is “murky.” And he doesn’t much care for those who question Walmart’s approach: In the 2006 dialogue with Ehrenreich on Slate, he upbraided activists who had pushed the firm to increase wages and offer better benefits:

"The collateral damage from these efforts to get Wal-Mart to raise its wages and benefits is way too enormous and damaging to working people and the economy more broadly for me to sit by idly and sing 'Kum-Ba-Ya' in the interests of progressive harmony.”

Unsurprisingly, most progressives do not share Furman’s rosy view of Walmart....
...Progressives may be unhappy about Obama's choice, but conservatives are tickled pink.

[Fuddnik]

27. This kind of appointment stopped being a surprise a long time ago.

Obama showed his true colors after the 2008 election, before the inauguration. The Cargo Cult told us wait until his second term, when he can show his true colors. And he continues.

--------------------------------------------------------------------------
And don't even think of offending their little emotions:

At Sun Jun 16, 2013, 12:17 PM an alert was sent on the following post:

It's one thing to say we can legitimately criticize him,
http://www.democraticunderground.com/?com=view_post&forum=1002&pid=3026994

REASON FOR ALERT:

This post is disruptive, hurtful, rude, insensitive, over-the-top, or otherwise inappropriate. (See <a href="http://www.democraticunderground.com/?com=aboutus#communitystandards" target="_blank">Community Standards</a>.)

ALERTER'S COMMENTS:

I don't even like the person this is a reply to, but this id really over the top. He's calling Obama supporters "shitsticks", Telling them to shut up, and saying they have no business being here. The whole post is arrogant and hypocritical.

You may also want to check out his transparency page.

The "shitsticks" comment alone should be enough to hide, but when you add everything else...

You served on a randomly-selected Jury of DU members which reviewed this post. The review was completed at Sun Jun 16, 2013, 12:22 PM, and the Jury voted 1-5 to LEAVE IT.

Juror #1 voted to LEAVE IT ALONE and said: No explanation given
Juror #2 voted to LEAVE IT ALONE and said: No explanation given
Juror #3 voted to LEAVE IT ALONE and said: The swarms of Obama worshipers who hunt down anyone who dares criticize a policy should be called shit stains, not shitsticks. Disruptive, hurtful, rude, insensitive, over the top, or otherwise inappropriate, applies doubly for the more obnoxious of the Cargo Cult.
Juror #4 voted to LEAVE IT ALONE and said: No explanation given
Juror #5 voted to HIDE IT and said: Hide this insult-filled rant.
Juror #6 voted to LEAVE IT ALONE and said: As Obama continues his trek to the right, we should step up our criticisms of him. I am going to let this stand.

--------------------------------------------------------------------------------------------


Doncha know, we're doing damage to "The Party" (the same one Orwell made famous in 1984) by pointing this stuff out. Never mind the damage Blue Dogs, DLC-Third Wayers, and New Dems are doing to the Party. I can't recognize it anymore.

Government by the corporations, for the corporations.

[xchrom]

18. Barriers to homeownership dividing Britain, youth say

http://uk.reuters.com/article/2013/06/17/uk-britain-housing-idUKLNE95G00120130617

(Reuters) - Most young Britons say rising barriers to home ownership are dividing the country socially and economically, and one in five has abandoned the dream of ever owning a property, a survey by mortgage provider Halifax said.

Over 70 percent of 8,051 survey respondents said the country was being split between those who could and those who couldn't buy a home, which in the long run could impact neighbourhoods, families and the job market, the Lloyds Banking Group-owned (LLOY.L) lender said on Monday.

The respondents, aged between 25 and 40, said the effects included leaving their generation without sufficient resources for retirement, affecting social mobility and widening the country's wealth gap.

House prices rose steeply in Britain from the late 1990s until the global financial crisis broke in 2008, and they have been kept high by a combination of factors, including historically low interest rates and shared ownership schemes.

[xchrom]

19. Britons' net incomes fall to lowest since 2001-02

http://uk.reuters.com/article/2013/06/14/uk-britain-economy-idUKLNE95D00220130614

(Reuters) - Britons' real net incomes fell to their lowest level in a decade in the year ending in March 2012, annual data from the country's labour ministry showed on Wednesday.

Average net incomes including social benefits fell 3 percent during the 2011/12 tax year to their lowest level since 2001/02 on an inflation-adjusted basis.

"Income fell as earnings and benefit income grew more slowly than the cost of living as measured by RPI (retail price inflation)," the Department for Work and Pensions said.

The fall in living standards is likely to have continued into the current tax year, as wages have continued to grow at a slower pace than inflation, and many benefits have been raised by less than the rate of inflation.

[xchrom]

20. Striking workers face off with police in Turkish capital

http://uk.reuters.com/article/2013/06/17/uk-turkey-protests-idUKBRE9590Q820130617


(Reuters) - Turkish riot police backed by water cannon faced off with around 1,000 trade union workers in the capital Ankara on Monday, after a weekend of some of the worst clashes since anti-government protests erupted late last month.

Police officers used megaphones to order workers to stop their march towards Ankara's central Kizilay district.

"Those of you on the streets must stop blocking the streets. Do not be provoked. The police will use force," they shouted, as several water cannon were positioned a few hundred metres away.

Further marches by striking workers were planned in Istanbul on Monday, despite government warnings that demonstrations would not be tolerated.

[xchrom]

22. Great Gatsby economics are no party for the middle class

http://www.washingtonpost.com/opinions/ej-dionne-great-gatsby-economics/2013/06/16/a3ed6bfe-d54a-11e2-a73e-826d299ff459_story.html

You don’t need me to tell you, but it’s a whole lot tougher leading a garage band than being a superstar. What you might not have known is just how much harder.

If you want an example of growing inequality, try the rock ‘n’ roll industry. Between 1982 and 2003, the share of concert income taken home by the top 1 percent of performers more than doubled, rising from 26 percent to 56 percent. The top 5 percent collected almost 90 percent of all concert revenues.

The rock world is simply a more extreme version of the larger American experience. The top 1 percent of families doubled their share of national income between 1979 and 2011: Their take went from 10 percent to 20 percent of the whole. We live in a superstar economy.

That phrase and the examples come from Alan Krueger, the outgoing chairman of the White House Council of Economic Advisers, in a speech last week at Cleveland’s Rock and Roll Hall of Fame that drove home the danger of growing economic inequality. To paraphrase Bruce Springsteen, we are not taking care of our own as we should.

[Demeter]

23. Fight the Future By PAUL KRUGMAN

http://www.nytimes.com/2013/06/17/opinion/krugman-fight-the-future.html

Last week the International Monetary Fund, whose normal role is that of stern disciplinarian to spendthrift governments, gave the United States some unusual advice. “Lighten up,” urged the fund. “Enjoy life! Seize the day!” O.K., fund officials didn’t use quite those words, but they came close, with an article in IMF Survey magazine titled “Ease Off Spending Cuts to Boost U.S. Recovery.” In its more formal statement, the fund argued that the sequester and other forms of fiscal contraction will cut this year’s U.S. growth rate by almost half, undermining what might otherwise have been a fairly vigorous recovery. And these spending cuts are both unwise and unnecessary. Unfortunately, the fund apparently couldn’t bring itself to break completely with the austerity talk that is regarded as a badge of seriousness in the policy world. Even while urging us to run bigger deficits for the time being, Christine Lagarde, the fund’s head, called on us to “hurry up with putting in place a medium-term road map to restore long-run fiscal sustainability.”

So here’s my question: Why, exactly, do we need to hurry up? Is it urgent that we agree now on how we’ll deal with fiscal issues of the 2020s, the 2030s and beyond?

No, it isn’t. And in practice, focusing on “long-run fiscal sustainability” — which usually ends up being mainly about “entitlement reform,” a k a cuts to Social Security and other programs — isn’t a way of being responsible. On the contrary, it’s an excuse, a way to avoid dealing with the severe economic problems we face right now. What’s the problem with focusing on the long run? Part of the answer — although arguably the least important part — is that the distant future is highly uncertain (surprise!) and that long-run fiscal projections should be seen mainly as an especially boring genre of science fiction. In particular, projections of huge future deficits are to a large extent based on the assumption that health care costs will continue to rise substantially faster than national income — yet the growth in health costs has slowed dramatically in the last few years, and the long-run picture is already looking much less dire than it did not long ago...Now, uncertainty by itself isn’t always a reason for inaction. In the case of climate change, for example, uncertainty about the impact of greenhouse gases on global temperatures actually strengthens the case for action, to head off the risk of catastrophe.

But fiscal policy isn’t like climate policy, even though some people have tried to make the analogy (even as right-wingers who claim to be deeply concerned about long-term debt remain strangely indifferent to long-term environmental concerns). Delaying action on climate means releasing billions of tons of greenhouse gases into the atmosphere while we debate the issue; delaying action on entitlement reform has no comparable cost. In fact, the whole argument for early action on long-run fiscal issues is surprisingly weak and slippery. As I like to point out, the conventional wisdom on these things seems to be that to avert the danger of future benefit cuts, we must act now to cut future benefits. And no, that isn’t much of a caricature. Still, while a “grand bargain” that links reduced austerity now to longer-run fiscal changes may not be necessary, does seeking such a bargain do any harm? Yes, it does. For the fact is we aren’t going to get that kind of deal — the country just isn’t ready, politically. As a result, time and energy spent pursuing such a deal are time and energy wasted, which would be better spent trying to help the unemployed.

Put it this way: Republicans in Congress have voted 37 times to repeal health care reform, President Obama’s signature policy achievement. Do you really expect those same Republicans to reach a deal with the president over the nation’s fiscal future, which is closely linked to the future of federal health programs? Even if such a deal were somehow reached, do you really believe that the G.O.P. would honor that deal if and when it regained the White House? When will we be ready for a long-run fiscal deal? My answer is, once voters have spoken decisively in favor of one or the other of the rival visions driving our current political polarization. Maybe President Hillary Clinton, fresh off her upset victory in the 2018 midterms, will be able to broker a long-run budget compromise with chastened Republicans; or maybe demoralized Democrats will sign on to President Paul Ryan’s plan to privatize Medicare. Either way, the time for big decisions about the long run is not yet.

And because that time is not yet, influential people need to stop using the future as an excuse for inaction. The clear and present danger is mass unemployment, and we should deal with it, now.

[Demeter]

25. Time to Buy House? Not on Your Life! Foreclosure Floodgates Will Open & Prices Plunge Mike Whitney

I THINK IT'S LIKELY THAT THE BANKSTERS WILL HAVE A CONTROLLED RELEASE OF FORECLOSED PROPERTIES, SO THAT THEIR HEDGE FUND BUDDIES CAN COMFORTABLY BUY THEM ALL WITH THE PROFITS OF THEIR FIRST PURCHASES OF HOMES FOR RENTAL PROPERTY...

http://www.informationclearinghouse.info/article35293.htm

Anyone who buys a house in today’s market should be aware of the risks. They should know that current prices are not supported by fundamentals, but by unprecedented manipulation by the Fed, the Obama administration, Wall Street Private Equity investors, and the nation’s biggest banks. If any of these main-players withdraws or even reduces their support for the market (in other words, if the banks release more of their distressed inventory, if rates rise, if PE firms buy fewer homes, or if the Congress curtails current mortgage modification programs), housing prices will fall. Given the increasing volatility in global stock and bond markets in recent weeks–which is likely to intensify as the Fed implements its exit strategy from QE– interest rates will continue to fluctuate putting downward pressure on housing sales and prices. The impact the Fed’s policy will have on markets and the economy is unknown. The Central Bank is in uncharted water. That makes it a particularly bad time to buy a home. Caveat emptor.

When we say that fundamentals are weak, it means that the factors that typically drive the market are not strong enough to boost sales or push up prices. In a normal market, “first-time homebuyers” and “move up” buyers would represent the vast majority of sales. In today’s market, these two “demand cohorts” are actually quite weak, which is to say that current prices are not sustainable. Consider this: According to Lender Processing Services (LPS) Mortgage Monitor for April, there are “4,699,000, or 9.76% of home loans delinquent or in foreclosure as of April 30th”…” (“Mortgage Delinquencies Down….But a Record 843 Days to Foreclose“, Naked Capitalism) So, nearly 5 million homes are either seriously delinquent or in some stage of foreclosure. This unseen backlog of distressed homes makes up the so called “shadow inventory” which is still big enough to send prices plunging if even a small portion was released onto the market. In other words, supply vastly exceeds demand in real terms. Now check this out from Zillow:

“13 million homeowners with a mortgage remain underwater. Moreover, the effective negative equity rate nationally —where the loan-to-value ratio is more than 80%, making it difficult for a homeowner to afford the down payment on another home — is 43.6% of homeowners with a mortgage.” (Zillow)

This might sound a bit confusing, but it’s crucial to understanding what’s really going on. While many people know that 13 million homeowners are underwater on their mortgages, they probably don’t know that nearly half (43.6%) of the potential “move up” buyers (who represent the bulk of organic sales) don’t have enough equity in their homes to buy another house. Think about that. Like we said, housing sales depend almost entirely on two groups of buyers; first-time homebuyers and move up buyers. Unfortunately, the number of potential move up buyers has been effectively cut in half. It’s simply impossible for prices to keep rising with so many move up buyers on the ropes. So, if “repeat” buyers cannot support current prices, then what about the other “demand cohort”, that is, first-time home buyers? It looks like demand is weak there, too. According to housing analyst Mark Hanson: “First-timer home volume hit a fresh 4-year lows last month and distressed sales 6-year lows”. So, no help there either. First-time homebuyers are vanishing due to a number of factors, the biggest of which is the $1 trillion in student loans which is preventing debt-hobbled young people from filling the ranks of the first-time homebuyers. Given the onerous nature of these loans, which cannot be discharged through bankruptcy, many of these people will never own a home which, of course, means that demand will continue to weaken, sales will drop and prices will fall.

The banks have countered this weakness in demand by withholding distressed inventory. According to Realty Trac, foreclosures are down 33 percent in May year-over-year. There’s no reason for this reduction in foreclosures because there are nearly 5 million homes that are either seriously delinquent or in some stage of foreclosure. The banks are simply manipulating distressed supply to push up prices and avoid losses. To better understand what the banks are up to, check out this article on Marketwatch666:

“As of April, the average seriously delinquent homeowner has not paid on their mortgage for 503 days, and that the typical home in foreclosure has been delinquent for 843 days; in general, those who are seriously delinquent (more than 90 days past due) are not being foreclosed on, and those who are in the foreclosure process are not having their homes seized. Since this metric seems to be increasing an average of ten days a month, and new foreclosure starts are being added each month which should be bringing the average days down, we can only conclude that the foreclosure process is damn near frozen.” (“Mortgage Delinquencies Down….But a Record 843 Days to Foreclose“, Naked Capitalism)

“843 days”! That’s a new record, which means that the banks are actually dragging the process out longer today then ever before. This has had profound effect on prices which have soared by more than 10 percent in the last 12 months creating the illusion of a sustainable recovery. Keep in mind, that the banks have little choice in the matter. They are still sitting on more-than one trillion dollars worth of non performing loans leftover from the recession. If they simply dumped their backlog of distressed homes onto the market all at once, the deluge would push prices below their 2009-lows leaving bank balance sheets in tatters. That’s the scenario they want to avoid at all costs. Now get a load of this article in last week’s Reuters:

“Well over a million U.S. homeowners are months behind on payments on government-backed mortgages, raising the risk federal housing agencies will end up facing the cost of managing a fresh flood of foreclosed homes, two government watchdogs said on Thursday.

Some 1.7 million borrowers have missed several payments on mortgages backed by the U.S. government, the inspectors general of the Federal Housing Finance Agency and Department of Housing and Urban Development said in a joint report.

These loan delinquencies represent a “shadow inventory” of homes that could hit the market if foreclosed on, which would need be managed by government-run Fannie Mae (FNMA.OB) or Freddie Mac (FMCC.OB), or some other federal housing agency.” (“Shadow’ homes could burden U.S. housing agencies”, Reuters)

Actually, the numbers are much larger that Reuters indicates, but it’s good to see someone in the MSM finally acknowledging the magnitude of the problem...It would be interesting to know how many of these 1.7 million non-performing loans were shunted off to Fannie and Freddie in 2009 and 2010 by cagey banksters who knew that they were essentially worthless. We’ll probably never know for sure. The fact is, the vast majority of toxic mortgages weren’t created by the GSE’s but by crooked bankers who pooled the dreck into private label securities and sold them to gullible investors around the world. Now, much of that securitized sewage is festering on the Fed’s bloated balance sheet. The Fed has replaced the shadow banking system as the place where bad loans go to die. Here’s more from Reuters:

“Once seized, these so-called real estate owned properties, or REOs, present significant financial challenges to these government agencies, the report said.

“Not only are current REO inventory levels elevated … they may rise over the next several years depending on the number of shadow inventory properties that are ultimately foreclosed on,” the report stated….

The report said the shadow inventory, which is made up of loans that have been delinquent for at least 90 days, is more than seven times the inventory of REOs that Fannie Mae, Freddie Mac and HUD currently own.” (Reuters)

So, the number of seriously delinquent mortgages IS MORE THAN SEVEN TIMES the inventory of REOs that Fannie Mae, Freddie Mac and HUD currently own?!? What the hell kind of shell-game are these guys playing? Do you get the impression, dear reader, that the government is pulling the wool over your eyes? 7X is a bit more than a rounding error, I’d say. Okay, so the government has been fudging the numbers to make things look better than they really are. (What a surprise) But why would the GSE’s try to hide what’s going on, after all, Fannie and Freddie have implicit government guarantees, so they don’t really have to worry about falling prices. And, as far as the red ink, well, Uncle Sugar will take care of that, right? Not exactly. It looks to me like Fannie and Freddie are tailoring their policies to meet the needs of the banks. As Reuters reluctantly admits, “Even a fraction of the shadow inventory falling into foreclosure could considerably swell … inventories of REO properties.”

It’s simple, really; more foreclosures mean lower prices. Lower prices, in turn, mean heavier losses for the banks. That’s why Fannie and Freddie are playing hide-n-seek; it’s another giveaway to the banks.

Reuters again: “Fannie Mae and Freddie Mac owned about 158,000 REO properties at the end of September 2012, while HUD had about 37,000.” (Reuters)

Huh? The author has already admitted that the real number is at least 7 times that amount (“Well over a million.”), so why the sudden reversal? Is he trying to downplay the bad news to slip it past his editor? Many of the experts still anticipate between 3 to 6 million foreclosures in the next few years, so it is doubtful that the current strategy will work. Eventually, the floodgates will open, distressed supply will be released, and prices will drop. And distressed inventory is just one of many headwinds facing the housing industry today. There’s also this: “Rising Prices Lead to Fewer Investor Purchases, Longer Holding Times“, DS News:

“Close to half—48 percent—of the investors surveyed in May said they will purchase fewer properties in the next 12 months than they did in the past year.” (DS News)

And this from CNN Money:

“Say goodbye to ultra-low mortgage rates.

In the past month, rates have been on the rise and they are expected to continue to climb. This week, the average rate on a 30-year fixed-rate mortgage jumped another 10 percentage points to 4.07% and are up from 3.3% in early May, according to mortgage giant Freddie Mac.

“It’s unlikely that rates will ever be that low again,” said Doug Duncan, Fannie Mae’s chief economist. “Those who didn’t take advantage of record-low rates have missed the boat — at least for now.” (“Why 3% Mortgage Rates Are a Thing of the Past”, CNN Money)

And this:

Application Volume Stumbles, Sales to Suffer, OC Housing News

“Mortgage application data for May lends credence to analysts’ predictions of a slowdown in the year’s second half, Capital Economics says in its latest US Housing Data Response. According to Capital Economics’ data—compiled from statistics offered by the Mortgage Bankers Association (MBA)—total mortgage application volume fell 2.0 percent from April to May, the first monthly drop since February and the biggest decline since January.” (“Application Volume Stumbles, Sales to Suffer“, OC Housing News)

And, finally, this from BusinessWeek:

“Hedge fund manager Bruce Rose was among the first investors to coax institutional money into the mom and pop business of single-family home rentals, raising $450 million last year from Oaktree Capital Group LLC.

Now, with house prices climbing at the fastest pace in seven years and investors swamping the rental market, Rose says it no longer makes sense to be a buyer.

“We just don’t see the returns there that are adequate to incentivize us to continue to invest….There’s a lot of — bluntly — stupid money that jumped into the trade without any infrastructure, without any real capabilities and a kind of build-it-as-you-go mentality that we think is somewhat irresponsible.” (“Carrington Stops Buying U.S. Rentals as Blackstone Adding“, BusinessWeek)

I could go on, but why bother? You get the point. The fact is, is that this is a uniquely bad time to buy a house. There’s too much uncertainty about rates, inventory, demand and investors. The risks far outweigh the rewards. Anxious buyers should hold-their-horses and wait for the market to normalize instead of chaining themselves to sinking asset that will cost them a bundle. Remember, patience is a virtue. It can also save you a lot of dough.

MIKE WHITNEY lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion (AK Press). Hopeless is also available in a Kindle edition. Whitney’s story on how the banks targeted blacks for toxic subprime mortgages appears in the May issue of CounterPunch magazine. He can be reached at [e-mail].

[Fuddnik]

29. Florida real estate faced with a double-whammy soon.

Rick Scott just signed legislation allowing banks to throw people out of their houses quicker, and to limit safeguards protecting homeowners from foreclosure.

And, to make houses more unaffordable,

Florida homeowners will start paying flood insurance premiums that can increase up to 25% per year. Even though Florida homeowners have subsidized the system for years, paying more than 4 times the amount in premiums, than they've received in claims. This provision will make a lot of homes un-sellable. Not to mention, many homeowners won't be able to afford the increases, and will wind up in foreclosure.

http://www.tampabay.com/news/business/banking/premiums-rising-for-national-flood-program-though-florida-pales-in-payouts/2126888

Florida didn't trigger the financial crisis within the National Flood Insurance Program.

In fact, over the past 35 years, the state's property owners have helped prop up the program, paying four times more than what they have gotten back in claims.

The payback for all that financial help: About 270,000 Florida properties could face huge flood insurance rate hikes. That's three times more than the next most-affected state, New Jersey.

The bull's-eye is on Pinellas County, which leads all counties across the nation with almost 51,000 affected properties, roughly an eighth of its homes and businesses.

To put the federal flood insurance program on firm ground and make it fairer, Congress passed a law last year that targets low-lying properties whose owners have for decades paid cheaper, subsidized flood insurance premiums.

Most Floridians are unaware of what's about to hit them, said Patty Latshaw of St. Petersburg-based Wright National Flood Insurance Co., the biggest writer of federal flood insurance in the country.

"A lot of people here think this doesn't pertain to them — that it's a New Jersey situation from (Hurricane) Sandy or a Louisiana issue due to (Hurricane) Katrina," Latshaw said. "We're really not hearing a big noise. … Not yet."

First hit are investor-owned properties losing their subsidies. They face increases of 25 percent a year for multiple years until their rates reflect the "full rate risk" of flooding.

(snip)

[DemReadingDU]

32. Yikes!

[Demeter]

31. Americans Sent Over a Hundred Million Father’s Day Messages, Says N.S.A.

http://www.newyorker.com/online/blogs/borowitzreport/2013/06/americans-sent-over-a-hundred-million-fathers-day-messages-says-nsa.html?mbid=nl_Borowitz%20%28139%29

Americans sent over a hundred million Father’s Day messages on Sunday, the National Security Agency reported today.

The hundred-million number, while robust, falls short of the hundred and twenty million Mother’s Day messages collected by the N.S.A. in May.

The difference between the two figures is “not surprising,” said N.S.A. director General Keith B. Alexander. He added, “On the whole, mothers take Mother’s Day more seriously—if the e-mails we read by mothers whose children forgot are any indication.”

General Alexander said that the agency collected in the neighborhood of two to three million such e-mails from angry mothers this year.

The N.S.A. director added that the agency had not foiled any terror plots over the weekend but did uncover between thirty and forty thousand extramarital relationships.