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Tansy_Gold

(17,815 posts)
Mon Jan 30, 2012, 07:19 PM Jan 2012

STOCK MARKET WATCH - Tuesday, 31 January 2012

[font size=3]STOCK MARKET WATCH, Tuesday, 31 January 2012[/font]


SMW for 30 January 2012

AT THE CLOSING BELL ON 30 January 2012
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Dow Jones 12,653.72 -6.74 (-0.05%)
S&P 500 1,313.01 -3.32 (-0.25%)
Nasdaq 2,811.94 -4.61 (-0.16%)


[font color=green]10 Year 1.84% +0.01 (0.55%)
30 Year 3.00% +0.02 (0.67%)



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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
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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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Financial Sector Officials Convicted since 1/20/09 = [/font][font color=red]12[/font]


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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]


65 replies = new reply since forum marked as read
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STOCK MARKET WATCH - Tuesday, 31 January 2012 (Original Post) Tansy_Gold Jan 2012 OP
Gah! My Eyes! Demeter Jan 2012 #1
Well, it was kind of a nod to Ghost Dog's heading back to that scepter'd isle. Tansy_Gold Jan 2012 #2
Aaargh. Ghost Dog Jan 2012 #18
No place is perfect. Tansy_Gold Jan 2012 #21
Lord Ashcroft accused of hiding business links to 'corrupt' islands Ghost Dog Jan 2012 #20
Yech! Fuddnik Jan 2012 #7
At least the cartoons here are silent. . . . . n/t Tansy_Gold Jan 2012 #9
they don't have to be Demeter Jan 2012 #13
As long as I am in charge of them, they will be silent. Tansy_Gold Jan 2012 #14
Mistress Tansy! nt xchrom Jan 2012 #28
BTW, Tansy, I have a quibble with the OP. Ghost Dog Jan 2012 #51
I'll bow to anyone's greater expertise. Tansy_Gold Jan 2012 #52
Need to change the remote batteries! Loge23 Jan 2012 #37
I'm catching up on a lot of reading. Fuddnik Jan 2012 #46
I had the indescribable experience of taking a neighbor to the ER this evening Demeter Jan 2012 #10
The Austerity Debacle By PAUL KRUGMAN Demeter Jan 2012 #3
The Original 99% Movement: Top Military Man Invokes the Occupy Movement in 1933 Demeter Jan 2012 #4
Marshall Auerback: Anschluss Economics – The Germans Launch a Blitzkrieg on Greek Debt Negotiations Demeter Jan 2012 #5
Government cheques don’t bounce Demeter Jan 2012 #6
Alex Tabarrok: Public goods, public goods, public goods!!! Demeter Jan 2012 #8
"Libertarian" push for public goods? Ghost Dog Jan 2012 #15
They are probably getting tired of losing public services and facilities Demeter Jan 2012 #22
For the Record: George W. Bush is the Real ‘Food Stamp President’ Demeter Jan 2012 #11
How Fraudsters, Cheaters and Exploiters Killed The Economy Demeter Jan 2012 #12
Asian Stocks Advance on Greek Debt Deal Talks, Japan Industrial Production Ghost Dog Jan 2012 #16
Nikkei posts best January performance in 13 years xchrom Jan 2012 #36
European Stocks Advance as Most Nations Support Fiscal Treaty; ARM Gains Ghost Dog Jan 2012 #17
Santander Net Slumps on Real-Estate Charges Ghost Dog Jan 2012 #19
Why is the dollar dropping like a stone? Demeter Jan 2012 #23
Probably tied to Ben's outlook last week (nt) Loge23 Jan 2012 #39
I think they must have been squeezing the shorts Demeter Jan 2012 #53
Is this why? Demeter Jan 2012 #24
i like the first one, too. nt xchrom Jan 2012 #26
Love that Dilbert.... InkAddict Jan 2012 #34
I read that with disbelief Demeter Jan 2012 #40
morning all xchrom Jan 2012 #25
The Darkest Day in the History of American Super PACs xchrom Jan 2012 #27
Higher oil prices boost Exxon 4Q profit 2 percent xchrom Jan 2012 #29
Markets look happy this morning! Ride the bull wave! Roland99 Jan 2012 #30
Looks more like a surfer's wipeout now... Demeter Jan 2012 #54
Eurozone Unemployment Hits New Record Ghost Dog Jan 2012 #31
German unemployment keeps falling Ghost Dog Jan 2012 #32
Euro zone jobless hits highest level since birth of euro xchrom Jan 2012 #33
Record drop in consumer credit, money supply {uk} xchrom Jan 2012 #35
Home Prices Decline For 7th Consecutive Month, Lowest Since 2003 DemReadingDU Jan 2012 #38
Noritake brings upscale tableware to Chinese xchrom Jan 2012 #41
Guaranteed Returns: John Paulson and the 92nd Street Y Demeter Jan 2012 #42
Entering the Debt Dimension Demeter Jan 2012 #43
Stocks shaken by new confidence data xchrom Jan 2012 #44
Tansy gets a lesson in shootin' irons! Fuddnik Jan 2012 #45
You don't want to see the wife's revenge, then--when she proves Annie wrong Demeter Jan 2012 #55
Annie Oakley is on PBS tonight on "The American Experience". Fuddnik Jan 2012 #65
A thousand years on,an updated Silk Road will bypass the West Ghost Dog Jan 2012 #47
Dow Poised for Longest Slump Since August xchrom Jan 2012 #48
Iceland: Recovering dubiously from the crash xchrom Jan 2012 #49
Europe May Be Planning 1.5 Trillion Euro Backstop Fund xchrom Jan 2012 #50
Fred Goodwin to lose knighthood Demeter Jan 2012 #56
Is this the dude Tansy_Gold Jan 2012 #61
HORRORSCOPES FOR THE WEEK BY ONION Demeter Jan 2012 #57
Oooh! I'm Taurus. Fuddnik Jan 2012 #58
a run down potato farm would be an improvement. xchrom Jan 2012 #59
Taoiseach and Opposition clash in wake of EU deal xchrom Jan 2012 #60
I'm Surprised the Irishman Isn't Strangling the Frenchman Demeter Jan 2012 #62
LOL!!! Nt xchrom Jan 2012 #64
'Chicken' for dessert DemReadingDU Jan 2012 #63
 

Demeter

(85,373 posts)
1. Gah! My Eyes!
Mon Jan 30, 2012, 09:39 PM
Jan 2012

Please, no more eye of Newt!

Well, after 14F Monday morning, it's supposed to hit 55F Tuesday. I hope so. I figure two more weeks of the chills, and I'll be back to the closest I can get to normal....

Tansy_Gold

(17,815 posts)
2. Well, it was kind of a nod to Ghost Dog's heading back to that scepter'd isle.
Mon Jan 30, 2012, 10:30 PM
Jan 2012

We had a glorious day today. I worked on erasing the tee-shirt "farmer" tan I got Saturday.

 

Ghost Dog

(16,881 posts)
18. Aaargh.
Tue Jan 31, 2012, 06:00 AM
Jan 2012

Rate of deaths in custody is higher than officials admit

The number of people who have died after being forcibly restrained in police custody is higher than officially stated, an investigation by The Bureau of Investigative Journalism and The Independent reveals today.

The investigation has identified a number of cases not included in the official tally of 16 "restraint-related" deaths in the decade to 2009 – including a landmark case that changed the way that officers carry out arrests. Some cases were omitted because the person had not been officially arrested or detained...

/... http://www.independent.co.uk/news/uk/crime/rate-of-deaths-in-custody-is-higher-than-officials-admit-6297270.html

One technique is so-called "prone restraint", which involves forcing a suspect face down on the floor, cuffing their hands behind their back and then putting pressure on their torso, shoulders and neck. Stricter guidelines on the use of prone restraint in prisons were brought in during the mid-1990s following a spate of restraint deaths. Prison service rules now state that "pressure should not be placed on the neck, especially around the angle of the jaw or windpipe. Pressure on the neck, particularly in the region below the angle of the jaw (carotid sinus) can disturb the nervous controls to the heart and lead to a sudden slowing or even stoppage of the heart."

/... http://www.independent.co.uk/news/uk/home-news/restraint-techniques-that-have-an-everpresent-risk-of-death-6297269.html

Former MI6 chief Sir Mark Allen sued over rendition

Two men who say they were rendered to Libya with the help of the UK have begun an action to sue one of Britain's most senior former MI6 officers.

Libyan dissidents Sami al-Saadi and Abdel Hakim Belhadj allege that Sir Mark Allen was complicit in their rendition and torture...

... Both men say that they were illegally detained and flown to Libya with the help of the UK.

Their wives and children were also rendered to Libya. Mr Belhadj says that his wife was also subjected to ill-treatment...

/... http://www.bbc.co.uk/news/uk-16804656

UK told to prepare for mass floods in future

Flooding caused by heavier rainfall will be the major threat to Britain from climate change in the coming decades, potentially costing the country billions a year, a new assessment of the risks of global warming concluded yesterday.

New research commissioned by the Government shows that if no further plans are made to adapt to changing flood risks, as temperatures rise and population grows, by the 2080s damage to buildings and property could reach £12bn per year, compared with current costs of £1.2bn. In the worst-case scenario, five million people could be affected. Flooding is regarded as the most serious of 100 separate challenges from a changing climate to Britain's economy, society and natural environment, which have been identified in a comprehensive new study, the Climate Change Risk Assessment (CCRA).

These include increased health problems for vulnerable people in hotter summers, increased pressure on the UK's water resources, droughts affecting farmers and the potential introduction of new pests and diseases.

/... http://www.independent.co.uk/environment/climate-change/uk-told-to-prepare-for-mass-floods-in-future-6294672.html

Water and sewerage bills are to rise by around £20 from April, regulator Ofwat has said.

The average bill will increase by 0.5% above inflation to £376, taking into account a rate of inflation of 5.2%, the water companies' watchdog said.

/... http://www.independent.co.uk/news/uk/home-news/water-bills-set-to-rise-to-an-average-of-376-6297347.html

Teenagers turn their backs on a university education

Universities have suffered the steepest fall in applications since records began, with the total number of students seeking places this autumn plummeting by 8.7 per cent as the true impact of tuition fee increases is felt.

Last night, there were warnings that the decline would lead to course closures and redundancies at campuses across the country. An even more marked drop of 9.9 per cent was recorded in applications from students in England, where fees are rising to up to £9,000 a year.

/... http://www.independent.co.uk/news/education/education-news/teenagers-turn-their-backs-on-a-university-education-6297253.html

Just a small sample of today's news stories from that place.

 

Ghost Dog

(16,881 posts)
20. Lord Ashcroft accused of hiding business links to 'corrupt' islands
Tue Jan 31, 2012, 07:34 AM
Jan 2012

Michael Ashcroft, the billionaire peer who for years bankrolled the Conservative Party, has been accused of hiding his business involvement in a Caribbean state whose government was brought down by corruption scandals...

... The islands, a British overseas territory, have been under direct rule by the Foreign Office since August 2009, when the then Prime Minister, Michael Misick, became embroiled in corruption allegations. Panorama reported that one of the allegations being investigated by the police is how Mr Misick could afford a luxury home, valued at $16m, which was built in 2006 by Johnston International.

The programme stated that Lord Ashcroft announced on the London Stock Exchange in 1999 that he had sold Johnston International, and has repeatedly asserted that he has had "no interest whatsoever" in the company since that date. But Panorama showed fax messages which it said were exchanged between Lord Ashcroft and the chief executive of Johnston International, Allan Forrest.

The faxes suggest that Mr Forrest repeatedly sought and got Lord Ashcroft's instructions or advice, despite the peer's denials that he was running the company. One fax said: "Dear Michael, a short note to thank you for the salary increase. Much appreciated."

In another, written after Mr Forrest had visited Belize, where Lord Ashdown originally made his £1.1bn fortune, refers to Johnston International's parent company, Oxford Ventures. Mr Forrest wrote: "The perception in Belize is that you are still in full control of Oxford's assets (which you are of course)." ...

/... http://www.independent.co.uk/news/uk/politics/lord-ashcroft-accused-of-hiding-business-links-to-corrupt-islands-6297313.html

 

Ghost Dog

(16,881 posts)
51. BTW, Tansy, I have a quibble with the OP.
Tue Jan 31, 2012, 01:51 PM
Jan 2012

When, as for example today, interest rates on US Treasuries rise, I think they should be colored RED (for danger to the real economy, see eg. Eurozone...); GREEN when they fall.

Tansy_Gold

(17,815 posts)
52. I'll bow to anyone's greater expertise.
Tue Jan 31, 2012, 02:26 PM
Jan 2012

Greater than mine, that is! (Cuz mine ain't too great. . . . )

Whatever the collective opinion is, I'll go with.


Loge23

(3,922 posts)
37. Need to change the remote batteries!
Tue Jan 31, 2012, 10:25 AM
Jan 2012

I agree, Fuddnik - it's absolutely maddening!
I have taken to muting, changing channels, turning the darn thing off - anything to avoid the almost unavoidable, especially these last few days.
Some thoughts about all of this...
- The ads are really the best advertising against voting for R's for the average undecideds.
- Virtually all of these millions and millions are going to the advertising industry - think about that. We're stuck in a economic quagmire and we're pouring massive amounts of money into advertising. So too with the idiotic valuations of that online billboard, game and gossip site, Facebook - all advertising revenue.
- Can you imagine the barrage of ads from both of our great choices in this "democracy" come summer?

 

Demeter

(85,373 posts)
10. I had the indescribable experience of taking a neighbor to the ER this evening
Mon Jan 30, 2012, 11:52 PM
Jan 2012

She's younger than I, thinner than I, and frankly, a hypochondriac. While it's entirely possible that she has some health issues, I sincerely doubt 90% of what she self-diagnoses.

So when she called to complain of crushing chest pain, I drove her in, since she said she couldn't afford an ambulance. Which was the first clue that this wasn't a real issue....remember my motto:

NO GOOD DEED GOES UNPUNISHED!

I am awaiting the lightning bolt. At home.

 

Demeter

(85,373 posts)
3. The Austerity Debacle By PAUL KRUGMAN
Mon Jan 30, 2012, 11:11 PM
Jan 2012
http://www.nytimes.com/2012/01/30/opinion/krugman-the-austerity-debacle.html

Last week the National Institute of Economic and Social Research, a British think tank, released a startling chart comparing the current slump with past recessions and recoveries. It turns out that by one important measure — changes in real G.D.P. since the recession began — Britain is doing worse this time than it did during the Great Depression. Four years into the Depression, British G.D.P. had regained its previous peak; four years after the Great Recession began, Britain is nowhere close to regaining its lost ground. Nor is Britain unique. Italy is also doing worse than it did in the 1930s — and with Spain clearly headed for a double-dip recession, that makes three of Europe’s big five economies members of the worse-than club. Yes, there are some caveats and complications. But this nonetheless represents a stunning failure of policy. And it’s a failure, in particular, of the austerity doctrine that has dominated elite policy discussion both in Europe and, to a large extent, in the United States for the past two years.

O.K., about those caveats: On one side, British unemployment was much higher in the 1930s than it is now, because the British economy was depressed — mainly thanks to an ill-advised return to the gold standard — even before the Depression struck. On the other side, Britain had a notably mild Depression compared with the United States. Even so, surpassing the track record of the 1930s shouldn’t be a tough challenge. Haven’t we learned a lot about economic management over the last 80 years? Yes, we have — but in Britain and elsewhere, the policy elite decided to throw that hard-won knowledge out the window, and rely on ideologically convenient wishful thinking instead.

Britain, in particular, was supposed to be a showcase for “expansionary austerity,” the notion that instead of increasing government spending to fight recessions, you should slash spending instead — and that this would lead to faster economic growth. “Those who argue that dealing with our deficit and promoting growth are somehow alternatives are wrong,” declared David Cameron, Britain’s prime minister. “You cannot put off the first in order to promote the second.” How could the economy thrive when unemployment was already high, and government policies were directly reducing employment even further? Confidence! “I firmly believe,” declared Jean-Claude Trichet — at the time the president of the European Central Bank, and a strong advocate of the doctrine of expansionary austerity — “that in the current circumstances confidence-inspiring policies will foster and not hamper economic recovery, because confidence is the key factor today.”

Such invocations of the confidence fairy were never plausible; researchers at the International Monetary Fund and elsewhere quickly debunked the supposed evidence that spending cuts create jobs. Yet influential people on both sides of the Atlantic heaped praise on the prophets of austerity, Mr. Cameron in particular, because the doctrine of expansionary austerity dovetailed with their ideological agendas....The infuriating thing about this tragedy is that it was completely unnecessary. Half a century ago, any economist — or for that matter any undergraduate who had read Paul Samuelson’s textbook “Economics” — could have told you that austerity in the face of depression was a very bad idea. But policy makers, pundits and, I’m sorry to say, many economists decided, largely for political reasons, to forget what they used to know. And millions of workers are paying the price for their willful amnesia.
 

Demeter

(85,373 posts)
4. The Original 99% Movement: Top Military Man Invokes the Occupy Movement in 1933
Mon Jan 30, 2012, 11:18 PM
Jan 2012
http://www.washingtonsblog.com/2012/01/the-original-99-movement.html

Smedley Butler was one of the most highly-decorated military men of all time. He is also the guy who – literally – stopped a coup against FDR. General Butler addressed the Bonus Army in Washington D.C. in 1933, as they “occupied” D.C. to demand compensation for their service to the country:

VIDEO AT LINK

General Butler invoked the 99% movement, telling the veterans:

We are divided, in America, into two classes: The Tories on one side, a class of citizens who were raised to believe that the whole of this country was created for their sole benefit, and on the other side, the other 99 per cent of us, the soldier class, the class from which all of you soldiers came. That class hasn’t any privileges except to die when the Tories tell them. Every war that we have ever had was gotten, up by that class. They do all the beating of the drums. Away the rest of us go. When we leave, you know what happens. We march down the street with all the Sears-Roebuck soldiers standing on the sidewalk, all the dollar-a-year men with spurs, all the patriots who call themselves patriots, square-legged women in uniforms making Liberty Loan speeches. They promise you. You go down the street and they ring all the church bells. Promise you the sun, the moon, the stars and the earth,–anything to save them. Off you go. Then the looting commences while you are doing the fighting. This last war made over 6,000 millionaires. Today those fellows won’t help pay the bill.


Indeed, veterans today support the 99% movement. They understand … just as General Butler understood.

As Butler wrote:

WAR is a racket. It always has been.

It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.

A racket is best described, I believe, as something that is not what it seems to the majority of the people. Only a small “inside” group knows what it is about. It is conducted for the benefit of the very few, at the expense of the very many. Out of war a few people make huge fortunes.

In the World War (i.e. WWI) a mere handful garnered the profits of the conflict. At least 21,000 new millionaires and billionaires were made in the United States during the World War. That many admitted their huge blood gains in their income tax returns. How many other war millionaires falsified their tax returns no one knows.

How many of these war millionaires shouldered a rifle? How many of them dug a trench? How many of them knew what it meant to go hungry in a rat-infested dug-out? How many of them spent sleepless, frightened nights, ducking shells and shrapnel and machine gun bullets? How many of them parried a bayonet thrust of an enemy? How many of them were wounded or killed in battle?

Out of war nations acquire additional territory, if they are victorious. They just take it. This newly acquired territory promptly is exploited by the few — the selfsame few who wrung dollars out of blood in the war. The general public shoulders the bill.


 

Demeter

(85,373 posts)
5. Marshall Auerback: Anschluss Economics – The Germans Launch a Blitzkrieg on Greek Debt Negotiations
Mon Jan 30, 2012, 11:33 PM
Jan 2012
http://www.nakedcapitalism.com/2012/01/marshall-auerback-anschluss-economics-the-germans-launch-a-blitzkrieg-on-the-greek-debt-negotiations.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

By Marshall Auerback, a portfolio strategist and hedge fund manager

News stories continue to suggest that Greece once again appears on the verge of reaching a deal with its private sector creditors on how much of a loss they would be willing to accept on their bond holdings. The latest numbers suggest a 70% write-down. A pretty striking comedown for what is supposed to be a “voluntary default” and, hence, not subject to the triggers of a credit default swap on Greek debt....Naturally, the spin surrounding the proposed agreement is that this is a “one-off” and that other troubled periphery nations shouldn’t even begin to think of securing a comparable deal. But the inherent tension between securing a write-down on Greek debt which more closely mirrors the disaster which is now the Greek economy, and the desire to minimise the potential contagion effect is rearing its ugly head already, and may help to explain some of Germany’s recent machinations....Peter Spiegel of the Financial Times published the German government’s proposal for Greece’s “improvement of compliance” with the terms of the bailout, and all of a sudden Greek PSI positively pales in comparison. According to Germany’s proposal, whatever the result of the PSI deal, Greece would need to “legally commit itself to giving absolute priority to future debt service” and “accept shifting budgetary sovereignty to the European level”. If the Greek government is not willing to do this, the troika would presumably turn off the taps of bailout money and Greece would default. With no access to market or official financing, Greece would be forced to exit the eurozone.

Now, polls appear to indicate that a bunch of the Greek middle classes might actually welcome EU control over their finances, as opposed to a bunch of corrupt Greek politicians, but overall, it’s almost certainly guaranteed to trigger a violent reaction. In any case, given that a deal with Athens is seemingly so close, why did Berlin choose this particular moment to make this demand, and place the entire deal potentially at risk?

I think we have to look beyond Greece for the answer to that question.

One suggestion by Megan Greene is that Berlin’s proposal is a by-product of the unintended consequences of the ECB’s three year long term refinancing operation (LTRO):

If eurozone banks have as much access to cheap, three-year ECB funding as their collateral allows, perhaps Germany and the troika have decided that eurozone banks can survive a Greek default.


In the absence of the ECB hoovering up all of Greece’s debt via its Securities Market Programme (“Not gonna happen; wouldn’t be prudent,” as George Bush the Elder/Dana Carvey might have said), Greece is, as Greene argues, clearly insolvent and would likely have to leave the eurozone to eventually return to growth. The German proposal, argues Greene, may have accelerated the inevitable. But there’s another, more sinister interpretation. The question which has been persistently asked since the debt renegotiations started with Greece is: what will stop Portugal, Ireland, or indeed Spain from demanding the same deal? And I continue to believe that Spain is the domino which is too big to fail. Its liabilities are too big to be covered by the existing firewall established by the EFSF and ESM. An expansion of the LTRO might address the solvency/banking crisis, but not the broader problem of deficient aggregate demand, high unemployment, and rising social turmoil.

So to repeat the question: how do you preclude Portugal, Ireland and, indeed, Spain from asking for the same deal as Greece, if the negotiations succeed? Answer; you can’t. So the Germans throw a politically impossible demand in front of the Greeks, in effect saying, “No more money unless you effectively surrender your national sovereignty.” And that’s the implied warning ahead for the other periphery countries which look to secure the deal currently on the table for Greece. In effect, the Germans (behind the auspices of the troika) are saying, “It’s fiscal austerity on our terms. You try to renegotiate like the Greeks and we take you over. The other alternative is that you leave.”

Anschluss economics, plain and simple.

 

Demeter

(85,373 posts)
6. Government cheques don’t bounce
Mon Jan 30, 2012, 11:37 PM
Jan 2012

AT LEAST, NOT UNTIL THEY DO...WHEN NO ONE WILL TAKE THE FIAT CURRENCY

http://www.macrobusiness.com.au/2012/01/government-cheques-dont-bounce/

Check out the chart below. It’s of the breakup of the US GDP with the last bar being the results for the 4th quarter of 2011 released Friday night. I got it out of The Atlantic on Saturday Morning and tweeted it. The reason I was so excited, well not excited really but rather whatever the word for heightened senses is, was the size of the Government drag on growth – the grey bar. SEE LINK



Now regular readers know what’s coming next – GDP = C+I+G+(X-M). These 5 Sectors, consumption, investment, government and net exports make up the 2.8% annualized growth rate for the last quarter. Leaving aside that this recovery is so bad each quarter of it so far has been below the post WWII average it’s the G that I’m interested in here today and particularly the negative contribution (don’t you love economics – negative contribution!) for the 4th quarter of 1%.

Austerity is the new black these days. Whether its Australian households, European governments or the United States Treasury everyone I’d saving and cleansing. But what is true of households is not true of sovereign nations per se. Sure the behavioral similarity in tightening your belt to pay you bills is understandably similar but the reality is the situation is very, very different. While myself and my family have to earn income in order to pay our bills or the cheques I write will bounce the same is not true of the government. Government cheques don’t bounce – not if they don't want them too and don't put artificial constraints on themselves – it is as simple as that.

Last night I was reading Warren Mosler’s, the father of Modern Monetary Theory, book “Seven Deadly Innocent Frauds of Economic Policy” again because of how this concept of Government cheques not bouncing tied back to austerity. One of the things you would have heard over the past year is that the problem in Europe and potentially the United States, United Kingdom and maybe even Australia eventually is that debt could become “unsustainable”. In his book Mosler talks about an exchange he had at a conference in Sydney with a David Gruen who was RBA Head of Research at the time.

“David, so tell me, what do you mean by the word unsustainable? Do you mean that if the interest rate is very high, and that in 20 years from now the government debt has grown to a large enough number, the government won’t be able to make its interest payments? And that if it then writes a check (sic) to a pensioner , that the check will bounce?

… No, we’ll clear the check , but it will cause inflation and the currency will go down. That’s what people mean by unsustainable.”

So government cheques don’t bounce – not least for economies like the US, Australia and the UK which have their own currencies....

The fact is: government deficits can never cause a government to miss any size of payment. There is no solvency issue. There is no such thing as running out of money when spending is just changing numbers upward in bank accounts at its own Federal Reserve.

Yes, households, businesses, and even states need to have dollars in their bank accounts when they write checks, or else those checks will bounce.”


But not sovereign governments with their own currencies.

So in the US the fact that the G in the GDP equation is dragging on growth is to my mind negligent as it is in the UK and Australia. Greece and Portugal don’t have their own currencies but have been living like they do so Europe still has its issues (think of them as states of Europe in the quote above). But for those of us with a choice it’s important to remember Government cheques don’t bounce – its ok to support your economy when it needs it. But if Governments are caught in a political and philosophical straight jacket then rates are going much lower in Australia and are going to stay low around the world for some time yet.

Risk assets will love that!

 

Demeter

(85,373 posts)
8. Alex Tabarrok: Public goods, public goods, public goods!!!
Mon Jan 30, 2012, 11:46 PM
Jan 2012
http://noahpinionblog.blogspot.com/2012/01/alex-tabarrok-public-goods-public-goods.html

It is difficult to overstate the intensity of the warm glow that fills my heart to see Alex Tabarrok writing this in the pages of the Atlantic:

To build an economy for the 21st century we need to increase the rate of innovation and to do that we need to put innovation at the center of our national vision...Innovation, however, is not a priority of our massive federal government. Nearly two-thirds of the U.S. federal budget, $2.2 trillion annually, is spent on the four biggest warfare and welfare programs, Medicaid, Medicare, Defense and Social Security. In contrast, the National Institutes of Health, which funds medical research, spends $31 billion annually, and the National Science Foundation spends just $7 billion...

The federal government does spend some money on innovation, but mostly for innovation in warfare...The basic and applied non-weapons research that has the best chance of creating beneficial spillovers is a small minority of defense R&D. DARPA, the Defense Advanced Research Projects Agency, for example, helped to develop the Internet but DARPA's budget is only $3 billion. Even when we lump all federal R&D spending together regardless of quality it amounts to just $150 billion, a mere 4 percent of the budget...

Our ancestors were bold and industrious. They built a significant portion of our energy and road infrastructure more than half a century ago. It would be almost impossible to build that system today. Could we build the Hoover Dam today? We have the technology. We seem to lack the will. Unfortunately, we cannot rely on the infrastructure of our past to travel to our future. Airports, an electricity smart grid that doesn't throw millions into the dark every few years, and ubiquitous Wi-Fi are among the important infrastructures of the 21st century, and they are caught in the regulatory thicket...

To restore our economy and our spirits we need to become an innovation nation. An innovative nation would improve the prospects for economic growth but could do much more. The warfare-welfare state divides the pie and also divides Americans. Americans, however, are an innovative, forward-thinking people and the prospects are good for uniting them on a pro-growth, pro-innovation agenda.


In other words: PUBLIC GOODS PUBLIC GOODS PUBLIC GOODS!!!

Also known as "public investment," "government investment," "public capital," "government capital," "partially nonrival production inputs," etc, public goods have been a major theme of this blog.

To see Alex Tabarrok trumpeting the importance of public goods is particularly gratifying to me, since Alex writes for Marginal Revolution, a blog whose leanings I would characterize as "libertarian," and works for George Mason University, an institution whose intellectual climate I would characterize as "libertarian." Which means that this article is part of the growing libertarian push for public goods, which first came to my attention from Peter Thiel...

MORE DEVELOPMENT OF THE THEME AT LINK
 

Ghost Dog

(16,881 posts)
15. "Libertarian" push for public goods?
Tue Jan 31, 2012, 05:20 AM
Jan 2012

Regulatory thicket? Welfare state divides?

Guess I should read this, carefully.

 

Demeter

(85,373 posts)
22. They are probably getting tired of losing public services and facilities
Tue Jan 31, 2012, 08:55 AM
Jan 2012

Due to insufficient funding by taxes, a lot of stuff is getting cut or discontinued. And private industry doesn't want to step in, because they know there's no money and lots of resistance....

Things are tough all over.

 

Demeter

(85,373 posts)
12. How Fraudsters, Cheaters and Exploiters Killed The Economy
Tue Jan 31, 2012, 12:06 AM
Jan 2012
http://www.alternet.org/newsandviews/article/766466/how_fraudsters%2C_cheaters_and_exploiters_killed_the_economy/#paragraph4

The spiral-to-the-bottom and inequality we are suffering is not an inevitable result of globalization, it is what happens when we don't hold cheaters and exploiters accountable and stop them. This is not just about Wall Street, it is the story of what has happened to our wages and benefits, jobs, factories, companies, industries, economy and democracy in the last 30-or-so years.

Cheaters, Fraudsters and Exploiters

If cheaters and exploiters are not held accountable and fraudsters are not prosecuted, then the advantages this brings them forces honest players out. We're all waiting to see if there is a deal in the works that lets big banksters off the hook for mortgage fraud and other (uninvestigated) crimes, making their shareholders pay fines for them instead. But that story of the 1%'s fraud and cheating and the consequences to the 99% are not what I am writing about here. This post is about how letting 1%er cheaters, fraudsters and exploiters off the hook has hurt America's manufacturing and trade.

Apple Can't Make It Here

Recent news stories about Apple hilight how we allowed our thriving, high-paying manufacturing sector to erode, with the result that our middle class is in decline. Apple used to proudly make their computers in the United States, but now everything is made in Asia. The NY Times' Charles Duhigg and Keith Bradsher, in How the U.S. Lost Out on iPhone Work describe how China's massive government subsidies and exploitation of workers mean “Those jobs aren’t coming back.”

The Entire Supply Chain Is Over There

China has done what it needs to do to bring factories, which bring supply chains, which bring industries. The NYT story describes what it means to have an entire supply chain located where the factories are,

MUCH ADO ABOUT APPLE...AND NOT FALLING FAR FROM THE TREE...AT LINK
 

Ghost Dog

(16,881 posts)
16. Asian Stocks Advance on Greek Debt Deal Talks, Japan Industrial Production
Tue Jan 31, 2012, 05:21 AM
Jan 2012

Jan. 31 (Bloomberg) -- Asian stocks rose, with a regional benchmark index headed for its biggest monthly rally since September 2010, as Greek Prime Minister Lucas Papademos said major progress was made in debt-swap talks and Japan’s industrial production grew faster than economists estimated.

... The MSCI Asia Pacific Index increased 0.6 percent to 122.87 as of 5:31 p.m. in Tokyo, with 12 shares rising for every seven that fell. The measure has risen 7.9 percent so far this month, the biggest such advance since September 2010, amid bets China will ease lending curb, the U.S. economy is improving and Europe is containing its debts crisis...

... Japan’s Nikkei 225 Stock Average rose 0.1 percent. South Korea’s Kospi Index gained 0.8 percent and Hong Kong’s Hang Seng Index climbed 1.1 percent. China’s Shanghai Composite Index (SHCOMP) added 0.3 percent. Australia’s S&P/ASX 200 Index lost 0.2 percent...

... The MSCI Asia Pacific Index gained 7.2 percent this year through yesterday, compared with increases of 4.4 percent by the S&P 500 and 3.3 percent by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 1.3 times book value. That compares with 2.1 times for the Standard & Poor’s 500 Index in the U.S. and 1.4 times for the Europe Stoxx 600 Index in Europe.

A gauge of manufacturing shares led the advance among the 10 industry groups in the MSCI Asian gauge. Japanese machinery makers rallied as the nation’s factory production rose 4 percent in December from the previous month, the biggest increase in seven months.

/... http://www.bloomberg.com/news/2012-01-31/asian-stocks-swing-between-gains-losses-on-europe-japan-production-data.html

xchrom

(108,903 posts)
36. Nikkei posts best January performance in 13 years
Tue Jan 31, 2012, 10:24 AM
Jan 2012
http://uk.reuters.com/article/2012/01/31/markets-japan-stocks-idUKL4E8CV58S20120131

TOKYO, Jan 31 (Reuters) - Japan's Nikkei share average
ended nearly flat on Tuesday, but logged its best January
performance in 13 years as investors remained optimistic that
the U.S economic recovery could offset disappointing domestic
corporate earnings.

It gained 4.1 percent in January, much better than its
average of 1.37 percent for the month between 1972 and 2011.

"A lot of people call this is short-covering or month-end
window dressing, but the market is definitely in an upward
trend," said Yoshihiro Ito, chief strategist at Okasan Online
Strategies.

"The fact that Portugal's bond yields rose and reports that
Greek talks are facing difficulties is nothing new and it's not
a reason to sell. It's all a matter of market sentiment --
investors remain hung-up on Europe, but now is not the time to
take a wait-and-see approach," he said.
 

Ghost Dog

(16,881 posts)
17. European Stocks Advance as Most Nations Support Fiscal Treaty; ARM Gains
Tue Jan 31, 2012, 05:25 AM
Jan 2012

European (SXXP) stocks rose, snapping a two-day drop, as most countries in the region agreed to tighter budget controls, outweighing concern over a delay in Greek debt talks. U.S. index futures and Asian shares also advanced...

... The Stoxx Europe 600 Index climbed 0.7 percent to 254.18 at 8:05 a.m. in London. The benchmark gauge has rallied 18 percent from its Sept. 22 low as the U.S. economy maintained its recovery and speculation grew that the euro area will contain the sovereign-debt crisis. Futures on the Standard & Poor’s 500 Index gained 0.3 percent and the MSCI Asia Pacific Index gained 0.5 percent.

European Union leaders, meeting in Brussels yesterday, completed a fiscal-discipline treaty that speeds sanctions on high-deficit states and requires euro countries to anchor balanced-budget rules in national law. Eight countries outside the euro backed the pact, while Britain and the Czech Republic boycotted it.

The policy makers, meeting at the 16th summit in two years, also decided to bring the region’s permanent bailout fund, the European Stability Mechanism, into operation on July 1, a year ahead of schedule.

/... http://www.bloomberg.com/news/2012-01-31/european-stock-index-futures-advance-as-most-nations-support-fiscal-treaty.html

 

Ghost Dog

(16,881 posts)
19. Santander Net Slumps on Real-Estate Charges
Tue Jan 31, 2012, 06:49 AM
Jan 2012

Banco Santander SA (SAN), Spain’s biggest lender, said fourth-quarter profit plunged as it anticipated tougher rules on recognizing real-estate losses at home and earnings declined in the U.K. and Brazil. (SANB11)

Net income fell to 47 million euros ($61.9 million) from 2.1 billion euros a year earlier, the bank said in a filing to regulators today. That compared with the average 1.78 billion- euro forecast in a Bloomberg survey of 10 analysts.

Santander and other Spanish banks are under pressure from Mariano Rajoy’s new government to recognize more losses on building land and apartments that have piled up on their balance sheets as a result of the country’s real-estate crash. The lender booked 1.81 billion euros in charges for Spanish real- estate provisions and a 600 million-euro goodwill charge at its Portuguese unit as profit sagged in its biggest markets.

“People do want to see these risks provisioned for properly and the sooner the better,” said Daragh Quinn, an analyst at Nomura International in Madrid, referring to the bank’s Spanish real-estate assets.

Santander climbed 1.1 percent to 6.05 euros as of 9:20 a.m. in Madrid trading, bringing this year’s gain to 3.1 percent and valuing the lender at 55.1 billion euros...

/... http://www.bloomberg.com/news/2012-01-31/santander-net-slumps-more-than-estimated-on-real-estate-charges-in-spain.html

Santander behaving the way banks should.

 

Demeter

(85,373 posts)
53. I think they must have been squeezing the shorts
Tue Jan 31, 2012, 02:39 PM
Jan 2012

(it's a form of money-laundering).


It's my post and I'll pun if I want to.

InkAddict

(3,387 posts)
34. Love that Dilbert....
Tue Jan 31, 2012, 10:10 AM
Jan 2012

Actually, I was thinking it might be that too much of the green stuff, a.k.a. cash, otherwise known as the Federal Reserve Note, is still disappearing into the second-hand wormhole market in Louisiana where TPTB have yet to hire the number of analysts needed to track the plastic transactions of their constituency, i.e., think the banksters big plastic aid contracts, so they'll know better where to squeeze. Nor will it do TPTB any benefit to have private mattresses stuffed w/dollar bills; it's harder, with stiffer penalties, to siphon that off, requiring multitudinous "mistaken" home invasions and arsons. Electronically, it can just GO POOF!

Yup, I think we can blame Louisiana for the dropping dollar...LOL.

See dixiegirrl's OP re cash restrictions, especially in light of your post regarding the GDP's contributions.

xchrom

(108,903 posts)
27. The Darkest Day in the History of American Super PACs
Tue Jan 31, 2012, 09:19 AM
Jan 2012
http://www.theatlantic.com/politics/archive/2012/01/the-darkest-day-in-the-history-of-american-super-pacs/252205/

Today, Jan. 30, 2012, is a uniquely strange day in the history of American democracy. It's the day before Florida's Republican primary, and the gap between the million dollars in outside spending and the possibility of transparency through technology is, quietly, bigger than it has ever been in the history of the republic. "There's really two phenomena here," says Commissioner Ellen Weintraub of the Federal Election Commission, "the creation of the super PACs and the compression of the primary schedule." We'll add a third: the blurring of the line between coordination and independence. They add up to mean that, when it comes to campaign spending, at this very moment we know only a fraction of the information we have the ability to know.

Of course, Citizens United, decided by the Supreme Court two years ago this month, threw out restrictions on campaign funding by corporations and unions. But it was SpeechNow.org vs. FEC, decided by the D.C. Circuit Court of Appeals two months later, that opened the doors to unlimited spending by groups of individuals, as long as they're not in cahoots with campaigns. The two decisions together created "super PACs," largely unfettered political-spending vehicles with comically oblique names like Restore Our Future and Winning Our Future and Priorities USA. But these new groups weren't free to do whatever they pleased. The courts threw their weight behind the idea of transparency, singing of the Internet's ability to keep the system sane.

"A campaign finance system that pairs corporate independent expenditures with effective disclosure has not existed before today," the Supreme Court said in its Citizens United decision. But, "with the advent of the Internet, transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages." The lower court affirmed the validity of disclosure.

But it hasn't exactly played out that way. And January 2012 in presidential politics in particular has conspired to show how far we are from the Supreme Court's wired utopia.

xchrom

(108,903 posts)
29. Higher oil prices boost Exxon 4Q profit 2 percent
Tue Jan 31, 2012, 09:27 AM
Jan 2012
http://hosted.ap.org/dynamic/stories/U/US_EARNS_EXXON_MOBIL?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-01-31-08-14-01

NEW YORK (AP) -- Exxon says its fourth-quarter earnings rose 2 percent as higher oil prices made up for a drop in production.

The largest U.S. oil company has seen production from its oil fields decline as it invests heavily in U.S. natural gas fields. The shift so far hasn't paid off as natural gas prices have dropped.

Exxon's net income totaled $9.4 billion, or $1.97 per share, in the fourth quarter, matching Wall Street expectations. That compared with $9.25 billion, or $1.85 per share, a year earlier. Revenue rose 15.6 percent to $121.6 billion.

Analysts expected Exxon Mobil Corp. to earn $1.97 per share on revenue of $118.8 billion, according to FactSet.

For the full year, Exxon earned $41.1 billion, or $8.42 per share.
 

Ghost Dog

(16,881 posts)
31. Eurozone Unemployment Hits New Record
Tue Jan 31, 2012, 09:39 AM
Jan 2012

BBC ... The jobless rate in the 17 countries that use the single currency was 10.4% in December, unchanged from November's figure which was revised up from 10.3%, reports the BBC.

Some 16.5 million people were out of work in the eurozone in December, up 751,000 on the year before.

The highest unemployment rate remains in Spain (22.9%), while the lowest is in Austria (4.1%).

Unemployment has been rising throughout 2011, as the debt crisis in the region has continued. In December 2010, the unemployment rate in the euro area was 10%...

... In the 27 EU countries, the unemployment rate was 9.9% in December, with 23.8 million people out of work. November's figure was also revised up from 9.8% to 9.9%.

/... http://www.thisdaylive.com/articles/eurozone-unemployment-hits-new-record/108268/

 

Ghost Dog

(16,881 posts)
32. German unemployment keeps falling
Tue Jan 31, 2012, 09:44 AM
Jan 2012

German unemployment fell to a record low this month, data showed Tuesday, as the deep restructuring and wage moderation of recent years shielded Europe's biggest economy from the worst of the debt crisis.

In nominal terms, the number of people registered as unemployed rose by 301,500 to 3.082 million in January, equivalent to a jobless rate - which measures the unemployment total as a proportion of the population as a whole - of 7.3 percent, data published by the Federal Labour Agency in Nuremberg showed.

That rate was an increase from the December level of 6.6 percent, but labour agency chief Frank Weise insisted the headline increase in unemployment was solely due to seasonal factors...

... Seasonally-adjusted data, calculated separately by the Bundesbank, showed that the jobless total actually decreased by 34,000 to 2.849 million this month, the lowest level since German unification in 1991.

And the seasonally-adjusted jobless rate slipped to a record low of 6.7 percent in January from 6.8 in December.

The figures were much better than expected: analysts had been pencilling in a drop of just 10,000 in the jobless total this month.

/... http://www.iol.co.za/business/international/german-unemployment-keeps-falling-1.1224283

xchrom

(108,903 posts)
33. Euro zone jobless hits highest level since birth of euro
Tue Jan 31, 2012, 09:47 AM
Jan 2012
http://uk.reuters.com/article/2012/01/31/uk-eurozone-unemployment-idUKTRE80U0JV20120131

(Reuters) - Euro zone unemployment has risen to its highest level since before the euro was introduced, data showed on Tuesday, a day after EU leaders promised to focus on creating millions of new jobs to try to kickstart Europe's floundering economy.

Joblessness among the 17 countries sharing the single currency rose to 10.4 percent in December, on a par with an upwardly revised November figure, the EU's statistics office Eurostat said in its release of seasonally-adjusted data.

It was the highest rate since June 1998, before the euro was introduced in 1999.

"We're looking at a further increase over the coming months, so that is worrying," said Martin van Vliet, an economist at ING. "Look at Greece, where unemployment is some 20 percent, and it is 23 percent in Spain. At a certain point this could lead to political unrest."

xchrom

(108,903 posts)
35. Record drop in consumer credit, money supply {uk}
Tue Jan 31, 2012, 10:21 AM
Jan 2012
http://uk.reuters.com/article/2012/01/31/uk-britain-economy-credit-idUKTRE80U0HR20120131

(Reuters) - Credit card and other unsecured lending to British consumers posted its sharpest drop in nearly two decades in December, supporting expectations that the Bank of England will soon inject more cash into the economy to prevent a deep recession.

A steep decline in money supply also added to views that 75 billion pounds in quantitative easing, or asset purchasing, launched in October are not enough to boost the economy, which may have already entered a mild recession at the end of last year.

Consumer credit fell by 400 million pounds last month - the biggest monthly drop since records began in 1993, the bank said on Tuesday, confounding forecasts for a 400 million pound rise.

Weak consumer spending has been a major drag on Britain's economy, with consumers cutting back on purchases as the rise in living costs has outpaced meagre wage increases and fears of job losses weigh on confidence.

DemReadingDU

(16,000 posts)
38. Home Prices Decline For 7th Consecutive Month, Lowest Since 2003
Tue Jan 31, 2012, 10:26 AM
Jan 2012

1/31/12 Home Prices Decline For 7th Consecutive Month, Lowest Since 2003

The November Case Shiller is out and while not surprising to most, some of those calling for a near-term housing bottom may be advised to reassess (for the 5th year in a row). According to the Top 20 City index composite, prices declined in 17 of 20 MSAs, with gains posted only in Phoenix, Denver and Minneapolis.

At 137.52, the Seasonally Adjusted composite dropped to the lowest since February 2003, and is now a third lower than the housing peak in April 2006. Yet the worst news is that, even with a 2 month delay, the housing drop accelerated into the end of the year, and the sequential drop of 0.7% was the biggest decline since March 2011. Which means that except for that errant spike in home prices in April 2011, we have now seen 18 consecutive months of housing price declines since that "rebound" in late 2009. Yet just like in Europe, the improvement is coming. Aaaaany minute now.


more...
http://www.zerohedge.com/news/no-housing-bottom-home-prices-decline-7th-consecutive-month-lowest-2003

xchrom

(108,903 posts)
41. Noritake brings upscale tableware to Chinese
Tue Jan 31, 2012, 11:07 AM
Jan 2012
http://www.japantimes.co.jp/text/nn20120131f1.html

Major ceramics producer Noritake Co. is stepping up its sales pitch for Western tableware in China's nascent market, where dishes designed for Chinese cuisine remain prevalent.

t remains to be seen how successful the Japanese-made tableware will be in China, the birthplace of ceramics. Much is at stake for Noritake, which is little known in China although it had already become a household name in the United States and Canada before World War II.

As business slows in Japan, the company's fortunes may hinge on how it fares in the Chinese market.

In late October, Noritake and its group firm, Okura Art China Inc., showcased their tableware and ceramic urns at Top Marques Shanghai, an exhibition targeting wealthy Chinese consumers. The event drew some 1,500 visitors, including corporate managers.
 

Demeter

(85,373 posts)
42. Guaranteed Returns: John Paulson and the 92nd Street Y
Tue Jan 31, 2012, 11:14 AM
Jan 2012
http://www.zerohedge.com/contributed/guaranteed-returns-john-paulson-and-92nd-street-y

AN OPEN LETTER TO THE SEC AND FINRA



Back at the end of November, Peter Lattman and Jenny Anderson reported in The New York Times that John A. Paulson, the billionaire hedge fund manager and member of the board of the 92nd Street Y, "has guaranteed he will cover the Y for any losses it incurs in his funds."

The Times reported further: ''This is a very uncommon arrangement,'' said Andrew M. Grumet, a lawyer specializing in philanthropy. ''But the 92nd Street Y isn't your average nonprofit, and John Paulson isn't your average money manager.'' Indeed.

As a member of FINRA and a 30-year veteran of the securities industry, I found the report troubling and called the 92nd Street Y for an explanation. No call back from the 92nd Street Y as yet.

Aside from the apparent conflict of interest involved with having a financial adviser sit as a director on the 92nd Street Y board, the situation also struck me as conflicted because of the explict guarantee made by Paulson.

Indeed,under US securities law and FINRA rules, it is unlawful and a violation of professional ethics for a registered person or investment advisor to guarantee investment results for any client.

So here are my questions for the 92nd Street Y,the State of New York, the SEC, FINRA and other interested parties:

1) Why is it OK for any investment adviser to sit on the board of any NY charity and lose money for that client with no professional repercussions?

2) Why is it OK for an investment adviser to guarantee the investment results of the 92nd Street Y in apparent violation of FINRA and SEC rules?

I look forward to your replies.

Best,

Chris
 

Demeter

(85,373 posts)
43. Entering the Debt Dimension
Tue Jan 31, 2012, 11:20 AM
Jan 2012
http://www.zerohedge.com/contributed/entering-debt-dimension

http://ilene.typepad.com/.a/6a010536583aff970b01676150befe970b-500wi CLICK FOR CARTOON


We ended last week’s newsletter explaining why we were not betting on an announcement for more quantitative easing by the Fed, although “consensus” economists claimed to be. We argued that additional QE was unlikely, citing our friends (Bruce Krasting, Lee Adler of the Wall Street Examiner, and Jon Hilsenrath - with his direct line to Bernanke). This week, those expecting easing were disappointed; there was no mention of launching any new program for large-scale asset purchases.

But the Fed did extend the period it anticipates keeping interest rates at or near zero percent (ZIRP). (See Wednesday’s press release here) The Fed also plans to continue its program to extend the average maturity of its holdings of securities, Operation Twist, and to maintain its policy of reinvesting principal payments from its existing holdings, including mortgage-backed and Treasury securities. It is currently holding nearly $3Tn in total assets. The returns from those assets are significant, and the Fed’s balance sheet is continuing to grow even after the end of its asset purchase programs.

http://ilene.typepad.com/.a/6a010536583aff970b01676150a242970b-500wi CLICK FOR GRAPH

In response, Bill Gross (co-chief investment officer of PIMCO) tweeted that this announcement was the equivalent of “QE 2.5,” while Bruce Krasting wrote,

“Well, we got an inflation target from the Fed. Basically, thinking at the Fed has been eliminated. The process has been automated. Bernanke has convinced the Fed board to adopt Core PCE as a determinate of monetary policy. So long as CPCE stays below 2%, Ben is going to have his foot planted on the monetary metal. It’s ‘full speed ahead’ according to the Chairman. He's pushed things off until 2014 - a very long time from now.” Bruce goes on to explain the major flaw in Bernanke’s reasoning, and how this decision has made him “a slave to a single dopey statistic.” (Bernanke Goes All In)


Phil wrote,

“The Central Bank's pronouncements came after a two-day policy meeting from which officials emerged still frustrated at the economy’s slow pace of growth, and a bit more confident that inflation is settling down after climbing last year. Fed Chairman Ben Bernanke signaled in a news conference after the meeting that the combination of persistent slow growth and low inflation, could give the Fed leeway to take more action to support the economy, though he didn't commit to it.”


In Jesse's (of Jesse’s Cafe Americain) words:

“This statement shows a longer term commitment to de facto QE at least. The Fed does not need to further expand its balance sheet just yet, but rather deploy those funds strategically while engaging in swaps with other central banks to counter the financial risks globally.

.

“I suspect that before they formally announce a further expansion of their balance sheet, the Fed will go 'off-balance sheet' in the easing as financial firms are often wont to do when engaging in opaque accounting. The swaps and noncompetitive bidding for balance sheet assets may be a part of this.

.

“I do not object to stimulus per se, but rather this type of blunt policy that does not address or repair the problems that led to the financial bubble and collapse in the first place.”


In Jesse's view, and we agree, the “yawning gap between productive labor and mere money manipulation” needs to be closed, and hard choices are required to resolve the unsustainable concentration of both power and risk.

“Demagoguery and deception in support of the status quo seems to be the rule of the day in the financial sector and its associated professions and exclusive clubs.

.

“Therefore self-regulation, restraint, and reform are a thin bet to say the least. The crisis is more like to continue to expand, and the taint of corruption and crime continue to spread.” (FOMC Statement - Targets 2% Inflation - Highly Accommodative Monetary Policy Until ‘Late 2014’)


One problem with large, public programs such as QE2 is that everyone jumps into the same side of the trade, e.g., going long equites in the famous “Tepper Put” that dominated the markets while QE2 was operating (buy stocks, you can’t lose). Using more low-key, less blatant ways of injecting liquidity into the financial system, Bernanke is continuing to provide stimulus while pretending to be an inflation hawk.

http://ilene.typepad.com/.a/6a010536583aff970b0163005b0803970d-500wi CLICK ON CARTOON

xchrom

(108,903 posts)
44. Stocks shaken by new confidence data
Tue Jan 31, 2012, 12:02 PM
Jan 2012
http://bottomline.msnbc.msn.com/_news/2012/01/31/10279254-stocks-shaken-by-new-confidence-data

Stocks were struggling Tuesday, following a report that U.S. consumer confidence unexpectedly fell in January as more Americans worried about the country's weak job market.

Key earnings also drove trading, with shares of Exxon falling and Eli Lilly and U.S. Steel advancing. The results reflected a mixed picture of corporate strength, continuing a trend this earning season.

Hopes built that Greece was nearing a debt swap deal, just a day after talks had stalled, lessening the odds of a messy default and possibly creating other shocks to the region's financial system.
advertisement

Also, European Union leaders agreed on a stricter budget discipline plan to prevent further debt build-up in the region.
 

Demeter

(85,373 posts)
55. You don't want to see the wife's revenge, then--when she proves Annie wrong
Tue Jan 31, 2012, 02:46 PM
Jan 2012

"Annie Get Your Gun" (1/5) - "You Can't Get a Man with a Gun"

Fuddnik

(8,846 posts)
65. Annie Oakley is on PBS tonight on "The American Experience".
Tue Jan 31, 2012, 08:31 PM
Jan 2012

I'd have checked the listings earlier, but I didn't dare go near the TV until the polls closed.

 

Ghost Dog

(16,881 posts)
47. A thousand years on,an updated Silk Road will bypass the West
Tue Jan 31, 2012, 01:03 PM
Jan 2012

... Countries elsewhere are certainly being attracted by China's magnetic pull. George Osborne talked at Davos with pride about the arrival of renminbi offshore trading in London. Germany sees China as a vital destination for its engineering products. The French are benefiting from a surge in demand for Bordeaux wines as the Chinese buy up buckets of the stuff, regardless of vintage.

The real action, however, is going on outside Europe and, indeed, bypassing the US. We are witnessing the creation of a Southern Silk Road, a return on the grandest of scales to the trade patterns of a thousand years ago. Trade back then was centred on Asia, the Middle East and East Africa. Europe, stuck in the Dark Ages, played only a bit part. <-- Except for parts of the Byzantine Empire, and of course Al Ándalus...

Growth in the world economy will increasingly depend on the multiplying links between Asia, the Middle East, sub-Saharan Africa and Latin America. Trade and capital flows between these geographically separate parts of the emerging world are still relatively modest. With a huge expansion of cross-border infrastructure investment, the establishment of new centres of financial excellence and the opening-up of new consumer markets, the Southern Silk Road could offer a revolution every bit as big as the opening-up of trade between the industrialised nations in the years following the end of the Second World War.

How the West copes with this remains to be seen. We are seeing a shifting centre of gravity, both politically and economically. The West can choose to grow old gracefully, accepting its diminished status in the world order. Or it can choose to resist the process, becoming ever-more isolationist. It's a fundamental choice, but one the Davos crowd didn't really want to think about: they were happy to believe that, with a few tweaks, the old order could be preserved...

/... http://www.independent.co.uk/news/business/comment/stephen-king/stephen-king-a-thousand-years-onan-updated-silk-road-will-bypass-the-west-6296650.html

No, I don't think this is by that Stephen King. But I could be wrong.

xchrom

(108,903 posts)
48. Dow Poised for Longest Slump Since August
Tue Jan 31, 2012, 01:20 PM
Jan 2012
http://www.bloomberg.com/news/2012-01-31/u-s-stock-index-futures-advance-as-eu-members-adopt-stricter-budget-rules.html

U.S. stocks reversed gains, sending the Dow Jones Industrial Average toward its longest decline since August, as reports showed consumer confidence trailed economists’ estimates and business activity cooled.

Energy and transportation shares slumped at least 0.8 percent among 24 groups in the Standard & Poor’s 500 Index. Exxon Mobil Corp. (XOM), the largest energy company by market value, dropped 2.3 percent amid lower-than-forecast sales. United Parcel Service Inc. (UPS), the biggest package-delivery company which is considered a proxy for the economy, slid 1.5 percent after reporting sales that missed analysts’ projections.

The S&P 500 declined 0.3 percent to 1,308.52 at 10:53 a.m. New York time, reversing a gain of as much as 0.6 percent. The Dow retreated 70.16 points, or 0.6 percent, to 12,583.56.

“People are on the fence with respect to whether we accelerate in economic terms and slow down again,” John Carey, a Boston-based money manager at Pioneer Investments, said in a telephone interview. The firm oversees about $220 billion. “We’d like to see better economic growth for sure,” he said. The European crisis “is maybe something that we’ll have to live with. It’s just never ending.”

xchrom

(108,903 posts)
49. Iceland: Recovering dubiously from the crash
Tue Jan 31, 2012, 01:31 PM
Jan 2012
http://www.aljazeera.com/indepth/features/2012/01/2012131144757624586.html

Reykjavid, Iceland - Three years ago, thousands of Icelanders were standing outside Iceland's parliament building chanting "incompetent government" in an attempt to bring down the conservative government that had been seen as responsible for the collapse of the country's banking system.

In 2008, all three major commercial banks collapsed because they could not refinance their short-term debt. It was the largest banking collapse ever in relation to the size of the economy.

The protestors won, the government resigned and a left-wing government consisting of the Left-Green Movement and the Social Democratic Alliance took over. The new government pledged to look after the welfare of the average Icelander, but opinions differ whether it has managed to do that.

After the crash, the Icelandic krona devalued significantly, which meant that the price of anything which had to be imported or was dependent on foreign currency increased considerably. Food, fuel and consumer goods were particularly affected, and are still much more expensive than they were prior to the crash.

xchrom

(108,903 posts)
50. Europe May Be Planning 1.5 Trillion Euro Backstop Fund
Tue Jan 31, 2012, 01:44 PM
Jan 2012
http://www.spiegel.de/international/europe/0,1518,812565,00.html

Europe could have a 'super' €1,500 billion ($1,969 billion) debt firewall by the summer under plans to combine three funds of €500 billion each. The Financial Times Deutschland reported on Tuesday that the plan was discussed at a meeting on the sidelines of the recent World Economic Forum in Davos attended by US Treasury Secretary Timothy Geithner, International Monetary Fund (IMF) chief Christine Lagarde, German Finance Minister Wolfgang Schäuble and his French counterpart Francois Baroin.

The proposal would see the current temporary bailout fund, the European Financial Stability Facility (EFSF), combined with, rather than replaced by, the permanent European Stability Mechanism (ESM). The third €500 billion chunk would be provided by the IMF. In return, euro-zone countries have already agreed to €150 billion in bilateral credit for the fund. The other €350 billion would come from across the world from countries such as Brazil and the UK. The US, however, would not participate -- even though Geithner himself said in Davos that only an extremely large firewall would ensure financial security.

The massive fund will only become reality if Berlin agrees to it, and the IMF and the European Commission are hoping to secure Germany's approval at the next EU summit at the beginning of March.
 

Demeter

(85,373 posts)
56. Fred Goodwin to lose knighthood
Tue Jan 31, 2012, 03:03 PM
Jan 2012

Sir Fred Goodwin, the former boss of Royal Bank of Scotland, is to be stripped of his knighthood, in a move David Cameron hopes will deflect ongoing public anger over high bonuses at the state-controlled bank

Read more >>
http://link.ft.com/r/R5WAEE/WTMFML/WH2F8/TU8CFA/4CIEOH/7V/t?a1=2012&a2=1&a3=31

QUICKLY! MY VINAIGRETTE!

AT LEAST HE GETS TO KEEP HIS HEAD. HENRY VIII WOULDN'T HAVE BEEN SO GENEROUS.

I WONDER IF HE'S A VIRGO OR AN AQUARIUS....

Tansy_Gold

(17,815 posts)
61. Is this the dude
Tue Jan 31, 2012, 04:47 PM
Jan 2012

from the smarmy photos posted here a week or so ago?


edited to add answer to me own query! Yep, same dude. googled him and got a screen full of smarm!

 

Demeter

(85,373 posts)
57. HORRORSCOPES FOR THE WEEK BY ONION
Tue Jan 31, 2012, 03:11 PM
Jan 2012

Aries

You've got tough row to hoe in front of you this week, which seems like merely a folksy euphemism until you find you've inherited a run-down potato farm.

Taurus

Conflicts at work and at home are cleared up instantly this week when you decide that all women are basically just crazy bitches.

Gemini

You are relived to find that, although you've left the window open and pages are indeed being torn from the calendar, you're not actually hurtling though time at a breakneck pace.

Cancer

Your life certainly isn't working out the way you had planned. Try to find some sort of equivalent of unplugging it and starting it over.

Leo
You're pretty sure that if God had really meant for man to fly, he would have given us all the ability to afford our own airplanes.

Virgo

The furious mobs will finally stop burning you in effigy next week, but only because they've decided to stop playing around with dolls and go right to the source.

Libra

You've always enjoyed story problems, so maybe you'll enjoy the one the police tell you about your car being found 200 miles away three days ago with eight dead women in the trunk.

Scorpio

The really interesting thing about next week isn't the remarkable size of the lobsters or how the polluted environment has affected their aggressiveness, but it's closely related.

Sagittarius

The bad news is your favorite shirt will be stained beyond saving next week; the good news is your favorite tie will be untouched, which is miraculous when you think about how many times you'll be shot.

Capricorn

The problems of reconciling the spiritual and material, or the intellectual and emotional, shall seem as nothing to you when compared with the problem of asking Erin out to the movies.

Aquarius

They may be laughing at you now, but they'll have to stop eventually if only to eat, catch their breath, and get a good night's sleep in preparation for laughing at you all day tomorrow.

Pisces

Sometimes all you want is to relax in your sweats with a movie and a bowl of popcorn, but this week you'll want six units of whole blood, clean bandages, a splint, and plenty of morphine.

xchrom

(108,903 posts)
60. Taoiseach and Opposition clash in wake of EU deal
Tue Jan 31, 2012, 04:08 PM
Jan 2012


?ts=1328039150
Taoiseach Enda Kenny speaks with French president Nicolas Sarkozy ahead of last night's talks in Brussels. Photograph: Jock Fistick/Bloomberg

Taoiseach Enda Kenny and the oppostion have clashed in the Dáil today over the new treaty agreed by EU leaders in Brussels last night and whether a referendum will be held on the issue.

Opposition parties have said they may take a legal challenge against the Government if it decides not to hold a referendum on the new European treaty.

There were heated exchanges in the Dáil between Mr Kenny and the Sinn Féin leader in the aftermath of yesterday’s meeting with Gerry Adams accusing the Taoiseach of being "buddy, buddy" and playing the "amadan" with French president Nicolas Sarkozy.



i don't know why it added the potato bug -- but i like the unintended inference.
"Taoiseach, could you tell us how much extra austerity you signed up to last night ?," Mr Adams added

DemReadingDU

(16,000 posts)
63. 'Chicken' for dessert
Tue Jan 31, 2012, 06:05 PM
Jan 2012

Graham Summers says...

This is a meringue, shaped like a hen, filled with luscious ice cream and sitting atop a nest of brittle sugar “straw,” whipped cream, and a pool of caramel syrup. It was extraordinary. The combination of textures and tastes was beyond anything my wife or I had seen in a dessert. Adding to this explosion of flavors was the fun of eating “chicken” as a dessert food and this was possibly the most memorable dessert of our lives. Indeed, this was more than just a dessert, it was a marketing tool for the restaurant as a whole: as soon as our order came out, every table around us ordered one too. By the time we left, I counted six other tables having “chicken” for dessert. In plain terms, we ordered a dessert, but Chef Richard delivered an “experience.” My wife and I laughed and shared many delightful moments as we butchered our “chicken.” Because of this, I didn’t care that the dessert cost $12. In fact, I probably would have paid $17 or more for it and not even batted an eye.






edit to add link
http://www.zerohedge.com/contributed/even-world-deleveraging-there-are-still-fortunes-be-made



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