STOCK MARKET WATCH -- Friday, 25 July 2014

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Friday, 25 July 2014[font color=black][/font]

SMW for 24 July 2014

AT THE CLOSING BELL ON 24 July 2014
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Dow Jones 17,083.80 -2.83 (-0.02%)
[font color=green]S&P 500 1,987.98 +0.97 (0.05%)
[font color=red]Nasdaq 4,472.11 -1.59 (-0.04%)


[font color=red]10 Year 2.50% +0.01 (0.40%)
30 Year 3.29% +0.01 (0.30%) [font color=black]


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[font size=2]Market Conditions During Trading Hours[/font]
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(click on link for latest updates)
http://tools.investing.com/market_quotes.php?
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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.
08/01/13 Fabrice Tourré convicted on six counts of security fraud, including "aiding and abetting" his former employer, Goldman Sachs
08/14/13 Javier Martin-Artajo and Julien Grout charged with wire fraud, falsifying records, and conspiracy in connection with JP Morgan's "London Whale" trade.
08/19/13 Phillip A. Falcone, manager of hedge fund Harbinger Capital Partners, agrees to admit to "wrongdoing" in market manipulation. Will banned from securities industry for 5 years and pay $18MM in disgorgement and fines.
09/16/13 Javier Martin-Artajo and Julien Grout officially indicted on charges associated with "London Whale" trade.
02/06/14 Matthew Martoma convicted of insider trading while at hedge fund SAC (Stephen A. Cohen) Capital Advisors. Expected sentence 7-10 years.
03/24/14 Annette Bongiorno, Bernard Madoff's secretary; Daniel Bonventre, director of operations for investments; JoAnn Crupi, an account manager; and Jerome O'Hara and George Perez, both computer programmers convicted of conspiracy to defraud clients, securities fraud, and falsifying the books and records.
05/19/14 Credit Suisse, which has an investment bank branch in NYC, agrees to plead guilty and pay appx. $2.6 billion penalties for helping wealthy Americans hide wealth and avoid taxes.








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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]

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1. Truly, we need some humor to get through it all

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24. Even more so

I THINK I AN SAY, WITHOUT FEAR OF CONTRADICTION, THAT CHARLIE BROWN SPEAKS FOR ALL OF US ON THE PROGRESSIVE, LIBERAL SIDE OF THE ELECTORATE




WHILE DILBERT'S DILEMMA RESEMBLES MY OWN FEELINGS ABOUT CONDO BOARD MEETINGS:

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2. Hedge funds escaped billions in taxes

http://www.usatoday.com/story/money/business/2014/07/21/hedge-funds-options-trades-tax-avoidance/12947225/

Two large banks used a complex financial scheme to help 13 hedge funds avoid paying billions of dollars in taxes and evade federal borrowing limits on brokerage accounts over a 15-year period, according to the findings of a Senate subcommittee investigation. Deutsche Bank and Barclays Bank sold "basket options" to the hedge funds that allowed the funds to report trading profits as long-term capital gains for tax purposes, even though 97% of the assets were held for less than six months, the Senate Permanent Subcommittee on Investigations said. Also, the trades were made in the banks' accounts so that the hedge funds would not be subject to leverage limits that prevent banks from lending more than $2 for every dollar put up by the hedge funds, according to its report. The funds, however, controlled all assets, executed all the trades and reaped the profits, the subcommittee said.

From 1998 to 2013, its report said, the banks sold 199 basket options to hedge funds to conduct more than $100 billion in trades. One fund, Renaissance Technologies, earned about $34 billion in profits and avoided paying $6.8 billion in taxes through the financial legerdemain, the report said. The subcommittee's findings focused on two hedge funds — Renaissance and George Weiss Associates — because it said they were involved in the single-largest volumes of trades.

"Ordinary Americans have shouldered the tax burden these hedge funds shrugged off," said Sen. Carl Levin, D-Mich, chairman of the subcommittee. "The same ordinary Americans would pay another price if the reckless borrowing outside of federal safeguards would blow up."

Deutsche Bank said in a statement: "The options offered by Deutsche Bank which were discussed in the Committee's report were at all times fully compliant with applicable laws, regulations and guidance. Moreover, they were a niche offering to a small number of clients over a discrete period of time which we completely ceased offering in 2010. We fully cooperated with the Committee throughout its investigation."

Barclays said in a statement that it "has been fully compliant with the law, has cooperated with the committee and looks forward to continuing that cooperation at the hearing. "

In a statement, Renaissance spokesman Jonathan Gasthalter said: "We believe that the tax treatment for the option transactions being reviewed by the (subcommittee) is appropriate under current law. These options provide Renaissance with substantial business benefits regardless of their duration. The IRS already has been reviewing these option transactions for over six years, and Renaissance has cooperated fully with both reviews."

George Weiss Associates said it terminated its basket options in May 2010 "because of increasing market volatility." It added, "basket options are lawful financial instruments often used to obtain leverage."

The basket options will be the subject of a subcommittee hearing Tuesday morning.

According to the subcommittee's findings, Deutsche Bank began selling the basket options in 1998 and Barclays started offering them in 2002. By exercising the option, a hedge fund would either make or lose money based on the results of millions of trades over many months. Since they often waited more than a year to exercise the option, the hedge funds treated the profits as long-term gains. The subcommittee, however, says the option was simply an artifice and the funds made an average 26 million to 36 million trades during the year, holding many positions for only seconds. As a result, the trades should have been part of a normal brokerage account, and the funds should have been paying an ordinary income tax rate for short-term gains, which is as high as 39% instead of a 15% or 20% rate for long-term capital gains.

In 2010, the Internal Revenue Service issued a memorandum that said basket options with constantly changing assets were not true options and investors must recognize the gains or losses when they occurred rather than when an option was exercised. At that time, Barclays continued offering new options for two years, the Senate report said. Deutsche Bank stopped offering new options but continued to administer existing ones. In 2012, the IRS notified Renaissance that it would not allow basket option profits from trades lasting less than 12 months to be treated as long-term capital gains and sought additional taxes from the company, the report said. Renaissance submitted a letter opposing the finding and the matter is now awaiting an appeal.

By conducting trades in the banks' accounts, the banks were able to provide the hedge funds as much as $20 in loans for each dollar put up by the funds, according to the report. While the hedge funds controlled all of the trades, the banks contend they were simply acting as investment advisers, the subcommittee said. The subcommittee said the banks also profited from the scheme, with Deutsche Bank earning $570 million in financing, trading and other fees and Barclays taking in $655 million. The subcommittee says the IRS should audit hedge funds that used basket options from Deutsche Bank or Barclays and collect unpaid taxes. Regulators also should step up their scrutiny of these transactions. The Treasury Department and the IRS also should simplify the rules so that regulators don't have to notify potentially thousands of a hedge fund's partners to conduct an audit, the subcommittee said.

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3. Painful Progress in Detroit

BS+MS+PHD (PILED HIGHER AND DEEPER)

http://www.nytimes.com/2014/07/23/opinion/painful-progress-in-detroit.html?_r=1

If the measure of a good compromise is that everyone is left unhappy, the Detroit bankruptcy plan certainly qualifies.

Detroit’s municipal retirees have approved a restructuring blueprint that will cut their promised pension payouts significantly as part of a larger effort to reduce the city’s $18 billion debt. Other creditors rejected the blueprint, including hedge funds and bond insurers that hold or back billions of dollars in municipal debt. One of their complaints is that the blueprint unfairly discriminates against them in favor of pensioners. Another complaint, advanced by a group of bondholders who would receive 100 percent of their principal under the plan, is that their losses are too great compared with what they would have made under the bonds’ original terms.

The next step is for Judge Steven Rhodes of federal bankruptcy court to hold a trial, scheduled to begin on Aug. 14, at which the City of Detroit will have to make the case for the blueprint, while objectors argue against it. If the judge finds the plan legal, equitable, fair and feasible, he would confirm it, in effect, forcing the blueprint’s terms on the “no” voters. Whatever the result, there will be no victories. Pensioners voted yes not because they were getting a sweet deal, but because they faced even deeper cuts — potentially as high as 27 percent of monthly benefits for some retirees — if they voted no. To avert such a crippling blow, the State of Michigan, nonprofit foundations and donors to the Detroit Institute of the Arts pledged $816 million to reduce the planned pension cutback and to protect the city’s art collection from being sold to pay off bondholders — but only if the pensioners approved the blueprint and if the judge confirms the plan. Nonuniformed city retirees now face cuts to their monthly pension payments of 4.5 percent, the elimination of annual cost-of-living adjustments and, for some, claw backs of annuity payments deemed excessive. Police and fire retirees, who are not covered by Social Security, face deep cuts to annual cost-of-living adjustments.

The no votes, in contrast, basically reflect the hopes of bondholders for a better deal, which they have the right to fight for. Some of their grievances involve complex legal issues that clearly need to be resolved in court. But there is no doubt that municipal pensioners who voted yes on the blueprint are a more vulnerable constituency than the financial institutions that voted no. The pensioners also have negotiated in good faith on a plan that is now Detroit’s best hope for making a fresh start. By comparison, most of the other creditors are professional investors who knew or should have known the risks of lending money to Detroit yet now find themselves calling for deeper pension cuts or auctioning off masterpieces in order to minimize their losses. Their no votes on the blueprint — and their probable appeal if Judge Rhodes confirms the blueprint — will only further delay Detroit’s restructuring and deepen its misery.

For now, the painful bankruptcy process is moving forward as it should. The outcome is uncertain, but one thing is sure: The people of Detroit have suffered enough.


THIS FROM THE CITY THAT GOT BAILED OUT BY GERALD FORD....

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4. Wall Street Cut From Guest List for Jackson Hole Fed Meeting

http://www.bloomberg.com/news/2014-07-22/wall-street-axed-from-guest-list-for-jackson-hole-fed-conference.html

Wall Street doesn’t lead to Jackson Hole this year....As the Federal Reserve Bank of Kansas City prepares to host next month’s annual gathering of central bankers in Wyoming, seasoned Fed watchers from the financial markets, including the chief U.S. economists of the biggest American banks, aren’t being invited, according to past participants. Among those who didn’t make the guest list: Vincent Reinhart of Morgan Stanley (MS), Jan Hatzius of Goldman Sachs Group Inc. (GS), and Bank of America Corp.’s Ethan Harris. Onetime conference regulars, including Mickey Levy of Blenheim Capital Management LLC and Meredith Whitney of Kenbelle Capital LP, also lose out. They’ll miss a conference that has foreshadowed some of the Fed’s biggest monetary-policy shifts since the financial crisis, and a keynote speech by Chair Janet Yellen. Perhaps as importantly, they also will be deprived of the opportunity to mingle with policy chiefs over meals and on mountain trails.

“For sell-side people, going to Jackson Hole was huge,” said John Makin, a resident scholar at the American Enterprise Institute in Washington, who as a principal of Caxton Associates LP attended most of the meetings during the past two decades. “If you’re a chief U.S. economist at a big bank, it was great to say you were there.”

This year’s three-day conference in the shadow of the Teton Mountains begins on Aug. 21 with the topic of “Re-evaluating Labor Market Dynamics.”

‘Primary Audience’

“The primary audience for the Jackson Hole economic symposium has always been central bankers,” said Diane Raley, a spokeswoman for the Kansas City Fed, who didn’t comment specifically on this year’s guest list...“Based on the topic of discussion, the remainder of the available seats varies from year to year as we consider participants who can bring relevant perspectives and insights to the topic discussion,” she said in an e-mail. The audience for this year’s conference “is designed to be a complement” to the focus on labor markets.

The exclusion of Wall Street may reflect a dispute between some regional Fed bank presidents who are more worried by loose monetary policy than Fed governors in Washington including Yellen, said Pippa Malmgren, founder of DRPM Group in London and another frequent delegate who won’t be attending this year.

“I fully support disinviting the chief economists of the largest beneficiaries of quantitative easing,” Malmgren said, referring to the Fed’s program of monthly bond purchases, which is on course to end this year.

Yellen Camp

“This weakens the support for the Yellen camp and gives her opponents more chance to make their case” during the meeting, said Malmgren, a former adviser to U.S. President George W. Bush.

Kansas City Fed President Esther George, the conference host, said in a July 15 speech that various economic indicators suggest the Fed “should already be raising rates” from near zero. Last year she dissented seven times at Federal Open Market Committee meetings, saying added stimulus may spur excessive risk-taking. She doesn’t vote on policy this year. The finance industry won’t be completely shut out, with former Bank of Israel Governor Jacob Frenkel, now chairman of JPMorgan Chase International, attending for a 29th straight year. Tim Adams, a former U.S. Treasury Department official and now president of the Washington-based Institute of International Finance, also will be there.

Invitation List

Academics with differing views on monetary policy also will ensure the debate stays hot. Stanford University’s John Taylor, Alan Blinder of Princeton University and Glenn Hubbard of Columbia Business School will all be in Wyoming. Other groups previously cut from the invitation list, which tends to run to about 150 people, include research directors at regional Fed banks. They lost out in 2010 but have since returned. The meeting has an agenda-setting reputation. In 2010 and 2012, then-Fed Chairman Ben S. Bernanke signaled new rounds of bond purchases that have pumped up the Fed’s balance sheet to a record $4.4 trillion. Two years ago, Columbia University Professor Michael Woodford’s call for “forward guidance” on the intended path for monetary policy was subsequently heeded by U.S. and European central bankers.

...........................

Limiting access for Wall Street and other private-sector economists marks a reversal from the Jackson Hole conferences of past years. The financial-market community was especially welcome in 2006. Malmgren, Makin and Sinai attended, as did Frenkel and Levy, then of American International Group Inc. and Bank of America respectively. They were joined by representatives from Citigroup Inc. (C), Morgan Stanley, Swiss Re Ltd., JPMorgan Chase & Co. (JPM), BCA Research Inc., Goldman Sachs, Tudor Investment Corp., Deutsche Bank AG (DBK), Lehman Brothers Holdings Inc., Pacific Investment Management Co., Macroeconomic Advisers LLC, the Lindsey Group LLC and Mesirow Financial Inc.

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8. Fed Hubris: Central Bank Ignores That It is on Thin Political Ice

http://www.nakedcapitalism.com/2014/07/fed-hubris-central-bank-ignores-thin-political-ice.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29



A shot across the Fed’s bow from Simon Johnson, former IMF chief economist and bank critic, on the surface looks to be a good bit of news. Johnson, in a recent Project Syndicate article, warns that the notoriously cloistered central bank is overly confident about its political position. Although Johnson is constrained by both space limits and Project Syndicate’s anodyne style, his warning is clear: the Fed is more powerful than ever despite having been wretchedly incompetent in the run-up to the crisis. Many would say it has compounded its incompetence by going into “if the only tool I have is a hammer, ever problem looks like a nail” mode with ZIRP and QE. The Fed was not only silent when its input would have mattered a great deal, in the fiscal stimulus fight of 2009, but Bernanke called for deficit cutting in 2012, even as he had his foot firmly on the not-very-effective QE accelerator. The result is a flaccid economy, bubbles in many financial assets and destabilizing hot money flows sloshing through developing economies.

As a result of this misrule, Johnson contends the central bank is much closer than it recognizes to losing its vaunted independence. Johnson points out that the right wing is keen about restricting the Fed’s freedom of action, and that they are a much more serious threat than the Fed appears to understand. What happens if the Republicans gain a majority in the Senate in the midterms? Even though Johnson is in some ways very critical of the central bank, he if anything overstated its base of support. The hostility towards the monetary authority among conservatives is perverse, given how much the Fed has done for the wealthy by showing such solicitude about asset prices. Nevertheless, it is not just the right that is unhappy with the Fed. It is pretty much anyone to the left of mainstream Democrats. Orthodox folks tend not to recognize its existence since its members are seldom welcome in polite DC company. Remember, it was Ron Paul and Alan Grayson who teamed up on Audit the Fed. And both conservative and liberal senators were responsible for putting an unheard of five holds on Bernanke’s reappointment as Fed chairman. Obama had to whip personally to get Bernanke approved...Johnson regards the support of the central bank as reasonably secure on the left; that’s true only to the extent that you conflate, as he does, the left with the Democratic party. As we pointed out, the strained effort by Janet Yellen to rebrand herself in a New Yorker profile as a friend of the downtrodden says she’s aware of the central bank’s vulnerability on its left flank. As our correspondent Li pointed out at the time:

The piece is weirdly designed to prevent New Yorker-reader limo-liberals from joining forces with right-wingers who justifiably want to know WTF the Fed is doing.

Johnson’s bone of contention with the Fed is the way it refuses to make banks safe, boring, and smaller, as it is required to do under Dodd Frank. The critical sections of his discussion:

…senior Fed officials seem to have slipped back into their pre-2008 ways, ignoring concerns about dangerous financial-sector behavior – even when those concerns are expressed by members of the US Senate Banking Committee. This is not only unfortunate; it is also dangerous, because the Fed’s political position is much more precarious than its leadership seems to realize…

For example, the Dodd-Frank legislation specifies that all large financial institutions should draw up meaningful “living wills” – specifying how they could be allowed to fail, unencumbered by any kind of bailout, if they again became insolvent.

Creating such living wills is not an option; it is a requirement of the law. Yet, in a recent speech that reviewed the landscape of financial reform, Fed Vice Chairman Stanley Fischer skipped over the requirement almost completely….

Fischer appears to prefer to rely on the resolution powers of the Federal Deposit Insurance Corporation….Unfortunately, as currently constructed, these resolution powers are unlikely to work. They do not apply across borders, there is not enough loss-absorbing capital in large complex financial institutions, and the funding structure of big bank holding companies remains precarious.

Senior Fed officials emphasize that big banks fund themselves with more equity now than they did in the past. But the Global Capital Index constructed by Thomas Hoenig, the FDIC’s vice chairman, indicates that the largest US banks are still 95% debt-financed. With that much leverage, it does not take a lot to create fear of insolvency.

Yet, despite repeated and responsible expressions of concern – including from Senate Democrats – the Fed continues to ignore these profound problems…This is more than disappointing. It is profoundly dangerous to the economy.

Yves here. In other words, the Fed has become “independent” in the worst possible way. It shirked its oversight duties prior to the crisis (for instance, the Fed gave up supervision of primary dealers in 1992, and Greenspan announced his intention to let banks do as they wished with derivatives in 1996, despite a monster wipeout in 1994-1995 that destroyed more value than the 1987 crash) and now it thumbs its nose at performing tasks clearly and explicitly assigned to it under Dodd Frank. Not that the Fed deserves to keep its independence, mind you. The Fed has engaged in a bad combination of political meddling and mission creep for so long that its wings should have been clipped years ago. It’s important to understand that the justification for Fed independence has become a dead letter. This is from former Fed economist Richard Alford, in a June 2008 post:

Since the first Latin American debt crisis, we have had a Fed that has been eager to lean against financial headwinds, but completely unwilling to take in sail when dealing with strong financial tail winds. The Fed did not the lean against either the NASDAQ or housing bubbles. Greenspan acknowledged that the NASDAQ might be a bubble, but decided it was appropriate to wait until the bubble popped and then mop up. Post 2000, the Fed denied the existence of a housing bubble. It ignored the declining credit standards, increased leverage, declining quality spreads and a Fed funds target below that implied by the Taylor Rule. The Fed then chose to characterize the bubble as localized froth even after it started to deflate. It then asserted that it was a contained sub-prime problem.

We have a Fed that is willing to incur short-term costs if it reduces inflation, but will not incur short-term costs to achieve financial stability or external balance. This would be less of a problem if another agency or agencies had the willingness and ability to insure financial and external balance, but it is clear that we do not. The Fed was granted independence and insulated from political pressure in order to accept short-term costs in order to enhance the prospects for long term growth. However, the current Fed, like the Fed of the 1970s, failed to use the freedom it was granted.

Assuming for the moment that the Fed either made an error of commission (spiking the punch bowl) or omission (failure to exercise its regulatory and supervisory powers), is there any reason to believe it was the result of an erosion of the independence of the Fed? Unfortunately, the public record suggests that Fed independence has been compromised. There is reason to believe that Greenspan entered into deals with two of the three administrations during his tenure as Chairman. Some commentators believe that he entered into deals with all three. However, the number is unimportant. What is important is that the Fed’s independence was compromised and a very public precedent was set. Never again will an FOMC Chairman be able to say “The Fed does not make deals” to a President or a Secretary of the Treasury or a member of Congress.

Compare the behavior of the Chairmen of the 1950s and Volcker to that of Greenspan. Chairman Eccles and McCabe both lost their Chairmanships because they wouldn’t compromise Fed independence. They stood their ground even after being summoned to the White House. Martin, appointed by Truman, was in later life referred to by Truman as “the traitor” presumably for taking the punch bowl away. The public image of Volcker is that of a man who twice a year endured public Congressional assaults, resisted political pressure, and enabled the Fed to stay the course.

Greenspan, on the other hand, jumped at the chance to meet Clinton, traveling to Little Rock before the inauguration. Bob Woodward in his book “Maestro” quotes Clinton telling Gore after the pre-inauguration meeting: “We can do business.” Woodward also quotes Secretary of the Treasury Bentsen telling Clinton that they had effectively reached a “gentleman’s agreement” with Greenspan. The agreement evidently involved Greenspan’s support for budget deficit reduction financed in part by tax increases. It is not clear what Greenspan received.

Even if the deal with Clinton contributed to a good policy mix, Greenspan should never have entered into that agreement/deal/understanding or another agreement/deal/understanding. The very act of negotiating and injecting the Fed into a discussion of budget decisions compromised Fed independence. Why shouldn’t Bush have expected the same? Why shouldn’t every succeeding President expect the Fed Chairman to be a “business” partner? Refusal to deal on the part of the Fed can no longer be attributed to principle and precedent. Refusal “ to do business” will now be viewed as a rejection, partisan or otherwise. The Fed is no longer able to stand apart from political battles. Greenspan severely compromised the Fed standing as an agency insulated from the short-sighted and partisan politics of Washington DC.

So if we were to have Audit the Fed implemented in its original version (the central bank succeeded in getting the bill considerably watered down) or have other right-left initiatives to bring a central bank that can’t shoot straight to heel, that would be a welcome development. The disconcerting part, as Johnson indicates, is that the Fed appears to think that it is invulnerable. Whether the central bank is capable of being reformed remains to be seen.

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5. The Secret Government Rulebook For Labeling You a Terrorist

https://firstlook.org/theintercept/article/2014/07/23/blacklisted/

The Obama administration has quietly approved a substantial expansion of the terrorist watchlist system, authorizing a secret process that requires neither “concrete facts” nor “irrefutable evidence” to designate an American or foreigner as a terrorist, according to a key government document obtained by The Intercept.

The “March 2013 Watchlisting Guidance,” a 166-page document issued last year by the National Counterterrorism Center, spells out the government’s secret rules for putting individuals on its main terrorist database, as well as the no fly list and the selectee list, which triggers enhanced screening at airports and border crossings. The new guidelines allow individuals to be designated as representatives of terror organizations without any evidence they are actually connected to such organizations, and it gives a single White House official the unilateral authority to place entire “categories” of people the government is tracking onto the no fly and selectee lists. It broadens the authority of government officials to “nominate” people to the watchlists based on what is vaguely described as “fragmentary information.” It also allows for dead people to be watchlisted.

Over the years, the Obama and Bush Administrations have fiercely resisted disclosing the criteria for placing names on the databases—though the guidelines are officially labeled as unclassified. In May, Attorney General Eric Holder even invoked the state secrets privilege to prevent watchlisting guidelines from being disclosed in litigation launched by an American who was on the no fly list. In an affidavit, Holder called them a “clear roadmap” to the government’s terrorist-tracking apparatus, adding: “The Watchlisting Guidance, although unclassified, contains national security information that, if disclosed … could cause significant harm to national security.”


IS IT FASCISM YET? MUCH MORE AT LINK

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6. Unintentional Tax Humor on the Inversion Scam at Forbes

http://www.nakedcapitalism.com/2014/07/unintentional-tax-humor-on-inversions.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

While you’ve all been busy being distracted by the strife in Gaza and Ukraine, or perhaps more sensibly decided to tune out and enjoy the summer, various not-so-pretty developments have been moving forward with alacrity in the US. One is a spate of so-called “inversion” deals, in which corporations use acquisitions to move their headquarters overseas, which allows them to arrange their affairs so as to greatly lower their tax bills. The latest group of companies to try this ruse are in the health care industry, brandishing the excuse that if they fail to follow this dodgy practice, they won’t be competitive. Kenneth Thomas has been on this beat at Angry Bear. Here’s a short overview of how inversion deals work earlier this week:

Corporate “inversions” are back in the news again, as multinational corporations try every “creative” way they can to get out of paying their fair share of taxes for being located in the United States. With inversions, the idea is to pretend to be a foreign company even though it is physically located and the majority of its shareholders are in the U.S.

“What’s that?” you say. At its base, what happens with an inversion is that a U.S. corporation claims that its head office is really in Ireland, the Cayman Islands, Jersey, etc. Originally, all you had to do was say that your headquarters was abroad. Literally.

Now, the rules require you to have at least 20% foreign ownership to make this claim, but companies as diverse as Pfizer, AbbVie, and Walgreen’s are set to run rings around this low hurdle. The basic idea is that you take over a smaller foreign company and pay for it partly with your own company’s stock to give the shareholders of the foreign takeover target at least a 20% ownership stake in your company.

Thus, with pharmaceutical company AbbVie’s takeover of the Irish company Shire (legally incorporated in the even worse tax haven Jersey), Shire’s shareholders will own about 25% of the new company, thereby qualifying to take advantage of the inversion rules. It expects that its effective tax rate will decline from 22.6% in 2013 to 13% in 2016. Yet nothing will actually change in the new company: it will still be headquartered in Chicago, and the overwhelming majority of shareholders will be American.

As David Cay Johnston points out, even some staunch business advocates like Fortune magazine are calling this tax dodge “positively un-American.” Further, as he notes, Walgreen’s wants to still benefit from filling Medicare and Medicaid prescriptions even if it ceases to pay much in U.S. corporate income tax. In other words, it will get all the benefits of being in the U.S., including lucrative government contracts, without paying for the costs of government.

Yves again. Not surprisingly, the media is starting to feature some strained defenses of these inversion transactions, and Thomas gave one the dressing down it deserved.

By Kenneth Thomas. Originally published at Angry Bear

David Cay Johnston emailed me that there were errors in Forbes contributor Tim Worstall’s recent criticisms of the linked article. Indeed there are, but the biggest one (or at least the funniest one) isn’t the one Johnston pointed me to.

Worstall writes that AbbVie’s pending inversion will not, by itself, reduce the taxes the company owes on its U.S. operations, though it could be a preparatory move to drain profits from the United States. I’ll come back to that point, but Worstall then gives the example of how AbbVie might sell its patents to a foreign subsidiary and pay royalties to that unit, thereby draining U.S.-generated profits to a tax haven subsidiary, for instance Bermuda (though Ireland is more germane in the real world for intellectual property). But then comes the zinger:

However, do note something else that has to happen with that tactic. That Bermudan company must pay full market value for those patents when they are transferred. Meaning that the US part of the company would make a large profit of course: thus accelerating their payment of tax to Uncle Sam. This tax dodging stuff is rather harder than it sometimes looks: if you’re going to place IP offshore you can do that, certainly, but you’ve got to do it before it becomes valuable, not afterwards. [link in original]

“Must pay full market value”? I’m falling off my chair! It’s like Worstall doesn’t think transfer pricing abuse exists. If patent, copyright, and other intellectual property transfers had to be made at full market value, they would never happen. As I explain in the linked post, academic research has shown that transfer pricing abuses, in this case underpricing the intellectual property transferred from the United States to Bermuda (again, really Ireland), are quite common when no arm’s-length market exists for a good. Since companies aren’t going to sell their crown jewels to strangers, how can a tax authority know what will be a fair price for a Microsoft patent going from the U.S., where it was derived, to its Irish subsidiary?

Let’s be a bit more precise. What would it take for Apple to buy all of Microsoft’s patents? In return for whatever lump sum Apple paid, it would need the equivalent back in terms of the present value of all Microsoft’s future royalty payments. But if Microsoft sold its patents to its Irish subsidiary at that price, Worstall would be right that there would be no tax benefit. And it’s not like it’s cost-free to organize such a transaction. Not only would Microsoft incur the costs of drawing up the contract and so forth, but nowadays companies are taking reputational hits as a result of their tax shenanigans: Ask Starbucks, Google, and Amazon. So if the transaction created no true savings, yet hurt a company’s reputation, we know that it wouldn’t make the transaction. The fact that multinationals are flocking to sell their intellectual property to Irish subsidiaries where the royalties are tax free tells us that the transfer price is not the “full market value” Worstall claims.

Moreover, contra Worstall, it isn’t a question of transferring the intellectual property before it’s valuable. If you’re a multinational drug company, you can make estimates of FDA approval, how much you think a drug will earn, and so forth. And you’ve got inside information! To take the simplest possible example, let’s say AbbVie has two drugs it thinks are each 50% likely to generate revenues with a present value of $500 million each. If you believe Worstall, it will sell one of the patents to its Bermudan subsidiary for only $250 million. But it will sell its other patent for another $250 million, so the supposed cost will still be $500 million and the subsidiary will expect to earn revenues equal to a present value of $500 million off whichever drug turns out to be successful. It’s inescapable that there is no point for a multinational company to sell the patent to its subsidiary at a fair price. There would be no tax benefit, and we wouldn’t be seeing Microsoft with $76.4 billion offshore or Apple with $54.4 billion offshore in 2013. Or a total of $1.95 trillion for 307 companies. Heck, even AbbVie has $21 billion permanently reinvested offshore, according to its 2013 Annual Report (downloadable here), p. 93. “Full market value,” indeed.

Finally, a note on Johnston’s and Worstall’s main dispute. Worstall argued that an inversion does not reduce the tax that a U.S. subsidiary would owe to the United States, noting that you can drain profits (except, as we saw, he doesn’t really believe you can drain profits) from the American subsidiary as long as you have a tax haven subsidiary, i.e., you don’t need inversion for that.

From a very narrow point of view, this is correct. But what Worstall overlooks is that, for the U.S., worldwide taxation substitutes for a general anti-avoidance rule making avoidance itself illegal, which is the approach most other industrialized countries take. Inversions make it impossible to police avoidance, so they indeed threaten tax collections from U.S. subsidiaries. But one might argue that deferral has almost completely neutered the benefit from worldwide taxation already. The bottom line is that the United States needs an end to deferrals at least until it adopts strong anti-avoidance rules, at which point it would only then be possible to discuss ending worldwide taxation.

But all of that will be for naught if we allow ourselves to be seduced by silly claims about how transfer prices have to be the same as “full market value.”

[Demeter]

7. US Courts Defend Rights of Vulture Funds Over Argentina

TRANSCRIPT AT LINK: http://www.nakedcapitalism.com/2014/07/us-courts-defend-rights-vulture-funds-argentina.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

[xchrom]

9. The Crisis in Black Homeownership

http://www.slate.com/articles/news_and_politics/politics/2014/07/black_homeownership_how_the_recession_turned_owners_into_renters_and_obliterated.html

In 2005, three years before the Great Recession, the median black household had a net worth of $12,124. Yes, this was far behind the median white household—which had a net worth of $134,992—but it was a huge improvement from previous decades, in which housing discrimination made wealth accumulation difficult (if not impossible) for the large majority of African-American families.

By the official end of the recession in 2009, median household net worth for blacks had fallen to $5,677—a generation’s worth of hard work and progress wiped out. (The number for whites, by comparison, was $113,149.) Overall, from 2007 to 2010, wealth for blacks declined by an average of 31 percent, home equity by an average of 28 percent, and retirement savings by an average of 35 percent. By contrast, whites lost 11 percent in wealth, lost 24 percent in home equity, and gained 9 percent in retirement savings. According to a 2013 report by researchers at Brandeis University, “half the collective wealth of African-American families was stripped away during the Great Recession.”

It was a startling retrenchment, creating the largest wealth, income, and employment gaps since the 1990s. And, if a new study from researchers at Cornell University and Rice University is any indication, these gaps are deep, persistent, and difficult to eradicate.

In the study, called “Emerging Forms of Racial Inequality in Homeownership Exit, 1968–2009,” sociologist Gregory Sharp and demographer Matthew Hall examine the relationship between race and risk in homeownership. Simply put, African-Americans are much more likely than whites to switch from owning homes to renting them.

[xchrom]

10. Russia Is Europe’s Gas Station

http://www.slate.com/articles/business/the_juice/2014/07/putin_economic_sanctions_he_has_nothing_to_fear_because_russia_is_europe.html

Following the downing of Malaysia Airlines Flight 317, many Europeans are eager for their governments to do something—anything—to punish Vladimir Putin for fomenting instability in the Ukraine.

But the debate over economic sanctions is shining an awkward spotlight on the large and important trade relations between Russia and Europe. As European Commission data shows, the European Union is the most significant foreign investor in Russia, providing up to three-quarters of foreign direct investment. France is moving ahead with the sale of expensive ships to Russia’s military. In Sweden earlier this month, I noticed large groups of Russian tourists in Stockholm (they were the ones, alas, who were shoving people aside in the museum bathroom lines). London’s high-end real estate and other trophy properties (like Chelsea F.C.) continue to act as safety-deposit boxes for Russian money. In 2013, the European Union imported 206.5 billion euros worth of goods from Russia.

If Europe were to refuse to do business with Russia—by declining to house the country’s cash, invest in its factories, and buy its exports—it could really cause some damage while limiting its own exposure. After all, Russian consumers can’t really afford to buy much of what Europe makes. In 2013, Russia imported only 120 billion euros in goods from the EU.

But a look inside the trade numbers reveals that Europe’s ability and willingness to punish Russia economically is severely compromised. Simply put, Russia is Europe’s gas station. If you refuse to patronize the gas station, you’ll certainly inflict some pain on the owner. But then you wouldn’t be able to get to work or drive to the mall or get your kids to school.

[Demeter]

17. Even worse is the distinct possibility that Russia had nothing to do with it

That in fact it is the US PNACers who fomented the instability, armed the neonazi parties that overthrew the Ukrainian government, and set up the shooting down of the Malaysian airliner (a case of two birds with one missile: evidently, Malaysia has somehow ticked off the Globalists) in a false flag gambit to open a shooting war.

If Russia is guilty of anything, it is of protecting Russian speaking citizens and their families and Russian interests, and being the only adult in the room.

[kickysnana]

26. Is there a link so I can catch up on this? n/t

[Demeter]

27. Several

Go back to the Weekends, and follow the links...

I'll see what I can scrounge up this weekend. MattSh might contribute some stuff from his bird's eye view in Ukraine, as well.

[kickysnana]

28. Thanks, bad vision for about a week now. Might have to go get some coke bottle glasses or give up

trying to keep up.

The sad thing is that I don't feel I can support a lot of things I would like to because everything is so corrupt and evil rules for so long again now.

I keep trying to hold onto that things go in cycles and things are bad sometimes everywhere and some places always but it seems that no good deed goes unpunished and no protective law, constitution or charter can stand up to the group evil that has been unleashed.

We had a NOOA? weather advisory for heat and they still sent the college football team out for practice and killed on of them in Mankato I think. They managed to pull $30k crowd source for medical bills and funeral costs in a week but why were they out there that night? Practice in the morning or after dusk not when it is lethal. Today they spot hit problems. We did something good this week we gave money for a funeral and that is all they can handle while the country is still going to hell. Sent a letter to the governor Dayton today about his showing up at a rally last evening to support Israel's invasion. This is the first rally for that, most here are for peace, truce, victims. Told him he needed to do what was right, not do what the powerful, scarey folks were telling him to do.

[Demeter]

29. Good website

http://www.moonofalabama.org/2014/07/ukraine.html

[Demeter]

30. Another good link from someone I trust

http://thiscantbehappening.net/node/2380

[xchrom]

11. UK economy back at pre-crisis level

http://www.bbc.com/news/business-28479902

The UK economy grew by 0.8% in second quarter of 2014, official figures show

The figures, from the Office for National Statistics (ONS), show the economy is now 0.2% ahead of its pre-crisis peak, which was reached in the first quarter of 2008.

The ONS said the economy had grown 3.1% since the second quarter of last year.

Chancellor George Osborne said: "Thanks to the hard work of the British people, today we reach a major milestone in our long-term economic plan."

[xchrom]

12. Amazon reports $126m quarterly loss

http://www.bbc.com/news/business-28473350

Amazon forecast third quarter sales of between $19.7bn and $21.5bn, which could mean sales growth of as little as 15% - well down on previous quarters.

Amazon has traditionally survived on thin profit margins, but investors have been reassured by strong sales growth.

But today's warning over sales has spooked investors.

In after hours trading in the US shares slumped by 6%.

[xchrom]

13. IMF lowers its global growth forecast for 2014

http://www.bbc.com/news/business-28470034

The International Monetary Fund (IMF) has lowered its forecast for global economic growth this year, from 3.7% to 3.4%.

The reduction reflects a weak start to the year in the United States and a number of downgrades to the outlook for several other individual economies.

However there were uplifts for some countries, the largest being the UK.

The global forecast for 2015 is unchanged, with growth predicted to be 4%.

[xchrom]

14. Banks may have to set aside more to cover bad loans

http://www.bbc.com/news/business-28473348


Changes to international accounting standards will mean banks have to record potential losses from their loan portfolios sooner, rather than waiting for borrowers to default.

The new standards have been published today by the International Accounting Standards Board (IASB).

The move could stop financial statements presenting an inaccurate, rosy image of a lender's finances.

It could also mean banks set aside more funds against potential losses.

[xchrom]

15. Rupert Murdoch's 21st Century Fox Just Sold $9 Billion Worth Of Stuff

http://www.businessinsider.com/r-bskyb-to-pay-8-billion-to-create-sky-europe-2014-25

LONDON/PARIS (Reuters) - Britain's BSkyB <BSY.L> has agreed to pay $9 billion to buy Rupert Murdoch's pay-TV companies in Germany and Italy, taking its hunt for growth into Europe by creating a media powerhouse with 20 million customers.
BSkyB, in which Murdoch's 21st Century Fox <FOXA.O> is also the largest shareholder, will pay for the deal using cash, debt, its stake in a TV channel and a placing of shares that represents around 10 percent of its issued share capital.

The deal adds to a flurry of consolidation in the global media sector and Fox is expected to use the proceeds to fuel its pursuit of Time Warner <TWX.N>, which recently rejected Fox's initial $80 billion bid.

BSkyB had flagged a possible deal for Sky Deutschland and Sky Italia in May. The price announced on Friday was slightly lower than expected by some analysts and the cost and revenue benefits laid out by BSkyB were greater than anticipated.



Read more: http://www.businessinsider.com/r-bskyb-to-pay-8-billion-to-create-sky-europe-2014-25#ixzz38TfIwyEt

[xchrom]

16. On Bank of Russia key rate

http://www.cbr.ru/eng/press/PR.aspx?file=25072014_133012eng_dkp2014-07-25T13_19_44.htm

On 25 July 2014 the Bank of Russia Board of Directors decided to raise the the Bank of Russia key rate to 8.0 percent per annum. Inflation deceleration in July 2014 has been slower than expected. At the same time, inflation risks have increased due to a combination of factors, including, inter alia, the aggravation of geopolitical tension and its potential impact on the ruble exchange rate dynamics, as well as potential changes in tax and tariff policy. The build-up of these risks will lead to inflation expectations remaining heightened and creates threats of inflation exceeding the target in the coming years. The adopted decision is aimed at slowing the consumer price growth to the 4.0% target level in the medium term. If high inflation risks persist, the Bank of Russia will continue raising the key rate.

In June 2014, the year-on-year consumer price growth rate increased to 7.8% and core inflation grew to 7.5%. Meanwhile, inflation expectations stayed elevated. The main reason for inflation acceleration was the effect of the observed ruble depreciation on prices of a wide range of goods and services. Moreover, there were a number of specific factors boosting prices for some food items. July has seen signs of inflation slowdown. However, deceleration in consumer price growth has been slower than expected. The annual consumer price growth rate stood at estimated 7.5% as of 21 July. Inflation deceleration was mainly caused by lower increases in administered prices and utility tariffs. Price growth rates for other goods and services have stabilised as a result of decreasing impact of ruble depreciation seen in January-March 2014 on consumer prices, along with improved conditions in food markets due to, inter alia, the new harvest coming in.

Monetary conditions have been tightening since March 2014, inter alia due to geopolitical factors. Interest rates on bank loans and ruble deposits increased. Lending growth slowed down slightly following the acceleration in the previous months. The year-on-year money supply growth rate has decreased which sets conditions for a decline in inflation in the medium term.

Over Q2 2014 the moderate recovery of economic activity has been observed. According to the Bank of Russia estimates, the GDP growth rate was close to zero in Q2 following negative figures earlier. Low economic growth rates are largely caused by structural factors. Utilisation of production factors — labor force and commercially viable production capacities — is high. Labour productivity growth is sluggish. Due to the demographic trends labour force shortage will continue to affect economic growth in the long term. Along with structural factors, external political uncertainty has a negative impact on economic activity. Investment demand remains weak amid low business confidence, limited access to long-term financing in both international and domestic markets, and declining profits in the real sector. Besides, consumer activity is cooling. Economic slack in most countries that are Russia’s trading partners does not contribute to acceleration in economic growth. At the same time, persistently high oil prices support domestic economy.

[xchrom]

18. German Business Confidence Continues To Fall

http://www.businessinsider.com/german-business-confidence-continues-to-fall-2014-7

BERLIN (AP) — German business confidence is down for a third month in a row amid ongoing concerns about the economic impact of the crises in Ukraine and Iraq.
The closely-watched Ifo Institute survey fell to 108 points in July from 109.7 points in June. Economists had widely been expecting a slight rise over June's figure.

The institute said Friday that businesses' assessment of their current situation fell to 112.9 points from 114.8 the previous month, while their expectations for the future fell to 103.4 from 104.8.

The Ifo survey is based on monthly responses from about 7,000 companies.



Read more: http://www.businessinsider.com/german-business-confidence-continues-to-fall-2014-7#ixzz38TnNzp8s

[xchrom]

19. Inflation In Japan Slows

http://www.businessinsider.com/r-japan-consumer-inflation-eases-in-june-as-weak-yen-impact-fades-2014-25

TOKYO (Reuters) - Japan's core consumer inflation eased slightly in the year to June, highlighting the challenges the central bank faces in meeting its 2 percent inflation target sometime next year.

But the slowdown will come as no surprise to the Bank of Japan, which has said inflation will continue to slow to around 1 percent in coming months as an increase in import costs from a weak fen fades.

The BOJ expects inflation to pick up again as a tight labor market lifts wages.

The central bank is thus in no mood to consider expanding stimulus any time soon, although some analysts warn it may face pressure to act if the economic recovery loses momentum and fails to nudge up prices late this year.



Read more: http://www.businessinsider.com/r-japan-consumer-inflation-eases-in-june-as-weak-yen-impact-fades-2014-25#ixzz38TnqI1MD

[xchrom]

20. Markets In Asia Are Up

http://www.businessinsider.com/markets-in-asia-are-up-2014-7

MUMBAI, India (AP) — Most major Asian stock markets rose Friday after U.S. unemployment claims fell to an eight-year low and tensions over the downing of a Malaysia Airlines jet eased.
Japan's Nikkei 225 gained 0.6 percent to 15,387.28 and South Korea's Kospi was up 0.3 percent to 2,036.20. China's Shanghai Composite added 0.5 percent to 2,115.53.

Other Asian markets were lackluster. Hong Kong's Hang Seng was nearly flat at 24,247.20 and India's Sensex was little changed at 26,265.01 after weeks of hitting new highs. Australia's S&P/ASX 200 shed 0.2 percent to 5,575.50.

The generally positive sentiment was fueled by favorable U.S. jobs data indicating that the world's largest economy is continuing to recover. On Thursday, U.S. unemployment claims fell to an eight-year low, declining by 19,000 to 284,000.



Read more: http://www.businessinsider.com/markets-in-asia-are-up-2014-7#ixzz38ToRQ95C

[Demeter]

21. Alas, the last day of my own special Hell Week opens

and I must depart for horrors unknown. I'll be back tonight: same Bat Time, Same Bat Channel, with the Weekend Economists thread. See you there!

[xchrom]

22. Ireland may seek EU nod to repay IMF loans early - Irish Times

http://uk.reuters.com/article/2014/07/25/uk-ireland-eu-imf-idUKKBN0FU14V20140725

(Reuters) - Ireland is taking soundings on whether its European Union partners would allow it to repay bailout aid early, but only the loans provided by the International Monetary Fund, the Irish Times said on Friday.

Such a move would allow Ireland to cut its debt servicing costs but could in theory penalise other EU states by making them wait longer for repayment of funds they granted.

Irish Finance Minister Michael Noonan said earlier this month he was considering how Ireland could repay the IMF loans early, but that such a move would also trigger early repayment of EU funds.

Ireland, which completed its three-year EU/IMF aid programme last year, returned to bond markets in January 2012 and borrowed 10-year debt at a record low of 2.32 percent last month.

[xchrom]

23. Euro zone private sector loans contract less in June - ECB

http://uk.reuters.com/article/2014/07/25/uk-ecb-money-m-idUKKBN0FU0SA20140725


(Reuters) - A decline in lending to households and firms in the euro zone slowed slightly in June and money supply grew, as the European Central Bank's new stimulus measures find their way through the system.

In an unprecedented move, the ECB started charging banks in June to keep their deposits overnight, a step it hopes will encourage banks to lend. A fresh injection of ultra-long loans later this year should make lending easier yet.

ECB data showed on Friday that loans to the private sector fell by 1.7 percent in June from the same month a year earlier after a contraction of 2.0 percent in May. Euro zone M3 money supply - a more general measure of cash in the economy - grew at an annual pace of 1.5 percent, up from 1.0 percent in May.

Howard Archer, economist at IHS Global Insight, said the ECB may take some heart from the figures.

[xchrom]

25. Wal-Mart’s New U.S. Chief Facing Empty Shelves, Grumpy Shoppers

http://www.bloomberg.com/news/2014-07-24/wal-mart-s-new-u-s-chief-facing-empty-shelves-grumpy-shoppers.html

Empty shelves, grumpy customers, long lines at the register: These are just some of the challenges facing Wal-Mart Stores Inc.’s new U.S. chief.

Greg Foran, who takes charge Aug. 9, inherits a chain wedded to an outdated big-box model, struggling to increase sales in its stores and online, and losing customers because it can’t keep stores adequately stocked. The sluggish U.S. performance contributed to lower-than-projected sales and profit in the quarter that ended April 30. Wal-Mart’s profit forecast for the current quarter also came in lower than analysts’ estimates.

By naming Foran, a 53-year-old New Zealander who previously ran the chain’s Asia operations and has worked at Wal-Mart only four years, Chief Executive Officer Doug McMillon is betting a relative newcomer can revive a company losing relevance in a world increasingly dominated by Amazon.com Inc.

Foran’s promotion is “an acknowledgement of needing fresh thinking,” said Bryan Gildenberg, an analyst at Kantar Retail in Boston. “There are some short-term execution issues that McMillon is trying desperately to fix.”