Economy
Related: About this forumSTOCK MARKET WATCH -- Thursday, 28 June 2012
[font size=3]STOCK MARKET WATCH, Thursday, 28 June 2012[font color=black][/font]
SMW for 27 June 2012
AT THE CLOSING BELL ON 27 June 2012
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Dow Jones 12,627.01 +92.34 (0.74%)
S&P 500 1,331.85 +11.86 (0.90%)
Nasdaq 2,875.32 +21.26 (0.74%)
[font color=black]10 Year 1.62% 0.00 (0.00%)
[font color=red]30 Year 2.69% +0.01 (0.37%) [font color=black]
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[font size=2]Market Conditions During Trading Hours[/font]
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[font size=2]Euro, Yen, Loonie, Silver and Gold[center]
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[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
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Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
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[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
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The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
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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
[/center][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
6/14/12 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.
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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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Demeter
(85,373 posts)YESTERDAY I POSTED EZRA KLEIN'S OPINION: http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/06/26/the-irony-of-the-individual-mandate/
HERE'S ANOTHER OPINION
http://www.motherjones.com/kevin-drum/2012/06/buying-insurance-vs-paying-fine-whats-tradeoff
Since the healthcare mandate is on everybody's mind today, Ezra Klein asks a good question: does the mandate even matter? ...So the fine is small and the government can't do much to collect it anyway. But in practice, there's an even more important question: how many people would fail to buy insurance and be forced to pay the fine in the first place? On the left, a fair number of people think that ACA's subsidies are stingy enough that poor families simply won't be able to afford insurance even if they want it, which would mean paying the fine instead. But is that true?
What follows is back-of-the-envelope stuff, but I think it's in the right ballpark. Let's take a family of four where the policyholder is age 35 and has an income of $40,000. How much would insurance cost them? According to this handy calculator from Kaiser, here's what that family would have to pay (converted into a monthly premium):
Premium cost: $925
Federal tax credit: $760
Net cost of policy: $165
However, this overstates things because it's based on the cost of a "silver" policy. But you don't have to buy a silver policy. You can pay more and get a gold or platinum policy, and more importantly, you can pay less and get a bronze policy. Bronze policies don't provide great coverage, but they do provide the basics and they also cover health emergencies. It's a reasonable option for someone who just can't afford more. By my rough calculation, a bronze policy would cost about $125 less than a silver policy. This means that the net monthly premium for our family of four would be about $40. That's not much — and it's half the cost of the fine.
But how about a family of four with an income of $50,000? After subsidies, their cost for a bronze policy would probably come to about $166 per month. That's more than the fine ($166 vs. $100) but not a lot more. How many families earning $50,000 would forego health insurance for a net cost of $66 per month? Not too many, I'd guess, even if the insurance policy is mediocre.
As for families making more than $50,000, hardly any of them are uninsured in the first place. This paper estimates only about 1.6 million uninsured adults with incomes consistently above $50,000. It's just not a big number...You can play with these numbers endlessly, and if you choose the worst possible set of circumstances you can always come up with an example or two of people who would be forced to pay a fair amount of money for health insurance they'd rather not have. But here are the basics for a family of four:
Under $30,000, families qualify for Medicaid and pay nothing for insurance.
Under $37,000 or so, most families can buy a bronze policy for free.
Between $37,000 and $45,000, the cost of a bronze policy is quite small, and certainly less than paying the fine.
Above $45,000, the cost of a bronze policy is a bit more than the fine.
Above $50,000, the cost of a bronze policy is significantly more than the fine, but there aren't very many uninsured families in this category.
The numbers work out differently for single people, but singles under 30 also have the option of buying only catastrophic coverage. We don't know yet how much policies like this are going to cost, but certainly substantially less than a bronze policy. For most under-30s, this means they have the option of free or nearly free coverage all the way up to a fairly high income level.
There are a lot of numbers in this post. Sorry about that. And I don't mean to imply that the mandate is meaningless: in fact, it probably has both an objective and a subjective effect. Objective because it makes the financial case for buying insurance stronger, and subjective because most people prefer to obey the law. Still, it's not overwhelmingly important. My personal preference would be for true national healthcare, and failing that, for higher subsidy levels under Obamacare. Nonetheless, the truth is that Obamacare makes insurance available to all poor families and most working class families either free or at very small cost. It's a pretty good deal. The mandate is a backstop, and it's one I support both on a substantive policy level and as a matter of constitutional law. But the subsidies and the insurance regs are the heart of Obamacare, and they always have been.
THE COMMENTS AT THIS LINK SUPPORT MY OPINION--
WHERE IS THE "ALL MEN ARE CREATED EQUAL" PART OF THIS KLUDGE? THE POINT OF SOCIALIZED MEDICINE IS THAT NO ONE GETS PREFERENTIAL TREATMENT. WITH A PROGRESSIVE TAX SYSTEM, "FROM EACH ACCORDING TO HIS MEANS, TO EACH ACCORDING TO HIS NEED", A VARIATION ON MARX'S PROVERB, ENSURES THAT CLASSES DO NOT SKEW THE OUTCOME.
IT'S NOT LIKE INSURANCE ACTUALLY KEEPS PEOPLE FROM GOING BANKRUPT...INSURANCE POLICIES ARE DESIGNED TO NOT PAY THE COSTS OF ANYTHING. OTHERWISE, THE INSURANCE COMPANIES WOULDN'T MAKE ANY PROFITS.
THIS ABORTION OF A HEALTHCARE SCAM IS NOT GOING TO DO THE JOB...AND LIKE THE EUROZONE, IT WILL LEAD TO POVERTY, DEATH AND A BLIGHTED NATIONAL ECONOMY.
MY SISTER IS IN MASSACHUSETTS, AND SHE'S EXPERIENCING THE ROMNEY/OBAMACARE FIRST HAND.
DESPITE ALL THE HAPPY TALK, IT'S NOT ADEQUATE FOR A 1ST WORLD NATION. HELL, IT'S NOT ADEQUATE FOR A 2ND WORLD NATION. AND NO 3RD WORLD NATION IN ITS RIGHT MIND WOULD WASTE THAT MUCH MONEY SUPPORTING INSURANCE COMPANIES.
RANT OFF.
That's the problem with blind allegiance.
The "cost" to the individual and/or the family has to include the benefit as well. If a plan costs X but covers nothing, then the cost is outrageous. If the only way to get decent coverage is to buy something you can't afford, then the cost is prohibitive.
I used to be an accountant. I know some of this stuff.
Demeter
(85,373 posts)Why truly affordable care means single-payer....What happens if the Supreme Court strikes down the “individual mandate” in the health care reform law? Commentators ranging from former Labor Secretary Robert Reich to Forbes Magazine columnist Rick Ungar agree: Such a decision could open the door to single-payer health care—perhaps even make it inevitable.
This may be the best news about health care in years. Because ever since Republicans convinced the Obama administration to drop the “public option” in the Affordable Care Act, health reform has been in trouble. True, most Americans favor many of the provisions of Affordable Care Act. But the overall plan rests on forcing you and me to buy insurance from the same companies that have been driving up the costs of health care all along—the same companies that have been finding creative ways to avoid covering needed care, shifting costs on to patients, and endlessly increasing premiums and out-of-pocket expenses for all of us.
Forcing all Americans into a failed system is bad policy, and it’s not just President Obama’s opponents who say so.
What the Doctors Ordered
When the Supreme Court agreed to hear a challenge to the Affordable Care Act brought by 26 state attorneys general, one of the supporting briefs came from an unexpected source—a group of 50 doctors who believe that single-payer health care is the way to cover everyone and contain costs. As a model for a revamped health care system, they point to Medicare, which covers millions of seniors while devoting just 2 percent of expenditures to overhead (compared to as much as 16 percent for private insurers). In spite of all the fear about government involvement in health care, Medicare is enormously popular; in a recent poll, two-thirds of Americans oppose changing Medicare to something more like private insurance. In the Medicare model, as in Canada’s single-payer system, health care providers are in private practice, but the government acts as insurer, covering everyone. The money for the program comes from payroll taxes. This model is just one of a variety of ways that industrialized countries provide universal coverage; only the United States does not yet offer universal coverage at all, and the impact of our fragmented, privatized approach ripples throughout the economy and into the lives of families that face bankruptcy and exclusion from needed treatment. AND DEATH!
While we in the United States spend far more on health care, per person, than any other nation, we’re way behind other wealthy countries when it comes to our actual health. The residents of 25 other countries—all of which spend less on health care than we do—can expect to live longer, on average, than U.S. residents. In a recent study of 19 industrialized countries, the United States came in last when it came to averting preventable death. Researchers say that amounts to more than a 100,000 avoidable deaths each year. We devote 15 percent of our economy (by GDP) to paying for health care (or $6,402 per person each year), and still leave millions without coverage. In contrast, the French spend 11 percent of GDP on health care (or $3,374 per person) and cover everyone; the French live two years longer, on average, than Americans, and have better health by all key measures.
Follow the Money
MUCH MORE AT LINK...READ IT AND SPREAD THE WORD!
Tansy_Gold
(17,868 posts)I still believe they (meaning the corporatized majority) knew that this bill was like a fattened suckling pig on a silver platter to the ravenous ins. cos. No way were they going to do anything that would actually provide health CARE to real human beings. All they care about is siphoning more working class wealth to the 1%, and this bill does it in spades.
Demeter
(85,373 posts)Imagine...sustain the act, and screw little people...and the Democrats are stuck with this turkey while insurance bloats and democracy continues to sink swiftly in the West...
Kill the act, and screw little people, and the Democrats, but the insurance companies go on bloating. And single payer gets a second chance...
How to maximize the profits? And the political profits....
I am surprised that Roberts couldn't sell the Fascist Four on it. A tax on the impoverished! They must see some as yet unrevealed silver lining that could undo all the criminality...or they are just plain nuts.
Demeter
(85,373 posts)For nearly four decades, as the second-in-command at Bernard L. Madoff Investment Securities, Peter B. Madoff ran the family business alongside his older brother. On Friday, Peter Madoff - more than three years after his brother, Bernard, confessed to running a vast Ponzi scheme that swindled investors out of billions of dollars - is expected to appear in Federal District Court in Manhattan and plead guilty to criminal charges, according to prosecutors. He would be the first relative of Mr. Madoff's to admit to wrongdoing in connection with the fraud.
Peter Madoff has agreed to a prison term of 10 years, prosecutors said in a letter filed with the court on Wednesday. As part of his plea deal, he has agreed to forfeit $143 billion, a staggering penalty that he is not likely to be able to pay. But it is a government calculation based on the amount of money that passed through the firm and a clear indication that prosecutors will seize all of his assets. The guilty plea does not amount to an admission that Peter Madoff knew about or participated in his brother's Ponzi scheme. Rather, it confirms the government's allegations that Peter Madoff served as a sham compliance officer who exercised little if any legal oversight over the firm's operations, effectively enabling his brother's crimes. A securities lawyer by training, Peter Madoff, 66, served various roles at the firm, including chief compliance officer and general counsel. He is expected to plead guilty to charges including falsifying documents, lying to regulators and filing false tax returns...Peter Madoff's life has been upended since the fraud was revealed in late 2008, living under the cloud of a criminal investigation and fending off the numerous civil lawsuits filed against him by Madoff victims.
Irving H. Picard, the Madoff bankruptcy trustee trying to recover money for victims of the fraud, sued Peter and other Madoff family members in July 2010 in an effort to claw back money from them. The lawsuit accused Peter, his daughter and Bernard Madoff's two sons of treating the firm as a "family piggy bank," spending about $200 million of victims' money. Mr. Picard said that Peter Madoff paid himself and his family about $60 million. That lawsuit does not accuse Peter Madoff of serving as Bernard's accomplice in the fraud, but instead asserts that he was "completely derelict" in his professional duties.
"Simply put, if the family members had been doing their jobs, honestly and faithfully," said the trustee's suit, "the Madoff Ponzi scheme might never have succeeded, or continued for so long."...So far, prosecutors have charged 13 defendants - now including Peter - for some degree of involvement. Of those 13, Peter Madoff will be the eighth person to plead guilty. The remaining five maintain their innocence and await trial before Judge Laura Taylor Swain in Federal District Court in Manhattan...Despite Peter's important role within the firm, Bernard remained its sole owner. For Peter's 40 years at the firm, he remained a salaried employee working for a brother who never made him partner. Eve though he had no ownership stake in the firm, he lived well, raising his family in the fancy Long Island suburb of Old Westbury, N.Y., where he belonged to the exclusive Glen Oaks Country Club. He owned a chateau-style home in Palm Beach, Fla., and an apartment on Park Avenue. Peter's luxurious lifestyle came, in part, from liberally borrowing money from the Madoff firm. In 2007, for instance, the firm made a $9 million unsecured loan to Peter, at a very favorable interest rate, to finance a real estate investment...
MORE DETAILS AT LINK
Demeter
(85,373 posts)William Hague, the British foreign secretary, wants to launch a comprehensive audit of the impact of European Union law on Britain this summer, an exercise that could fuel a Conservative drive to repatriate powers from Brussels
Read more >>
http://link.ft.com/r/BLH300/4CUHDE/06MUC/TUZHM0/5VTLQM/36/t?a1=2012&a2=6&a3=27
Demeter
(85,373 posts)The United States Federal Reserve’s recent announcement that it will extend its “Operation Twist” by buying an additional $267 billion of long-term Treasury bonds over the next six months - to reach a total of $667 billion this year - had virtually no impact on either interest rates or equity prices. The market’s lack of response was an important indicator that monetary easing is no longer a useful tool for increasing economic activity.The Fed has repeatedly said that it will do whatever it can to stimulate growth. This led to a plan to keep short-term interest rates near zero until late 2014, as well as to massive quantitative easing, followed by Operation Twist, in which the Fed substitutes short-term Treasuries for long-term bonds...These policies did succeed in lowering long-term interest rates. The yield on ten-year Treasuries is now 1.6%, down from 3.4% at the start of 2011. Although it is difficult to know how much of this decline reflected higher demand for Treasury bonds from risk-averse global investors, the Fed’s policies undoubtedly deserve some of the credit. The lower long-term interest rates contributed to the small 4% rise in the S&P 500 share-price index over the same period...The Fed is unlikely to be able to reduce long-term rates any further. Their level is now so low that many investors rightly fear that we are looking at a bubble in bond and stock prices. The result could be a substantial market-driven rise in long-term rates that the Fed would be unable to prevent. A shift in foreign investors’ portfolio preferences away from long-term bonds could easily trigger such a run-up in rates.
Moreover, while the Fed’s actions have helped the owners of bonds and stocks, it is not clear that they have stimulated real economic activity. The US economy is still limping along with very slow growth and a high rate of unemployment. Although the economy has been expanding for three years, the level of GDP is still only 1% higher than it was nearly five years ago, when the recession began. The GDP growth rate was only 1.7% in 2011, and it is not significantly higher now. Indeed, recent data show falling real personal incomes, declining employment gains, and lower retail sales. The primary impact of monetary easing is usually to stimulate demand for housing and thus the volume of construction. But this time, despite historically low mortgage interest rates, house prices have continued to fall and are now more than 10% lower in real terms than they were two years ago. The level of real residential investment is still less than half its level before the recession began. The Fed has noted that structural problems in the housing market have impaired its ability to stimulate the economy through this channel. Business investment is also weak, even though large corporations have very high cash balances. With so much internal liquidity, these businesses are not sensitive to reductions in market interest rates. At the same time, many very small businesses cannot get credit, because the local banks on which they depend have inadequate capital, owing to accrued losses on commercial real-estate loans. These small businesses, too, are not helped by lower interest rates.
The Fed’s monetary easing did temporarily contribute to a weaker dollar, which boosted net exports. But the dollar’s decline has more recently been reversed by the global flight to safety by investors abandoning the euro...Even if the US economy continues to stumble in the months ahead, the Fed is unlikely to do anything more before the end of the year. The next policy moves to help the economy must come from the US Congress and the administration after the November election. Nonetheless, what needs to be done is already clear. The cloud of a sharp rise in personal and corporate income-tax rates, now scheduled to occur automatically at the start of 2013, must be removed. The projected increase in the long-term fiscal deficit must be reversed by stemming the growth in transfers to middle-class retirees. Fundamental tax reform must strengthen incentives, reduce distorting “tax expenditures,” and raise revenue. Finally, the relationship between government and business, now quite combative, must be improved.
If these things happen in 2013, the US economy can return to a more normal path of economic expansion and rising employment. At that point, the Fed can focus on its fundamental mandate of preventing a rise in the rate of inflation. Until then, it is powerless.
WHAT A DREAMER! WHAT BIG MASSIVE HOLES IN THIS TISSUE OF LIES...
Demeter
(85,373 posts)There are reports that Congress is at last about to reach a deal on a transportation bill, exactly 1,001 days after the expiration of the last transportation reauthorization bill that Congress passed. What's still unclear is what kind of deal this will be.
The right deal would create 1 million jobs desperately needed by the construction and other blue-collar workers disproportionately hit by our long-running jobs crisis. But if House Republicans continue to play their role as economic and political saboteur, the country could instead be hit with the layoffs of 2 million workers.
That's why this morning you should send a message to your member of Congress and tell them to get behind the Senate transportation jobs bill: http://action.ourfuture.org/p/dia/action/public/?action_KEY=172
That bill, which gets a thumbs up from TheMiddleClass.org, would provide funding for transportation projects for the next two years, giving states the certainty they need to take on the road and mass transit projects that will not only put people to work but enable a growing economy to move people and goods more efficiently.
It also maintains or improves policies that have worked for communities for decades but are under siege by congressional conservatives, such as procedures that allow transportation projects to be properly vetted for their environmental impact before construction begins or allowances for states to use federal funding for pedestrian or bicycle safety.
Congress only has until Sunday to act....MORE
Demeter
(85,373 posts)
xchrom
(108,903 posts)
Fuddnik
(8,846 posts)I've got a brazillion errands to run this morning, and projects to do around the house.
See y'all later.
xchrom
(108,903 posts)Fuddnik
(8,846 posts)And I might get some new shoes to boot!
xchrom
(108,903 posts)this is years and years ago now -- ralph lauren -- but just gorgeous.
i hear gator tastes like chicken!
Roland99
(53,342 posts)
Demeter
(85,373 posts)I didn't try it.
xchrom
(108,903 posts)it just doesn't seem appetizing to me.
i'm not in any rush to try rattle snake, either.
Fuddnik
(8,846 posts)Usually as an appetizer. Gator bits and gator bites.
It's similar to calamari in texture but a milder taste.
AnneD
(15,774 posts)so having gator on the menu is not uncommon. I really like it. It is like you say, chewy yet mild. It takes up the flavor of the sauce it is cooked in, but this is Texas-we fry everything. I love a good gator po boy-better than shrimp.
A term of endearment for cajun children is gator bait. When hunting gators (at night), years ago, kids would sit at the front of the boat splashing the water surface while the dad was ready with the shot gun. The sound they make slapping the water's surface mimics the sound of a bird or fish in trouble. If there was a hungry gator around-they would be drawn to the sound. When you saw those red glowing eyes, voila, you had meat.
Fuddnik
(8,846 posts)Putting anything other than fried oysters on a Po Boy is sacrilege!
AnneD
(15,774 posts)oysters are best serves on the half shell-with crackers and sauce.
I bet you eat the shells too!
AnneD
(15,774 posts)eat the oysters, drink the beer, and look for pearls. Women need extra calcium in their diet you know. Pearls don't do to well when heated.
Demeter
(85,373 posts)It's like a old chestnut comedy routine...predictable, but endlessly producing the same effect...
xchrom
(108,903 posts)The number of people out of work in Germany rose by 7,000 in June to give a jobless rate of 6.8% of the workforce, according to official figures.
The German Employment Agency's figures recorded the third consecutive monthly increase.
However, the relatively modest rise left the percentage of the workforce without a job unchanged.
The actual number out of work in June was 2.882 million, from an upwardly revised 2.875 million in May.
Demeter
(85,373 posts)In 2008, Fannie Mae and Freddie Mac went bust. The collapse of the mortgage giants put the economy into a tailspin. You can’t blame Obama for that. In 2009 with Fan and Fred in receivership, the White House revved up D.C.’s other mortgage giant, the Federal Housing Authority (FHA). Everything that happened at FHA since January of 2009 is Obama’s headache. The Government Accountability Office (GAO) released a report on the activities at FHA in 2009 and 2010. These were critical years for FHA as it was growing like crazy due to policy actions by the White House.
The most significant effort to prop up the housing market was the First-Time Home Buyers Credit (FTHBC). In 2009 FHA doled out $12 billion of FTHBC money.There was only one catch to getting the FTHBC money. The borrower had to be current on their federal taxes to become eligible. However, it seems that the nice folks at FHA overlooked those rules.... The GAO found that the FHA "insured over $1.44 billion in mortgages for 6,327 borrowers with $77.6 million in federal tax debt who benefited from the 2008 American Recovery and Reinvestment Act. Of these borrowers, 3,815 individuals claimed and received $27.4 million in Recovery Act First-Time Homebuyer Credits (FTHBC).
In addition, the GAO found that those borrowers were 3X’s more likely to default.
To apply for FHA mortgage insurance, one has to supply a valid Social Security Number. It's the law that an individual can’t get FHA insurance, or FTHBC money with a federal tax judgement outstanding. If the GAO can track who got money and who owed taxes, then surely the FHA could have taken the time to look. But they didn’t.
Demeter
(85,373 posts)
Demeter
(85,373 posts)Finland doesn’t get the white-hot attention Germany does, but it should because it could be the driving force behind a breakup of the Eurozone. And it fired another shot: it demanded collateral for its share of the billions of euros that Cyprus would receive from the bailout Troika.
Cyprus is the fifth of 17 Eurozone countries to ask for a bailout. It’s panic time. The first tranche, €1.8 billion, is needed by June 30 to prop up its second largest bank, Popular Bank. And suddenly, Bank of Cyprus, the largest bank, needs €500 million. That’s just the beginning. All its big banks have been eviscerated by Greek government bonds, Greek corporate debt, a real estate bubble that collapsed, and a title-deed scandal that they colluded in—whose outcrop is now gumming up their balance sheets (I warned about it in October.... Another Eurozone Country Bites the Dust SEE LINK IN ORIGINAL POST). Though the government denied any amounts had been discussed, Reuters' “Eurozone sources” attached a number to it: €10 billion—for a country that acceded to the Eurozone in 2008, has a GDP of only €17.3 billion, and has the population of San Francisco (just above 800,000). It takes a lot of talent to do so much with so little. In return, the bailout Troika will prescribe its bitter medicine: bank recapitalizations, structural reforms, privatizations, reductions in civil servants, and budget cuts. Communist President Demetris Christofias, who speaks fluent Russian, attended university in Moscow, and is an ally of Russian President Vladimir Putin, had already endeared himself to the bailout Troika—the European Commission, the ECB, and the IMF—by accusing them of being run like a “colonial force.” Being so closely tied to Greece and having seen what happened there, Cypriots are worried about the fate that might befall them. But Finance Minister Vassos Shiarly had soothing words. It would be premature to speculate, he said on state radio, but the terms of the bailout “won’t be so painful as some may believe.”
Cyprus has been playing a guessing game. It would prefer a bilateral loan from either Russia or China. A veritable shuttle diplomacy has been taking place, with Cypriot officials flying to one or the other country and returning with promising smiles but little else. Last year, after it had been cut off from the capital markets, Cyprus received a €2.5 billion loan from Russia; and earlier this month, rumors were swirling around that it would receive another €5 billion. But so far, nothing. And the Chinese, who know how to negotiate, even with their communist friends, have shifted their attention to Malta on another project. Russia and China have reason for wanting a stake in Cyprus: vast off-shore deposits of natural gas. The field off the southern coast might hold as much as 8 trillion cubic feet of gas. It’s likely that there are other fields around Cyprus. 15 major oil and gas companies and consortiums, including some from Russia and China, are bidding to do exploratory drilling, and they’re eager to build LNG export terminals and other massive infrastructure projects (read.... Manna for Bankrupt CyprusSEE LINK AT OP). But Russia and China could demand a heavy price in return for a loan—and that’s why Cyprus is even talking to the despised Troika. President Christofias, whose communist heart is closer to Russia and China, has perhaps already seen that price. So he’s fishing for a better deal. But by June 30, Cyprus must get the first €1.8 billion.
Ironically, the next day, Cyprus will rotate into the Presidency of the Council of the EU for a six-month term, as spelled out in the Lisbon Treaty. That’s democracy at the EU level: mechanized, predetermined by treaty, beyond vote. And the only directly elected institution of the EU, the European Parliament, shares the legislative functions with the Council (that Cyprus will preside) and the European Commission, but it’s emasculated because it cannot even propose bills. This lack of democracy is the dark backdrop to the tohubohu about a fiscal union, a banking union, Eurobonds, and the idea of integrating the Eurozone more deeply, and all the other panaceas to be discussed at the EU summit: they hinge on transferring important aspects of sovereignty from democratic nations to unaccountable bureaucrats, appointed technocrats, or predetermined officials, all with an ever-increasing thirst for power. And the frustration is already high....
“An EU paradox! Now we have a situation where the dog will be in charge of the sausage supply,” said Kurt Lauk, President of the economic advisory board of the CDU, the party of German Chancellor Angela Merkel. “How can Cyprus engage in crisis management when it’s stuck deep in a crisis itself?” he asked. An eloquent paradigm for all Eurozone bailouts. He then demanded that all bailed-out countries be excluded from the presidency. An issue left up to voters, directly or indirectly, in democracies. During the two-day EU summit, all eyes will be breathlessly riveted on Chancellor Merkel—with one question on all lips: will she blink? Because nothing less than the future of the Eurozone and the euro is at stake. And by extension, the world economy. Only she can save it. And she’d have only 48 hours! Read.... The EU Summit To Save The Euro: It Already Collapsed.
Demeter
(85,373 posts)Stock futures added to losses on Thursday after a German finance ministry spokesman said an earlier report that Germany has changed its position on euro bonds was not true.
S&P 500 futures fell 7.8 points and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration of the contract. Dow Jones industrial average futures lost 72 points and Nasdaq 100 futures fell 10 points.
Demeter
(85,373 posts)European Central Bank President Mario Draghi is contemplating taking interest rates into a twilight zone shunned by the Federal Reserve.
While cutting ECB rates may boost confidence, stimulate lending and foster growth, it could also involve reducing the bank’s deposit rate to zero or even lower. Once an obstacle for policy makers because it risks hurting the money markets they’re trying to revive, cutting the deposit rate from 0.25 percent is no longer a taboo, two euro-area central bank officials said on June 15.
“The European recession is worsening, the ECB has to do more,” said Julian Callow, chief European economist at Barclays Capital in London, who forecasts rates will be cut at the ECB’s next policy meeting on July 5. “A negative deposit rate is something they need to consider but taking it to zero as a first step is more likely.”
Should Draghi elect to cut the deposit rate to zero or lower, he’ll be entering territory few policy makers have dared to venture. Sweden’s Riksbank in July 2009 became the world’s first central bank to charge financial institutions for the money they deposited with it overnight. The Fed rejected cutting its deposit rate from 0.25 percent last year. With Europe’s debt crisis damping inflation pressures and curbing growth, the ECB may feel the benefits outweigh the negatives...
I NEVER REALIZED MONEY MARKET FUNDS WERE PART OF THE "SHADOW BANKING SYSTEM". PERHAPS SOMETHING ABOUT THE WAY THEY OPERATE HAS CHANGED?
Demeter
(85,373 posts)Despite public resistance, officials involved in the deliberations said the German government was becoming more amenable to quick action
Read more >>
http://link.ft.com/r/G8OTZZ/PFXQHG/B49CK/R32LZM/QNYD9V/W1/t?a1=2012&a2=6&a3=28
SOUNDS LIKE WISHFUL THINKING, TO ME
xchrom
(108,903 posts)Shares in Malaysian palm oil firm Felda have surged on their debut as investors bet on growing demand for its product from the region.
The firm's shares jumped as much as 19% to 5.39 ringgit on the Malaysian stock exchange, Bursa Malaysia.
The company had raised almost 10.4bn ringgit ($3.2bn; £2bn) via its share sale, which was the world's second biggest this year after Facebook.
Malaysia is the world's second largest producer of palm oil.
According to government statistics, the palm oil industry currently generates an annual turnover of $16.6bn (£10.6bn).
Fuddnik
(8,846 posts)Never mind.....
Demeter
(85,373 posts)First it was $2 billion.
Then "as high as $4 billion."
Now there's word from The New York Times that:
"Losses on JPMorgan Chase's bungled trade could total as much as $9 billion, far exceeding earlier public estimates, according to people who have been briefed on the situation."
The total has grown, according to the Times, "as the bank has been unwinding its positions."
...As we reported last week, while he declined to tell Congress just how much the losses will end up being, JPMorgan CEO Jamie Dimon had a quip ready when asked if they might approach $1 trillion.
"Not unless this earth is hit by a moon," he said.
Demeter
(85,373 posts)Shares of J.P. Morgan Chase & Co. fell in premarket trading Thursday, retreating in the wake of a report suggesting that the credit-derivatives trading loss suffered by the blue-chip bank could ultimately approach $9 billion.
The loss, arising from trading undertaken by the company’s investment office in London, would be more than four times the $2 billion figure that Chief Executive Jamie Dimon revealed in early May...The New York Times, citing sources described as having been briefed on the situation, reported Thursday that J.P. Morgan Chase has already exited more than half of the soured position, having previously stated that it aimed to clear the position by early 2013.
Demeter
(85,373 posts)JPMorgan shares fell 5.3 percent in Frankfurt on Thursday after a newspaper reported that losses from a bungled credit derivatives trade could reach $9 billion in a worst-case scenario.
The U.S. bank's shares in New York are also trading down 5.4 percent in pre-market trading.
The story was "likely disappointing today" for the shares, Evercore Partners said in a research note.
...An internal report at the bank projected in April that the losses could reach $8-9 billion, assuming worst-case conditions, the newspaper said.
Roland99
(53,342 posts)couldn't help myself there...
Demeter
(85,373 posts)So happy to oblige!
AnneD
(15,774 posts)that reads this tread was surprised. Now how much did the customers at MF Global lose?
Demeter
(85,373 posts)...When Jamie Dimon, the bank’s chief executive, announced in May that the bank had lost $2 billion in a bet on credit derivatives, he estimated that losses could double within the next few quarters. But the red ink has been mounting in recent weeks, as the bank has been unwinding its positions, according to interviews with current and former traders and executives at the bank who asked not to be named because of investigations into the bank...he bank’s exit from its money-losing trade is happening faster than many expected. JPMorgan previously said it hoped to clear its position by early next year; now it is already out of more than half of the trade and may be completely free this year.
...With much of the most volatile slice of the position sold, however, regulators are unsure how deep the reported losses will eventually be. Some expect that the red ink will not exceed $6 billion to $7 billion...JPMorgan plans to disclose part of the total losses on the soured bet on July 13, when it reports second-quarter earnings. Despite the loss, the bank has said it will be solidly profitable for the quarter — no small achievement given that nervous markets and weak economies have sapped Wall Street’s main businesses. To put the size of the loss in perspective, JPMorgan logged a first-quarter profit of $5.4 billion...
“Essentially, JPMorgan has been operating a hedge fund with federal insured deposits within a bank,” said Mark Williams, a professor of finance at Boston University, who also served as a Federal Reserve bank examiner.
As traders in JPMorgan’s London desk work to get out of the huge bet, which started generating erratic losses in late March, the traders based in New York are largely sitting idle, according to current traders in the unit.
“We are in a holding pattern,” said one current New York trader who asked not to be named.
The losses are the most embarrassing fumble for Mr. Dimon since he became chief executive in 2005...
MORE
Tansy_Gold
(17,868 posts)Not sure if Max Ehrlich was the first, but I read his version when I was about 11. . . .
http://www.amazon.com/The-Big-Doubleday-Science-Fiction/dp/B0007DK5UA/ref=tmm_hrd_title_0
snot
(10,538 posts)For my own edification:
"In the USA a . . . a trillion is a thousand times a billion.
"In Great Briton a . . . trillion is a million times a billion."
From http://mathcentral.uregina.ca/QQ/database/QQ.02.06/bill2.html
Roland99
(53,342 posts)DOW 12,471 -82.00 -0.65%
NASDAQ 2,544 -13.75 -0.54% [/font]
Demeter
(85,373 posts)And there's always the Eurozone comedian act to follow...
Roland99
(53,342 posts)Roland99
(53,342 posts)* Continuing claims decline 15,000 to 3.29 million
* Four-week claims average drops by 750 to 386,750
* U.S. jobless claims fall 6,000 to 386,000
(Statistically speaking, unchanged)
Demeter
(85,373 posts)Roland99
(53,342 posts)* Corporate profits fall $6.8 billion
* Drop in profits linked to tax-credit expiration
lowest corporate profits since 2008.
Fuddnik
(8,846 posts)Like that asshole in today's toon.
Roland99
(53,342 posts)* Revised U.S. first-quarter GDP stays at 1.9%
* Exports, imports revised down in first quarter
Demeter
(85,373 posts)The British Bankers Association will ask the UK government to consider regulating and supervising the setting of the London interbank rate offered rate at the heart of Barclays’ £290m penalty for rates manipulation.
Under a historical quirk, the process of setting Libor has always been considered a private activity run by the banking trade body, although the banks who participate in the rate-setting process are regulated by the Financial Services Authority.
Read more >>
http://link.ft.com/r/NA70KK/8ZHCL2/9MEOW/QNVFF3/L94DFC/T3/t?a1=2012&a2=6&a3=28
Demeter
(85,373 posts)The settlement with US and UK regulators prompts Bob Diamond and three executive directors to waive any potential bonus for this year
Read more >>
http://link.ft.com/r/TWK799/DWOA3I/7ZY85/ZGXBH4/WTJSFW/ZH/t?a1=2012&a2=6&a3=28
OH, DEAR HOWEVER WILL THEY MANAGE?
Ghost Dog
(16,881 posts)... Tracey McDermott, director of enforcement at the FSA, which imposed fines alongside the US financial regulator, told the BBC: "We have a number of investigations that are ongoing.
"Obviously we need to look at each case on its own particular facts but the initial indications are that Barclays was not the only firm that was involved in this."
The US Department of Justice also said criminal investigations into "other financial institutions and individuals" was ongoing.
Other big names believed to be under investigation include Citigroup, JP Morgan, Deutsche Bank, HSBC and Royal Bank of Scotland...
/... http://www.bbc.co.uk/news/business-18622264
But, where are the arrests? Perp-walks? Riker's Island and the like?
/... http://www.businessinsider.com/barclays-falls-17-2012-6
Eugene
(61,939 posts)Source: Associated Press
Four more banks fingered in interest-rate investigation
Updated 17m ago
LONDON (AP) – Four more global banks are being investigated for the alleged financial market manipulation that led to fines of $453 million against Barclays Bank, British Treasury chief George Osborne said Thursday, causing stocks in those groups to plummet.
Osborne said Citigroup in the U.S., Switzerland's UBS, and Britain's HSBC and Royal Bank of Scotland were also being probed for allegedly providing false figures on key interest rates upon which mortgages and consumer loans are priced.
On Wednesday, U.S and British regulators imposed the fines on Barclays for manipulating the interest rate — the London interbank offered rate (LIBOR) — to its advantage between 2005 and 2009.
[font size=1]-snip-[/font]
Read more: http://www.usatoday.com/money/industries/banking/story/2012-06-28/britain-bank-probe/55883264/1
Ghost Dog
(16,881 posts)Most everyone in the world paying or receiving interest has been defrauded.
I'd see one mother of a class-action looming here, were it not that I'm aware that the whole concept of "rule of law", and indeed so-called "democracy" itself, (and, don't talk to me about "justice"
has already been long-flushed down the tubes. Better that than the coke, the temporary buzz, the ephemeral "profits" of the "Lords of the Universe", right?
Demeter
(85,373 posts)Falcone and his hedge fund have been charged by the SEC over allegations he improperly used customer funds to pay his taxes
Read more >>
http://link.ft.com/r/TWK799/DWOA3I/7ZY85/ZGXBH4/YBFR3W/ZH/t?a1=2012&a2=6&a3=28
YES, BUT, AT LEAST HE PAID THEM
Demeter
(85,373 posts)See, you can teach an old dog new tricks!
Fuddnik
(8,846 posts)
DemReadingDU
(16,000 posts)had to use The Google
Demeter
(85,373 posts)or "Winnie the Pooh" Disney version....
xchrom
(108,903 posts)
Let's be clear. The two-day meeting of European heads of state that begins in Brussels on Thursday will not come up with a solution to the sovereign debt crisis. It won't even get close, so any investor going long on the euro in anticipation of a successful outcome had better ought to have an exit strategy.
The reason for pessimism about the summit's outcome is not just based on historical experience, although this is certainly part of it. Nor is that the big players have done their usual trick of generating unrealistic expectations in the run-up to the talks. In the past that has been the case, but not this time.
Instead, the issue this time is that there appears to be differences between Germany and the other three members of the Big Four – France, Italy and Spain – that cannot be reconciled, at least for the moment.
Paris, Madrid and Rome have forged what might be called, for shorthand purposes, a Latin bloc. They have a long list of suggestions for how the single currency could work more effectively: a banking union, commonly issued eurozone bonds, a willingness by the European Central Bank to intervene directly in financial markets to buy the bonds of troubled countries. Put simply, what they want is a Europe in which Germany continues to write the cheques but has no greater say than now in how sovereign countries raise their taxes or run their banks.
xchrom
(108,903 posts)Co-operative businesses have outperformed conventional companies for the fourth consecutive year, spearheaded by booming education, retail and renewable sectors.
The UK Co-op movement grew by 1.5% in 2011, more than twice the rate of the general economy, which increased by just 0.7% , according to trade body Co-operatives UK.
The report, The co-operative economy 2012 - alternatives to austerity, shows how the £35.6bn co-op economy has seen an 8.9% rise in the number of co-operative enterprises from 5,450 in 2010 to 5,933 in 2011.
Ed Mayo, secretary general of Co-operatives UK said that co-operative schools were the biggest growth area in the co-operative sector this year:
xchrom
(108,903 posts)The United States Federal Reserve's recent announcement that it will extend its "Operation Twist" by buying an additional $267bn (£171bn) of long-term Treasury bonds over the next six months — to reach a total of $667bn this year — had virtually no impact on either interest rates or equity prices. The market's lack of response was an important indicator that monetary easing is no longer a useful tool for increasing economic activity.
The Fed has repeatedly said that it will do whatever it can to stimulate growth. This led to a plan to keep short-term interest rates near zero until late 2014, as well as to massive quantitative easing, followed by Operation Twist, in which the Fed substitutes short-term Treasuries for long-term bonds.
These policies did succeed in lowering long-term interest rates. The yield on 10-year Treasuries is now 1.6%, down from 3.4% at the start of 2011. Although it is difficult to know how much of this decline reflected higher demand for Treasury bonds from risk-averse global investors, the Fed's policies undoubtedly deserve some of the credit. The lower long-term interest rates contributed to the small 4% rise in the S&P 500 share-price index over the same period.
The Fed is unlikely to be able to reduce long-term rates any further. Their level is now so low that many investors rightly fear that we are looking at a bubble in bond and stock prices. The result could be a substantial market-driven rise in long-term rates that the Fed would be unable to prevent. A shift in foreign investors' portfolio preferences away from long-term bonds could easily trigger such a run-up in rates.
xchrom
(108,903 posts)Bankia is worth less than nothing. The value of a group made up of seven savings banks, including the once powerful Caja Madrid, has been estimated at minus 13.63 million euros ahead of the nationalization process of 100 percent of its parent company, Banco Financiero y de Ahorros (BFA). This was the result of the valuation presented to the bank's board of directors on Wednesday. This means that the seven savings banks that created BFA by joining forces are left empty-handed and without future dividends to use on their social and cultural work, traditionally a defining characteristic of regional lenders.
The negative appraisal comes ahead of public capital injections that include 4.46 million euros in capitalization and a further 19 billion euros requested by Bankia chairman, José Ignacio Goirigolzarri, who took over from Rodrigo Rato, a former IMF chief.
This is not the first time that a banking group has been found to be worth nothing. It happened to Unnim, while CatalunyaCaixa and Novacaixagalicia still hold on to minority shares in the nationalized banks through which they conduct their business. But these two lenders now find themselves in further need of capital, which may lead to their complete expropriation after all. Bankia was taken over by the state in May, triggering investor concerns over the country’s banking sector, which has been severely exposed to the real estate crash and continues to hold large amounts of rapidly devaluating land and property.
On Wednesday, the Bank of Spain warned that second-quarter results will likely confirm a deepening of the recession, following a GDP contraction of 0.3 percent in the first three months of the year.
Roland99
(53,342 posts)Nasdaq 2,829 -46 -1.60%
S&P 500 1,315 -17 -1.25%
GlobalDow 1,766 -15 -0.85%
Gold 1,551 -27 -1.74%
Oil 78.45 -1.76 -2.19% [/font]
US 10-yr yields down to 1.57%
EURUSD at 1.242
xchrom
(108,903 posts)UPDATE 10:35 AM
Stocks are now tumbling.
The Dow's off by 150 points.
Treasuries are rallying with the 10-year note now yielding just 1.6%.
However, the hospital operators are rallying. Tenet Healthcare is up 6.8%.
UPDATE 10:20 AM
Uncertainty has turned into all out confusion as various news outlets gave conflicting reports on the Supreme Court's ruling on the Affordable Health Care Act.
Bottom line is that they did uphold it.
Stocks ticked down further briefly, but are back to being down by around 90 points.
Read more: http://www.businessinsider.com/stock-market-update-2012-6#ixzz1z6JjCVAz
girl gone mad
(20,634 posts)but great for the health care industry as they will get to eat up even more of the shrinking pie.
Demeter
(85,373 posts)Roland99
(53,342 posts)As far as single payer?
*sigh*
until The Great Reset happens, I don't hold much hope.
Fuddnik
(8,846 posts)Just passed the station.
What a difference a day makes. I can see the sea walls across the street. The golf course is green again. Sunny and dry. And a $5.00 rebate on vodka. What more could you ask for.
Demeter
(85,373 posts)Sigh
Hotler
(11,445 posts)YEAH! Remember what the repugs said to us after the SCOTUS gave us shrub. "Get over it."
Tansy_Gold
(17,868 posts)Roland99
(53,342 posts)3:15 comes around and Bang! Zoom! Almost back to flat on the day.
Demeter
(85,373 posts)Ghost Dog
(16,881 posts)(Reuters) - Britain's economy fell back into recession faster than first thought and seems unlikely to recover for some time, data showed on Thursday, echoing grim predictions from a central bank now all but certain to revive its stimulus program next week.
The economy shrank by 0.3 percent between January and March, the Office for National Statistics said. That confirmed an earlier estimate, but revised figures for the last quarter of 2011 showed a slump of 0.4 percent, steeper than initially reported.
A spread of downbeat data highlighted broad weakness in Britain's economy, which has struggled to gain traction since the 2007/08 financial crisis as government spending cuts bite and the debt turmoil in the euro zone crushes confidence.
Bank of England Governor Mervyn King said on Tuesday that the outlook had worsened significantly in recent weeks and Britain risked falling into a downward spiral as businesses put off investment due to uncertain global prospects.
Thursday's data bolstered an already strong case for the BoE to restart its quantitative easing bond-buying program, a day after a Reuters poll of economists give a median 75 percent chance that the bank will flood the market with another 50 billion pounds of cash at its July 4/5 meeting.
/... http://www.reuters.com/article/2012/06/28/us-britain-economy-idUSBRE85R0KX20120628
Comments:
1. The finger-pointing scapegoating (at any factor not anglo-american) is beyond deeply shameful. It is irretrievably pathetic, as if we who pay attention, and even most who don't, don't know where the crux of the problem really lies;
2. Wow. It's a long time since I've seen the sacred term "confidence" mentioned so explicitly by scribes servants of Reuters or the like... The end is close, very close now.