STOCK MARKET WATCH -- Wednesday, 3 October 2012

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Wednesday, 3 October 2012[font color=black][/font]

SMW for 2 October 2012

AT THE CLOSING BELL ON 2 October 2012
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Dow Jones 13,482.36 -32.75 (-0.24%)
[font color=green]S&P 500 1,445.75 +1.26 (0.09%)
Nasdaq 3,120.04 +6.51 (0.21%)



[font color=green]10 Year 1.62% -0.02 (-1.22%)
30 Year 2.81% -0.01 (-0.35%) [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
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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




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

[Demeter]

1. I survived Tuesday (gasp, pant)

If I can get to the end of Wednesday alive, it will be a real accomplishment.

And I'm throwing the NYTimes Midnight Thursday....no rest for the wicked.

Needless to say, I've sold off all my personal time for $10/hour. Not a fair price, but that's what is offered.

[Demeter]

3. Watch Out, Fuddnik and Roland!

Prediction of 28F Sunday night. It's real early to be so sure, but I thought you might like to be forewarned....

[Roland99]

9. I'll be back in the warmer climes of home by Friday evening

Escaping just ahead of the cold front!

[Fuddnik]

25. There goes my round of golf in Cleveland.

I won't get there until next Thursday morning.

Anymore, I start crying when it gets below 70.

It's raining now, but I'm going to take a ride over to the local Harley dealer. I got a mailer from them yesterday, and something had my name written all over it.

[Demeter]

2. Love That Bank Humor CROSSPOST

http://www.workinglife.org/2012/10/01/love-that-bank-humor/

Really, I can’t tell whether people who work at the major banks moonlight as comedy writers for The Daily Show, or they are so immune to public shame or punishment that they just don’t give a damn.

I’m really hoping that it’s the former option because you need to laugh sometimes. And this one fits the bill for laughter or loud swearing, or maybe both:

“We are canceling the remaining amount you owe Chase!” says a letter that JPMorgan Chase sent recently to thousands of home loan borrowers. “You are approved for a full principal forgiveness of your Home Equity Account,” says another, from Bank of America.

Jackie Esposito, of Guilford, Conn., got a letter like that. But she wasn’t elated — because she doesn’t owe the money anymore. She and her husband filed for bankruptcy three years ago. The roughly $64,000 they owed Chase has been legally wiped out.

What’s going on?

A good question.

Cast your mind back to February. Five of the nation’s big banks, including Chase and Bank of America, agreed to pay $25 billion to settle state and federal claims over questionable mortgage practices and promised to work harder to help borrowers who were in trouble. To prod the banks, the government said it would give them credits against the amounts they agreed to pay.

So, to the ire of customers who couldn’t get banks to work with them before, banks are now forgiving debts that no longer exist.

“When I got this letter that said they were going to relieve our debt, I just about fell over,” Ms. Esposito said last week. “You can’t forgive a debt that you’re legally unable to collect.”

In one sense, this is a direct outcome of a refusal to put bank executives in jail. When banks, or any institutions, pay fines to “settle” charges, that money essentially comes out of the pockets of shareholders. Not a single dime comes from the personal bank accounts of executives who continue to have jobs and reap huge pay and benefits.

So, the lesson for those guys is: let’s continue to try to commit fraud on our customers.

[westerebus]

12. The Bi-partisan approves this message.

[Demeter]

4. Not only is NY State a hotbed for bank fraud

It is the only state rated as "widespread" for influenza at this time...

[Demeter]

5. A Speed Limit for the Stock Market By ROGER LOWENSTEIN

http://www.nytimes.com/2012/10/02/opinion/putting-the-brakes-on-high-frequency-trading.html

IMAGINE if the stock market were hijacked by computers that executed trades in a fraction of the time that it takes to blink. Since no mere mortal could understand the “thinking” behind such nanosecond trading, ordinary investors — even longtime institutional traders — would have little clue as to why any company’s share price was moving up or down in any moment. The values of well-established corporations would sometimes swing wildly from one second to the next and we slow-reacting, human investors wouldn’t know why. You don’t really have to imagine this. This is how our stock markets function today. Some 50 percent to 70 percent of all trading is done by “traders” who live in server parks, are nourished by direct current and speak only in binary pulses. Several other countries are starting to regulate this high-frequency trading, or H.F.T. But in the United States, the deep-seated bias toward “liquidity” — the notion that more volume will always make it easier for investors to buy and sell shares — has discouraged regulators from taking action. Lately, though, after several well-publicized market blowups traced to H.F.T., officials are having second thoughts. In late September, the Senate banking committee held a hearing on the issue, and the Securities and Exchange Commission is getting into the act with a panel discussion today. Even Wall Street veterans have begun to question whether a market flooded with speed demons is good for society.

The purpose of financial markets, remember, is not to provide a forum for split-second trading. If you want to gamble, go to Las Vegas. Markets exist to provide some minimal level of liquidity, so that long-term investors have the confidence to invest. And they exist so that companies and investors can discover how much an ownership position in, say, Apple is worth. When Apple stock goes up, it sends a signal to other firms to invest in the same or similar technologies. Thus does a capitalist society allocate resources. A well-functioning market can accommodate some hyperactive turnstile traders as long as it has enough legitimate investors — people who are thinking about the outlook for companies down the road...(BUT WHY SHOULD THE MARKET HAVE TO PUT UP WITH THIS BS? JUST SAY "NO" TO HFT!--DEMETER) The reason that market squares like me harp on the long term isn’t because we’re technologically illiterate. It’s because, again, society relies on the market to allocate capital.

If market signals are based on algorithms that become outmoded in a nanosecond, we end up with empty factories and useless investment. Incredibly, we have let capital formation become subordinate to traders on electronic steroids — with some hedge funds setting up their servers just inches away from stock exchange servers to get a jump on other steroid-crazed traders. David Lauer, a former trader, told the Senate panel that high-speed technology was “a destructive force in the market” with “no social benefit.” He’s right. The “liquidity” H.F.T. provides is long past the point of being helpful. When high-speed trading was new, trading costs for all investors seemed to dip, but that trend has stopped, suggesting a point of diminished returns. Volume on the New York Stock Exchange now is four times the level it was in 1999 — a year with so much excess liquidity that it witnessed the greatest stock market bubble in history. And in exchange for providing the markets with more liquidity than they need, H.F.T. is creating a problem of a potentially enormous scale. It’s not just that such trading is unfair to traditional investors who, obviously, cannot take advantage of price movements they cannot see. (The truth is, parlor investors who try to beat the pros at short-term trading have always been easy fodder for Wall Street.) The greater concern is that it will subject markets to more destabilizing crashes and that prices will come to reflect the “judgments” not of investors, but of high-speed robots. We’ve seen evidence of that already. In May 2010, several publicly traded companies briefly lost nearly $1 trillion of market value in a so-called “flash crash” that the S.E.C. said was triggered by a single firm using algorithms to rapidly sell 75,000 futures contracts. Unless something is done, the markets will grow only more volatile and less responsive to investment values.

Lawmakers in Germany, Australia and other countries are proposing to address the problem by imposing new restrictions on high-speed traders, and considering options like erecting superfast shutdown switches that might be able to cordon off damage in a crisis. But the better way to discourage this excessive, short-term market myopia is to take a page from anti-tobacco efforts: let high taxes discourage the antisocial behavior. We already encourage long-term investing by taxing capital gains on investments held for more than a year at a rate of just 15 percent — in contrast to short-term capital gains, which are assessed at much higher rates. We could simply fine-tune that incentive even more. Intraday trades should be taxed at 50 percent. And “investments” that mature in 60 seconds should be regarded as, in effect, electronic errors — with any profit going to the government. This will greatly reduce high-speed trading and divert its remaining gains to the public.

***********************************************************

Roger Lowenstein, an outside director of the Sequoia Fund, is writing a book about the origins of the Federal Reserve.

[Demeter]

6. Analysis: New York suit against JPMorgan makes a ripple, not a splash

http://news.yahoo.com/u-officials-see-more-financial-crisis-cases-jpmorgan-185424917--sector.html

New York state's lawsuit against JPMorgan Chase & Co alleging fraud in mortgage-backed securities sold by Bear Stearns may be one of the broadest cases to come out of the financial crisis, but its impact is likely to be limited. The biggest beneficiaries may be investors who have taken out private lawsuits against the bank.

The civil suit, brought by New York Attorney General Eric Schneiderman, is the first from a federal-state financial fraud task force. It did not unearth any previously unknown details or attempt to assign criminal liability.

Instead, it largely follows in the footsteps of private suits from investors who have accused Bear Stearns and other firms of deceptively selling toxic mortgage-backed securities.

While the state could extract a monetary settlement out of JPMorgan that rivals other financial-crisis cases and government officials pledged more cases will follow, the biggest outcome of the New York state suit will be to add firepower to multibillion-dollar private litigation dogging Wall Street...

[otherone]

7. good morning , good morning

[Tansy_Gold]

8. And a good one to you, too!

Up at 4:00 a.m. local time. I can't sleep in this coastal humidity.

And yes, I'm headed to the beach again for more diamonds.

[DemReadingDU]

28. Not so good, spouse's computer is sick

http://www.democraticunderground.com/10953657

[xchrom]

10. bon jour! kiss, kiss my darlings...

[xchrom]

11. Why Italy Will Be The Place The Euro Dies

http://www.businessinsider.com/on-politics-italian-and-american-style-2012-10

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An interesting article from WaPo about a rising political star in Italy. (Link) Some details:

Beppe Grillo is a well know TV personality/comedian in Italy. At age 64 he ran for political office in Parma, and won. He has been doing a lot of talking since, and his philosophies have become very popular. His message is Italian nationalism, an end to the link with the Euro, he has even advocating defaulting on Italy’s debt. From the WaPo article:

Four months after his Five Star Movement swept into government here in a surprise victory that sent his national profile soaring, he stood in a town square and delivered a breathless tirade against “the forces” seeking to destroy Italian society.

He called for a referendum on the euro and said Rome should follow in the footsteps of Argentina and Ecuador by suspending payments on the national debt.


Read more: http://www.businessinsider.com/on-politics-italian-and-american-style-2012-10#ixzz28EmRDJBN

[Demeter]

13. It just doesn't know it, yet

[xchrom]

14. ...

[AnneD]

29. LOL LOL LOL....

[DemReadingDU]

33. video: He's dead

[Po_d Mainiac]

15. Another Greece fire?

A list of some 2,000 Greeks with large deposits in a Swiss bank – that had been on a missing CD – was given to the government on Oct. 2 by PASOK leader Evangelos Venizelos, who said he had been given the information while he was finance minister in a former government but didn’t act on it because it was not legally obtained.

snip

In the meantime, the government is trying to keep the list secret to prevent another embarrassing gaffe after the names of 33 politicians, including seven former ministers, said to be under review to explain huge sums in their bank accounts and whether they evaded taxes, was leaked to media sources and put on the Internet.

http://greece.greekreporter.com/2012/10/02/venizelos-gives-list-of-2000-greeks-with-swiss-deposits/

Tax payers in the rest of the EZ should be puking

[Demeter]

18. Bicarbonate of soda

good for grease fires and stomach upsets!

[AnneD]

30. A teaspoon....

of bicarb in an 8 oz glass is also good for the indigestion and upset stomach that your investments give you.

[Demeter]

16. QE’s biggest problem? Destruction of savings

http://www.marketwatch.com/story/qes-biggest-problem-destruction-of-savings-2012-10-03-81031426?siteid=YAHOOB

When the ugly phrase quantitative easing was first introduced to the world, it was sold as a temporary, emergency measure, to be used in the rarest of circumstances. But now it is establishing itself as part of the normal operation of the global economy.

We are only starting to understand what the long-term consequences of that will be....Winding the clock back a few years, there was usually just one major central bank rolling the printing presses at any one time. But right now all of them are pumping out freshly minted money. The Federal Reserve, the Bank of Japan, the Bank of England, and now the European Central Bank are all creating new money in different ways. Nor can it really be presented as an emergency measure anymore. An emergency is something that comes along very occasionally, and which justifies an extreme response. But the U.K., for example, is now heading into its fifth year since the credit crunch, with little sign of output getting back to where it was before the crash. That isn’t an emergency any more. It is just everyday normality. In truth, QE has gradually shifted from being a one-off to being part of the make-up of the economic system. But is that saving the global economy? Or just leading us to a fresh disaster?

The arguments around this issue get very stale. The QE crowd — very often university economists — argue that printing money is essential to stop the economy collapsing completely. Their opponents — very often hedge-fund managers or taxi drivers — warn darkly of rampant inflation and soaring bond yields....The real danger with permanent QE is not inflation at all. It is that savings rates will be destroyed, and that capital will end up being invested in all the wrong things. Take a look at what QE is actually trying to achieve. The main objective is to reduce long-term interest rates. But if you are a saver, it is not hard to figure out that you are getting a worse deal than you should be. The central bank is driving down the returns you can earn on your money. In effect, it is rigging the market against you. The result? If you have any sense you will stop saving...in the U.K.the savings rate has dropped from 9% when QE started to just 6% now. In the U.S., the personal saving rate has dropped all the way down to 3.7% according to the Department of Commerce. That is lower than any time since 2007 —although of course personal savings rates have been very low in the US for a long time. In Japan, where QE has the longest track record, the savings rate has dropped to around 2%, compared with as much as 40% in the early 1990s. The ECB has only just started printing money. But if the other countries where it has been tried are anything to go by, in a couple of years even the Germans will be going out every weekend to buy top-of-the-range iPhones on credit cards that are already maxed out.

...The conclusion must be that any economy that engages in QE is going to damage its long-term growth rate, and is best avoided. That has certainly been true of Japan. The Nikkei never got back to the levels it hit before the central bank started printing money. It may be true of the U.S. and U.K. as well, and quite soon Europe too.

MORE

[Demeter]

17. Strange bedfellows: Swindler, Stinger-missile brokers, the CIA

A decade before he launched the celebrated Fort Lauderdale Trump Tower, Felix Sater hatched a bold plan to keep out of prison. Charged in a New York securities scandal, the 46-year-old businessman traveled to his native Russia where he took on a unique role that went far beyond flipping on dangerous criminals. He began spying for the CIA. Tapping into the vast underground of the former Soviet Union, Sater was able to track down a dozen Stinger missiles equipped with powerful tracking devices on the black market. With the backing of U.S. agents, Sater agreed to buy the weapons — keeping them out of the hands of terrorists. In return, the CIA pledged to keep Sater from going to jail in the stock scam he concocted with New York organized crime figures...Now, years after the failure of the Trump Tower, a legal battle has ensued between burned investors trying to reveal Sater’s background and federal agents who say national security is at stake.

“The problem is at scandal level, and the damage done to victims is incalculable,” argued attorney Richard Lerner in a brief before the U.S. Supreme Court.

Next month, a New York federal judge will decide whether to release dozens of documents in a dispute that alleges Sater stole millions from investors while he was given sweeping protections by prosecutors. Saying the government has a duty to protect witnesses, prosecutors are fighting to keep Sater’s case hidden in a battle that’s expected to be heard by the justices. Even the federal judge, Leo Glasser, has weighed into the case, arguing in a hearing that revealing some of the secrets could “significantly affect matters of national interest.”

Though the federal prosecutor’s office in Brooklyn has declined to talk about Sater’s role with the government, records just released show he was finally sentenced in 2009 — 11 years after he was charged in the New York stock fraud case. The outcome: a $25,000 fine, no prison time. In addition, he was not ordered to pay back his victims — mandatory under federal law — despite losses totaling $40 million.


Read more here: http://www.miamiherald.com/2012/09/08/2992317/strange-bedfellows-swindler-stinger.html#storylink=cpy

[xchrom]

19. You Can't Lead A Good Life On A US Factory Job Anymore

http://www.businessinsider.com/us-factory-workers-used-to-live-pretty-good-lives-but-not-anymore-2012-10

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Jim Ellis had a job with benefits but gave it up for a shot at something with a bright future, if he could just get his foot in the door.

In this part of the country, that meant he wanted to work for Caterpillar Inc., the construction equipment powerhouse. Now the Canton, Ill., resident is on the morning shift at the company's East Peoria plant, installing fenders on tractors and working on hydraulic lines, a manufacturing job description that once promised an American middle-class lifestyle.

The reality for Ellis is nothing like that.

With the new job he started in January, Ellis' pay jumped by $5, to $15.57 per hour, but he has no medical benefits for himself or his 3-year-old daughter, whom he shares custody of with his ex-girlfriend. Between rent and child support, he acknowledges falling back on his parents for support.


Read more: http://www.businessinsider.com/us-factory-workers-used-to-live-pretty-good-lives-but-not-anymore-2012-10#ixzz28F4d40aI

[xchrom]

20. ROSENBERG: There's A New Debt Bubble Forming And It's Keeping Buyers Out Of The US Housing Market

http://www.businessinsider.com/rosenberg-student-loan-bubble-housing-2012-10

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The U.S. housing recovery has been sluggish at best. But the question remains: will the recovery hold?
David Rosenberg is doubtful.

In his latest Breakfast With Dave note, Rosenberg points to another financial bubble that's keeping homebuyers out of the market: student debt.

From his recent note:

STUDENT LOANS – THE NEXT BUBBLE?
As the WSJ reports, the student default rate for loans taken on after October 2009 has jumped to 9.1% – double what it was five years ago. The federal government now estimates that about 20% of students who took on federally-assisted credit will end up defaulting in their lifetime. According to Pew Research, fully 40% of households headed by someone younger than 35 is saddled with student debt, with the average liability rising 14% from 2007 to 2010 to nearly $27k (in real terms).




Read more: http://www.businessinsider.com/rosenberg-student-loan-bubble-housing-2012-10#ixzz28F5yFVY3

[xchrom]

21. No Joy on Wall Street as Biggest Banks Earn $63 Billion

http://www.bloomberg.com/news/2012-10-03/no-joy-on-wall-street-as-biggest-banks-earn-63-billion.html

Four years ago today, President George W. Bush signed into law the biggest corporate rescue in American history. Even as U.S. unemployment has remained above 8 percent for 43 months, the country’s biggest banks are making almost as much as they ever have.

The combined $63 billion in profit reported by the six largest U.S. lenders over the four quarters through June is more than they earned in any calendar year since the peak in 2006.

Bank of America Corp. made more in the 12-month period than Walt Disney Co. and McDonald’s Corp. combined. Citigroup Inc. (C), which like Bank of America took $45 billion in taxpayer funds from the Troubled Asset Relief Program, earned more than Caterpillar Inc. (CAT) and Boeing Co. JPMorgan Chase & Co. (JPM), the largest U.S. bank by assets, had profits of more than $17 billion even after reporting a $5.8 billion trading loss.

Still, Wall Street isn’t enjoying its good fortune.
Those billions of dollars in profits aren’t enough, according to interviews with more than a dozen bank executives and analysts. The lowest leverage in a decade, return on equity at a third of 2006 levels, higher capital requirements, shares trading below book value, declining bonuses, job cuts, the European sovereign-debt crisis and a backlash against bankers have damped the joys of profit, they said.

[Demeter]

26. When One Has an Addiction--There's NEVER Enough

and the banksters need to go cold turkey...right into asceticism: The principles and practices of an ascetic; extreme self-denial and austerity, FOR THEMSELVES! NOT FOR THE REST OF US.

In other words, being a banker should be the low-profile, middle class, boring job it was, with shades of disreputableness, and not the Masters of the Universe, Looters Anonymous job that Washington has let it become.

[xchrom]

22. EU Single Market Act II aims to boost competition

http://www.bbc.co.uk/news/business-19812283

The European Commission has put forward new proposals to make it easier for people and businesses to move and do business within the European Union.

The commission's Single Market Act II has four key aims.

They include fostering mobility of citizens and businesses across borders and making it easier to gain access to finance across the 27 nation EU area.

The act also hopes to strengthen social entrepreneurship and boost consumer confidence.

[Demeter]

27. Sounds like outsourcing to me

Germans beware!

[xchrom]

23. Indonesia factory workers on strike for more pay

http://www.bbc.co.uk/news/world-asia-19816462


Factory workers in Indonesia are asking for better benefits

Tens of thousands of Indonesian factory workers have gone on a one-day strike to demand higher wages and better working conditions.

They want revisions to a law that allows companies to hire temporary workers for a year without benefits.

More than two million factory workers joined the strike in 24 cities, labour union leaders say.

But an official from an association of employers said that the actual number was lower.

[xchrom]

24. US SERVICE FIRMS GROW AT FASTEST PACE IN 6 MONTHS

http://hosted.ap.org/dynamic/stories/U/US_ECONOMY_SERVICES?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-10-03-10-39-29

WASHINGTON (AP) -- U.S. service companies, which employ nearly 90 percent of the work force, grew in September at the fastest pace since March. The growth was driven by sharp increases in current and future sales.

The Institute for Supply Management said Wednesday that its index of non-manufacturing activity rose to 55.1, up from 53.7 in August. Any reading above 50 indicates expansion.

The report measures growth in a broad range of businesses from retail and construction companies to health care and financial services firms. The service sector has grown for 33 straight months, based on the ISM survey.

The September survey points to a rise in consumer demand, which could help lift economic growth from its tepid pace and ultimately lead to more hiring.

[jtuck004]

31. We are becoming Hong Kong. n/t

[Fuddnik]

32. Well then, I'll take the Moo Shu Pork.