STOCK MARKET WATCH -- Monday, 8 October 2012

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Monday, 8 October 2012[font color=black][/font]

SMW for 5 October 2012

AT THE CLOSING BELL ON 5 October 2012
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Dow Jones 13,610.15 +34.79 (0.26%)
[font color=red]S&P 500 1,460.93 -0.47 (-0.03%)
Nasdaq 3,136.19 -13.27 (-0.42%)



[font color=red]10 Year 1.74% +0.02 (1.16%)
30 Year 2.97% +0.03 (1.02%) [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]

[Betsy Ross]

1. Are they doing business on the Federal holiday? nt

[Tansy_Gold]

2. i honestly don't know

But we'll be here!

And we do keep watch on other markets, too.

[Wellstone ruled]

3. On Tuesday morning

the DOW will open following a all time high reach on Friday,10,2012. Obama yes!! Eat sh*t and die Rethugs!!! You tried to throw this nation back into a major Depression and you failed so far.

[DemReadingDU]

4. Stock Market Holidays

Last edited Mon Oct 8, 2012, 06:29 AM - Edit history (1)

Stock Market Holidays

The major stock exchanges in the United States observe the following nine holidays:

New Year's Day
Martin Luther King, Jr. Day (third Monday in January)
President's Day (third Monday in February)
Good Friday
Memorial Day (last Monday in May)
Independence Day
Labor Day (first Monday in September)
Thanksgiving Day
Christmas

If the holiday falls on a Saturday, the markets will close on the Friday preceding the holiday unless the Friday is the end of a monthly or annual accounting period. If the holiday falls on a Sunday, the markets will close on the Monday following the holiday.


click to see the holiday schedule for 2011, 2012, 2013
http://markets.pe.com/pe/stock_market_holidays


oops, typo

[AnneD]

5. Ah yes...

The Native American National Day of Morning. I'll pull out my Dia Del Muerta scrub top and wear my skeleton ear rings.

[Ghost Dog]

6. This is open, and moving

[Ghost Dog]

7. Global growth worries hit shares and oil

European stocks, oil and gold fell on Monday as concerns over the global economic outlook and its impact on the coming corporate earnings season weighed on investor sentiment.

The World Bank cut its estimate for East Asian growth including for China, and this has undone some of the positive sentiment that followed Friday’s sharp drop in US unemployment for September.

“The big bogeyman in the closet is China and everyone is trying to guesstimate if it’s going to have a hard landing or a soft landing,” said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.

However, national holidays in Japan and the United States on Monday were expected to limit trading activity. The pan-European FTSEurofirst 300 was down 0.7 percent at 1,103.51 points in early trade with the German DAX down 0.8 percent despite data showing an unexpected jump in German exports during August.

Seasonally adjusted exports jumped 2.4 percent month-on-month, far outperforming expectations for a drop of 0.5 percent and beating even the highest forecast in a Reuters poll of 17 economists for a 0.5 percent rise.

“It is incredible how German exports are winning in such a tough environment,” said DekaBank economist Andreas Scheuerle.

/... http://www.khaleejtimes.com/biz/inside.asp?xfile=/data/market/2012/October/market_October14.xml§ion=market

Earlier today, the World Bank slashed its outlook for growth in China to 7.7 percent in 2012 and 8.1 percent in 2013, down from 8.2 percent and 8.6 percent, respectively...

... For all of East Asia, the World Bank see 7.2 percent growth in 2012 and 7.6 percent growth in 2013. This is down from 7.6 percent and 8.0 percent.

"This is the slowest growth rate in the Asia Pacific region since 2001. It's even slower than the peak of the financial crisis in 2009," Hofman said.

/... http://www.businessinsider.com/world-bank-cuts-asian-growth-forecasts-2012-10#ixzz28hTRObcI

(Reuters) - China risks economic malaise, deepening unrest and ultimately even a crisis that could shake the Communist Party's grip on power unless its next leader, Xi Jinping, pushes through stalled reforms, experts close to the government have warned.

The warnings, striking for their openly urgent tone, have been aired both inside the party and publicly, and reflect an internal debate about the direction of the new leadership that takes power next month.

"There is a potential crisis in China's model of economic growth," said a paper from Strategy and Reform, one of several think tanks and groups that throughout this year have plied officials with blueprints for Xi's coming decade in power.

"The next decade might be the last opportunity for actively pursuing reform, and we should treasure this last chance," said the paper released on the group's website (www.reform.org.cn).

"China is confronting a perilous jump, one that it can neither hide from nor avoid no matter what," said the paper from the group, which includes academics, company executives, government policy-advisers and some officials...

/... http://uk.reuters.com/article/2012/10/07/us-china-politics-reform-idUSBRE8960K320121007

[Ghost Dog]

8. Why China’s slowdown may get permanently worse

... The Chinese themselves are attempting to engineer a smooth slowdown. “The government recognizes that its current development path is no longer sustainable (politically, socially and environmentally) and must therefore change,” says Michal Meidan, an analyst with Eurasia Group. By appearances, this dip has caught the rest of the world by surprise. Yet it shouldn’t have. The world’s key economic and energy models have signaled a more conservative Chinese growth rate for some time. For instance, in its forecast of 2008-2013 global energy consumption, the US Energy Information Administration factored in Chinese economic growth of just 5.7%.

It may be the speed and impact of the slowdown that have agitated those in the world who have come to rely on the Chinese economy. Olivier Desbarres, head of foreign exchange trading at Barclays, says that, while Chinese growth of 7% or 7.5% is not a crisis, no one knows where the contraction will actually stop, leading to a fear that its GDP growth could go lower.

In fact there are demographic reasons (pdf, page 1) to understand the slowdown not as temporary, but the beginning of a long-term phenomenon, one that could become much worse if not arrested. In a June 2012 study (pdf, page 18), Wang Feng of the Brookings Institution examined young workers—the type that energize an economy with a willingness to migrate and work at repetitive jobs for relatively low wages—and found a striking population decline. In 2010, there were 116 million Chinese aged 20 to 24, but that will fall to 94 million by 2020, Feng forecast, a 20% plunge. And when Feng factored in a fast-rising enrollment in higher education, he foresaw an even smaller population of workers aged 20-24: just 67 million by 2030, a 42% drop from 2010.

Barclays’ Parker suggests that the conventional wisdom—a steep upward economic trajectory, leading to Chinese economic ascendance over all—has appeared doubtful for some time. Economists have gone wrong using thin analysis, he says, relying on “four data points and a little imagination.”

“The first problem with this style of analysis is that it ignores institutional challenges, technology changes, economic dynamism (or lack thereof), resource constraints, the long arc of history, the impact on the environment, changing consumer preferences, exports as a driver of commodity consumption, and how far China has already pulled forward future demand growth,” Parker wrote in his note to clients. “Not to mention the risk of a sophomore slump. In other words, it discards context entirely.”...

/... http://qz.com/7474/why-chinas-slowdown-may-get-permanently-worse/

... The economy is slowing as the current model is running out of gas. Unprofitable but powerful state-owned banks and companies are squeezing out the private sector, which the government says is responsible for 90% of new jobs, 65% of patented inventions and 80% of technological innovation. College graduates–who have risen to 6.5 million annually from 2 million annually a decade ago– can’t find jobs. Those who do are averaging $300 a month, the same as uneducated migrant workers. China is getting old before it gets rich. The worker-to-pension ratio is projected to fall from three to one now to one to two in 30 years.

China also must escape from “the middle-income trap,” which occurs when domestic consumption and innovation must replace export-led fast-growth through cheap labor and foreign technology adoption. Not an easy transition. The World Bank says that of 101 middle-income economies in 1960, only 13 had reached high income status by 2008. Chinese consumption is only 35% of GDP, compared to 71% in the US and 54% in India. Just over half of the Chinese population now lives in cities–the US ratio in 1920. By 2030, some two-thirds of China’s people are expected to be living in cities. This means that an average of 13 million to 15 million rural residents will move to cities each year. The good news, according to China’s top economic planners, is that if China can reform its urban residency requirements and transform these downtrodden migrants into the next wave of urban consumers, they will form a “potential new global market of unprecedented size.”...

/... http://qz.com/12877/chinas-pile-of-problems/

[Demeter]

9. Foreclosure mills in the clear; Florida closes cases with no findings

http://www.palmbeachpost.com/news/business/real-estate/foreclosure-mills-in-the-clear-state-closes-cases-/nSWQ5/

Florida’s attorney general has closed a high-profile investigation into alleged wrongdoing by the state’s largest foreclosure law firms with no findings. The probes, opened by former attorney general Bill McCollum in 2010, ended not with the swiftness of a gavel falling, but in a slow fizzle of court judgments, law firm implosions and the firing of two top state investigators by Attorney General Pam Bondi. A February Florida Supreme Court decision that upheld a ban on the state from investigating the firms under the Florida Deceptive and Unfair Trade Practices Act was the real decider, attorney general communications director Jennifer Meale said Friday. “Accordingly, we have closed our law firm investigations and anticipate that any enforcement action will be up to the discretion of the Florida Bar,” Meale said.

The Florida Bar has maintained it only has the power to investigate individual attorneys. As of mid-August, 149 cases of attorney-related foreclosure fraud had been investigated by the Florida Bar with no disciplinary actions taken. There were 171 cases pending at that time. Accusations against the seven law firms, which represent lenders in foreclosure cases, included taking illegal shortcuts to hasten home repossessions and filing fraudulent documents in court. Attorney Gerald Richman, who represents the Boca Raton-based firm of Shapiro & Fishman, said having the cases closed vindicates his position that the state has no jurisdiction to investigate and that his client did nothing wrong. “There was never any scheme or plot to injure anyone,” Richman said Friday. “They operated as lawyers and given the tremendous volume of cases they had to handle, they did an excellent job.”

Homeowners and foreclosure defense attorneys who battled the so-called “foreclosure mills” in court said they were frustrated by how the cases were handled. Royal Palm Beach-based defense attorney Tom Ice said he was disappointed that “politics should trump the rule of law...Having said that, they might as well close the cases, they weren’t doing anything to go forward with the investigations anyway,” Ice said. “Bondi fired the lead investigators and otherwise ignored the fraud committed against Florida citizens.”

Former assistant attorneys general Theresa Edwards and June Clarkson were fired in May 2011. An inspector general’s inquiry upheld the firings, saying they were dismissed because of their “poor judgment and lack of independent investigation on high-profile foreclosure mill cases.” But the duo were responsible for the only settlement reached in the foreclosure firm investigations: a $2 million agreement with the Fort Lauderdale-based law firm of Marshall C. Watson, which admitted no wrongdoing. “We are not surprised in the least, but are very disappointed that Florida chooses to ignore these huge problems,” Clarkson said Friday about the end of the investigations.

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

Palm Beach County homeowner advocate Lisa Epstein, whose grassroots effort helped uncover the robo-signing issue, said she has little faith anyone will be held accountable for foreclosure malpractice.

“As we’ve all seen, foreclosure mills have nothing to fear from the Florida Bar,” she said. “In the end, government and law enforcement on all levels has implemented a policy to bail out the banks while the people, the rule of law, the authenticity of the nation’s property records, and the integrity of our judiciary go to hell.”

[Demeter]

10. EU Parliament to back jail sentences for Libor cheats

http://www.reuters.com/article/2012/10/05/us-banking-libor-eu-idUSBRE8940XC20121005

Traders found guilty of rigging Libor and other financial market benchmarks would face jail from next year under a cross-party deal to be voted through next Tuesday in the European Parliament. The Parliament's economic affairs committee is due to back new rules that would bring manipulation or insider trading involving benchmarks under the EU's market abuse rules. The Parliament may back minimum criminal sentences for market abuse of five years for serious crimes and two years for lesser breaches but some countries are likely to oppose this as it touches on national sovereignty.

Arlene McCarthy, the committee's British centre-left member who is steering the measure through the parliament, said fines had failed to change culture in banking. "We are therefore extending the law to, for the first time, impose tough EU wide criminal sanctions and jail time," McCarthy said in a statement. "We have also extended the scope to cover all benchmarks and indices as the Libor manipulation shows that abuse is still rife in the banking sector." British bank Barclays was fined a record 290 million pounds in June to settle allegations that it manipulated Libor - the London Interbank Offered Rate - an interest rate used as a basis for pricing more than $300 trillion products from home loans to credit cards.

A cross-party compromise in the Parliament would apply the EU's market abuse rules to interest rates, currencies, benchmarks, interbank rates like Libor, indices and financial instruments or any interest rate-based derivative contract. "I am confident that the full committee will back a tough approach to abuse and manipulation which, as the Libor crisis showed, continues to undermine confidence and integrity in financial markets," McCarthy said.

The UK Financial Services Authority still has no direct power over Libor and used breaches of principles as a basis for the action against Barclays. The UK watchdog has also outlined plans to overhaul Libor, which is meant to reflect rates at which banks borrow from one another. The Libor rigging also did not come under the EU's existing market abuse rules which the bloc is now revising. The Parliament will sit down with EU states after the vote to agree a final legal text. EU member states are also set to back making benchmark rigging illegal. The Parliament is also going to amend plans to curb the activities of so-called high-frequency traders who bombard markets with many unfilled orders...MORE

[Demeter]

11. Courts taking up opposition to Dodd-Frank

http://www.washingtonpost.com/business/economy/courts-taking-up-opposition-to-dodd-frank/2012/10/05/ebeb1874-0e27-11e2-bb5e-492c0d30bff6_story.html

After failing to scuttle the landmark legislation in Congress, critics of the Dodd-Frank Act overhauling financial regulations are trying to chisel away at it in the courts — with some initial success.

Twice, federal regulators have lost in court trying to defend the rules, which were put in place after the 2008 financial crisis. On Friday, they were back in court again, fighting for yet another regulation they say is linked to Dodd-Frank.

Each time, the challenge came from a lawyer with a prominent legal pedigree: Eugene Scalia, son of Supreme Court Justice Antonin Scalia.

The legal battles raise an urgent question that’s likely to surface again and again about how much deference the courts are willing to grant the agencies that police corporate America...

DEAR GOD, THERE'S ANOTHER ONE!

[Demeter]

12. Lehman's brokerage, Europe units settle $38 billion of claims

http://www.reuters.com/article/2012/10/05/us-lehman-settlement-idUSBRE8940LG20121005

The U.S. brokerage unit and a European unit of the former Lehman Brothers Holdings Inc said they settled litigation over $38 billion of asset claims, a major step toward customers and creditors recovering money.

The announcement Friday by Lehman Brothers Inc and Lehman Brothers International Europe comes four years after Lehman, once Wall Street's fourth-largest investment bank, filed for bankruptcy at the height of the 2008 global financial crisis.

James Giddens, the trustee liquidating the brokerage unit, said the accord was a "critical milestone" that would let customers recover 100 percent of their property much sooner than if LBIE litigated claims over more than 200,000 trades.

Tony Lomas, joint administrator of LBIE, said the pact enables him to focus on distributing more than $7 billion of assets....

[Demeter]

13. Lehman Brokerage Payout Nearer After $38 Billion Pact

http://www.businessweek.com/news/2012-10-06/lehman-brokerage-payout-nearer-after-38-billion-affiliate-pact

Defunct brokerage Lehman Brothers Inc., which hasn’t paid hedge funds after four years in liquidation, is nearer to making them whole after reaching a “critical milestone” in settling a $38 billion dispute with an affiliate, the trustee said.

Brokerage trustee James Giddens, who is facing payment demands by New York hedge fund Elliott Management Corp., said the brokerage approved a $7.5 billion customer claim by Lehman Brothers International Europe, plus income of $600 million, with another approved claim of $500 million by the affiliate. The brokerage will get a general claim against LBIE of $4 billion, he said in a statement yesterday.

“This is a critical milestone for customers because, if approved by the court, the agreement sets the stage for distributions that will provide for 100 percent recovery of customer property,” he said. “The agreement resolves tens of billions in claims from LBI’s largest single customer claimant and will allow for customer and creditor distributions much sooner than if LBIE’s claims involving hundreds of thousands of transactions were litigated.”

The brokerage and its parent, Lehman Brothers Holdings Inc., have been disputing for years the claims filed against them, with some of the largest coming from former affiliates. Giddens has said that LBIE, the Lehman parent and the Swiss affiliate had the largest claims against the brokerage. The Lehman brokerage will settle a $6 billion claim by the Swiss affiliate, granting a $190 million customer claim and a $360 million unsecured creditor claim, Giddens said in a federal court filing in Manhattan on Oct. 3. The settlement with Lehman Brothers Finance AG will help the brokerage trustee to pay hedge funds and banks “as soon as possible,” he said.

MORE

[Demeter]

14. Do We Really Need Freddie to Subsidize Rental Investors?

Just because the banks are on one side of an issue does not always mean they are wrong, just that they might be right for the wrong reason. The Wall Street Journal reports today that a Fannie plan to subsidize substantial investors in rental properties is stymied thanks to bank lobbying. The housing giant had planned to launch a program to lend to institutional investors in single family rental properties (note that small investors would not have access). The rationale was to “jump start” a housing recovery and boost short term demand. Banks argue they are willing to lend and hence there is no need.

The truth is that professional investors are already pursuing the single family home market aggressively, which means the case for goosing their returns with cheap government funding is weak. Spreads between returns on single family rentals and multifamily rentals are the highest they have ever been. Professional investors also believe they have solutions to managing dispersed homes: concentrations within suburban areas (as in you buy a lot in say Atlanta, not in 10 cities across the South), renovating properties using standard installations (for those that do rehabs) so that you can inventory only one type of bathroom faucet). Investors also see certain plusses in single family homes relative to apartments: less frequent turnover. Multifamily buildings typically experience 50% turnover in a year, while renters of single family homes stay in place longer (and rental income loss due to turnover is a big cost)...Mind you, I’m not completely sold on the bull case (which sees all the risks to the upside). But there are investors now who are assembling portfolios and earning attractive current yields who aren’t assuming home price appreciation as part of their total returns. And even the enthusiasts have reservations about certain markets as far as the jobs outlook in concerned (Las Vegas, for instance). Similarly, cities where they can’t get enough concentration are off the list (for instance, I’d imagine Birmingham, AL would be off the radar for most, due to the the size of city, the dispersion of homes: too many in the price range they regard as too risky from a quality of tenant perspective, and the lack of a driver of jobs growth).

The reason for investor optimism? They are renting properties for more than a mortgage payment would be….if the borrower could get a mortgage. So it’s the mortgage availability that is driving the rental opportunity. If you are self-employed, you simply cannot get a mortgage; I know of people who were willing to put 50% down who were rejected. And W-2 borrowers need 20% down. Investors regard single family rental conversions the most attractive opportunity in the housing/mortgage space, and remember, this is now perceived to be the bright spot in this technical economic recovery. Another indicator is that Fannie and Freddie have been piloting bulk sales programs. Investors are already beyond that (largely due to the fact that the programs were taking too long to get launched and also were more cumbersome than they had anticipated). They are pursuing multi-channel sourcing strategies, and banks are finding buyers for the sort of properties investors would want (modern construction, roughly $50,000 to $200,000). Institutional investors are buying them individually (some are even conducting door-knocking campaigns of homeowners whose houses are not on the market but look like short sale candidates and report good success), or even from local aggregators who will buy a small number of properties of the type that would appeal to professionals investors. Banks are admittedly charging juicy interest rates for investors in portfolios of single family homes; I’ve heard 13% for loans of only 3 years. But the caution isn’t unwarranted. This is a new model and the operators can’t point to a track record as far as stability of income stream, costs, tenant turnover, wear and tear on the home. In a year or two, institutional investors will have more data about how this market has performed and will have a much better sense of the risk level and hence what would be an appropriate level of return to require.

The public policy goal of Fannie and Freddie was to increase homeownership. The only reason for supplying funds to large, absentee landlord would be to reduce losses on liquidating foreclosed homes that they’ve guarantee. The newfound investor enthusiasm for this type of investment says government support is not justified. Indeed, the investors unwittingly undermine their own case. From the Journal article:

“Financing from Freddie would be the greatest economic stimulus,” says Aaron Edelheit, chief executive of American Home Real Estate Co., which owns more than 1,500 houses and is actively buying more. “You’d have the greatest land grab you’ve ever seen.”

...So in a fight between the mercenary interests of two groups, spread hungry-banks and self-confessed potential land-grabbers, ordinary citizens look to be winding up with the least bad remedy. Too bad we aren’t always so lucky.

Read more at http://www.nakedcapitalism.com/2012/10/do-we-really-need-freddie-to-subsidize-rental-investors.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29#4G0W5wBu1tiKPrCL.99

[Demeter]

15. Romneys likely gained from complex offshore deals, tax experts say

http://www.kansas.com/2012/10/02/2512727/romneys-likely-gained-from-complex.html#storylink=cpy

Mitt Romney’s former private equity firm used a half-dozen companies and partnerships in the tax havens of Luxembourg, Ireland and the Grand Caymans four years ago to channel $689 million in loans to a U.S. company that it co-owned...some tax experts say that the circuitous paper chain likely was structured to avoid certain taxes for passive investors, including blind trusts for the Republican presidential candidate and his wife. It’s just one of a maze of transactions involving the Romney family portfolio that were engineered in tax-neutral nations. The gradual emergence of outlines of these deals in recent weeks is prompting some experts to challenge Romney’s pronouncement that his scores of offshore investments haven’t lowered his federal taxes by so much as a dollar.

“It appears likely that offshore entities helped his investments avoid taxes or adverse tax consequences,” David Miller, a prominent New York tax attorney, told McClatchy.

The New York Times reported Tuesday that it obtained documents showing that an offshore fund in which Romney’s investment retirement account held an interest probably used a “blocker” — an intermediary company that legally insulated the White House hopeful from paying 35 percent in taxes...The release of documents from entities set up by Bain Capital Inc., the firm that Romney ran from 1984 to 1999, also are lifting a shroud from the dizzying world of private equity, an industry that has racked up huge profits with help from a small army of tax attorneys. Critics say these firms have found ways to exploit gaps between U.S. and other countries’ laws to deprive the U.S. treasury of billions, if not tens of billions, of dollars. The offshore deals are generally considered legal, typically structured to shield pension funds, foundations and other tax-exempt organizations from U.S. taxes, and foreign investors from U.S. taxes or taxes in their own countries. The California State Teachers’ Retirement System, for example, has since 2006 invested more than $500 million in three of the funds in which Ann Romney’s trust holds a stake...Even indirectly, Romney benefited. Whenever Bain’s strategies reduced taxes for a fund, he reaped returns because his 10-year retirement package gave him a slice of the management fees and profits from Bain Capital deals. The lower the taxes, the bigger the returns for each partner.

Because of the secrecy surrounding tax filings, no hard proof has surfaced that the Romneys actually realized any tax breaks from their offshore dealings. Such opaque rules leave tax experts making educated guesses. Romney, whose tenure as Bain Capital’s chief executive helped him amass a fortune worth up to $250 million, has refused to release enough financial data to definitively settle the touchy question of whether he got offshore tax reductions. The issue of how much he’s paid in taxes while piling up all of that money and his refusal to release more than two years of his personal tax returns have dogged him for months ... Miller, the tax lawyer, has reviewed Romney’s 2011 tax return and evaluated what’s public about some of the offshore deals. He’s found several instances in which evidence suggests Romney got tax breaks, including for his individual retirement account. Miller’s assessment is at odds with Romney’s campaign. Michele Davis, a spokeswoman, said in a statement that “investments by the blind trusts in funds established outside the U.S. are taxed in the very same way they would be if the shares were held in the U.S.”

“No taxes are evaded or reduced,” Davis said. “These funds are all registered with the IRS (Internal Revenue Service) and report all income to investors and the IRS, just like domestic funds.”

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

Members of Congress, he joked, “weren’t smart enough to think of this.”

Read more here: http://www.kansas.com/2012/10/02/2512727/romneys-likely-gained-from-complex.html#storylink=cpy#storylink=cpy

[Demeter]

16. Obama Campaign “Clarifies” Approach on Social Security

http://news.firedoglake.com/2012/10/06/obama-campaign-clarifies-approach-on-social-security/

... President Barack Obama’s re-election campaign delivered an email to supporters clarifying their response, which left a number of key details unanswered and retained a degree of flexibility for the President over his choices for the program...:

President Obama and Romney agree that we need to make gradual changes to make sure Social Security stays solvent over the long term. The disagreement is over how to do it — and that’s where President Obama and Romney have fundamentally different ideas.

President Obama will under no circumstances agree to put your retirement at risk by privatizing Social Security, and he will reject any plan that slashes Social Security benefits. Because Romney opposes any effort to raise a single penny in new revenue, his Social Security plan is forced to rely solely on big benefit cuts to maintain solvency — analysis of a similar plan showed current workers would see cuts of up to 40 percent that would badly hurt their financial security.

Romney and Ryan also supported the Bush privatization plan that would have had exposed Social Security benefits to the financial crisis that devastated many pension funds and retirement accounts.

Cutter also sent readers to a page at BarackObama.com for more clarification. That site refers to a Bloomberg piece from Peter Diamond and Peter Orszag, which analyzes Mitt Romney’s Social Security plans. Those plans have been remarkably consistent over the course of the campaign – he wants to slowly raise the retirement age, and engage in “progressive price indexing,” where higher income earners see their benefit rates grow more slowly than those at the lower end of the scale. As Diamond and Orszag show, you would have to set the bar of “higher income earners” at the top 60% of earners in the country in order to derive any meaningful revenue from progressive price indexing. And raising the retirement age would impact all workers, regardless of income. Here’s how that all plays out.

These two steps would eliminate the long-term deficit in Social Security, according to the official analysis of the plan done by the Office of the Chief Actuary at Social Security. But they would do so by substantially reducing benefits, even for middle earners. According to the analysis, a medium earner (someone bringing in about $45,000 a year today) retiring in 2050 at age 65 would receive 32 percent less in annual benefits than under the current formula. By 2080, the reduction would amount to almost 40 percent.

A high earner (someone with income of about $70,000 currently) retiring in 2050 would get 40 percent less and, by 2080, almost 50 percent.

But Diamond and Orszag, in substitution, offer their plan which they claim would have that same middle-income earner receive 10% less in benefits over their lifespan. “The Romney-type approach would reduce [benefits] by about $7,500 a year. Under our plan, it would be only about $2,500 lower,” Diamond and Orszag write.

At the Truth Team page, you see Obama’s principles on Social Security reform laid out. And it matches what Obama has been saying on this matter for a while, full of vague statements and undefined concepts:

• Any reform should strengthen Social Security for future generations and restore long-term solvency.
• The administration will oppose any measures that privatize or weaken the Social Security system.
• While all measures to strengthen solvency should be on the table, the administration will not accept an approach that slashes benefits for future generations.
• No current beneficiaries should see their basic benefits reduced.
• Reforms should strengthen retirement security for the most vulnerable, including low-income seniors.
• Reform should maintain robust disability and survivors’ benefits.

The only hard line here is on privatization. I don’t know what “slashes” benefits means relative to simply reducing them. I don’t know what “basic” benefits means relative to the benefits people receive. And while later, Romney gets criticized for “proposing to close Social Security shortfalls through benefit cuts alone,” there’s no indication of any revenue increases Obama would support. In other words, this set of principles was constructed to give Obama maximum wiggle room on Social Security, so that all people can read into it whatever they want. You can see someone who supports no benefit cuts, or modest benefit cuts, or revenue increases through changing the payroll tax cap, or no increases. President Obama won’t privatize Social Security. As for what else he would do, it’s not clear. There’s no definitive rejection of raising the retirement age, for example. He doesn’t dismiss progressive price indexing out of hand. There’s no description of changing the cost of living adjustment calculation by moving to chained CPI, which is a net benefit cut. You just have an offhand reference to a column criticizing Romney’s Social Security approach, written by two guys whose plan for Social Security includes straight benefit reductions and an increase in the payroll tax rate without changing the payroll tax cap.

I think this “clarification” creates more questions than resolutions.

[Demeter]

17. Treasury Report Reveals Performance of Largest Servicers

http://www.dsnews.com/articles/treasury-report-reveals-performance-of-largest-servicers-2012-10-05

On Friday, Treasury released the Making Home Affordable Program report, which details performance from the nine largest servicers participating in the Making Home Affordable (MHA) program. The most recent August servicer report provided data on servicers’ ability to reach out to delinquent homeowners who are at least 60 days behind to inform them of the program. The results were from August 2011 to July 2012, and revealed GMAC led with a 97 percent right-party contact (RPC) ratio. Right party contact occurs when a servicer has successfully communicated with the correct homeowner about resolving the delinquency based on program guidelines. The RPC ratio is the share of homeowners the servicer has established RPC with as a percent of HAMP eligible loans. OneWest followed GMAC closely at second, with a 95 percent RPC ratio. Bank of America established a 93 percent RPC ratio, followed by Homeward Residential (92 percent), which will be acquired by Ocwen Financial. Wells Fargo also had a notably high RPC ratio of 90 percent. The report also revealed servicers’ performance when converting eligible trials into permanent modifications on or after June 1, 2010. Homeward Residential and OneWest had the highest conversion rates, with both seeing 90 percent of trials turn into permanent modifications. The report stated the average trial length is 3.5 months.

When resolving borrower disputes related to the MHA program, the largest servicers resolved the issues within the required 30-day time frame. According to the report, examples of escalations include allegations that the servicer did not properly assess the homeowner according to program guidelines, inappropriately denying the homeowner for applicable MHA program(s), or initiated or continued inappropriate foreclosure actions. The servicers assessed resolved cases within 30 days in this most recent third quarter and in the second quarter of this year.

To encourage servicers to modify homeowners at an early stage of delinquency, monetary incentives are higher for servicers who complete a modification on a loan that was 120 days delinquent or less at trial start. None of the nine major servicers averaged less than 120 for homeowner delinquency at trial start..MORE

[xchrom]

18. sigh -- it's monday

[Demeter]

45. Last time I let you use my bathroom, X

Had to go buy a shower curtain rod this morning....

[xchrom]

46. Sorry. I'm a disaster on mondays. Nt

[Demeter]

47. The Kid took out the shower curtain

You blabbed about it...you paparazzi, you!

[xchrom]

48. ...

[xchrom]

19. South Africa's Currency Continues To Get Crushed

http://www.businessinsider.com/south-african-rand-2012-10

South Africa's currency, the rand, continues to get crushed against the dollar as ongoing strikes effectively shuts down the economy.
Here's a look at the rand against the U.S. dollar, which got as week as 8.9975 per dollar:

[Demeter]

20. Repo Man Envy, Argentina-Elliott Edition

http://www.creditslips.org/creditslips/2012/10/repo-man-envy-argentina-elliott-edition.html



A court in Ghana has "detained" an Argentine navy ship with over 200 sailors on board, as part of the continuing effort by Elliott Management to get paid on defaulted government bonds. This is so wacky, it should be a movie.

The Libertad is a lovely sailing ship that once held a transatlantic crossing record, and is now used to train Argentine sailors. As a navy vessel, it is likely covered by sovereign immunity. Even if Elliott gets to keep the beauty, selling it would be a whole lot of hassle (do research immunity law before you bid). Even if the ship fetches the high end $15 million, it would be a drop in the bucket to Elliott's holdings. Money is not the point here. The point is to hassle the Argentine government and show those who might be tempted to follow its example that Elliott means business. But would a government as determined as this one to resist Elliott in particular ever cave in? If anything, the ship caper sets up a testosterone contest. Elliott shows that it is willing to "scour the Earth" for Argentina, and President Cristina Fernandez de Kirchner shows that she can lead the resistance to "bond vigilantes."

Then again, if I were Elliott, I might want to keep the Libertad for sentimental value.

[xchrom]

21. More Cracks In The German Economy

http://www.businessinsider.com/german-manufacturing-2012-10

Germany's August manufacturing orders fell 1.3 percent in August, which was worse than the 0.5 percent decline expected by economists.
Weakness came from within. Domestic orders plunged 3.0 percent.
Germany is the largest economy in Europe.
Last month, a survey of German business confidence reflected an econmomy experiencing no growth.
One of the biggest concerns plaguing the economy lately has been inflation.
Here's a longer term look at manufacturing from Markit's Chris Williamson:

[Demeter]

22. Obama’s Debate: What the Fuck Did You Expect? Mobutu Sese Seko

http://gawker.com/5949208/obamas-debate-what-the-fuck-did-you-expect

INTERESTING RAMBLE

[Demeter]

25. The Peril of Obama’s “Man Crush” on Geithner is exposed by the Debate By William K. Black

http://neweconomicperspectives.org/2012/10/the-peril-of-obamas-man-crush-on-geithner-is-exposed-by-the-debate.html

FDR transformed the nation when he was confronted with the Great Depression and World War II. He famously welcomed the hate of the banksters. President Obama wanted the love (and the contributions) of the banksters. He chose Timothy Geithner to be his pipeline to the banksters because Geithner shared Obama’s lack of passion for holding the banksters accountable for their frauds that drove the ongoing crisis. We have known the core of these sad facts for years, for they were revealed (irony of ironies) in a May 22, 2010 article whose theme was that we had all done Geithner and Obama a terrible injustice by criticizing them for their servile approach to the banks. The key facts that the article disclosed can be summarized in a sentence: Obama developed a “man crush” on Geithner and decided to follow Geithner’s policies to bail out the banksters rather than hold them accountable for the frauds that made them wealthy and caused the Great Recession. Obama’s “man crush” is particularly odd given the fact that Geithner is a Republican who, as a fig leaf, became an independent.

I emphasize that Obama is the President and the man who chose Geithner to head Treasury and, eventually, become his principal advisor on finance and economics. While this article focuses on Geithner’s role, the responsibility and culpability lie primarily with Obama. I find the May 2010 article’s sycophancy towards Geithner so appalling that it is acutely painful to, in the interest of brevity, ignore its defects and simply report its disclosures. Books published recently by Suskind, Barofsky, Bair, and Connaughton have confirmed and expanded these disclosures about Geithner’s all-encompassing dedication to the interests of the banksters.

I argued in my first appearance on Bill Moyer’s in April 2009 that Obama’s acceptance of Geithner’s advice to serve the interests of the banksters rather than America could cost him reelection. Romney and Ryan have been such terrible candidates with awful policies that recent polls have indicated that Obama has a substantial advantage in the electoral vote. Wednesday’s debate, however, has exposed the political insanity of Obama’s embrace of the banksters. (I have often explained why the policy is substantively insane and provide only the briefest summary here.) The single most important thing that Obama could have done to respond effectively to the crisis and to prevent future crises was to take on the systemically dangerous institutions (SDIs) whose fraudulent CEOs drove the crisis. The SDIs inherently put us constantly at risk of systemic crisis, are so large that they are inefficient, make “free markets” impossible because they receive a huge, implicit federal subsidy, and pervert democracy into crony capitalism. Leaving the banksters in charge of our largest banks also guarantees recurrent, intensifying financial crises. Taking on the SDIs, particularly their CEOs who grew wealthy by looting “their” banks would have also been the single most just and politically popular action Obama could have taken.

I want to emphasize the “just” aspect. Holding the banksters accountable for their crimes has nothing to do with “pitchforks,” vengeance, or scapegoats. Holding elite criminals accountable is a minimum condition for a democratic state that aspires to be a great nation. Americans yearn for a president who demands that we live up to our best natures. The May 2010 article unintentionally demonstrates the author’s, Geithner’s, and Bill Clinton’s inability to even fathom the concept that justice requires holding the banksters accountable for their crimes. Indeed, the article descends into this loathsome slander of the American people...


LENGTHY, DETAILED, MUST-READ!

[bread_and_roses]

49. Hear! Hear!

just got to this - accords more or less with my take

[xchrom]

23. EUROPE STOCKS DOWN AS GLOBAL GROWTH WOES INTENSIFY

http://hosted.ap.org/dynamic/stories/W/WORLD_MARKETS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-10-08-06-46-49

PARIS (AP) -- Europe's stock markets fell Monday ahead of a two-day meeting of its finance ministers while the World Bank cut its growth forecasts for Asia.

Investors were also disappointed by falling commodity prices and a mixed finish on Wall Street on Friday despite a drop in the U.S. unemployment rate. There was also some frustration regarding mainland Chinese shares, which opened to losses after a weeklong holiday.

European stocks fell in early trading. By midmorning in London, Britain's FTSE 100 was off 0.75 percent at 5,826.94, Germany's DAX slid 1.4 percent to 7.289.14 and France's CAC 40 lost 1.4 percent to 3,409.81.

Wall Street looked as though it would open lower with Dow Jones industrial futures down 0.4 percent to 13,485 with S&P 500 futures down the same amount at 1,449.30.

[Demeter]

24. Cybercrime Gang Recruiting Botmasters for Large-Scale MiTM Attacks on American Banks

https://threatpost.com/en_us/blogs/cybercrime-gang-recruiting-botmasters-large-scale-mitm-attacks-american-banks-100412

A slew of major American banks, some already stressed by a stream of DDoS attacks carried out over the past 10 days, may soon have to brace themselves for a large-scale coordinated attack bent on pulling off fraudulent wire transfers. RSA’s FraudAction research team has been monitoring underground chatter and has put together various clues to deduce that a cybercrime gang is actively recruiting up to 100 botmasters to participate in a complicated man-in-the-middle hijacking scam using a variant of the proprietary Gozi Trojan.

This is the first time a private cybercrime organization has recruited outsiders to participate in a financially motivated attack, said Mor Ahuvia, cybercrime communications specialist for RSA FraudAction. The attackers are promising their recruits a cut of the profits, and are requiring an initial investment in hardware and training in how to deploy the Gozi Prinimalka Trojan, Ahuvia added. Also, the gang will only share executable files with their partners, and will not give up the Trojan’s compilers, keeping the recruits dependent on the gang for updates.

Generally, cybercrime gangs deploy as few as five individual botmasters to help in successful campaigns; with this kind of scale, banks could be facing up 30 times the number of compromised machines and fraudulent transfers, if the campaign is successful.

“This Trojan is not well known. This is not SpyEye or Citadel; it’s not available for everyone to buy,” Ahuvia said. “Security vendors and antivirus signatures are less likely to catch it or be familiar with it. It will be tricky for vendors to detect and block it. This gang is keeping a tight hold on the compiler. By only giving up executable files, they can control how any antivirus signatures are in the wild and keep unique signatures to a minimum.”

As many as 30 banks have been targeted, many of them well known and high profile, Ahuvia said. RSA said the gang is targeting American banks because of past success in beating their defenses, as well as a lack of two-factor authentication required for wire transfers.Some European banks, for example, require consumers to use two-factor authentication. She added that RSA FraudAction was unsure how far along the recruitment campaign had gone, or when the attacks would launch...

[Demeter]

26. Troika wants faster cuts

http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_32131_03/10/2012_464427



The troika is demanding that Greece increase the amount of spending cuts it will make next year by more than 1 billion euros in order for the country’s lenders to approve the austerity package the government has put together. Kathimerini understands the European Commission, European Central Bank and International Monetary Fund want to increase the frontloading of the measures because they believe the Greek economy will perform worse than forecast in the draft 2013 budget presented by Finance Minister Yannis Stournaras this week.

The government predicted that the recession will reach 3.8 percent of gross domestic product next year but the troika believes that the contraction is likely to be as high as 5 percent, Finance Ministry sources said. This has prompted visiting inspectors to ask the Greek side to increase from 7.8 billion euros to as much as 9.2 billion the amount of cuts to be implemented next year. The total package is worth about 13.5 billion euros. The troika thinks this will lead to Greece wiping out its primary deficit next year but not achieving a primary surplus of 1.1 percent of GDP, as forecast by Stournaras...

DEAR GOD, WHERE DOES IT END? UPPING THE PAIN BECAUSE THEIR DEMANDS UPPED THE PAIN...

[Demeter]

27. Greek Prime Minister Warns of Societal Collapse Like Weimar Germany; Citizens Storm Defense Ministry

http://globaleconomicanalysis.blogspot.com/2012/10/greek-citizens-storm-defense-ministry.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29

Greece is politically and economically bankrupt. Unemployment is 24.4% and destined to get much worse with the latest round of austerity measures. Worse yet, Greece is still encumbered by massive layers of bureaucracy that makes it difficult to get anything done.

Yesterday, in a massive breach of security, Greek citizens stormed the defense ministry. This has German chancellor Angela Merkel willing to take a chance on a trip to Greece next week.

Today, Antonis Samaras, the Greek Prime Minister warns of societal disintegration without urgent financial aid...

[Demeter]

28. “What if the Global Financial Crisis is Permanent?”

http://www.macrobusiness.com.au/2012/10/what-if-the-gfc-is-permanent/

While Europe may be reaching a deal of sorts between Teutonic lender and Latin borrower, and while pre-election America may appear to be regaining momentum in the form of lending and employment data, economic turbulence has merely moved eastwards in its slow, global orbit.

With the Asian Development Bank cutting regional growth forecasts from 6.9% to 6.1%, and Future Fund chief David Murray warning of an external finance shock in Australia, IMF chief economist Olivier Blanchard seems right when he forecast on Wednesday that the world would not recover from the financial crisis until at least 2018.

But what if Blanchard were wrong? What if his premise was incorrect? Certainly, there is a very real structural slowdown in China, a pause in the consumption rates of South Asia and Indonesia, and a continuing malaise in Japan, but what if we didn’t look at this as a crisis, but as statis? What if our obsession with economic growth and measures of growth turned out to be an illusion.

The Financial Times’ Martin Wolf opened this can of worms on Tuesday, asking if unlimited growth was a thing of the past. Citing research on historic rates of productivity by economist Robert Gordon, Wolf questioned whether our current third industrial revolution – that of information, rather than steam and mechanisation in the 19th, or urbanisation and middle class expansion in the 20th century – was really all that profound...

[Demeter]

30. Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds

THE PROBLEM IS THE US IS SUFFERING FROM A MASSIVE, AND POTENTIALLY FATAL INFESTATION OF PARASITES. AND NO, I DON'T MEAN THE POOR AND NEEDY. I MEAN THE POWERFUL AND GREEDY.

IF THERE'S ENOUGH WILL POWER IN THE GOVERNMENT TO KILL THE PARASITES, WE CAN HAVE GROWTH AGAIN. BUT IT WILL BE GREEN GROWTH--GROWTH TO A SUSTAINABLE ECONOMY IN HARMONY WITH NATURE, NOT SEEKING TO EXTRACT, SUBJUGATE AND DESTROY NATURE.

http://www.nber.org/papers/w18315.pdf?new_window=1

[Demeter]

36. New poll shows popularity of Greece's Golden Dawn at 22 percent

THAT'S THE NEO-NAZI GROUP...

http://digitaljournal.com/article/333096#ixzz28iFwj3Dt

[Demeter]

29. We had a hard frost last night, down to the grass

Partly because it rained yesterday, partly because it was 29F before sunrise...

guess there's no autumn, this year.

[xchrom]

34. that's how it's feeling here too.

the weather had been too nice for the trees to really turn -- now it seems like we're really heading for some Weather.

i guess the leaves will just turn brown and fall off.

pretty cold and over cast here.

[Demeter]

31. Only Four More Weeks Of Campaign Hell

Chavez won by an overwhelming margin...despite all the bluster and bullying by the 1%ers.

this nation needs a Chavez, or at least, an FDR.

[Demeter]

33. lambert here: Mission elapsed time: T + 28 and counting*

That which is crooked cannot be made straight: and that which is wanting cannot be numbered. –Ecclesiastes 1:15

Readers, I’m a little over capacity this evening, what with trying to put a stake in the heart of a project. So I thought do a recap on the Social Security flap from last week’s debate between Obama and Romney. Spoiler alert: There’s nothing new here, but that’s not necessarily a good thing.

I actually had a lead written: “Long, long ago, in a primary far away, there was a candidate who needed an issue. His name was Barack Obama.” I thought that was pretty funny, because I started to pay close attention to Obama when he put Social Security “in play” in the 2008 Iowa primaries (and as a “character issue,” too, to add insult to injury). As Atrios remarked (October 27, 2007) at the time (citing Drum): “I appreciate that Obama needs an issue, but please don’t put social security into the Washington water. Once it gets in there all the serious pundits spend their days figuring out how best to starve granny.” (Readers: Notice that “zombie-eyed granny starver” has a pedigree, and it’s bipartisan.) I say “in play” because Democrats, with perhaps an assist from what we then thought of as the left blogosphere, had just finished beating George W. Bush like a gong for trying to privatize Social Security, and we thought Social Security was off the table. Atrios — he’s a professional economist! — explained (October 29, 2007): “So, anyway, having someone suggest that Social Security is a problem which needs to be dealt with by any serious candidate is like the bat signal for people like me. There is no problem with Social Security. None at all” (italics mine. Well, every reason, if you want to dogwhistle Republicans, but that’s a thread for another day.) Anyhow, I parsed Obama’s words carefully from then on, and ultimately left the Party, but that’s another thread for another day, too. “Class of” 2008. I know, way too late!)

Anyhow, that lead didn’t work out, because here’s Obama on on ABC’s “This Week with George Stephanopoulos on May 13, 2007, well before Iowa. Which I missed, because I was too busy beating up on Republicans to pay attention to the good guys (hollow laughter):

STEPHANOPOULOS: You’ve also said that with Social Security, everything should be on the table. OBAMA: Yes. STEPHANOPOULOS: Raising the retirement age? OBAMA: Everything should be on the table. STEPHANOPOULOS: Raising payroll taxes? OBAMA: Everything should be on the table.

So Obama’s been willing to gut Social Security for some time. Aren’t they all? Fast forward to last week’s Presidential debates. October 3, 2012:

OBAMA: “You know, I suspect that on Social Security, we’ve got a somewhat similar position.”

Remarkably, or not, Obama agreed with Romney on Social Security before Romney had taken a position in the debate (although by this point Romney had dragged Big Bird to the chopping block by his scrawny neck, which might have been a clue). What could possibly have been the basis for Obama’s suspicion? Rather than take my blogger’s tin shovel to the ginormous pile of impacted yet steaming dung and leachate that is our legacy party discourse, let me just take the Republican platform (undated, and, in the proprietary PDF format, unlinkable, so classy) as a proxy for Romney’s views:

“While no changes should adversely affect any current or near-retiree, comprehensive reform should address our society’s remarkable medical advances in longevity and allow younger workers the option of creating their own personal investment accounts as supplements to the system.”

Well, that’s clear enough: A two-tier benefit system, with a measure of privatization. It’s also similar to the White House position (“check the web site!”), which is presumably a reasonable proxy for Obama’s position:

Seniors and Social Security

He [Obama] believes that no current beneficiaries should see their basic [meaning?] benefits reduced and he will not accept an approach that slashes [reduces OK, then?] benefits for future generations. The President also stands firmly opposed to privatization and rejects the notion that the future of hard-working Americans should be left to the fluctuations of financial markets.

So, Obama, the Republican Platform, and the White House are all agreed that the future of Social Security will be a two-tier system. In the debate, what did Romney have to say?

ROMNEY: “[N]either the president nor I are proposing any changes for any current retirees or near retirees, either to Social Security or Medicare. So if you’re 60 or around 60 or older, you don’t need to listen any further. But for younger people, we need to talk [dread words!] about what changes are going to be occurring.”

Romney too. So, that to me is what the debate boils down to, and it’s not news: A two-tier system of Social Security, with the battle to be fought out over privatization. (And you can bet that the battle, despite the White House’s brave deceptive words, won’t be about whether, but about when, how, and how much. After all, when you’ve mandated that people go on the market for a health exchange, why not mandate they go on the market for a retirement exchange? (Heck, a body organ exchange, but that might be carrying the good thing of a market state too far.))

How the young are going to handle both privatized retirement and massive debt is an open question, but no doubt the confidence fairy or the magicians of the marketplace have a ready answer.

One could wish that the entire debate was not framed as “I’ve got mine” — as Romney gracefully puts, “you don’t need to listen any further” — “now you get yours,” since, after all, what the legacy parties are doing, by advocating a two-tier system, is encouraging elders to betray their own children and grandchildren to age without dignity when their time comes. What a degraded, debased, vile, repellent, and let’s-just-go-ahead-and-call-it-evil political class we have today, to be sure. And yet, they think they know us so well, trying to work this con. Let’s hope they’re wrong.

* Slogan of the day: Forward to Shared Sacrifice With The Obama!

SOURCE IS THE NAKED CAPITALISM EMAIL OF 10/6/2012

[Demeter]

32. Honey, The Americans Shrank The Apple Trees

http://www.npr.org/blogs/thesalt/2012/10/08/162305162/honey-the-americans-shrank-the-apple-trees?ft=1&f=1001

When Zarrina Mulloboeva got invited to go apple picking the other day, she thought it would be a taste of home. She's an exchange student from Tajikistan, in central Asia — a country close to the ancestral homeland of apples...But when Mulloboeva arrived at the orchard, she was startled to find that in America, this land of skyscrapers and super-sized portions, the apple trees are midgets. Back in Tajikistan, apples hang on trees that are big as houses, and it takes real work to get at them. Here, she didn't even need a ladder.

Actually, American apple trees used to be big, too. So what made them shrink? Very simple: Dwarfing rootstocks. "It all began a hundred years ago," says Gennaro Fazio, a geneticist with the USDA's Plant Genetic Resources Unit in Geneva, New York. In 1913, Fazio says, a scientist named Ronald Hatton went to work at a new agricultural research center in the small town of East Malling, in England. There, he started to catalog the "rootstocks" being used by apple growers across Europe.

Apple growers have known for centuries that they can graft together the roots of one tree variety with the fruit-bearing branches of another. That way, they can create a tree that combines the best of both: strong, disease-resistant roots with branches that yield delicious apples. Hatton was intrigued by "a group of rootstocks that will dwarf the tree and make it more productive," says Fazio. Essentially, those roots channel the tree's energy away from making wood and toward growing fruit. He published information about them and distributed several of the most promising ones to apple growers But it took a long time for the industry to come around to more petite trees, Fazio says. Most growers couldn't believe that small trees could be more productive than big ones. With time, though, growers realized that if they used dwarfing rootstocks and planted their trees closer together, they could increase their harvest of apples per acre by 200 to 300 percent. And they also discovered it's a lot easier to pick the fruit from dwarf trees and spray them, too (if you are inclined to spray your trees). By now, smaller trees are the rule in the United States and Europe. In many other places, though — including the central Asian homeland of apples — you'll still need a tall ladder to get your hands on the fruit.

[xchrom]

35. EUROPE STOCKS DOWN AS GLOBAL GROWTH WOES INTENSIFY

http://hosted.ap.org/dynamic/stories/W/WORLD_MARKETS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-10-08-06-46-49

PARIS (AP) -- Europe's stock markets fell Monday ahead of a two-day meeting of its finance ministers while the World Bank cut its growth forecasts for Asia.

Investors were also disappointed by falling commodity prices and a mixed finish on Wall Street on Friday despite a drop in the U.S. unemployment rate. There was also some frustration regarding mainland Chinese shares, which opened to losses after a weeklong holiday.

European stocks fell in early trading. By midmorning in London, Britain's FTSE 100 was off 0.75 percent at 5,826.94, Germany's DAX slid 1.4 percent to 7.289.14 and France's CAC 40 lost 1.4 percent to 3,409.81.

Wall Street looked as though it would open lower with Dow Jones industrial futures down 0.4 percent to 13,485 with S&P 500 futures down the same amount at 1,449.30.

[xchrom]

37. US FUTURES HEADING LOWER ON DOUR FORECAST FOR ASIA

http://hosted.ap.org/dynamic/stories/U/US_WALL_STREET_PREMARKET?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-10-08-08-30-04

NEW YORK (AP) -- U.S. stock futures are heading lower with economists growing increasingly pessimistic about Asia as well as expectations for a leaden performance from major U.S. corporations as the earnings season kicks off this week.

Dow Jones industrial futures are down 45 points to 13,491. The broader S&P futures have given up 5.7 points to 1,449.80. Nasdaq futures are down 13.25 points to 2,791.

The World Bank on Monday warned of the possibility of a "more pronounced slowdown" in China, the world's second largest economy, and it cut its growth forecast for all of Asia.

Major U.S. corporations begin posting results for the latest quarter this week, starting with Alcoa on Tuesday.

[xchrom]

38. Merkel 'Must Stay Tough in Athens'

http://www.spiegel.de/international/europe/german-press-comments-on-angela-merkel-s-greek-visit-on-tuesday-a-860031.html


Chancellor Angela Merkel's trip to Athens on Tuesday, her first since the outbreak of the euro crisis there two-and-a-half years ago, is intended as a show of German solidarity with the recession-plagued nation, but for thousands of Greeks it will be an opportunity to vent their fury at her for insisting on crippling austerity in return for financial aid.

The German leader has become a hate figure to many Greeks and has often been portrayed as a Nazi in protest signs and on newspaper covers. Tuesday's trip is being billed in Germany as the most difficult of her career. The Greek Sunday newspaper Proto Thema gave a taste of what she can expect on the streets of Athens by running the headline "Heil!"
Other newspaper commentators in Greece were more moderate, though, urging Merkel to take a look at how the nation is suffering.

"She does not come to support Greece, which her policies have brought to the brink. She comes to save the corrupt, disgraced and servile political system," said Alexis Tsipras, who leads the opposition Syriza alliance. "We will give her the welcome she deserves."



***when the other guy is bleeding to death on the floor -- how hard is it to be tough?
and what does she want from a corpse, anyway?

[xchrom]

39. Three former Anglo executives sent for trial

http://www.irishtimes.com/newspaper/breaking/2012/1008/breaking19.html


Three former executives of Anglo Irish Bank have been sent forward for trial at the Circuit Criminal Court on charges of providing unlawful financial assistance to 16 individuals in July 2008.

The bank's former chairman Seán FitzPatrick, former finance director Willie McAteer and former managing director of the bank in Ireland Pat Whelan were served the books of evidence - amounting to nine volumes in three boxes - in court this morning.

The men appeared before Judge Cormac Dunne at the Criminal Courts of Justice next to the Phoenix Park in Dublin, sitting beside each other for the first time since they were charged in July. They did not speak to each other during the ten-minute hearing.

Mr McAteer and Mr Whelan were accompanied by their wives, while Mr FitzPatrick attended court with his sister and his daughter. Mr FitzPatrick wore a navy suit, light blue shirt and pink tie. Mr McAteer wore a navy suit, blue tie and light blue shirt. Mr Whelan wore a navy suit and shirt but no tie.

[xchrom]

40. China firms 'should be kept from US'

http://www.irishtimes.com/newspaper/breaking/2012/1008/breaking5.html

?ts=1349704771
Huawei and ZTE have dismissed allegations in a US report that potential Chinese state influence on firms poses a security threat.

China's top telecommunications gear makers should be shut out of the US market because potential Chinese state influence on them poses a security threat, the US House of Representatives' Intelligence Committee said in a draft of a report to be released today.

US intelligence must stay focused on efforts by Huawei Technologies and ZTE to expand in the United States and tell the private sector as much as possible about the purported espionage threat, the panel leaders said, based on their 11-month investigation of the pair.

Employee-owned Huawei is the world's second-biggest maker of routers, switches and other telecommunications equipment after Sweden's Ericsson. ZTE ranks fifth.

The broadside comes as Huawei mulls a possible initial public offering, sources said, as part of a possible effort to overcome suspicions that have all but blocked its US efforts, including business combinations.

[xchrom]

41. North's private sector shrinks {ireland}

http://www.irishtimes.com/newspaper/breaking/2012/1008/breaking33.html


Northern Ireland’s private sector shrank last month, with dwindling new business dragging the index down.

The Ulster Bank Northern Ireland Purchasing Managers’ Index showed a sharp decline, with the seasonally adjusted Business Activity Index posting 44.6. That was below the 50 mark that separates expansion from contraction, but a rise on August’s 42.4 reading.

New orders continued their downward trend, falling for the 58th month in a row.

Input costs continued to rise, mainly due to higher fuel costs, but that increase was not passed on to clients as strong competition forced prices lower during the month.

[xchrom]

42. Bank Profit Leading S&P 500 as U.S. Income Growth Falters

http://www.bloomberg.com/news/2012-10-07/bank-profits-leading-s-p-500-as-u-s-earnings-growth-sputters.html

As third-quarter earnings season begins, the companies analysts are most bullish about are the ones whose stock prices are farthest below their highs -- banks.

While financial institutions in the Standard & Poor’s 500 Index climbed 24 percent in 2012 for the biggest rally in nine years, they remain 58 percent below the record of February 2007, according to data compiled by Bloomberg. Signs of a housing recovery prompted Wall Street firms to raise estimates for profit growth to 21 percent for the third quarter and 32 percent in the fourth, the most of 10 S&P 500 industries.

Bulls say banks will continue to rally as Federal Reserve stimulus boosts earnings and helps companies from BB&T Corp. to KeyCorp and Wells Fargo & Co. (WFC) rebound from the 84 percent drop during the financial crisis. Bears say gains will be limited to traditional lenders and increased regulation will drag down firms that depend on trading and underwriting for revenue.

“As transactional volume increases for consumer, housing and business credit, there is an opportunity to increase earnings” among regional lenders, said Michael Shaoul, chairman of New York-based Marketfield Asset Management, which oversees $3 billion. Firms outside of the “purer banking model” face too much regulation, he said in an Oct. 3 e-mail.

[DemReadingDU]

43. Karl Denninger: Caution: Do You Bank Online?

Heads up!


10/8/12 Karl Denninger: Caution: Do You Bank Online?

If so, you had better be paying attention -- and so better your bank. There are reports circulating of an "impending" massive cyberheist operation that is targeted at consumers who use online banking services -- which is, unfortunately, a huge percentage of people.

There have been multiple "denial-of-service" attacks aimed at large banks over the last couple of months; you have probably seen the reports and might have even been impacted by them. This is a bit different, however, in that it looks like perhaps those were preparatory actions -- or intended to insert some sort of "worm." In any event it's not good; reports are that the "ringmasters" are in Russia and Eastern Europe, long a hotbed of this sort of activity.

The gist of the attack is that most US banks do not require "two factor" authentication before initiating a wire transfer. This is especially important because once a wire transfer is confirmed it is really gone, and in general cannot be recalled. It appears that they intend to deploy (or may have already deployed!) trojan horse programs that capture keystrokes, obtain login information and then en-masse initiate wire transfers out of the United States from the victims' accounts before the banks can react, effectively draining huge sums of money and distributing the proceeds among the crooks.

Now there's always the possibility that the rather-brash braggadocio being displayed by the "distributors" of these threats and announcements is nothing other than a police sting operation. But in Russia nobody is ever really sure. My experience with cyberhackers is that the Chinese are more-interested in commercial advantage (e.g. stealing your source code, CAD drawings, etc) while the Russians and Eastern Europeans, if they break into your network, are more-likely to leave behind some sort of nasty that is intended to find a way to rob you financially. Both are bad news but for the consumer the Chinese hacker is pretty much an annoyance as you don't have what he wants. The Russian dude is a different matter entirely.

The biggest challenge is that today's hacker looking to rob you is more-interested in getting some sort of "quiet" keylogger or other trojan into your system. These are very difficult to detect, as they're not designed to disrupt your system's operation in any way -- just to look for anything that appears to be a password and then sending it on to the criminals. Do not be fooled if you're on a Mac into thinking you're impervious either -- and in particular be very careful with mobile devices, most of which are far weaker than their desktop counterparts when it comes to security.

I can't judge the credibility of this threat accurately, but it has attracted the attention of a fair number of folks who are sounding warning bells, and at least thus far the information appears to be reasonably credible. Tickerforum and my home network systems (which include a pretty-robust firewall) attract over a thousand penetration attempts on an average day, and sometimes become the target of various denial-of-service games. That's all in a day's "ordinary" for sites around the Internet; this is a bit different as the intent isn't to annoy or harass, it's to steal and you're the target. Be wary.

http://market-ticker.org/cgi-ticker/akcs-www?post=212456

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44. Euro Weakens With Asian Stocks as Aussie Touches Low

http://www.bloomberg.com/news/2012-10-08/euro-weakens-with-asian-stocks-as-aussie-touches-low.html

Stocks, commodities and the euro fell as European finance ministers prepared to meet to discuss the region’s debt crisis, while the yen gained and Chinese shares slid as the World Bank forecast slowing growth in East Asia.

The MSCI All-Country World Index fell 0.8 percent at 10:35 a.m. New York time and the Standard & Poor’s 500 Index lost 0.5 percent. The euro weakened against 13 of 16 major peers and the yen gained versus all 16, while the rand dropped to the lowest since April 2009. China’s yuan touched the highest level since 1993, while the Shanghai Composite Index (SHCOMP) slipped on the first trading day after a week’s holiday. German 10-year note yields fell 4 basis points. Silver led the S&P GSCI gauge of commodities lower.

European finance ministers will meet in Luxembourg to discuss Spain’s finances and closer banking cooperation, while German Chancellor Angela Merkel visits Greece tomorrow for the first time since the crisis erupted. Growth in developing East Asia will probably slide to an 11-year low of 7.2 percent this year, the World Bank estimates. Alcoa Inc. (AA) unofficially starts the U.S. earnings season with the release of its third-quarter numbers tomorrow, the fifth anniversary of the record highs in the S&P 500 and Dow Jones Industrial Average.

“We’re back to dealing with the issues in Europe,” Bruce McCain, chief investment strategist at the private-banking unit of KeyCorp in Cleveland, said in a phone interview today. His firm oversees $20 billion. “We’re going back to a period where investors become less enthusiastic as they realize the problems of the world have not gone away.”