STOCK MARKET WATCH -- Friday, 16 August 2013

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Friday, 16 August 2013[font color=black][/font]

SMW for 15 August 2013

AT THE CLOSING BELL ON 15 August 2013
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Dow Jones 15,112.19 -225.47 (-1.47%)
S&P 500 1,661.32 -24.07 (-1.43%)
Nasdaq 3,606.12 -63.15 (-1.72%)


[font color=green]10 Year 2.49% -0.03 (-1.19%)
30 Year 3.58% -0.03 (-0.83%)[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
Wall Street on Parade
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[font color=black][font size=2]Handy Links - Essential Reading:[/font][/font]
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Matt Taibi: Secret and Lies of the Bailout


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[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
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LegitGov
Open Government
Earmark Database
USA spending.gov
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[font color=black][font size=2]Handy Links - Videos:[/font][/font]
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Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
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[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison
6/4/12 Matthew Kluger, lawyer, sentenced to 12 years in prison, along with co-conspirator stock trader Garrett Bauer (9 years) and co-conspirator Kenneth Robinson (not yet sentenced) for 17 year insider trading scheme.
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."
8/22/12 Doug Whitman, Whitman Capital LLC hedge fund founder, convicted of insider trading following a trial in which he spent more than two days on the stand telling jurors he was innocent
10/26/12 UPDATE: Former Goldman Sachs director Rajat Gupta sentenced to two years in federal prison. He will, of course, appeal. . .
11/20/12 Hedge fund manager Matthew Martoma charged with insider trading at SAC Capital Advisors, and prosecutors are looking at Martoma's boss, Steven Cohen, for possible involvement.
02/14/13 Gilbert Lopez, former chief accounting officer of Stanford Financial Group, and former controller Mark Kuhrt sentenced to 20 yrs in prison for their roles in Allen Sanford's $7.2 billion Ponzi scheme.
03/29/13 Michael Sternberg, portfolio mgr at SAC Capital, arrested in NYC, charged with conspiracy and securities fraud. Pled not guilty and freed on $3m bail.
04/04/13 Matthew Marshall Taylor,fmr Goldman Sachs trader arrested, charged by CFTC w/defrauding his employer on $8BN futures bet "by intentionally concealing the true huge size, as well as the risk and potential profits or losses associated."
04/04/13 Matthew Taylor admits guilt, makes plea bargain. Sentencing set for 26 June; faces up to 20 years in prison but will likely only see 3-4 years. Says, "I am truly sorry."
04/11/13 Ex-KPMG LLP partner Scott London charged by federal prosecutors w/passing inside tips to a friend in exchange for cash, jewelry, and concert tickets; expected to plead guilty in May.
08/01/13 Fabrice Tourré convicted on six counts of security fraud, including "aiding and abetting" his former employer, Goldman Sachs
08/14/13 Javier Martin-Artajo and Julien Grout charged with wire fraud, falsifying records, and conspiracy in connection with JP Morgan's "London Whale" trade.









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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]

[Turbineguy]

1. The Fed may start witholding

the Bernankaine injections..... Wallstreeters are addicted to it.

[Demeter]

2. The Fed is a Pusher

Not gonna wean off a "customer"

[Turbineguy]

4. Yes

[Hotler]

12. ...........

: .................................

[Demeter]

3. A word the the Wise

Don't challenge Tansy Gold on the subject of "shredded wheat". Just saying....


And by golly, it's another Weekend, coming straight at ya!

I have a topic, the life of a fascinating man of whom I heard on NPR: Fritz Haber. I think his life and times worthy of consideration.

If you have another, more immediate topic, I can be persuaded to push him off....

[Demeter]

11. I think Bert Lance will bump Fritz Haber to another weekend

Last edited Fri Aug 16, 2013, 07:42 AM - Edit history (1)

Good ole boy Bert was the First Bankster....in this latest round of banksterism.

And if you saw Fritz there, it's because I was typing in my sleep last night....

[Demeter]

5. SEC bars Conrad Black from U.S. directorships

http://news.yahoo.com/sec-bars-conrad-black-u-directorships-must-pay-205605224.html

The U.S. securities regulator on Thursday banned former press baron Conrad Black from acting as a director of a U.S. company and said he must pay $4.1 million in restitution, in a settlement that ends a long-standing lawsuit over Black's dealings as the head of the Hollinger media empire...The final judgment by the U.S. Securities and Exchange Commission followed Black's appeal of an October 2012 SEC judgment that ordered him to pay $6.1 million....The SEC deal clears the way for the Ontario Securities Commission, Canada's major securities regulator, to proceed with its own case against Black and two other former Hollinger executives...In a hearing scheduled to begin on Friday, the regulator wants to ban Black from buying or trading in securities and from becoming a director of a public company in Ontario. Black described the OSC action as a "technical matter...I am not aware of any monetary claim, or of any ground for one," he said.

The $4.1 million will be paid to Chicago Newspaper Liquidation Corp, formerly known as the Sun-Times Media Group, which was a Hollinger successor company in the United States...In its heyday, Hollinger International operated a raft of newspapers that included the Chicago Sun-Times, the Jerusalem Post, Britain's Daily Telegraph and the National Post in Black's native Canada. (Black, 68, gave up Canadian citizenship when he became a member of Britain's House of Lords)...Black was found guilty in 2007 of scheming with partner David Radler and other executives to siphon off millions of dollars from the sale of newspapers as they unwound Hollinger International. But two of his three fraud convictions were later voided and his 78-month sentence was shortened to 42 months....He was released from U.S. prison more than a year ago after serving a sentence for fraud and obstruction of justice... He served 37 months, was released in May 2012 and now lives in Toronto.

"In the circumstances, and given the correlation of forces and the defamation I endured, it is a very happy ending," Black said in an email, noting that a libel suit related to the affair had ended in a settlement. "The collapse of the onslaught against me speaks for itself."

YES, BUT IS IT JUSTICE?

[Demeter]

6. Judge declines to approve AMR restructuring

http://news.yahoo.com/judge-says-doubts-amr-bankruptcy-plan-145011808.html

A bankruptcy judge on Thursday held off approval of a restructuring plan for American Airlines, citing a U.S. government challenge this week to the airline's proposed merger with US Airways Group Inc. American's parent company, AMR Corp , worked out the $11 billion merger with US Airways as part of a plan to exit bankruptcy, where it has been since 2011.

Judge Sean Lane had been expected to approve the plan at a hearing on Thursday. But, two days before the hearing, the U.S. Justice Department sued to block the merger, saying it would lead to higher fares and hurt consumers. Instead of approving the plan, Lane gave AMR and its creditors until August 23 to submit briefs on how he should proceed. Lane said he needed more information about the appropriateness of approving the restructuring plan in light of the antitrust challenge. AMR and US Airways, which have said they will fight the antitrust lawsuit, and their lawyers argued on Thursday that Lane should still approve the bankruptcy plan.

A lawyer for US Airways, Daniel Wall, said the Justice Department's timing, just two days before the final hearing, was "audacious."

"Don't allow the bankruptcy issues, which are complicated enough on their own, to be held hostage to very late-filed antitrust issues," Wall told the judge.

But Lane cited "lingering doubts" about the benefits of approving a bankruptcy plan before the antitrust issue is resolved. "What would be the point of entering a confirmation order ... if, in fact, there's a lot more work to be done?" he said.

Under the restructuring plan, a reorganization cannot go ahead without antitrust approval for the merger, which could take months. If the Justice Department ultimately succeeds in blocking the merger, it would put AMR's restructuring back at square one, requiring it to forge new strategies for paying back creditors. AMR shareholders, who stand to receive a 3.5 percent stake in the new entity under the merger, would likely be wiped out under any plan that excludes a merger, restructuring experts have said.

Lane said he had strongly considered canceling Thursday's hearing but decided to give parties an open forum to discuss the antitrust challenge. The bankruptcy plan has the support of nearly all of AMR's key creditors, and Lane had already signed off on the merger and an initial outline of the restructuring plan that incorporates it. Absent the antitrust challenge, Thursday's hearing would have been the final step in AMR's exiting bankruptcy and implementing its merger.

[Demeter]

7. BUYOUTS-Ruling against Sun Capital could have wider private equity impact

http://in.reuters.com/article/2013/08/07/buyouts-suncapital-scottbrass-idINL1N0G81TV20130807

In a court case that could add a new risk factor to some private equity deals, the First Circuit Court of Appeals last month ruled in favor of the New England Teamsters and Trucking Industry Pension Fund, which argued that two investment funds managed by Sun Capital Partners were liable for $4.5 million in pension liabilities for Scott Brass Inc. The Sun Capital portfolio company went bankrupt in 2008. The ruling dials up the potential risks for sponsors contemplating buying companies with employee pension obligations. Experts said the ruling could lower the price of some deals, and lead some firms to steer clear of troubled companies that have pension obligations, even if they are the only potential suitors willing to try and rescue them.

Scott Brass is a Rhode Island-based maker of brass and copper products that was purchased by two Sun Capital funds, Sun Capital Partners III LP and Sun Capital Partners IV LP, in 2006. Things quickly went south after the price of copper fell sharply; the company declared bankruptcy two years later. Soon after Scott Brass went bankrupt, the Teamsters pension fund that provided benefits for some of Scott Brass's unionized workers presented Sun Capital with a bill for $4.5 million in "pension withdrawal liabilities." Such withdrawal liabilities are the cost to a firm for stopping regular contributions to a pension plan that covers workers at multiple companies.

Sun Capital claimed in court that its funds were passive investment vehicles that didn't meet the criteria under the Employee Retirement Income Security Act, or ERISA, that would require the funds to assume these liabilities (an argument that a corporate acquirer would be unable to make). But the First Circuit Court, which covers much of New England, ruled otherwise, saying that Sun Capital was engaged in a "trade or business" through its management and operational control of Scott Brass, and wasn't just a "passive investor." The ruling not only prevented Sun Capital from avoiding these pension obligations. It also affirmed that Sun Capital was a "business," whose primary purpose was "to seek out potential portfolio companies that are in need of extensive intervention with respect to their management and operations, to provide such intervention, and then to sell the companies." This active relationship was explicit, according to the court, since Scott Brass paid Sun Capital for the management services it provided to the portfolio company. These fees offered "a direct economic benefit" to Sun Capital in exchange for its business services, countering Sun Capital's claims that its only benefit was passive investment income from dividends and capital gains. Moreover, said the court, these fees for management services would not flow to a fund's other investors, its limited partners.

"This was the right decision," said Catherine Campbell, a pension attorney at Feinberg Campbell and Zack, which represented the New England Teamsters in the case. She said "private equity firms pitch to investors by saying that they apply their capital, people and expertise to turn companies around and then sell them at a profit. How can you do that and be a passive investor, as they were claiming in court?"

But Steve Judge, the chief executive of the Private Equity Growth Capital Council, the industry's main trade group, said that argument was too simple since there were many different types of private equity firms, many of which don't do turnarounds or don't seek full control of companies in their portfolios...The Private Equity Growth Capital Council's Judge worried that if this ruling were to be applied widely, "it would upend longstanding case law on which PE firms, investors and portfolio companies have long relied."

HE SAYS THAT LIKE IT WOULD BE A BAD THING

....MORE

[Demeter]

8. Goldman Sachs Cooperating With U.S. Credit-Swaps Inquiry

http://www.bloomberg.com/news/2013-08-08/goldman-sachs-cooperating-with-u-s-credit-swaps-inquiry.html


Goldman Sachs (GS) Group Inc., the fifth-largest U.S. bank by assets, said it’s cooperating with the U.S. Department of Justice’s four-year-old antitrust probe into the credit-default swaps market.

The firm has received civil investigative demands related to the investigation, New York-based Goldman Sachs said in a regulatory filing today. The bank was among more than a dozen financial institutions accused by the European Union last month of colluding to curb competition in credit derivatives.

Morgan Stanley (MS) and Citigroup Inc. also said in filings last week that they were cooperating with the probe. The Justice Department sent civil investigative notices in July 2009 to the banks that own London-based Markit Group Ltd., a provider of data on derivatives and bonds, to find out if they had unfair access to price information, three people familiar with the matter said at the time.

Markit’s shareholders included Goldman Sachs, JPMorgan Chase & Co. (JPM), Bank of America Corp., and Royal Bank of Scotland Group Plc, according to filings with the U.K.’s Companies House at the time. Bloomberg LP, the owner of Bloomberg News, competes with Markit in selling information to the financial-services industry.

TURNING WORMS AND GNAWING CANKERS!

[Demeter]

9. Brazil won't rule out retaliation if U.S. cotton payments end

http://www.reuters.com/article/2013/08/08/brazil-cotton-usa-idUSL1N0G91PC20130808

Brazil's foreign minister, Antonio Patriota, said on Thursday he could not rule out retaliation if the United States stopped paying Brazil monthly compensation for controversial cotton subsidies. The dispute flared up days before the arrival of U.S. Secretary of State John Kerry, who is to plan an October state visit to Washington by President Dilma Rousseff. The payments to Brazil could be suspended under automatic spending cuts that would take effect if the Obama administration and Congress fail to agree on the size of the U.S. deficit for the fiscal year starting Oct. 1.

Ties between the two countries have been roiled by recent revelations of U.S. spying on Brazil's Internet communications.

"We are going to study our options and one option that cannot be excluded is cross-retaliation," Patriota told reporters in Rio de Janeiro, where he met with Canada's foreign minister John Baird. "We are facing an interesting situation that will require a decision by Brazil," he said.

Brazil, the United States' top trade partner in South America, has already identified possible targets for retaliation. In March 2010, before Washington agreed to the payments, the Brazilian government published a list of some 100 U.S. goods that could be subjected to import tariffs. The list included a tariff increase on cars to 50 percent from 35 percent, a rise on non-hard wheat tariffs to 30 percent from 10 percent and a 48 percent levy on milk powder, up from 28 percent. Cotton would be charged a 100 percent import tariff, the highest on the list. The foreign ministry estimated the annual impact of the retaliation would be $591 million. Brazil was also considering lifting patent protection on U.S. products. Brazil won a challenge against U.S. cotton subsidies at the World Trade Organization in 2004 that led to an agreement under which Brazil said it would not impose $830 million in sanctions against U.S. products if the United States paid into an assistance fund for Brazilian cotton farmers. The temporary resolution, under which the United States has paid Brazil $147 million a year since 2010, was supposed to last for a couple of years while Washington wrote a new farm law that would eliminate long-standing U.S. cotton subsidies. The U.S. Congress is months behind schedule in drawing up the legislation. The Obama administration did not propose carrying the payments beyond September on the expectation that a new farm bill would end the dispute.

U.S. Secretary of Agriculture Tom Vilsack visited Brazil earlier this week, accompanied by Senate Agriculture Committee chair Debbie Stabenow, and told Brazilian authorities that the cotton compensation payments would be temporarily suspended because of the automatic spending cuts. Vilsack told the Brazilians he does not have the authority to make the payments and that they would have to wait until the new farm law resolved the dispute, according to the agriculture newsletter, The Hagstrom Report. The Brazilians said their patience was not endless, the newsletter reported.

[Demeter]

10. Americans Giving Up Passports Jump Sixfold as Tougher Rules Loom

HERE'S YOUR HAT; WHAT'S YOUR HURRY? OR, GETTING OUT WHILE THE GETTING'S GOOD?

http://www.bloomberg.com/news/2013-08-09/americans-giving-up-passports-jump-sixfold-as-tougher-rules-loom.html

Americans renouncing U.S. citizenship surged sixfold in the second quarter from a year earlier as the government prepares to introduce tougher asset-disclosure rules. Expatriates giving up their nationality at U.S. embassies climbed to 1,131 in the three months through June from 189 in the year-earlier period, according to Federal Register figures published today. That brought the first-half total to 1,810 compared with 235 for the whole of 2008.

The U.S., the only nation in the Organization for Economic Cooperation and Development that taxes citizens wherever they reside, is searching for tax cheats in offshore centers, including Switzerland, as the government tries to curb the budget deficit. Shunned by Swiss and German banks and facing tougher asset-disclosure rules under the Foreign Account Tax Compliance Act, more of the estimated 6 million Americans living overseas are weighing the cost of holding a U.S. passport.

“With the looming deadline for Fatca, more and more U.S. citizens are becoming aware that they have U.S. tax reporting obligations,” said Matthew Ledvina, a U.S. tax lawyer at Anaford AG in Zurich. “Once aware, they decide to renounce their U.S. citizenship.”

Fatca requires foreign financial institutions to report to the Internal Revenue Service information about financial accounts held by U.S. taxpayers, or held by foreign entities in which U.S. taxpayers hold a substantial ownership interest. It was estimated to generate $8.7 billion over 10 years, according to the congressional Joint Committee on Taxation. The 2010 Fatca law requires banks to withhold 30 percent from “certain U.S.-connected payments” to some accounts of American clients who don’t disclose enough information to the IRS. While banks can sign agreements to report to the IRS individually, many are precluded from doing so by privacy laws in their jurisdictions.

The Treasury Department last month announced that the IRS will delay the start of Fatca by six months until July 1, 2014, to give foreign banks time to comply with the law. The extension of the act follows a previous one-year delay announced in 2011. Financial institutions including Canada’s Toronto-Dominion Bank (TD) and Allianz SE of Germany have expressed concerns that Fatca is too complex. The latest delay comes after the Swiss government agreed in February to simplifications that will help the country’s banks implement Fatca.

MORE...THE NITTY GRITTY

[AnneD]

30. As someone wanting to leave...

I am not a wealthy person but I am more and more disenchanted with the way things are going. I may take my hard earned assets and go to a kinder gentler place. I refuse to support facism. THe America I use to swear allegience to is long gone.

[Demeter]

31. I know how you feel

I've decided to stay (like I had a choice) and fight. Fight dirty, too.

Perhaps, if things improve personally, I'll check out Iceland. But that's in "retirement".

[jtuck004]

34. Where do people think about moving to? Anyone?

Without revealing too much here, it would be interesting, and perhaps enlightening, to have a conversation about where.

I've thought about Canada, but they don't want any more older folks, I think. Denmark would be interesting, but like other countries they have fairly restrictive immigration policies, so even if one wanted to live and work there they may not be able to.

My wife would just as soon go South, (not Mexico, but South America) but we have to think about health care for her rheumatoid arthritis. But I left Oklahoma because I was tired of burning up every summer, so that's probably out

Anyone else thought about where they might go, what you might do? It's not a silly question any longer, I think.

[Demeter]

35. Parts of South America Are NOT Horrible

Ecuador is cool and dry, because it's mountainous. It's a continent, after all.

As I mentioned: Iceland.

[DemReadingDU]

36. i'm staying where I am

I hate moving.

[Demeter]

13. Rockefeller impostor gets 27-to-life for San Marino man's murder

WHILE THE REAL ONES GO FREE, DESPITE MORE HEINOUS CRIMINALITY...

http://www.latimes.com/news/local/la-me-rockefeller-sentencing-20130816,0,6167399.story

Christian Karl Gerhartsreiter was convicted of killing his landlady's son, who went missing in 1985. The victim's body was found in 1994....A German-born fabulist who masqueraded as a member of the Rockefeller family was sentenced Thursday to 27-years-to-life in prison for killing his San Marino landlady's son in 1985. Christian Karl Gerhartsreiter, acting in his own defense, addressed the court before sentencing and blamed the slaying of 27-year-old John Sohus on the man's wife, Linda.

"I want to assert my innocence," said Gerhartsreiter, wearing a blue jail jumpsuit with his hands cuffed in front of him. "I firmly believe that the victim's wife killed the victim, but, be that as it may … I did not commit the crime."

Gerhartsreiter, 52, was convicted in April of murdering Sohus with a blunt object. Sohus' body was found in 1994, buried three feet deep behind a guesthouse where Gerhartsreiter had been living on the Lorain Road property, where the couple lived with John's mother in the main house. Gerhartsreiter left San Marino — where he was known as British aristocrat Christopher Chichester — shortly after the couple's disappearance in 1985. He reemerged on the East Coast, pretending to be television and film producer Christopher Crowe before convincing some on Wall Street that he was a bond trader. He eventually began saying he was Clark Rockefeller, a scion of the wealthy family. He gained entry to exclusive social clubs and fooled many, including his Harvard-educated wife.

Linda Sohus, who disappeared at age 29, has never been found.

In an emotional speech before the judge's sentence, John Sohus' half sister, Ellen Sohus, addressed Gerhartsreiter directly.

"Why did you kill my brother?" she asked. "What happened to Linda? I believe Linda is dead and that you are responsible for her death."

[Demeter]

14. Moment of Truthiness By PAUL KRUGMAN

We all know how democracy is supposed to work. Politicians are supposed to campaign on the issues, and an informed public is supposed to cast its votes based on those issues, with some allowance for the politicians’ perceived character and competence. We also all know that the reality falls far short of the ideal. Voters are often misinformed, and politicians aren’t reliably truthful. Still, we like to imagine that voters generally get it right in the end, and that politicians are eventually held accountable for what they do. But is even this modified, more realistic vision of democracy in action still relevant? Or has our political system been so degraded by misinformation and disinformation that it can no longer function?

Well, consider the case of the budget deficit — an issue that dominated Washington discussion for almost three years, although it has recently receded. You probably won’t be surprised to hear that voters are poorly informed about the deficit. But you may be surprised by just how misinformed. In a well-known paper with the discouraging title, “It Feels Like We’re Thinking,” the political scientists Christopher Achen and Larry Bartels reported on a 1996 survey that asked voters whether the budget deficit had increased or decreased under President Clinton. In fact, the deficit was down sharply, but a plurality of voters — and a majority of Republicans — believed that it had gone up.

I wondered on my blog what a similar survey would show today, with the deficit falling even faster than it did in the 1990s. Ask and ye shall receive: Hal Varian, the chief economist of Google, offered to run a Google Consumer Survey — a service the company normally sells to market researchers — on the question. So we asked whether the deficit has gone up or down since January 2010. And the results were even worse than in 1996: A majority of those who replied said the deficit has gone up, with more than 40 percent saying that it has gone up a lot. Only 12 percent answered correctly that it has gone down a lot.

Am I saying that voters are stupid? Not at all. People have lives, jobs, children to raise. They’re not going to sit down with Congressional Budget Office reports. Instead, they rely on what they hear from authority figures. The problem is that much of what they hear is misleading if not outright false. The outright falsehoods, you won’t be surprised to learn, tend to be politically motivated. In those 1996 data, Republicans were much more likely than Democrats to hold false views about the deficit, and the same must surely be true today. After all, Republicans made a lot of political hay over a supposedly runaway deficit early in the Obama administration, and they have maintained the same rhetoric even as the deficit has plunged. Thus Eric Cantor, the third-ranking Republican in the House, declared on Fox News that we have a “growing deficit,” while Senator Rand Paul told Bloomberg Businessweek that we’re running “a trillion-dollar deficit every year.” Do people like Mr. Cantor or Mr. Paul know that what they’re saying isn’t true? Do they care? Probably not. In Stephen Colbert’s famous formulation, claims about runaway deficits may not be true, but they have truthiness, and that’s all that matters. Still, aren’t there umpires for this sort of thing — trusted, nonpartisan authorities who can and will call out purveyors of falsehood? Once upon a time, I think, there were. But these days the partisan divide runs very deep, and even those who try to play umpire seem afraid to call out falsehood. Incredibly, the fact-checking site PolitiFact rated Mr. Cantor’s flatly false statement as “half true.” Now, Washington still does have some “wise men,” people who are treated with special deference by the news media. But when it comes to the issue of the deficit, the supposed wise men turn out to be part of the problem. People like Alan Simpson and Erskine Bowles, the co-chairmen of President Obama’s deficit commission, did a lot to feed public anxiety about the deficit when it was high. Their report was ominously titled “The Moment of Truth.” So have they changed their tune as the deficit has come down? No — so it’s no surprise that the narrative of runaway deficits remains even though the budget reality has completely changed. Put it all together, and it’s a discouraging picture. We have an ill-informed or misinformed electorate, politicians who gleefully add to the misinformation and watchdogs who are afraid to bark. And to the extent that there are widely respected, not-too-partisan players, they seem to be fostering, not fixing, the public’s false impressions.

So what should we be doing? Keep pounding away at the truth, I guess, and hope it breaks through. But it’s hard not to wonder how this system is supposed to work.

THIS IS THE CONDITION THAT BROUGHT FORTH BRADLEY MANNING, EDWARD SNOWDEN, AND OTHER WHISTLEBLOWERS....



http://www.nytimes.com/2013/08/16/opinion/krugman-moment-of-truthiness.html

[Demeter]

15. No Banker Left Behind NYT EDITORIAL

http://www.nytimes.com/2013/08/16/opinion/no-banker-left-behind.html

The Detroit bankruptcy case has been cast as a contest between bondholders and pensioners that can be resolved only by shared sacrifice. In principle, we have no problem with that, though in practice, the pensioners’ fair share will have to take into account their extreme vulnerability: Public pensions are not federally insured and many municipal retirees do not receive Social Security.

What we do have a problem with is shared sacrifice that does not seem to apply to the big banks that abetted Detroit’s descent into bankruptcy. Last month, just days before its bankruptcy filing, Detroit reached its first settlement with creditors. The settlement was with UBS and Bank of America, and though the precise terms will not be nailed down until the bankruptcy judge weighs in, Detroit is set to pay an estimated $250 million to terminate a soured derivatives transaction from 2005. The derivatives, known as interest-rate swaps, were supposed to protect Detroit from rising interest payments on a chunk of its variable rate debt. The banks would pay Detroit if interest rates rose, and Detroit would pay the banks if rates fell. By 2009, both interest rates and the city’s credit rating were falling, forcing Detroit to pay the banks some $50 million a year and to pledge roughly $11 million a month in casino-tax revenue as additional collateral. In the settlement, Detroit will keep the casino-tax revenue. It will also reduce its debt load, according to city officials, because the banks have agreed to a discount of as much as 25 percent off what they are owed. But the haircut doesn’t mean that the banks will suffer. They have already made money on the swaps; the true extent of any discount will not be known until the deal is finalized.

This much is clear:

■ The banks’ 25 percent hit is nothing compared with the 90 percent cut to pensions suggested by the city — a cut that would be disastrous in both human and political terms and that the State of Michigan must prevent from happening.

■ Municipal officials are prey for Wall Street. The Dodd-Frank financial reform law called on regulators to establish “enhanced protection” for municipalities and other clients in their dealings with Wall Street, but the Securities and Exchange Commission has not yet completed rules, while the Commodity Futures Trading Commission’s rules are so weak as to virtually invite the banks to exploit municipalities.

■ The special treatment banks receive when debtors are in or near bankruptcy is unfair and economically destabilizing. Detroit’s agreement with the two banks requires court approval, but, in general, swap deals by banks are not subject to the constraints that normally apply in bankruptcy cases; in effect, the banks are paid first, even before other secured creditors and certainly before pensioners. That privilege, dating to the heyday of derivatives deregulation in the 1990s and 2000s, is destabilizing because the assurance of repayment fosters recklessness.

Detroit’s problems are a reminder of broader challenges, identified but still unmet: protecting pensions; protecting municipalities from Wall Street; and, at long last, revoking the obscene privileges of banks that allow them to prosper on the failings of others.

[Demeter]

16. What Really Ails Detroit By STEPHAN RICHTER

http://www.nytimes.com/2013/08/16/opinion/what-really-ails-detroit.html

IS Detroit’s collapse the story of one American city gone awry? Or is it indicative of a more profound nationwide problem? The facts point to the latter. Though Detroit’s bankruptcy is exceptional in many ways — notably, its size and its disproportionate impact on African-Americans — the overall decline of America’s manufacturing centers is evident in the deterioration of many smaller cities and towns throughout the Midwest and Northeast.

What accounts for this sad turn of events?

The traditional narrative holds that globalization, outsourcing and, after 2007, the recession have been responsible for devastating American manufacturing by moving jobs out of the country in enormous numbers. But at best, that is a convenient half-truth. American manufacturing has been in trouble even since its heyday, in the 1950s and 1960s, when the United States was the global economic powerhouse and American assembly-line workers earned very decent middle-class wages.

That era of prosperity was not, as is so often claimed, the manifestation of the American dream. Rather, it was, or should have been, a warning sign that America was riding a fleeting wave of progress. Almost nobody was looking hard enough to the future and asking what it would take to sustain success.

The reason so many manufacturing-sector workers in the United States received such high pay at that time was not that they had exceptional skills or had received superior training; it was that the corporations for which they worked were unsurpassed in their dominance and generated huge revenues. LIE NUMBER 1

But that dominance was, to a considerable degree, a momentary quirk of history: the absence, in the wake of World War II, of any real competition from other nations. Once foreign competition was re-established, in Europe and Asia, only the superior skills of a nation’s workers and a focus on long-term workers’ training would allow a country to stay ahead. LIE NUMBER 2

For the United States, the day of reckoning came as other nations recovered from the war. In the 1970s, for example, American car manufacturers began facing competition on their home soil for the first time. Belittling the Japanese and their funny little cars was not an effective competitive response, though not for want of trying. LIE NUMBER 3

In that moment, American companies, communities and employees(?) should have started taking the competition seriously. That did not happen. Companies like General Motors continued to shower blue-collar workers with handsome pay and benefits.

Who was to blame for this? Not the unions. They did what they were supposed to do: ask for higher pay and more benefits. No, the fault lay with the top corporate managers: it was their job, as capitalists, to deny such increases if they were not justified by productivity trends. LIE NUMBER 4

But with a fatal arrogance, executives at American manufacturing companies did allow those increases, in part to maintain a society of contented, trouble-free workers, though executives would also use those increases as cover for their own rapidly swelling compensation. In the 1960s, the average compensation of an American C.E.O. was about 25 times the average compensation of a production worker. That ratio rose to about 70 times by the end of the 1980s, and to around 250 times these days.

It is tragic to hear voices from Detroit declaring themselves ready for a resuscitation of the city. Revival is a question not just of will but also of the available skills base, which unfortunately has deteriorated as a result of a failure to invest in training. LIE NUMBER 5

That skills deteriorated is, to a considerable extent, the fault of the unions. Unfortunately, they shared the management class’s shortsighted focus on extracting the maximum amount of compensation from companies, even in the face of the underlying businesses’ failing strength. LIE NUMBER 6

Developing the necessary skills base is not a short-term project. It requires decades of concerted effort on many fronts, by many national, regional and local actors, including collaboration among companies, government, trade associations, schools, colleges and universities.

This kind of common purpose, however, is not something that American society, with its ethos of individualism and personal independence, seems capable of undertaking. Doing the right thing for the long haul is typically put off for a later time, if it ever happens. LIE NUMBER 7

That such a “strategy” is self-defeating ought to be obvious. Sadly, it is not — not in an instant-gratification world.

Globalization, in many ways, serves as an early warning system for the changes required in a domestic society. No society should have been better prepared to utilize this tool than the United States, given its traditional — but at least for now largely lost — proclivity to embrace change. That it didn’t work out that way is a tragedy of the nation’s own making. LIE NUMBER 8

Stephan Richter is publisher of The Globalist, an online magazine.


WE HAVEN'T SEEN SUCH BLATANT CHUTZPAH AND SPIN SINCE....THE DAYS OF W!

[xchrom]

17. Housing Starts in U.S. Rise on Multifamily Properties

http://www.bloomberg.com/news/2013-08-16/housing-starts-in-u-s-rise-on-rebound-in-multifamily-properties.html

New-home construction in the U.S. climbed in July, reflecting a rebound in multifamily projects that overshadowed a slowdown in single-family properties.

Housing starts climbed 5.9 percent to an 896,000 annualized rate from a revised 846,000 pace in June that was higher than previously reported, figures from the Commerce Department showed today in Washington. The median estimate of 82 economists surveyed by Bloomberg was for a 900,000 rate. Multifamily construction surged 26 percent, while work began on 2.2 percent fewer single-family homes.

Builders are contending with a limited supply of available land as well as rising interest rates that are marking up the cost of homeownership versus renting. Further gains in employment and increases in home prices are needed to help sustain demand in an industry that has supported growth in the world’s biggest economy.

“There does seem to be a little bit of plateauing perhaps in construction activity right now,” Stephen Stanley, chief economist at Pierpont Securities LLC in Stamford Connecticut, said before the report. “Housing starts have rebounded pretty sharply from their lows, but the levels are still far below anything I would consider normal or healthy.”

[Demeter]

18. Morning, X! Take over, please

Reality is getting an early start, today.

See you on the Weekend?

[xchrom]

19. aye, aye -- and see you on the weekend, miss demeter!

[xchrom]

20. Productivity in U.S. Rises Above Forecast as Output Grows

http://www.bloomberg.com/news/2013-08-16/productivity-in-u-s-rises-more-than-forecast-as-output-grows.html

The productivity of U.S. workers rose more than projected in the second quarter as the world’s largest economy expanded.

The measure of employee output per hour increased at a 0.9 percent annualized rate, after a 1.7 percent decline in the prior three months, a Labor Department report showed today in Washington. The median forecast in a Bloomberg survey of economists called for a 0.6 percent advance. Expenses per worker rose at a 1.4 percent rate, greater than estimated.

Even with the second-quarter pickup, productivity was unchanged in the 12 months ended in June, below the average 2.4 percent annual gain in the 2000-2011 period, the report showed. Businesses are reaching the limit of how much efficiency they can squeeze from their existing staff, a sign they may take on more workers once they see faster sales.

“We expect slow productivity going forward,” Jennifer Lee, a senior economist at BMO Capital Markets in Toronto, said before the report. “There’s only so much efficiency you can squeeze out from your workforce. At some point companies will have to start accelerating hiring.”

[xchrom]

21. China Begins Using Arctic Shipping Route That Could 'Change The Face Of World Trade'

http://www.businessinsider.com/china-begins-using-arctic-shipping-route-that-could-change-the-face-of-world-trade-2013-8



The maiden voyage to Europe by a Chinese merchant ship through the "Northeast Passage" will help the world's biggest exporter speed goods to market and is a symbol of Beijing's strategic ambitions in the Arctic.

The emerging Arctic Ocean shipping route north of Russia has been opened up by global warming and cuts thousands of kilometres (miles) -- and many days -- off the journey from China to its key European market.

A vessel owned by Chinese state shipping giant COSCO left the northeastern port of Dalian last week bound for Rotterdam in the Netherlands, on a 5,400-kilometre (3,380-mile) voyage which state media said would take just over 30 days.

That is up to two weeks faster than the traditional route between Asia and Europe through the Suez Canal, according to COSCO.



Read more: http://www.businessinsider.com/china-begins-using-arctic-shipping-route-that-could-change-the-face-of-world-trade-2013-8#ixzz2c8WVQZl9

[xchrom]

22. The Trend In The Stock Market Has Turned Down

http://www.businessinsider.com/stock-market-trend-turning-down-2013-8

The market was hit hard from all directions today. Major company reports indicated more economic weakness ahead at the same time that an imminent tapering of QE became more imminent. The ten-year bond rate took another leap higher in response to lower unemployment claims despite WalMart and Cisco joining Macy’s in forecasting lower revenues in the second half. This was enough to cause the market to plunge down through its near-term S&P 500 support of 1676 on volume that, although still low, was solidly higher than the previous day. It is now likely that the market has begun a new major down leg. We cite the following factors, many which have been around for a while, that now seem to be coming to a head.

The 10-year rate has jumped from 1.6% to 2.8% within a relatively short period of time in response to the prospect of Fed tapering, indicating that the bond market caught on to its negative implications quickly while stocks have been slow to react until very recently. The interest rate rise has increased mortgage rates significantly and will impact consumer borrowing rates for durable goods such as autos.

Asset values such as stocks and real estate have become increasingly dependent on QE for growth in the absence of a self-sustaining economic recovery. With earnings growth having leveled off, the seemingly open-ended QE has been virtually the only factor holding up the market. The market similarly soared during QE1 and QE2, and corrected after they ended, only to be bailed out by QE3 and QE4, which deliberately had no definitive ending date. Now that the ending date of QE4 is no longer infinite, the market is likely to act as it did in anticipating the end of the prior QE programs.



Read more: http://comstockfunds.com/default.aspx/act/newsletter.aspx/category/MarketCommentary/MenuGroup/Home/NewsLetterID/1734/startrow/1.htm#ixzz2c8Xi1lkN

[xchrom]

23. India's Stock Market Has Its Worst Sell-Off In 4 Years

http://www.businessinsider.com/india-stock-market-dives-2013-8

Global markets are selling off.

But nowhere is it worse than India.

"India's Sensex 4% drop, the largest in more than 4 years, essential offset the previous four day advance," noted Brown Brothers Harriman's Marc Chandler. "Basic materials and banks were the hardest hit sectors.

"Many reports attributed the sharp losses to renewed weakness of the rupee, which fell to new record lows against the dollar, despite official efforts to tighten restrictions on capital outflows."

The sell-off was also driven by Moody's move to downgrade the bank financial strength ratings (BFSRs) and baseline credit assessments (BCAs) of three Indian public sector banks.





Read more: http://www.businessinsider.com/india-stock-market-dives-2013-8#ixzz2c8YHimtz

[xchrom]

24. America No Longer Has A Monopoly On The Global Growth Story

http://www.businessinsider.com/usa-no-longer-monopolizing-growth-story-2013-8

For a lot of 2013, the big economic story has been the coming rise of the American economy vis-a-vis pretty much every other major economy around the world.

Europe has been the basket case of the global economy for years, China appears to be slowing (at least as of the second quarter), and emerging markets find themselves on the hot seat as investors begin frontrunning a tapering of Federal Reserve bond purchases, which could come possibly as soon as September.

The thesis is that the U.S. dollar is on the verge of a secular bull market, is re-correlating with U.S. stocks (implying that U.S. stocks are on the cusp of a bull market as well), and will help contribute to U.S. economic and stock market outperformance relative to the rest of the world in the years ahead.

However, in the last few weeks, signs have emerged that America may not actually have such a monopoly on the global growth story as one might think based on the narrative outlined above.



Read more: http://www.businessinsider.com/usa-no-longer-monopolizing-growth-story-2013-8#ixzz2c8Yv69jf

[Demeter]

32. Bull Market? US?

Surely that's a Freudian slip, or misprint? Maybe a BS market....

[xchrom]

25. JPMORGAN: BUY GOLD

http://www.businessinsider.com/jpmorgan-buy-gold-2013-8

Since hitting a four-year low of $1179 an ounce on June 28, gold has shown some strength, rallying 15% over the past month and a half to current levels around $1360.

In a note to clients Thursday titled, "Gold and the Denver play: Gold Shrugs Off the Paulson Sale; Buy the Bounce," JPMorgan analysts John Bridges and Anant Inani point to a number of bullish factors for the shiny yellow metal:

Gold shrugged off news today that Paulson & Co had cut its exchange listed gold exposure in half and rose 2.2% to $1,365/oz. This may be delivering an exclamation mark to define the end of the 10-month, 25% fall in gold and 50% fall in gold equities, (while the S&P advanced 13%).

The World Gold Council reported today that physical gold demand remains strong, questioning the price weakness seen in paper markets. Additionally, gold supplies could be constrained in September if labor strikes are initiated in South Africa.



Read more: http://www.businessinsider.com/jpmorgan-buy-gold-2013-8#ixzz2c8ZVNJjl

[xchrom]

26. Rupee falls to a record low against the dollar

http://www.bbc.co.uk/news/business-23722553

The Indian rupee has hit a record low against the dollar despite recent efforts to prop-up the currency.

On Wednesday India's central bank put further restrictions on the amount of money that companies and individuals can send out of the country.

That had little impact and the rupee fell to 62.03 to the dollar, below its previous low of 61.80 hit on 6 August.

Overseas investors have been pulling money out of Indian shares and debt on concerns over the economy.

[xchrom]

27. Broken Ladder: Social Justice Becomes Elusive in Germany

http://www.spiegel.de/international/germany/social-justice-elusive-in-germany-despite-campaign-pledges-a-916412.html

Who knows whether he will ever return to this office building. Who knows whether he will ever be allowed to set foot in such a building again -- a place where employees sip their espressos on designer couches and gaze at the sky through a glass ceiling.

Can, the 20-year-old son of Turkish immigrants, doesn't know either, so he pulls out his smartphone and takes a few snapshots. He photographs the shiny coffeemaker, the plants in concrete planters and the paternoster carrying men and women in business dress.
At this point, Can is merely a guest. With his plaid shirt and large headphones dangling around his neck, he still looks noticeably out of place in the Munich offices of the Boston Consulting Group (BCG). He is there because one of the management consultants is his personal coach. The employment office has brought them together, and now they are collaborating on a project: Can's future.

It had looked pretty grim until now. Can had what advisors at the employment office call "difficult starting conditions." He grew up in a neighborhood with many high-rise buildings and very few music schools. He repeated the 5th, 7th and 10th grades and left school with close to a failing grade in math and German. He didn't even bother to send out job applications.

[xchrom]

28. Portugal makes unexpectedly dramatic exit from recession

http://elpais.com/elpais/2013/08/14/inenglish/1376508624_014629.html

Portugal has emerged from recession for the first time in two and half years, the country’s National Statistics Institute (INE) revealed on Wednesday. GDP grew an unexpected 1.1 percent in the second quarter of 2013 after 10 consecutive quarters of contraction.

The data reflects a notable improvement on the figures recorded from January to March, when the economy shrank 0.4 percent, and places Portugal at the top of the European Union for growth in the second quarter.

The recovery between April and June significantly surpassed the calculation of a number of organizations, which forecast a more moderate increase of between 0.3 and 0.6 percent. Official estimates have predicted that Portugal will suffer a contraction of over two percent in 2013.

“The significant acceleration in exports of goods and services” registered in this period and the less-marked decline of investment than in previous quarters explains the GDP increase, the INE noted in a press release.

The news came as EU statistics agency Eurostat revealed that the euro zone as a whole had at last emerged from the recession in which it has been mired for the last 18 months. It had been known for several days that the euro zone would register a positive figure in the second quarter, but the strong advances of France, Germany and, above all, Portugal took many by surprise.

[xchrom]

29. Amazon diverts Spanish sales abroad to avoid tax

http://elpais.com/elpais/2013/08/13/inenglish/1376395732_243075.html

Internet retail giant Amazon has reorganized its activities in Spain since purchasing Buyvip and opening its Spanish online store. The company has transformed the fashion retailer, which it bought for 70 million in 2010, into a services company and rechristened it Amazon Spain Services, slimming it down in order to take the sales side to Luxembourg, where sales for the rest of its products are handled.

The setup mimics that of its other Spanish company, Amazon Spain Fulfillments, which even exploits regulations for small- and medium-sized enterprises to pay less, enjoying a reduced tax rate for not invoicing for its sales in Spain.

Amazon is not the first company to use this model. Other big technology firms also use it to minimize the amount of tax they pay on earnings created in the Spanish market. Apple, Google and other companies handle their sales out of Ireland with their firms in Spain only declaring a part of the income generated in the Spanish market as commission for services provided, or similar ploys. Developed countries are now searching for a way to put a stop to such practices.

The company founded by Jeff Bezos openly admits in its annual report that it pays less tax on profits accrued in its European operations by virtue of being based in Luxembourg. The structure it has chosen to launch its online store in Spain fits the same model. Despite the success of the store's launch, Amazon's Spanish subsidiary declared losses of 54,329.80 euros, according to accounts deposited at the Mercantile Registry.

[Fuddnik]

33. Good Ole Rupert Murdoch Jr.

Bozos bought himself a big newspaper now. The guy has no credibility now. Just think of how it will soar now that he's Charles Krauthammers boss.

A guy who doesn't like to pay his taxes, and employs an army of overworked minimum wage slaves.

Yep, the real toast of the DC cocktail circuit.