STOCK MARKET WATCH -- Wednesday, 16 July 2014

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Wednesday, 16 July 2014[font color=black][/font]

SMW for 15 July 2014

AT THE CLOSING BELL ON 15 July 2014
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Dow Jones 17,060.68
S&P 500 1,973.28
Nasdaq 4,416.39


[font color=green]10 Year 2.55% -0.01 (-0.39%)
30 Year 3.37% -0.02 (-0.59%)[font color=black]


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[font size=2]Market Conditions During Trading Hours[/font]
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(click on link for latest updates)
http://tools.investing.com/market_quotes.php?
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[font size=2]Euro, Yen, Loonie, Silver and Gold[center]

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[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
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Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
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[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
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The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
Wall Street on Parade
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[font color=black][font size=2]Handy Links - Essential Reading:[/font][/font]
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Matt Taibi: Secret and Lies of the Bailout


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[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
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LegitGov
Open Government
Earmark Database
USA spending.gov
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[font color=black][font size=2]Handy Links - Videos:[/font][/font]
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Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
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[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison
6/4/12 Matthew Kluger, lawyer, sentenced to 12 years in prison, along with co-conspirator stock trader Garrett Bauer (9 years) and co-conspirator Kenneth Robinson (not yet sentenced) for 17 year insider trading scheme.
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."
8/22/12 Doug Whitman, Whitman Capital LLC hedge fund founder, convicted of insider trading following a trial in which he spent more than two days on the stand telling jurors he was innocent
10/26/12 UPDATE: Former Goldman Sachs director Rajat Gupta sentenced to two years in federal prison. He will, of course, appeal. . .
11/20/12 Hedge fund manager Matthew Martoma charged with insider trading at SAC Capital Advisors, and prosecutors are looking at Martoma's boss, Steven Cohen, for possible involvement.
02/14/13 Gilbert Lopez, former chief accounting officer of Stanford Financial Group, and former controller Mark Kuhrt sentenced to 20 yrs in prison for their roles in Allen Sanford's $7.2 billion Ponzi scheme.
03/29/13 Michael Sternberg, portfolio mgr at SAC Capital, arrested in NYC, charged with conspiracy and securities fraud. Pled not guilty and freed on $3m bail.
04/04/13 Matthew Marshall Taylor,fmr Goldman Sachs trader arrested, charged by CFTC w/defrauding his employer on $8BN futures bet "by intentionally concealing the true huge size, as well as the risk and potential profits or losses associated."
04/04/13 Matthew Taylor admits guilt, makes plea bargain. Sentencing set for 26 June; faces up to 20 years in prison but will likely only see 3-4 years. Says, "I am truly sorry."
04/11/13 Ex-KPMG LLP partner Scott London charged by federal prosecutors w/passing inside tips to a friend in exchange for cash, jewelry, and concert tickets; expected to plead guilty in May.
08/01/13 Fabrice Tourré convicted on six counts of security fraud, including "aiding and abetting" his former employer, Goldman Sachs
08/14/13 Javier Martin-Artajo and Julien Grout charged with wire fraud, falsifying records, and conspiracy in connection with JP Morgan's "London Whale" trade.
08/19/13 Phillip A. Falcone, manager of hedge fund Harbinger Capital Partners, agrees to admit to "wrongdoing" in market manipulation. Will banned from securities industry for 5 years and pay $18MM in disgorgement and fines.
09/16/13 Javier Martin-Artajo and Julien Grout officially indicted on charges associated with "London Whale" trade.
02/06/14 Matthew Martoma convicted of insider trading while at hedge fund SAC (Stephen A. Cohen) Capital Advisors. Expected sentence 7-10 years.
03/24/14 Annette Bongiorno, Bernard Madoff's secretary; Daniel Bonventre, director of operations for investments; JoAnn Crupi, an account manager; and Jerome O'Hara and George Perez, both computer programmers convicted of conspiracy to defraud clients, securities fraud, and falsifying the books and records.
05/19/14 Credit Suisse, which has an investment bank branch in NYC, agrees to plead guilty and pay appx. $2.6 billion penalties for helping wealthy Americans hide wealth and avoid taxes.








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

[Demeter]

1. My baby is 27 today (and I am 72)

(well, not officially, it just feels that way).

[Fuddnik]

2. Happy Birthday Baby!!!

[xchrom]

4. birthday time!

[Demeter]

3. Thinking of Trying to Make Money Off Airbnb or Uber? Read This First

http://www.alternet.org/economy/thinking-trying-make-money-airbnb-or-uber-read-first?akid=12016.227380.jBePcp&rd=1&src=newsletter1011288&t=13

...Here’s the bottom line: none of the businesses that have sprung up to serve the sharing economy are 501c3 non-profit entities. Rather, they are corporations whose goal is to make a profit out of a much less formal sharing economy that already existed. Long before Airbnb was launched in 2008, a friend of mind traveled across Europe using a couch-surfing style network called Servus. I’ve formed some lasting friendships with people with a free Airbnb-style network, Hospitality Club, that offers hosts and guests the chance to review each other, Airbnb style. Airbnb has just formalized those arrangements, while ride-sharing companies like BlaBla Car have done the same with those old-fashioned ride share boards on walls or online – and build in a profit for the middleman. But you don’t get to become one of the most valuable venture capital-based businesses in the world, as Airbnb has done, and to be worth an estimated $10bn (more than some hotel chains) if all you are is part of a “movement”. Nope, you have to have found a way to make being the middleman pay off very handsomely indeed – and that’s capitalism 101, not a movement.

All of which means that if you’re doing business with Airbnb – or Uber, or Parking Panda, or Liquid, or any of the other sharing economy enterprises springing up – you need to think of it in those terms, too.

First of all, while you may think of this as just generating a bit of extra income on the side – a way to pay off your student loans, to make your summer vacation pay for itself, to fund your weekends out with friends or to help save up to pay for a wedding or a downpayment for your house or car – the IRS won’t see it that way. And if you think the IRS won’t ever know, well, let me disabuse you of that right now. You’ll fill out tax forms – and come January, you’ll get a 1099 form. Depending on the figure on it, you may end up kissing your expected refund goodbye, or facing an unexpected tax liability. If that 1099 form doesn’t show up? Don’t heave a sigh of relief and fail to report that income. If you think an unexpected tax liability is bad, getting on the wrong side of the IRS is exponentially worse.

The best idea of all is to talk to your accountant and ask for their input. At what point does sharing economy income change your tax picture by putting you in a higher tax bracket? Are there any additional writeoffs you should be aware of? Sure, this might cost you an hour of her time – but it could save you a lot of money down the road. And remember, you’re thinking of this as a business – just like the Airbnbs, Ubers and others who are quite happy to scoop up a percentage of what you collect.

[xchrom]

5. CHINA GROWTH EDGES UP IN POSSIBLE SIGN OF RECOVERY

http://hosted.ap.org/dynamic/stories/A/AS_CHINA_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-07-16-03-41-15

BEIJING (AP) -- China's economic growth edged up in the latest quarter and more than 7 million new jobs were created in the first half of the year, easing pressure on communist leaders as they try to prevent a precipitous slowdown in the world's second-largest economy.

Economic growth rose to 7.5 percent over a year earlier in the three months ended June 30 from the previous quarter's 7.4 percent, data showed Wednesday. The first quarter matched a downturn in late 2012 for the slowest rate since the 2008 global crisis.

Communist leaders are trying to steer China toward growth based on domestic consumption instead of trade and investment. But the unexpectedly sharp slowdown raised fears of politically dangerous job losses. Beijing responded with mini-stimulus measures based on higher spending on construction of railways and other public works.

"A lot of the June data looks quite strong, stronger than expected," said economist Julian Evans-Pritchard of Capital Economics. "I think it should vindicate policymakers' approach to targeted measures to stimulate growth."

[xchrom]

6. STUDY: US MILLENNIALS BUYING HOMES LATER

http://hosted.ap.org/dynamic/stories/U/US_MILLENNIAL_HOME_SALES?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-07-16-00-02-13

WASHINGTON (AP) -- Don't blame the millennial generation for lackluster home sales.

They are increasingly ethnically diverse, more educated and less likely to be married - all factors that make them less likely to own a home, said a new report released Wednesday by Trulia, the online real estate firm. After adjusting for these population changes, younger Americans are actually buying homes at the same rate as they did during the late-1990s.

"For at least the past 20 years, there have been significant demographic headwinds for homeownership for young people," said Jed Kolko, chief economist at Trulia.

The analysis suggests that the recession - for all its damage to the economy - did little to turn off millennials from the idea of owning a home compared to previous generations. In fact, the report shows that the major group whose ownership rates suffered because of the downturn is middle-aged Americans.

[xchrom]

7. STOCKS UP AFTER CHINA GROWTH REPORT, ASIA DAWDLES

http://hosted.ap.org/dynamic/stories/W/WORLD_MARKETS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-07-16-05-53-37

TOKYO (AP) -- European stocks advanced Wednesday after China's economic growth picked up slightly in the second quarter but Asian markets were lukewarm about the data that largely fitted expectations.

The world's second-largest economy expanded 7.5 percent over a year earlier in the April-June quarter, picking up slightly from 7.4 percent growth in the first quarter, and suggesting the government's mini-stimulus measures had helped to offset a housing slowdown.

In Europe, Britain's FTSE 100 added 0.9 percent to 6,770.58 and the CAC-40 in France surged 1.4 percent to 4,363.72. Germany's DAX rose 1.2 percent to 9,835.02.

Wall Street was poised for gains. Dow futures added 0.3 percent to 17,040 and S&P 500 futures gained 0.3 percent to 1,973.30.

[xchrom]

8. FRANCE BATTLES AGAINST BAD RESTAURANT FOOD

http://hosted.ap.org/dynamic/stories/E/EU_FRANCE_DEFINING_DINING?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-07-16-05-26-12

PARIS (AP) -- Restaurant-goers in France will start seeing a funny little symbol on their menus this week: a skillet with a house on top, indicating your menu choice is made in-house.

It's part of a new law meant to battle against the surprising amount of factory-made, pre-packaged food in French restaurants. France's chief of consumer affairs, Carole Delga, told The Associated Press that the logo would better inform customers about what they're getting, and highlight the country's culinary traditions.

However, many in the restaurant industry say the law doesn't go far enough, because it allows dishes made from frozen, pre-peeled or pre-cut products to count as home-made.

Parliament approved the law March 17, and it came into effect this week. Restaurants and catering companies have until January 1 to adapt their menus.

[Demeter]

15. Interesting Idea

In America, it would have practically no use...

[Demeter]

9. Citigroup Reaches $7 Billion Mortgage-Bond Settlement

http://www.bloomberg.com/news/2014-07-14/citigroup-reaches-7-billion-mortgage-bond-settlement.html

Citigroup Inc. (C) agreed to pay $7 billion in fines and consumer relief to resolve government claims that it misled investors about the quality of mortgage-backed bonds sold before the 2008 financial crisis. The bank took a $3.7 billion charge in the second quarter ended June 30 to cover the cost of the settlement, the New York-based firm said today in a statement. Citigroup climbed 3.6 percent to $48.68 at 11:46 a.m. in New York, the best performance among 84 companies in the Standard & Poor’s 500 Financials Index.

Citigroup was among lenders including Bank of America Corp. investigated by the Justice Department for allegedly misrepresenting the quality of mortgage-backed bonds as home prices plummeted in 2006 and 2007. JPMorgan Chase & Co. (JPM), the biggest U.S. bank, agreed in November to pay $13 billion to resolve similar federal and state probes. The government has sought about $17 billion from Bank of America, a person familiar with those talks has said.

“The bank’s misconduct was egregious,” U.S. Attorney General Eric Holder said today at a press conference in Washington to discuss the Citigroup settlement. “The size and scope of this resolution goes beyond what could be considered the mere cost of doing business.”

About $2.5 billion of the settlement will be paid in various forms of consumer relief by the end of 2018, the bank said. The accord includes a record $4 billion civil penalty to the Justice Department, $300 million to state attorneys general and $200 million to the Federal Deposit Insurance Corp.

“We also have now resolved substantially all of our legacy RMBS and CDO litigation,” Citigroup Chief Executive Officer Michael Corbat said in a separate statement. “This settlement is in the best interests of our shareholders, and allows us to move forward and to focus on the future, not the past.”

DETAILS AT LINK

[xchrom]

10. CHINA MOVES OIL RIG OUT OF WATERS VIETNAM CLAIMS

http://hosted.ap.org/dynamic/stories/A/AS_VIETNAM_CHINA_RIG?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-07-16-05-49-49

HANOI, Vietnam (AP) -- China on Wednesday moved an oil rig out of waters claimed by Hanoi after two months of drilling that triggered a near-breakdown in ties between the neighbors and led to deadly protests in Vietnam.

Withdrawing the rig from near the Paracel Islands in the South China Sea reduces the immediate risk of a naval standoff but will do little to mend relations between the two countries. Beijing made it clear it was shifting the billion-dollar rig because it had completed its work, not because of the criticism of its actions.

Vietnam demanded that China never deploy a rig again in waters it claims in the region.

"Vietnam is determined to defend its sovereignty and sovereign rights in accordance with international law," the foreign ministry said in a statement.

[Demeter]

16. Leaving a big hole in the ocean?

Oil leak, anyone?

[xchrom]

17. i always wonder about those kind of details. nt

[xchrom]

11. BULGARIA TOPS LAVENDER OIL PRODUCERS RANKING

http://hosted.ap.org/dynamic/stories/E/EU_BULGARIA_LAVENDER_BOOM?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-07-16-05-40-57

KAZANLAK, Bulgaria (AP) -- Dozens of workers wade through a sea of purple, picking lavender blossoms in the sweltering heat. The 100-degree Fahrenheit temperatures give the blossoms their highest concentration of oil - a liquid treasure that is prized by perfume makers around the world.

Bags packed with lavender petals are taken to the nearby distillery where workers press them by foot before the precious oil is extracted in a steam distillation process.

Bulgaria has overtaken France in the past three years as the world's biggest producer of lavender oil. The Balkan country has doubled its production from 60 metric tons in 2011 to an expected 120 tons this year, as other Balkan countries cut production, according to one of the country's top producers.

"Bulgaria took advantage of this niche," said Filip Lissicharov, owner of Enio Bonchev lavender oil company in this central Bulgarian town.

[Demeter]

12. 'BRICS' nations to form development bank to rival World Bank, IMF

http://www.latimes.com/business/la-fi-brics-bank-20140716-story.html

The so-called BRICS countries agreed to form an international development bank with aspirations to challenge the dominance of the World Bank and the International Monetary Fund. Leaders of Brazil, Russia, India, China and South Africa said Tuesday that the New Development Bank will start with $50 billion in capital and $100 billion as a currency reserve fund for liquidity crises. Operating details still need to be resolved. Still, the BRICS bank, which could add more member nations, represents a bid to expand the influence of the BRICS emerging markets and act as a counterbalance to institutions run by the U.S. and other developed nations, experts said.

"This is about the consolidation of BRICS 2.0," said Marcos Troyjo, professor of international and public affairs at Columbia University and co-director of the BRICLab Center. "If BRICS 1.0 was about capturing investor attention to the scale of their economic relevance, BRICS 2.0 is about embarking on institution building."

The BRICs acronym was coined by Goldman Sachs Group Inc. economist Jim O'Neill in 2001 to describe the four large emerging markets — Brazil, Russia, India and China — that could play a large role in global economic growth. They began meeting for periodic summits in 2009, and were later joined by South Africa. As developing countries began playing a larger role in the world economy, their leaders repeatedly complained that they have not been given correspondingly larger voices in international financial institutions such as the World Bank and the IMF, both based in Washington. The U.S. typically appoints the World Bank president, and European countries appoint the IMF chief.

"International governance structures designed within a different power configuration show increasingly evident signs of losing legitimacy and effectiveness," said the official statement signed by the BRICS leaders, who met in Fortaleza, Brazil, on Tuesday. "We believe the BRICS are an important force for incremental change and reform of current institutions toward more representative and equitable governance."

Brazilian President Dilma Rousseff, Russian President Vladimir Putin, Indian Prime Minister Narendra Modi, Chinese President Xi Jinping and South African President Jacob Zuma hammered out some of the final details before signing the agreement Tuesday. Among the terms are that the bank will be in Shanghai, its first president will be from India, and the first chair of the board of directors will be from Brazil. On Wednesday, the BRICS leaders will meet with the heads of South American countries through the intergovernmental Union of South American Nations, which was founded in 2008. The new bank is expected to make loans for development and infrastructure projects. It also will function as an incubator for development expertise from other emerging economies.

Other countries, such as Indonesia, Mexico or Turkey, could eventually join the bank, Troyjo said, noting that BRICS countries have seen their growth slow over the last few years from the peak of international investor interest in emerging market countries.

"The only thing they may have in common is the use of some kind of state capitalism in their growth," he said. "The BRICS are needing to reinvent themselves, and it's unlikely their route forward can be the same route that got them here."

[Demeter]

13. Speed Traders Should Operate in Good Times and Bad, Study Says

OR NOT AT ALL?

http://www.bloomberg.com/news/2014-07-15/speed-traders-should-operate-in-good-times-and-bad-study-says.html

Computerized market makers should be required to trade futures contracts in good times and bad in order to ease turbulence during a crisis, according to a study sponsored by the U.S. industry’s regulator.

High-frequency traders, firms capable of buying and selling in millionths of a second, are more likely than manual traders to leave markets in volatile times such as the 2008 financial crisis, according to the study. About 61 percent of all trading in U.S. futures markets is now done by these firms, according to Tabb Group, and the paper suggests their exit could leave markets without enough buyers and sellers to operate effectively.

“In the current anonymous world, there is nothing holding back traders and liquidity suppliers from running away,” Pradeep Yadav of the University of Oklahoma, one of the authors of the study sponsored by the U.S. Commodity Futures Trading Commission, said in a phone interview. “They can’t just be fair-weather friends. There needs to be some framework of affirmative obligation to make a market in those times.”

The study’s recommendations are being made as the CFTC examines how the U.S. futures exchanges it regulates reward market makers that trade contracts based on everything from interest rates to foreign exchange and lumber. With trading now conducted by anonymous brokers, firms have less trust in the market and are faster to exit, Yadav said...

[Demeter]

14. Argentine debt holdout urges talks, says deal still possible

http://www.reuters.com/article/2014/07/14/us-argentina-debt-idUSKBN0FJ1FQ20140714

Aurelius Capital Management, one of the lead holdout creditors seeking to settle with Argentina over sovereign debt payments from its 2002 default, said on Monday the government faces a new crisis on July 30 unless it engages in serious negotiations.

Argentine officials and the holdout investors met separately with a court-appointed mediator on Friday, emerging from his offices after five hours of discussions with no resolution and no further talks scheduled. Both sides have ramped up the rhetoric to explain why they are on one level eager to negotiate and on another at pains to show why the other side is not engaging.

"Absent a deal, Argentina’s next sovereign debt crisis will start on July 30. There is still time to avoid that outcome, but only if the Argentine government commences serious discussions with us immediately," Aurelius said in a statement.

The firm said that together with other holdout creditors, it has offered to meet with the government anytime, anywhere, but has been rebuffed.

"Argentine officials refuse to meet with us or even negotiate with us indirectly. Sadly, this approach gambles with the livelihoods and futures of the Argentine people."

In 2012, U.S. District Judge Thomas Griesa in New York awarded the holdouts $1.33 billion plus accrued interest in a case based upon the pari passu, or equal treatment, clause used to sell the bonds originally in 1994...Without a deal, Latin America's No. 3 economy risks tumbling into a new default as it battles a recession, one of the world's highest inflation rates and dwindling foreign reserves...Argentina continues to request a stay, or suspension, of Griesa's judgments while talks continue. That would give the nation more time beyond a July 30 deadline for a coupon payment to bondholders who agreed to two prior restructurings in 2005 and 2010. The government says it cannot voluntarily offer better terms for a restructuring with holdouts because of a provision called the Rights upon Future Offers, or RUFO, which expires on December 31. It is designed to stop anyone getting a better deal than the exchange bondholders. Legal experts have not dismissed the clause as a hurdle to a deal, but they also believe it can be overcome.

The holdouts have said they would discuss an accommodation to let the government pay the other bondholders facing potential default if negotiations to settle the legal dispute have made good progress before July 30. But they also argued to Griesa that there were no grounds for granting a stay...

[xchrom]

18. Scotland Will Be Banned From Europe For 5 Years If It Votes For Independence

http://www.businessinsider.com/europe-ban-on-scotland-if-it-votes-for-independence-2014-7

If Scotland votes for independence in its referendum on Sept. 18, it will not be allowed to join the European Union for five years.

New European Union chief Jean-Claude Juncker said last night that the EU needs to take a break from admitting new countries. “Under my presidency of the commission, ongoing negotiations will continue … but no further enlargement will take place over the next five years," Juncker said, according to the BBC.

The exile period shouldn't be a surprise. José Manuel Barroso, Juncker’s predecessor, said the same thing. It would be "extremely difficult, if not impossible" for Scotland to join Europe, The Telegraph reported.

The statement deals further bad news to the pro-independence "Yes" movement, which wants to separate Scotland from Britain. Currently, pro-union "No" voters have the edge in opinion polls, 45%-34%.



Read more: http://www.businessinsider.com/europe-ban-on-scotland-if-it-votes-for-independence-2014-7#ixzz37cyiKdrb

[Demeter]

19. JPMorgan pulls back from mortgage lending on foreclosure worries

http://finance.yahoo.com/news/jpmorgan-pulls-back-mortgage-lending-foreclosure-worries-194104579--sector.html

JPMorgan Chase & Co, the second-largest U.S. mortgage lender, is backing away from making home loans to less creditworthy borrowers after losing faith in its ability to recover much money from foreclosing on homes, even with government guarantees. The shift reflects a change in the way JPMorgan runs its mortgage business: while it used to regard collateral and U.S. government lending programs as key backstops to most of its loans, it now pays closer attention to the credit quality of borrowers. The bank wants to reduce the chances of having to foreclose on a loan, because it's bad business.

"The cost to take a customer through the foreclosure process is just astronomical now," Kevin Watters, chief executive of JPMorgan Chase's residential mortgage banking business in New York, told Reuters in an interview. In addition to federal standards, states, and in some cases local governments, have written their own rules making it more expensive for banks to recover loan losses, he said. According to foreclosure data firm RealtyTrac, it took an average of 120 days to foreclose on a home at the beginning of 2007, just as the housing bubble was starting to burst. In the first quarter of 2014, it took 572 days, or more than 1.5 years.

Lenders have generally been paying more attention to borrowers' credit quality since the financial crisis, but JPMorgan is going a step further in its reluctance to rely on government loan guarantees and insurance. If other lenders choose the same path as JPMorgan, it could become more difficult for people to secure financing to buy homes, even though government programs are intended to help credit flow to these borrowers, said Christopher Mayer, a professor of real estate finance at Columbia University.

"This could reduce the number of first-time buyers and slow the speed with which people who lost their homes during the crisis can become homeowners again," said Mayer.

For now, JPMorgan is taking a different path from smaller competitors, many of which have lowered their underwriting standards. Some lenders, particularly those that aren't banks, are increasingly willing to make subprime loans. Over the last 18 months lenders have been making loans to borrowers with lower and lower credit scores on average, according to mortgage data provider Ellie Mae, although the mean is still well within the "prime" category.

As JPMorgan pulls back from mortgage lending, non-banks are ramping up. The third biggest mortgage lender in the United States in the first quarter was Detroit's Quicken Loans, according to industry newsletter Inside Mortgage Finance, after Wells Fargo & Co and JPMorgan. Quicken is a bigger mortgage lender now than Citigroup Inc or Bank of America Corp. The mortgage market is shrinking as rising rates cut into refinancing demand and home sales growth is spotty. But JPMorgan is shrinking faster than many of its rivals: its market share fell to 8.1 percent in the first quarter of 2014 from 11.1 percent in the same quarter a year earlier, according to Inside Mortgage Finance....On Tuesday, the bank posted a $74 million loss from making mortgages in the second quarter, compared with $566 million of income in the same quarter last year. The bank has said it expects to lose money making home loans for the full year...JPMorgan may take until 2015 to fully formulate its new mortgage strategy, but one area it is pulling back from already is loans made under the Federal Housing Administration program, which allows first-time homeowners to borrow as much as 96.5 percent of the purchase price of their house. The government guarantees these loans against default, but the FHA has clashed with JPMorgan and other big banks over whether some of the loans they made qualified for the insurance.

MORE--DIMON DISSES FHA....

[Demeter]

20. The Rise of the Non-Working Rich ROBERT B. REICH

http://robertreich.org/post/91880951615

...The real non-workers are the wealthy who inherit their fortunes. And their ranks are growing. In fact, we’re on the cusp of the largest inter-generational wealth transfer in history. The wealth is coming from those who over the last three decades earned huge amounts on Wall Street, in corporate boardrooms, or as high-tech entrepreneurs. It’s going to their children, who did nothing except be born into the right family...The “self-made” man or woman, the symbol of American meritocracy, is disappearing. Six of today’s ten wealthiest Americans are heirs to prominent fortunes. Just six Walmart heirs have more wealth than the bottom 42 percent of Americans combined (up from 30 percent in 2007).

The U.S. Trust bank just released a poll of Americans with more than $3 million of investable assets. Nearly three-quarters of those over age 69, and 61 per cent of boomers (between the ages of 50 and 68), were the first in their generation to accumulate significant wealth. But the bank found inherited wealth far more common among rich millennials under age 35. This is the dynastic form of wealth French economist Thomas Piketty warns about. It’s been the major source of wealth in Europe for centuries. It’s about to become the major source in America – unless, that is, we do something about it. As income from work has become more concentrated in America, the super rich have invested in businesses, real estate, art, and other assets. The income from these assets is now concentrating even faster than income from work. In 1979, the richest 1 percent of households accounted for 17 percent of business income. By 2007 they were getting 43 percent. They were also taking in 75 percent of capital gains. Today, with the stock market significantly higher than where it was before the crash, the top is raking even more from their investments.

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

..family trusts used to be limited to about 90 years. Legal changes implemented under Ronald Reagan extended them in perpetuity. So-called “dynasty trusts” now allow super-rich families to pass on to their heirs money and property largely free from taxes, and to do so for generations...George W. Bush’s biggest tax breaks helped high earners but they provided even more help to people living off accumulated wealth. While the top tax rate on income from work dropped from 39.6% to 35 percent, the top rate on dividends went from 39.6% (taxed as ordinary income) to 15 percent, and the estate tax was completely eliminated. (Conservatives called it the “death tax” even though it only applied to the richest two-tenths of one percent.). Barack Obama rolled back some of these cuts, but many remain...Before George W. Bush, the estate tax kicked in at $2 million of assets per couple, and then applied a 55 percent rate. Now it kicks in at $10 million per couple, with a 40 percent rate.

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What to do? First, restore the estate tax in full. Second, eliminate the “stepped-up-basis on death” rule. This obscure tax provision allows heirs to avoid paying capital gains taxes on the increased value of assets accumulated during the life of the deceased. Such untaxed gains account for more than half of the value of estates worth more than $100 million, according to the Center on Budget and Policy Priorities. Third, institute a wealth tax. We already have an annual wealth tax on homes, the major asset of the middle class. It’s called the property tax. Why not a small annual tax on the value of stocks and bonds, the major assets of the wealthy? We don’t have to sit by and watch our meritocracy be replaced by a permanent aristocracy, and our democracy be undermined by dynastic wealth. We can and must take action — before it’s too late.

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21. Bank Of America's Q2 Beat Expectations, But There Was A Big Adjustment

http://www.businessinsider.com/bank-of-america-earnings-2014-7

Bank of America announced Q2 financial results that were stronger than expected.
Adjusted earnings per share came in at $0.41 per share, which was much stronger than the $0.29 expected.

One big adjustment during the quarter was litigation costs which slashed $0.22 from the bottom line.



Read more: http://www.businessinsider.com/bank-of-america-earnings-2014-7#ixzz37d6bpjze

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22. Two Significant Datapoints Are Coming Up Today That Will Tell Us Something About The Inflation Debat

http://www.businessinsider.com/economic-data-july-16-2014-7

There are two significant economic datapoints coming out in the US today.
Here they are, via Calculated Risk:

• At 8:30 AM, the Producer Price Index for June from the BLS. The consensus is for a 0.3% increase in prices.

• At 9:15 AM, the Fed will release Industrial Production and Capacity Utilization for June. The consensus is for a 0.4% increase in Industrial Production, and for Capacity Utilization to increase to 79.2%.

One reason these are both interesting is that they may help shape the debate about inflation. The Producer Price Index (PPI) is itself an inflation measure, which attempts to capture the cost of raw goods that go into making things. And "Capacity Utilization" tells us how much of our current produciton infrastructure is in use or idle. The higher that number gets, the less slack there is in the system.

The question of whether inflationary pressures are building in the economy is one of the biggest, and most important questions of the moment. Right now, the Fed's view is that there isn't much inflation pressure, and that signs of rising prices are "noise." It's this view which allows it to indicate that rate hikes won't come for quite awhile yet. If the Fed is wrong, and there isn't much slack in the system, and prices for all kinds of things start to tick up, then the Fed could be forced to hike sooner.



Read more: http://www.businessinsider.com/economic-data-july-16-2014-7#ixzz37d7Tbwj4

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23. SOCGEN: The 'Dark Cloud Of A Housing Downturn' Still Looms For The Chinese Economy

http://www.businessinsider.com/socgen-dark-cloud-china-2014-7

Chinese GDP data for Q2 is out today, and the median market expectation among economists is for annualised growth of 7.4% year on year.
This is a stronger number than might have been expected earlier in the year for the economy whose fortunes are closely linked to that of Australia’s, being our closest trading partner. There has been some gathering momentum in China’s economy in recent months, thanks to some targeted stimulus measures from the Chinese government, such as rail building projects.

Societe Generale is a little ahead of the market, expecting GDP growth of 7.5% for the year. This is a big upward revision to their previous estimate of 7.1%.

But this morning they warn a good number shouldn’t be taken as a sign that China is out of the woods. In their Asia morning call today, the bank wrote to clients:

… better GDP growth in Q2 does not mean lower risk ahead, in our view. The dark cloud of the housing downturn is still hovering over the economy. The latest report from Soufun, a private data provider that monitors property prices in 100 Chinese cities, showed that the average residential property price declined 0.5% mom in June, more than doubling the pace of contraction in the previous month. The survey also indicated that new apartments offered deeper discounts, as developers were eager to boost sales in order to liquidate their inventories. Housing construction and investment data are likely to have deteriorated further in June. As a result, we expect year-to-date fixed asset investment growth to remain at 17.2% yoy, despite a positive base effect and further pick-up in infrastructure investment.


Read more: http://www.businessinsider.com.au/soc-gen-the-dark-cloud-of-a-housing-downturn-still-looms-for-the-chinese-economy-2014-7/#ixzz37d8FtlzR

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24. The End of the World Bank?

http://www.bloombergview.com/articles/2014-07-15/the-end-of-the-world-bank

The new international financial institutions that Brazil, Russia, India, China and South Africa are creating this week at their summit meeting in Brazil would have made little sense in the world of Western triumph Francis Fukuyama described in his 1989 article, "The End of History?" That world, however, didn't materialize.

In this one, the BRICS nations' rebellion against Western-run pillars of the global financial system is more than just a political gesture: It is a threat and a bargaining tool.

The World Bank has a subscribed capital of $223.2 billion, paid in or payable by 188 countries. The U.S. is the biggest shareholder with 16 percent. China is the third biggest, with 5.76 percent, which makes its share of the World Bank's capital $12.86 billion. So the $10 billion it agreed to put into the BRICS Development Bank won't be much smaller. Russia, India, Brazil and South Africa, all contributing equally, will pay in more money to the BRICS bank than they do to the World Bank.

The contributions that nations make to the International Monetary Fund -- which has $315 billion in immediately available resources and more than $1 trillion it can get under certain conditions -- are also determined by the relative sizes of their economies. The U.S., again, is the biggest contributor. Russia's IMF quota is $9.19 billion -- roughly half the $18 billion it will provide to the BRICS nations' last-resort pool, the $100 billion Contingent Reserve Arrangement. China is contributing $41 billion to the reserve, almost three times its IMF quota.

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25. BofA Profit Fall 43% on Expenses Linked to Mortgage Costs

http://www.bloomberg.com/news/2014-07-16/bofa-profit-fall-43-on-expenses-linked-to-mortgage-costs.html

Bank of America Corp., the second-biggest U.S. bank, said profit declined 43 percent on costs tied to mortgage disputes, including a settlement with American International Group Inc.

Net income fell to $2.29 billion in the second quarter, or 19 cents a share, from $4.01 billion, or 32 cents, a year earlier, the Charlotte, North Carolina-based firm said today in a statement. Earnings excluding litigation costs were 41 cents a share. The average estimate of 24 analysts surveyed by Bloomberg was 29 cents.

Mortgage-related legal costs continue to dog Brian T. Moynihan, 54, in his fifth year as chief executive officer. Through the first quarter, the bank had booked more than $55 billion in expenses tied to home loans, foreclosures or bonds backed by mortgages, mostly because of his predecessor’s 2008 purchase of subprime lender Countrywide Financial Corp.

“If they’re in talks with the government for another settlement and have a grasp of what the number will be, they have to put aside money for it,” said Nancy Bush, a bank analyst who founded NAB Research LLC in New Jersey. “The Street is saying, ‘Whatever, just get it done.’”

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26. EU Readies Russia Sanctions Amid U.S. Pressure on Ukraine

http://www.bloomberg.com/news/2014-07-15/eu-leaders-weigh-sanctions-against-russia-over-ukraine.html

European Union leaders may impose their first sanctions today against Russian companies that are helping undermine Ukraine as the U.S. urges the bloc to take a tougher stance against Moscow.

EU leaders may also agree at a summit tonight in Brussels to cut off lending for investment projects in Russia, halt bilateral cooperation programs and further clamp down on commerce with Crimea, which President Vladimir Putin’s government annexed from Ukraine in March, according to a draft document of conclusions obtained by Bloomberg News.

The EU “condemns the continuation of illegal activities by armed militants in eastern Ukraine,” the draft says. The 28-nation bloc will “proceed with the expansion of restrictive measures.”

The EU summit follows a meeting in Washington of EU ambassadors and U.S. officials, who told their European allies Russia was sending heavy weapons including tanks and rockets and other means of support to separatists in eastern Ukraine in contradiction to statements by Putin’s government that it is trying to pursue peace.

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27. Obama Administration Seeks Curbs on Offshore Tax Deals

http://www.bloomberg.com/news/2014-07-16/obama-administration-seeks-curbs-on-offshore-tax-deals.html

The Obama administration called for immediate congressional action to stop U.S. companies from using cross-border mergers to escape the country’s tax system, the latest trend in corporate deal-making.

In a letter calling for a “new sense of economic patriotism,” Treasury Secretary Jacob J. Lew said Congress should approve tax changes retroactive to May.

“We should prevent companies from effectively renouncing their citizenship to get out of paying taxes,” Lew wrote in the letter to top congressional tax writers, which was dated yesterday and obtained by Bloomberg News. “We should not be providing support for corporations that seek to shift their profits overseas to avoid paying their fair share of taxes.”

The mergers used to legally avoid taxes, known as inversion transactions, have become increasingly popular over the past year, particularly in the pharmaceutical industry. Companies such as Minneapolis-based Medtronic Inc. (MDT) and Canonsburg, Pennsylvania-based Mylan Inc. (MYL) have announced their intention to move their legal addresses outside the U.S. Pfizer Inc., based in New York, attempted to move its tax address to the U.K. by purchasing London-based AstraZeneca Plc. (AZN)

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28. Dollar Dominance Intact as U.S. Fines on Banks Raise Ire

http://www.bloomberg.com/news/2014-07-15/dollar-dominance-intact-as-u-s-fines-on-banks-raise-ire.html

The record fine imposed on France’s largest bank over transactions in U.S. dollars revived European complaints about the greenback’s pre-eminence in global finance. History shows calls to supplant the currency will be futile.

The dollar hasn’t budged from its top spot for the past three decades, withstanding repeated efforts to unseat it. Almost 90 percent of the $5.3 trillion a day in foreign-exchange transactions last year involved the dollar, the same share as in 1989, data from the Bank for International Settlements show. More than 80 percent of trade finance was done in dollars in 2013, according to Swift, a global financial-messaging network.

Companies, consumers and central banks around the world prefer the dollar to other currencies, including the euro and yen, because they trust the Federal Reserve and the U.S. government to back it, according to Marc Chandler, the chief currency strategist at Brown Brothers Harriman & Co.

“There are always people who say the dollar is going to be replaced, but it hasn’t happened,” said Chandler, who’s based in New York. “The biggest threat to the dollar’s dominance is the U.S. deciding to abdicate one day, not others complaining about it for this reason or that.”

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29. EU Bank-Aid Rules Await Test as Espirito Santo Wobbles

http://www.bloomberg.com/news/2014-07-15/eu-bank-aid-rules-await-test-as-espirito-santo-wobbles.html

Banco Espirito Santo SA could become a test case for European Union rules on creditor losses at failing banks, adding to pressure on Portugal’s second-biggest lender as it tries to avoid collapse.

Prime Minister Pedro Passos Coelho last week urged Banco Espirito Santo’s corporate group to negotiate with creditors “as soon as possible,” while ruling out the need for a bailout. The bank roiled markets on July 10 when a parent company called Espirito Santo International SA missed some payments on commercial paper.

Passos Coelho’s comments highlight the twofold challenge facing equity and junior debt investors: bank bondholders would face losses both if the bank collapsed on its own and if it received a government capital injection, because of EU rules put in place at the height of the debt crisis.

“You have to do the bail-in at some stage in order to give a credible signal to investors so that investors adjust their exposures,” Guntram Wolff, director of the Bruegel research group in Brussels, said by telephone.

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30. Exotic Debt Trap Spurs Danske Bank Pension Fund Review

http://www.bloomberg.com/news/2014-07-15/exotic-debt-trap-spurs-danske-pension-fund-review-nordic-credit.html

The pension unit of Danske Bank A/S (DANSKE), Denmark’s biggest lender, is setting aside 5 percent of its $60 billion under management to escape credit markets it says may suffer a price shock.

Danica Pension will use the funds to accelerate purchases in private equity and other assets less exposed to market froth, Chief Financial Officer Jacob Aarup-Andersen said in an interview. The fund is targeting investments with a closer price link to the “real economy,” he said.

“If I had to list the number of exotic deals that have been proposed here at almost no extra yield, it is quite phenomenal,” he said. “The moment yields disappear in one asset class, people just move on to the next. It’s hard to find yield, and we don’t want to be blind and just chase yield down the curve.”

An unprecedented period of monetary easing across most of the developed world is distorting asset prices, the Bank for International Settlements said in June. Bonds in the Bank of America Merrill Lynch Global High Yield Index soared to a record of more than $2 trillion in July. So far this month, the index has delivered investors a 0.01 percent loss, according to data compiled by Bloomberg.

[DemReadingDU]

31. Bloomberg video - A Rare Look Inside Foxconn's Latest Facility

A Rare Look Inside Foxconn's Latest Facility
July 14 (Bloomberg) --- The world's largest consumer electronics producer, Foxconn, unveiled a new campus in the relatively-undeveloped city of Guiyang last week. It's the first manufacturing base Foxconn built with environment sustainability as the focus. But that's not its only purpose. Bloomberg's Christine Hah was in Guiyang to suss out just what Chairman Terry Gou has in mind.

appx 2.5 minutes

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32. France Investigating Package Delivery Companies

PARIS — Three of the world's leading package delivery businesses are being investigated by France's competition watchdog, and may face fines.

U.S.-based FedEx Corp., TNT Express NV from the Netherlands and Britain's Royal Mail PLC are all under investigation for unidentified malpractices.

Yannick Le Dorze of the French Competition Authority said Wednesday that an investigation is underway, but would not name the companies targeted or say what they are suspected of doing. He said it could take months before the probe is concluded.

FedEx, TNT Express and Royal Mail said in statements they could suffer "material" losses after receiving a notice from the French authority alleging breaches of anti-trust rules. The three companies all said they were cooperating with the competition authority.

http://abcnews.go.com/International/wireStory/france-investigating-package-delivery-companies-24578837