STOCK MARKET WATCH -- Wednesday, 16 January 2013

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Wednesday, 16 January 2013[font color=black][/font]

SMW for 15 January 2013

AT THE CLOSING BELL ON 15 January 2013
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Dow Jones 13,534.89 +27.57 (0.20%)
S&P 500 1,472.34 +1.66 (0.11%)
[font color=red]Nasdaq 3,110.78 -6.72 (-0.22%)


[font color=red]10 Year 1.83% +0.02 (1.10%)
30 Year 3.02% +0.02 (0.67%) [font color=black]


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[font size=2]Market Conditions During Trading Hours[/font]
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[font size=2]Euro, Yen, Loonie, Silver and Gold[center]

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[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
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Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
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[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
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The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
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[font color=black][font size=2]Handy Links - 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.



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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. It's more like the manure wagon has overturned

and covered the road. Nothing passes that doesn't get smeared in shit.


Take as examples the following posts....

[Demeter]

2. How Pursuit of (A CRIMINAL) Billionaire Hit One Dead End

http://dealbook.nytimes.com/2013/01/14/how-pursuit-of-billionaire-hit-one-dead-end/

When Jonathan Hollander left his high-flying job at SAC Capital Advisors in late 2008, he departed one of Wall Street’s premier hedge funds...Weeks later, when two Federal Bureau of Investigation agents confronted him outside the Equinox gym in Greenwich Village, Mr. Hollander realized that investigators viewed his former employer as something else — a corrupt organization rife with insider trading.

The agents took Mr. Hollander into a nearby cafe and questioned him about his trading in the stock of a supermarket chain. They showed him a sheet of paper with headshots of several of his former colleagues. At the center was a photograph of Steven A. Cohen, the billionaire owner of SAC, according to two lawyers briefed on the meeting who requested anonymity because they were not authorized to discuss it publicly. The agents compared Mr. Cohen to a Mafia boss who sat atop a criminal enterprise, the lawyers said.

In the end, no criminal case was filed against Mr. Hollander. And neither Mr. Cohen nor SAC has been accused of any wrongdoing. Mr. Cohen has told employees and clients that he and SAC have at all times acted appropriately...An examination of Mr. Hollander’s case, based on a review of court documents and interviews with people involved in the investigation, provides a lens into the government’s aggressive crackdown on insider trading and fierce pursuit of Mr. Cohen over the last decade. Investigators saw Mr. Hollander as a suspect, and he also piqued their interest as someone who could open a window into SAC and Mr. Cohen.

Yet the investigation of Mr. Hollander, 37, also highlights the challenges of using lower-level employees to build a case against their boss. The authorities have moved on from Mr. Hollander, who is working as an entrepreneur. Today, they are focused on another former junior SAC employee, Mathew Martoma, who is fighting a recent indictment and refuses to cooperate with the government. Mr. Martoma’s case has increased the pressure on SAC and Mr. Cohen, who was involved in the trades at the center of the charges against Mr. Martoma....

MEANWHILE...BACK AT THE TBTF....

[Demeter]

3. Bank Deal Ends Flawed Reviews of Foreclosures

http://www.nytimes.com/2013/01/11/business/bank-deal-ends-flawed-reviews-of-foreclosures.html

Federal banking regulators are trumpeting an $8.5 billion settlement this week with 10 banks as quick justice for aggrieved homeowners, but the deal is actually a way to quietly paper over a deeply flawed review of foreclosed loans across America, according to current and former regulators and consultants.

To avoid criticism as the review stalled and consultants collected more than $1 billion in fees, the regulators, led by the Office of the Comptroller of the Currency, abandoned the effort after examining a sliver of nearly four million loans in foreclosure, the regulators and consultants said.

Because they have no idea how many borrowers were harmed, the regulators are spreading the cash payments over all 3.8 million borrowers — whether there was evidence of harm or not. As a result, many victims of foreclosure abuses like bungled loan modifications, deficient paperwork, excessive fees and wrongful evictions will most likely get less money.

“It’s absurd that this money will be distributed with such little regard to who was actually harmed,” said Bruce Marks, the chief executive of the nonprofit Neighborhood Assistance Corporation of America...

THE WHOLE EVENT FROM BEGINNING TO NOW IS ABSURD. WATCH HOW EVERYONE TWISTS AND TURNS TO AVOID THE ELEPHANT IN THE LIVING ROOM...

[Demeter]

4. The Foreclosure Fiasco By JOE NOCERA

http://www.nytimes.com/2013/01/15/opinion/nocera-the-foreclosure-fiasco.html?_r=0

It’s been five days since Jessica Silver-Greenberg’s article (POSTED ABOVE) on the latest bank settlement was posted on The New York Times’s Web site. I’m still shaking my head. Her “story behind the story” of the $8.5 billion settlement between federal bank regulators and 10 banks over their foreclosure misdeeds illustrates just about everything that is wrong with the way the government has handled the Great Foreclosure Crisis.

Shall we count the ways?

1. It is more about public relations than problem-solving. Pick a program — any program — that the Obama administration unveiled to help troubled homeowners over the past four years. Not one has amounted to a hill of beans. This settlement is no different. The country’s primary bank regulator, the Office of the Comptroller of the Currency — which, along with the Federal Reserve, engineered the settlement — is trying to make it look like a victory. Of the $8.5 billion, $3.3 billion will go directly to foreclosed-upon borrowers, making it “the largest cash payout to date,” according to Bryan Hubbard, the O.C.C.’s chief spinmeister. (The rest of the money will consist of reduced interest payments and loan modifications.)...In truth, the O.C.C. needed to save face after a foreclosure review process it had mandated had become an expensive fiasco. As amply demonstrated by Silver-Greenberg and American Banker, the government insisted that the banks hire expensive consultants to do a review of every foreclosure that took place in 2009 and 2010. The consultants racked up more than $1 billion in fees, while proceeding at such a molasseslike pace that the feds and the banks finally threw up their hands. The settlement made the whole thing go away.

2. Accountability? What’s that? We have known for a long time that overwhelmed bank servicers took shortcuts, like robo-signing, that violated many state laws. They also put people through hell who were trying to get a modified mortgage. “I’ve seen marriages break up because of what banks put families through,” says Elizabeth Lynch of MFY Legal Services. All this settlement does is push those misdeeds under an $8.5 billion rug.

3. It won’t actually help anybody. The settlement will cover some 3.8 million foreclosures. The government is going to distribute $3.3 billion dollars. It comes to around $868 per lost home...Of course, the O.C.C. says that is the wrong way to look at it: Some people — military personnel, for instance — could get as much as $125,000 while others won’t get much at all. People denied a modification will be eligible for up to $40,000 or $50,000, said Hubbard. I have no doubt that money will be welcome. But for those who lost their homes because of bank misconduct, it doesn’t come close to making them whole.

4. The money is being distributed with no regard to whether a borrower suffered harm. In some ways, this is the sorriest part of the whole episode. The foreclosure review never answered the key question: which borrowers had legitimate claims against their bank and which didn’t. Thus, the settlement doesn’t make that distinction. If you lost your house in 2009 and 2010, you are going to get money — whether the bank was culpable or not. “The notion of error is not involved in this settlement,” conceded Hubbard.

As a result, those who really were truly harmed by bank behavior will be shortchanged. As Karen Petrou, the well-known banking consultant, puts it, the government has “come up with something that gives every borrower — maybe — a pittance and leaves the truly hurt — and there were many — as much in the lurch as before.”

This is hardly the only time in recent months that a settlement that is publicized as righting a wrong instead hands money to people who were never victimized. Think back to the $4.3 billion fund established by Congress to compensate people who became sick because of their exposure to toxic dust created by the 9/11 attacks. Even though there is no scientific evidence that the dust caused cancer, the government added cancer to the list of diseases that would be compensated. The result will be less money for those who truly did become sick because of their exposure to the 9/11 aftermath....

[Demeter]

5. The Second Amendment was Ratified to Preserve Slavery

http://truth-out.org/news/item/13890-the-second-amendment-was-ratified-to-preserve-slavery

The real reason the Second Amendment was ratified, and why it says "State" instead of "Country" (the Framers knew the difference - see the 10th Amendment), was to preserve the slave patrol militias in the southern states, which was necessary to get Virginia's vote. Founders Patrick Henry, George Mason, and James Madison were totally clear on that . . . and we all should be too.

In the beginning, there were the militias. In the South, they were also called the "slave patrols," and they were regulated by the states. In Georgia, for example, a generation before the American Revolution, laws were passed in 1755 and 1757 that required all plantation owners or their male white employees to be members of the Georgia Militia, and for those armed militia members to make monthly inspections of the quarters of all slaves in the state. The law defined which counties had which armed militias and even required armed militia members to keep a keen eye out for slaves who may be planning uprisings.

As Dr. Carl T. Bogus wrote for the University of California Law Review in 1998, "The Georgia statutes required patrols, under the direction of commissioned militia officers, to examine every plantation each month and authorized them to search 'all Negro Houses for offensive Weapons and Ammunition' and to apprehend and give twenty lashes to any slave found outside plantation grounds."

It's the answer to the question raised by the character played by Leonardo DiCaprio in Django Unchained when he asks, "Why don't they just rise up and kill the whites?" If the movie were real, it would have been a purely rhetorical question, because every southerner of the era knew the simple answer: Well regulated militias kept the slaves in chains.

MORE AT LINK

[AnneD]

31. Having grown up in the West....

it was really the wild wild West.

I grew up listening to stories, a few first hand (on both sides) of the Great Indian Wars (1622-1923). The only break in the Indian Wars was for the Civil War. Neither side wanted to open up a second front. If an unfriendly Indian or settler didn't get you, the wildlife would (and still can in some areas).

I have noticed this is something that is frequently forgotten in all the gun control talks. We have a historical gun culture that is fairly recent.

My train of thought is that TPTB want to place us all on the Reservation (AKA POW camps, formally known as the land of the free and the home of the brave). Having had ancestors that were forcible marched to their POW camp, I have an inherent distrust of the government. The great white father is not all that great.

[Demeter]

6. Eight Things I Miss About the Cold War By Jon Wiener

http://truth-out.org/news/item/13936-eight-things-i-miss-about-the-cold-war

1. The president didn’t claim the right to kill American citizens without “the due process of law.”

2. We didn’t have a secret “terrorism-industrial complex.”

3. Organized labor was accepted as part of the social landscape.

“Only a fool would try to deprive working men and women of their right to join the union of their choice.” That’s what President Dwight D. Eisenhower said in 1952. “Workers,” he added, “have a right to organize into unions and to bargain collectively with their employers,” and he affirmed that “a strong, free labor movement is an invigorating and necessary part of our industrial society.” He caught the mood of the moment this way: “Should any political party attempt to… eliminate labor laws, you would not hear of that party again in our political history.” “There is,” he acknowledged, “a tiny splinter group, of course, that believes you can do these things, but their number is negligible... And they are stupid.”

You certainly wouldn’t catch Barack Obama saying anything like that today...

4. The government had to get a warrant before it could tap your phone.

5. The infrastructure was being expanded and strengthened.

6. College was cheap.

7. We had a president who called for a “war on poverty.”

In his 1966 State of the Union address, President Lyndon Baines Johnson argued that “the richest Nation on earth… people who live in abundance unmatched on this globe” ought to “bring the most urgent decencies of life to all of your fellow Americans.” LBJ insisted that it was possible both to fight communism globally (especially in Vietnam) and to fight poverty at home. As the phrase then went, he called for guns and butter. In addition, he was determined not simply to give money to poor people, but to help build “community action” groups that would organize them to define and fight for programs they wanted because, the president said, poor people know what’s best for themselves.

Of course, it’s true that Johnson’s “War on Poverty,” unlike the Vietnam War, was woefully underfunded, and that those community action groups were soon overpowered by local mayors and Democratic political machines. But it’s also true that President Obama did not even consider poverty worth mentioning as an issue in his 2012 reelection campaign, despite the fact that it has spread in ways that would have shocked LBJ, and that income and wealth inequalities between rich and poor have reached levels not seen since the late 1920s. Today, it’s still plenty of guns -- but butter, not so much.

8. We had a president who warned against “the excessive power of the military-industrial complex.”

MORE DETAIL AT LINK

[Demeter]

7. America's False History Allows the Powerful to Commit Crimes Without Consequence

http://truth-out.org/progressivepicks/item/13904-americas-false-history-allows-the-powerful-to-commit-crimes-without-consequence

Seasoned journalist Robert Parry offers a thoroughly researched account of how the Republican Party and neocons have conspired to creative a false narrative about America's political and constitutional history. In particular, Parry tenaciously documents the accusations that he has pursued for years: that the Nixon campaign undermined peace talks that likely would have ended the Vietnam War in 1968 or 1969 in order to win the presidency; and that the Reagan campaign conspired with the revolutionary Iranian government to ensure that the US embassy hostages were not released before the 1980 election in order to seal Jimmy Carter's defeat.

Furthermore, Parry ties together calamitous US foreign policy decisions with the "stolen narrative" that has suppressed the true account of how the neocons and right wing rose to power in the US. Indeed, Parry connects the dots from the sabotaged Lyndon Johnson Vietnam peace talks to the deceptions that led to the Iraq War and beyond.

At the end of Chapter Eight of American's Stolen Narrative, Robert Parry writes: "But the end result of the failed investigations into the presidencies of Ronald Reagan and George H.W. Bush meant something else for the American people. They were left wandering in a wilderness of false narratives, trying to chart their future on a map drawn by liars."

MORE AT LINK

[Demeter]

8. I suppose it depends on who is making the change...

[Demeter]

9. Why Obama’s Gamble on Debt Ceiling Depends on GOP Being More Sane Than it Is By Robert Reich

http://www.nationofchange.org/why-obama-s-gamble-debt-ceiling-depends-gop-being-more-sane-it-1358259894


A week before his inaugural, President Obama says he won’t negotiate with Republicans over raising the debt limit. At an unexpected news conference on Monday he said he won’t trade cuts in government spending in exchange for raising the borrowing limit.

“If the goal is to make sure that we are being responsible about our debt and our deficit - if that’s the conversation we’re having, I’m happy to have that conversation,” Obama said. “What I will not do is to have that negotiation with a gun at the head of the American people.”

Well and good. But what, exactly, is the President’s strategy when the debt ceiling has to be raised, if the GOP hasn’t relented? He’s ruled out an end-run around the GOP. The White House said over the weekend that the President won’t rely on the Fourteenth Amendment, which arguably gives him authority to raise the debt ceiling on his own. And his Treasury Department has nixed the idea of issuing a $1 trillion platinum coin that could be deposited with the Fed, instantly creating more money to pay the nation’s bills. In a pinch, the Treasury could issue IOUs to the nation’s creditors — guarantees they’ll be paid eventually. But there’s no indication that’s Obama’s game plan, either.

So it must be that he’s counting on public pressure — especially from the GOP’s patrons on Wall Street and big business — to force Republicans into submission. That’s probably the reason for the unexpected news conference, coming at least a month before the nation is likely to have difficulty paying its bills.

The timing may be right. President is riding a wave of post-election popularity. Gallup shows him with a 56 percent approval rating, the highest in three years. By contrast, Republicans are in the pits. John Boehner has a 21% approval and 60% disapproval. And Mitch McConnell’s approval is at 24%. Not even GOP voters seem to like Republican lawmakers in Washington, with 25% approving and 61% disapproving. And Americans remember the summer of 2011 when the GOP held hostage the debt ceiling, bringing the nation close to a default and resulting in a credit-rating downgrade and financial turmoil that slowed the recovery. The haggling hurt the GOP more than it did Democrats or the President.

But Obama’s strategy depends on there being enough sane voices left in the GOP to influence others. That’s far from clear.

FURTHERMORE, IT'S NEGOTIATING WITH TERRORISTS, INSTEAD OF EXERCISING THE POWERS OF THE OFFICE.

MORE

[DemReadingDU]

10. Theme song for today

[Demeter]

11. JPMorgan told to fix oversight tied to $6B loss

http://hosted.ap.org/dynamic/stories/U/US_JPMORGAN_OVERSIGHT?SITE=IADES&SECTION=HOME&TEMPLATE=DEFAULT

JPMorgan Chase & Co. has been ordered to take steps to correct poor risk management that led to a surprise trading loss last year of more than $6 billion.

Federal regulators also on Monday cited the bank for lapses in oversight that could allow the bank to be used for money laundering.

JPMorgan, the nation's largest bank by assets, will not pay a fine under the agreements with the Federal Reserve and the U.S. Comptroller of the Currency, a Treasury Department agency. The bank promised to strengthen its policies and procedures to control risk and to screen customers to prevent money laundering.

The regulators each issued two cease-and-desist orders against JPMorgan, a sanction that requires a bank to change its practices. They said they had found "deficiencies" in the bank's procedures for preventing money laundering, and also uncovered "unsafe or unsound practices" regarding management of risk. The orders said the regulators and other government agencies could pursue further action.

Britain's Financial Services Authority, meanwhile, said in a statement Monday that its own investigation into JPMorgan's trading loss continues....

WELL! THAT'S MIGHTY "ELITE" OF THEM

[Demeter]

27. JPMorgan slashes Dimon's bonus on "Whale" trade SCHAUDENFREUDE FOR BREAKFAST

http://news.yahoo.com/jpmorgan-quarterly-profits-rise-53-percent-122245543--sector.html

JPMorgan Chase & Co's board of directors cut Chief Executive Jamie Dimon's bonus in half, citing the company's $6.2 billion "London Whale" trading loss, the company said on Wednesday. A CLEAR CASE WHERE HALF IS NOT BETTER THAN NOTHING!

Dimon's pay was slashed even though JPMorgan, the largest U.S. bank, said fourth-quarter net income jumped 53 percent, and earnings for 2012 set a record. Fourth-quarter results were helped by increased mortgage lending profit and a decline in costs for bad loans. The board said the bank's strong results were a key reason to give Dimon a bonus, but the London trading losses cut into his compensation.

"As chief executive officer, Mr. Dimon bears ultimate responsibility for the failures that led to the losses in the Chief Investment Office," the bank said in a securities filing.

The trading loss, which was suffered primarily in the second quarter of 2012, has been a major embarrassment for the company.

Dimon's pay for 2012 was $11.5 million, the company said in the filing, including a salary of $1.5 million and a bonus of $10 million. In 2011 Dimon was paid $23 million, including the same salary and a bonus of $21.5 million. The report of the bank's management task force, released on Wednesday, primarily assigns blame for the trading losses to the failure of three executives beneath Dimon: Ina Drew, the former chief investment officer; Barry Zubrow, the former risk chief; and Douglas Braunstein, the former chief financial officer. Drew failed to properly oversee the trades that led to the losses, Zubrow failed to properly set up the risk function in the Chief Investment Office, and Braunstein was responsible for a weakness in financial controls, the report said. But Dimon was not without blame either, according to the task force.

&quot He) could have better tested his reliance on what he was told," the task force said, while also praising him for responding "forcefully" when he learned of the problem.

[xchrom]

12. willow weep for me

[xchrom]

13. JP Morgan profits rise sharply to $5.7bn

http://www.bbc.co.uk/news/business-21044121

JP Morgan Chase has reported a sharp rise in profits on the back of strong growth in lending and deposits.

Net income for the final three months of the year was $5.7bn (£3.6bn), up 54% on the $3.7bn the bank made a year earlier. Total revenue was up 10% at $24.4bn.

The bank's investment banking division performed particularly well, with net income more than doubling to $2bn.

Net income for the whole of 2012 was $21.3bn, a record for the firm.

[xchrom]

14. Japan's Nikkei falls on yen concerns

http://www.bbc.co.uk/news/business-21039441

Japan's stock market has suffered its biggest one-day fall in eight months after government ministers expressed concerns about the weak yen.

The Nikkei index fell 278.64 points, or 2.6%, to 10,600.44, the day after hitting a near three-year high.

The yen has been weakening against the dollar for two months, but has rebounded in the past two days, raising fears that exports may suffer.

Analysts said traders taking profits on recent gains contributed to the drop.

[xchrom]

15. BOJ head says economy will stay weak

http://www.japantimes.co.jp/text/nb20130116n1.html

Bank of Japan Gov. Masaaki Shirakawa said Tuesday that the economy remains weak as the central bank prepares to decide whether to add to stimulus for the fourth time in five months.

"Exports and production are decreasing as the global slowdown continues," Shirakawa told a meeting of BOJ branch managers in Tokyo, adding that the bank will pursue "powerful monetary easing."

In its quarterly report on regional economies released after the meeting, the BOJ downgraded assessments of eight of nine areas of the country compared with three months earlier for the second straight quarter, citing the continued pressure placed on manufacturing due to slowdowns overseas.

All regions except Hokkaido revised their assessments downward. The reasons given were that the pickup in the economy has stalled, been weakening or is unchanged.

[xchrom]

16. That's Life- Sinatra Suite{twyla tharpe choreography}

[xchrom]

17. US Postal Service faces ruin without rescue from Congress, watchdog warns

http://www.guardian.co.uk/world/2013/jan/15/us-postal-service-ruin-congress-warning

The chief postal watchdog has warned that the troubled US Postal Service will go out of business this year unless Congress acts to rescue it.

David Williams, the inspector general of the USPS, says the service is in "very serious trouble", after five years lumbered with heavy debt and falling revenues.

In an interview with the Guardian, Williams warns that Congress, which has been distracted by November's elections and the fiscal cliff crisis, must act this year to save the service.

The USPS lost over $16bn last year, and has lost about $41bn over the past five years, according to Robert Taub, a vice-chairman of the Postal Regulatory Commission.

[xchrom]

18. Germany's export model faces reality check

http://www.guardian.co.uk/business/economics-blog/2013/jan/15/germany-exports-economic-slowdown

Like Britain, Germany needs to rebalance its economy. But whereas the UK tends to live beyond its means, consuming and importing too much, Germany has the opposite problem. The sharp slowdown in 2012 growth shows just how vulnerable Europe's biggest economy is to events in the rest of the world.

After posting strong growth of 4.2% in 2010 and 3% in 2011, Germany came down to earth with a bump last year. National output expanded by 0.7%, and although Berlin has yet to publish data for the final three months of 2012 the government is pencilling in a fall in gross domestic product of around 0.5%.

Two key factors lie behind the current slowdown. Firstly, life has been a lot tougher in 2012 for German exports. The impressive recovery in 2010 was largely due to global demand for Germany's precision manufacturing goods, particularly the machine tools needed by the bigger developing countries for their industrialisation programmes. That demand cooled in 2012, with the uncertainty caused by the US fiscal cliff row further affecting export sales.

[xchrom]

19. World Bank trims growth forecast

http://www.washingtonpost.com/business/economy/world-bank-trims-growth-forecast/2013/01/15/f5fafc0e-5f48-11e2-b05a-605528f6b712_story.html

The World Bank has sharply reduced its estimate of global economic growth in 2013, projecting that the downturn in Europe and the United States’ fiscal problems will continue to weigh on investment and spending.

The bank said it expects the world economy to expand 2.4 percent this year, compared with 3 percent growth it had forecast as of June.

The second half of 2012 saw a worsening of the euro crisis, fiscal brinksmanship in the United States that left central debt and spending issues unresolved, and a recognition that developing countries were slowing as well.

Although World Bank officials said they found some developments last year “comforting,” including the deal that avoided the worst of the “fiscal cliff” in the United States, they still saw big risks ahead: a misstep in Europe that aggravates problems there, or a collapse in fiscal talks that threatens the U.S. sovereign debt rating.

[xchrom]

20. Peugeot Citroen workers occupy, shut down production at plant that automaker is abandoning

http://www.washingtonpost.com/business/peugeot-citroen-workers-occupy-shut-down-production-at-plant-that-automaker-is-abandoning/2013/01/16/995e646a-5fd2-11e2-9dc9-bca76dd777b8_story.html

PARIS — Hundreds of Peugeot Citroen workers occupied a French factory scheduled to be sold off, largely shutting down production in a protest against planned layoffs at the struggling automaker.

The Aulnay plant near Paris has been at the center of a battle over the future of France’s largest automaker. The company announced last year that it planned to cut 8,000 jobs and close Aulnay as it struggles to compete in Europe’s stagnant car market. The company reported a €819 million ($990 million) loss in the first half of 2012; it will announce its full-year results next month.

On Wednesday, the CGT union said 300 workers stopped all production at the plant. The company meanwhile said around 230 were out on strike — with many more absent — and that very little work was being done.

That’s a small percentage of the 3,000 people employed at Aulnay, but the union said they were able to “paralyze” the factory because most of the striking employees work in production.

[xchrom]

21. U.S media brings glitz to increasingly urbane Mongolia

http://www.rawstory.com/rs/2013/01/16/u-s-media-brings-glitz-to-increasingly-urbane-mongolia/



Every time a new Mongolian-language edition of Cosmopolitan magazine is released, Tselmeg Erdenkhuu sits down with a friend to explore a monthly dose of Hollywood gossip, glitzy fashion and scintillating sex.

“They talk about sex a lot in this magazine, like what position is healthy or how to make men go crazy,” said the 28-year-old businesswoman, a single mother.

The titillating revelations are just part of a US media invasion of the once remote country, which has ridden a globalisation wave since shaking off communism two decades ago.

Mongolians are avid readers and the country’s literacy rate is over 97 percent, a legacy of the Soviet-era education system which saw village boarding schools set up for nomads’ children.

[xchrom]

22. Flag Riots in Northern Ireland Grim Prospects Drive Youth to Sectarian Violence

http://www.spiegel.de/international/europe/flag-riots-grim-prospects-drive-northern-irish-youth-to-violence-a-877569.html

The violent flag riots in Belfast have shown just how delicate relations between sectarian groups in the British province remain. They also reveal the frustrations of a generation that has grown up feeling misunderstood and disadvantaged.

Raymond Lavery was about to describe just how messy the situation has become in Belfast when a loud bang, probably a firecracker, ripped through the air a few meters away. The explosion was so loud that any normal person would duck for cover. But Lavery didn't even flinch.

He was standing in front of one of the many walls in the Northern Irish capital that separate Catholics and Protestants. The 52-year-old works for Inner East, an outreach project for boys and girls on the Protestant side of the wall. His office is near one of the streets where wooden pallets, trash bins and cars have been burning for weeks now. "It's not only about the flag anymore," he says.

On Dec. 3, the Belfast City Council voted to stop flying the British flag on the city hall every day. Instead, the Union Jack will now only be raised on special occasions. Protestants saw the decision as yet another defeat by the city's increasingly strong Catholic community, and it didn't take long for more than 1,000 Protestants to protest in front of the building. Lavery was among them.

[xchrom]

23. Frank Sinatra - "I Get A Kick Out Of You"

[xchrom]

24. Euro at 10-Month High Poses Economic Threat, Juncker Says

http://www.bloomberg.com/news/2013-01-16/euro-exchange-rate-is-dangerously-high-juncker-says.html

The euro’s 8 percent gain against the U.S. dollar in the past six months is posing a fresh threat to the European economy just as it shows signs of escaping the debt crisis, said Jean-Claude Juncker, who leads the group of euro-area finance ministers.

Echoing policy makers from Switzerland to Japan in bemoaning strong exchange rates, Juncker late yesterday called the euro’s value “dangerously high” after the 17-nation currency this week traded above $1.34 against the dollar for the first time since February last year.

The euro has rallied amid growing signs in financial markets that the three-year debt turmoil is fading and after European Central Bank President Mario Draghi last week signaled no immediate plan to ease monetary policy further.

“It was said last year that the euro zone was at risk of breaking and I said last year that this won’t happen,” Juncker, who steps down this month as head of the so-called eurogroup, told an annual gathering of business leaders in Luxembourg. “The euro zone has become more stable after lots of efforts, some from me,” Juncker said, adding that now “the euro foreign-exchange rate is dangerously high.”

[xchrom]

25. Consumer Prices in U.S. Little Changed as Inflation Recedes

http://www.bloomberg.com/news/2013-01-16/consumer-prices-in-u-s-little-changed-as-inflation-recedes.html


The cost of living was little changed in December, capping the third-smallest annual gain in the past decade, indicating U.S. inflation remains at bay.

The unchanged reading in the consumer-price index matched the median estimate of 83 economists surveyed by Bloomberg and followed a 0.3 percent drop the prior month, Labor Department data showed today in Washington. Costs rose 1.7 percent in 2012, down from a 3 percent increase in 2011.

Price increases will probably remain restrained as retailers like Target Corp. (TGT) use discounts to attract customers and budget battles in Washington hurt confidence. Federal Reserve policymakers are unlikely to maintain unprecedented easing measures while inflation holds below their target level and absent further progress on reducing joblessness.

Price gauges “are all sending a pretty consistent message of contained inflation pressures,” Daniel Silver, an economist at JPMorgan Chase & Co. in New York, said before the report. The Fed’s accommodative monetary policy is “on track, definitely from the inflation front,” he said.

[xchrom]

26. Bank of Portugal predicts much deeper recession than the government this year

http://elpais.com/elpais/2013/01/15/inenglish/1358266569_425965.html

The Bank of Portugal on Tuesday predicted another dire year for the domestic economy, which is expected to shrink by almost double the amount estimated by the government.

In its winter bulletin on the outlook for the economy posted on its website, the central bank forecast that GDP would contract 1.9 percent this year after a drop in output of 3.0 percent last year. In its fall report, it estimated a contraction of 1.6 percent. The government and the so-called troika – the IMF, European Union and European Central bank, expect GDP to contract 1.0 percent this year.

The ongoing austerity program imposed on the government of Prime Minister Pedro Passos Coelho in exchange for a bailout of 78 billion euros will continue to weigh on domestic demand, which the central bank expects will make a negative contribution to GDP of 4.0 percentage points, compared with a negative 7.2 points in 2012.

However, the main reason for the revision in the size of the contraction is weaker export growth, largely because of the slowdown in the euro zone. This will cause the positive contribution of net trade -- exports minus imports -– to slow to 2.1 percentage points from 4.2 points.

[Demeter]

28. Goldman earnings soar on revenue gains, compensation cuts

http://news.yahoo.com/goldman-earnings-soar-revenue-gains-compensation-cuts-125047982--sector.html


Goldman Sachs Group Inc said its fourth-quarter earnings nearly tripled, driven by big gains in stock and bond values, increased revenue from dealmaking and lower compensation expenses. Goldman, the fifth-largest U.S. bank by assets, reported earnings of $2.8 billion, or $5.60 per share, up from $978 million, or $1.84 per share, in the same period a year ago. Analysts mostly had been forecasting much lower figures. Following its early morning report on Wednesday, Goldman shares were up 1.8 percent at $138 in premarket trading.

A significant part of Goldman's earnings boom came from improvements in market values in the stock and bond markets, as well as increased activity. The New York-based investment bank said it took in "significantly higher" revenues from credit products and mortgages in its bond-trading business. Its investing and lending division, which mostly earns money from higher values on Goldman's own stock and bond investments, reported nearly $2 billion worth of revenue. But gains were broad, with revenue up across each of Goldman's business lines, from investment banking to investment management. Overall, its revenue rose 53 percent to $9.2 billion from $6 billion in the fourth quarter of 2011.

Goldman's earnings were also helped by a sharp decline in compensation expenses, typically the biggest cost for Wall Street firms. The bank said compensation fell 11 percent in the fourth quarter compared with a year ago. The expense was just 21 percent of net revenue, roughly half of what the firm usually pays out to employees.

[Demeter]

29. Why the Housing Recovery is Nearly Homeowner-Less

http://truth-out.org/news/item/13883-why-the-housing-recovery-is-inequitable

The financial crisis of 2008 was terrible for homeowners saddled with heavy mortgage payments, especially the millions of low-income, first-time buyers who were tempted to buy in with deceptive loans during the height of the housing bubble. About 4 million foreclosures have been completed since the financial crisis of 2008, according to CoreLogic, a data provider to the real estate industry. Since 2006, when subprime loans first began to default in large numbers, there have been 9.4 million foreclosures initiated, according to the Federal Reserve Bank of New York (US Fed). To a select group of hedge fund and investment bankers the financial crisis that pivoted on these foreclosures was the opportunity of a lifetime. They made billions from the crash by wagering against the stability of the US housing market.

Now some of the same elite investors are tacking backward and betting on a recovery of the housing market. It's a strange recovery though, propelled not so much by families seeking their own piece of the American dream, but instead by the US Fed's monetary policies. Low-interest rates fostered by the Fed are causing big-money investors to purchase foreclosed single-family homes in blocks of hundreds, even thousands. Expected gains in home prices are also leading hedge funds and investment bank traders to gamble on housing derivatives.

Like the so-called jobless recovery, characterized by rising business earnings in the midst of high unemployment, the nascent housing recovery is not propelled by a rise in homeownership rates, employment and incomes. Instead, foreclosure rates remain high, as does do unemployment figures, and there's a big backlog of bank-owned properties that has yet to hit the market. Meanwhile, many former home owners have been relegated to the status of renters. If home prices are truly embarked on a sustained rise, the big gains in any new equity created will likely accrue to a smaller number of owners, many of them corporate investor-landlords, and to a few elite financial speculators positioned to make complex derivatives bets on housing bonds. That's how it's playing out so far...

[Demeter]

30. America has a talent for selling ‘really bad debt’

http://www.marketwatch.com/story/sorry-mr-president-we-are-a-nation-of-deadbeats-2013-01-16?siteid=YAHOOB

PREVIOUS HEADLINE: sorry-mr-president-we-are-a-nation-of-deadbeats

Scott Reynolds Nelson, a history professor at the College of William and Mary in Williamsburg, Va., came out with a book last September called “A Nation of Deadbeats.” Subtitled “An Uncommon History of America’s Financial Disasters,” it chronicles crises as far back as the 1700s. Most of these episodes left the foreign creditors wondering whether Americans would ever pay their debts.

Slave owners in the 1800s, for instance, borrowed heavily from overseas investors, promising higher returns from cotton production. These projections fell short and the slave owners defaulted en masse...
Railroads in the 1850s created what Nelson argues were the first collateralized debt obligations. They sold bonds based on mortgages for homesteads along the tracks. Overseas investors snapped them up and then they went belly up.

History truly repeats. As the lending cycle accelerates, bankers, brokers, money lenders and insurers eventually lose their wits. Greed, if not sheer momentum, overwhelms them, and soon they can no longer tell good loans from bad. When the music stops, they hide from creditors, file bankruptcies and lobby for government rescues. Read Brett Arends’ column on the recent history of Americans walking away from debts...This impulse may be universal to human societies, but Americans have a special knack for it.

“We are supremely talented at selling really bad debt,” Nelson explained in a telephone interview. “It’s an American gift. We have always had an amazingly slick sell-side. It’s selling the Brooklyn Bridge. It’s selling land in the West that we don’t own.”

OH! HE MEANS FRAUD, SNAKE OIL, PIE-IN-THE-SKY!

MORE ABUSE AT LINK

[Roland99]

32. Fewer sellers are cutting prices on their homes

http://blogs.marketwatch.com/thetell/2013/01/16/fewer-sellers-are-cutting-prices-on-their-homes/

In another sign of a tightening housing market, the rate of price reductions in the U.S. is falling, the chief economist at real estate site Trulia wrote in a Wednesday blog post.

This month 33.6% of for-sale homes have prices that are reduced from their original listing, down from 36.7% a year earlier, according to economist Jed Kolko.

“Now is the bargain real estate season: asking home prices typically hit their seasonal low point from November through January. This winter, however, markdowns are harder to find,” Kolko wrote. Read Kolko’s blog post.

Looking at the 100 largest cities, 83 are seeing fewer price reductions compared with the same period in the prior year. However, Kolko noted that there are substantial regional differences. For example, 48% of homes in Springfield, Mass. have price reductions this month, compared with 15% in Oakland, Calif.

[bread_and_roses]

33. OMFG - did you guys see this WSJ "pity the rich" "infographic?"

http://www.slate.com/blogs/moneybox/2013/01/16/wsj_fiscal_cliff_infographic.html

Sorry if it's already been posted - no time to read the thread, but didn't want you to miss it if not

[Demeter]

34. No, that's a new one

Is it the Onion?

[bread_and_roses]

35. Evidently not ... at least, I don't think so

I was alerted to it through an e-mail list I'm on - which sent me here http://afscme.tumblr.com/post/40696645755/fify-wall-street-journal - I don't get the WSJ, so don't know for sure, but unless Matthew Yglesias forgot to say it was a joke ....