STOCK MARKET WATCH -- Tuesday, 12 February 2013

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Tuesday, 12 February 2013[font color=black][/font]

SMW for 11 February 2013

AT THE CLOSING BELL ON 11 February 2013
[center][font color=red]
Dow Jones 13,971.24 -21.73 (-0.16%)
S&P 500 1,517.01 -0.92 (-0.06%)
Nasdaq 3,192.00 -1.87 (-0.06%)


[font color=red]10 Year 1.96% +0.01 (0.51%)
30 Year 3.17% +0.01 (0.32%)[font color=black]


[center][/font]

[HR width=85%]

[font size=2]Market Conditions During Trading Hours[/font]
[center]


[/center]

[font size=2]Euro, Yen, Loonie, Silver and Gold[center]

[/center]

[center]

[/center]

[HR width=95%]

[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
[center]
Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
[/center]

[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
[center]
The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
[/center]

[font color=black][font size=2]Handy Links - Essential Reading:[/font][/font]
[center]
Matt Taibi: Secret and Lies of the Bailout


[/center]

[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
[center]
LegitGov
Open Government
Earmark Database
USA spending.gov
[/center]

[font color=black][font size=2]Handy Links - Videos:[/font][/font]
[center]
Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
[/center]

[div]
[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.



[HR width=95%]


[center]
[HR width=95%]
[font size=3][font color=red]This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.[/font][/font][/font color=red][font color=black]

[Demeter]

1. I survived Monday

Will someone please tell me why I should try? Weather ghastly, and getting worse--dropping into single digits by Friday.

[Fuddnik]

2. Hang in there!

I heard from a very reputable groundhog, that spring is just around the corner.

[Demeter]

3. I just need to take my vitamins

and escape to Hawaii, or something. Preferably another country.

[Demeter]

4. Forty Million Fiscal-shielded Euros Seized at MPS

I THINK WHOEVER WRITES HEADLINES OVER THERE HAS ALREADY STARTED THE SOTU DRINKING GAME...

http://www.corriere.it/english/13_febbraio_07/million-fiscal_4afea21e-7137-11e2-9be5-7db8936d7164.shtml

Bank admits €730 million losses on derivatives. Cash and securities seized at other banks and trust funds. New managers say they are injured parties and will act to recover the money...Estimates of losses over derivative contracts subscribed by the Monte dei Paschi di Siena (MPS) bank for the Antonveneta takeover are running at about €730 million. The figure was totted up by the MPS board at the end of a more than six hour-long meeting on Wednesday. The impact on MPS’s accounts on 31 December 2012 of the operation code-named Santorini is €305 million, the Alexandria operation adds €273 million and the potential losses from Nota Italia come to 151.76 million.

JUDICIAL SEIZURE – Yesterday, financial police officers seized fiscal-shielded cash and securities held at banks and trust funds for a total of about €40 million. Former chair Giuseppe Mussari and his number two Antonio Vigni now face charges of market rigging and issuing a fraudulent prospectus, as well as of criminal association for the purpose of defrauding the bank. The new MPS CEO Fabrizio Viola said: “We are the injured parties and will act to recover the money”.

VIGNI’S EIGHT-HOUR GRILLING – As expected, the Siena public prosecutor’s office witnessed the first questioning of a top Mussari-era executive, the former director general Antonio Vigni. Mr Vigni was quizzed for more than eight hours without a break and could be called back for further questioning in the next few days, probably after public prosecutors Aldo Natalini, Antonio Nastasi and Giuseppe Grosso have interviewed Giuseppe Mussari.

MORELLI UNDER INVESTIGATION – One of the former MPS managers under investigation is Marco Morelli, the current head of Merrill Lynch in Italy and formerly in charge of the MPS legal department, before a stint at Intesa Sanpaolo as director general.

BALDASSARRI – Details are also emerging about the position of Gianluca Baldassarri, formerly head of the MPS finance department in London, who is believed to be under investigation at Siena. Mr Baldassarri “is not untraceable, just out of the office”, said his lawyer Filippo Dinacci, who explained: “My client is out of the office on business scheduled some time ago and he will be back next Monday”.

“TIME-BOMB” DERIVATIVES AT TRANI – According to investigators at Trani, the tens of millions of euros’ worth of derivatives sold between 2008 and 2010 by five Italian banks to businesses in the north Bari area were “time bombs”. The crisis-stricken companies had sought loans from the banks involved (MPS, BNL, Unicredit, Intesa Sanpaolo and Credem). Investigating magistrates Antonio Savasta and Michele Ruggiero, who conducted the inquiries, are formulating charges of fraud with multiple aggravating circumstances and usurious lending against about sixty suspects, almost all of them employed at branches in north Bari. Sources at the public prosecutor’s office reveal that subscribers included local authorities, such as the municipality of Molfetta, which was one of the most exposed and managed to arrange a transaction to get rid of the junk bonds.

ANOTHER NATION BLOWN OUT OF THE WATER BY THE DREADED DERIVATIVES INNOVATIONS....

[Demeter]

14. An Explanation Of The Derivatives Scandal That Could End Up Reshaping The Italian Election

On January 17, Bloomberg News correspondents Elisa Martinuzzi and Nicholas Dunbar broke news of a major scandal in Italy...Monte dei Paschi – the world's oldest bank and one of Italy's biggest – had engaged in shady derivatives deals with Deutsche Bank to cover up hundreds of millions of euros in losses, then employed some creative accounting to hide the trades from shareholders and the public. Now that the story is out and an investigation is underway, Monte dei Paschi's losses from properly accounting for the effects of the derivatives trades on its balance sheet are expected to total €730 million ($977 million).

Given the bank's close association with the Italian left and the fact that it has received state-backed bailouts since the derivatives trades took place but before they were revealed, the Monti dei Paschi derivatives scandal has become a major storyline in the upcoming Italian national election, just weeks away.

MORE

[Demeter]

5. The Importance of Excel BE AFRAID, BE VERY AFRAID

http://baselinescenario.com/2013/02/09/the-importance-of-excel/

the role of Microsoft Excel in the “London Whale” trading debacle.

The issue is described in the appendix to JPMorgan’s internal investigative task force’s report. To summarize: JPMorgan’s Chief Investment Office needed a new value-at-risk (VaR) model for the synthetic credit portfolio (the one that blew up) and assigned a quantitative whiz (“a London-based quantitative expert, mathematician and model developer” who previously worked at a company that built analytical models) to create it. The new model “operated through a series of Excel spreadsheets, which had to be completed manually, by a process of copying and pasting data from one spreadsheet to another.” The internal Model Review Group identified this problem as well as a few others, but approved the model, while saying that it should be automated and another significant flaw should be fixed. (The flaw was that illiquid tranches were given the same price from day to day rather than being priced based on similar, more liquid tranches, which lowered estimates of volatility (since prices were remaining the same artificially).) After the London Whale trade blew up, the Model Review Group discovered that the model had not been automated and found several other errors. Most spectacularly,

“After subtracting the old rate from the new rate, the spreadsheet divided by their sum instead of their average, as the modeler had intended. This error likely had the effect of muting volatility by a factor of two and of lowering the VaR . . .”

I write periodically about the perils of bad software in the business world in general and the financial industry in particular, by which I usually mean back-end enterprise software that is poorly designed, insufficiently tested, and dangerously error-prone. But this is something different. Microsoft Excel is one of the greatest, most powerful, most important software applications of all time. (But, like many other Microsoft products, it was not particularly innovative: it was a rip-off of Lotus 1-2-3, which was a major improvement on VisiCalc.) Many in the industry will no doubt object. But it provides enormous capacity to do quantitative analysis, letting you do anything from statistical analyses of databases with hundreds of thousands of records to complex estimation tools with user-friendly front ends. And unlike traditional statistical programs, it provides an intuitive interface that lets you see what happens to the data as you manipulate them.

As a consequence, Excel is everywhere you look in the business world—especially in areas where people are adding up numbers a lot, like marketing, business development, sales, and, yes, finance. For all the talk about end-to-end financial suites like SAP, Oracle, and Peoplesoft, at the end of the day people do financial analysis by extracting data from those back-end systems and shoving it around in Excel spreadsheets. I have seen internal accountants calculate revenue from deals in Excel. I have a probably untestable hypothesis that, were you to come up with some measure of units of software output, Excel would be the most-used program in the business world. But while Excel the program is reasonably robust, the spreadsheets that people create with Excel are incredibly fragile. There is no way to trace where your data come from, there’s no audit trail (so you can overtype numbers and not know it), and there’s no easy way to test spreadsheets, for starters. The biggest problem is that anyone can create Excel spreadsheets—badly. Because it’s so easy to use, the creation of even important spreadsheets is not restricted to people who understand programming and do it in a methodical, well-documented way. (PowerPoint has an oft-noted, parallel problem: It’s so easy to use that people with no sense of narrative, visual design, or proportion are out there creating presentations and inflicting them on all of us.)

This is why the JPMorgan VaR model is the rule, not the exception: manual data entry, manual copy-and-paste, and formula errors. This is another important reason why you should pause whenever you hear that banks’ quantitative experts are smarter than Einstein, or that sophisticated risk management technology can protect banks from blowing up. At the end of the day, it’s all software. While all software breaks occasionally, Excel spreadsheets break all the time. But they don’t tell you when they break: they just give you the wrong number. There’s another factor at work here. What if the error had gone the wrong way, and the model had incorrectly doubled its estimate of volatility? Then VaR would have been higher, the CIO wouldn’t have been allowed to place such large bets, and the quants would have inspected the model to see what was going on. That kind of error would have been caught. Errors that lower VaR, allowing traders to increase their bets, are the ones that slip through the cracks. That one-sided incentive structure means that we should expect VaR to be systematically underestimated—but since we don’t know the frequency or the size of the errors, we have no idea of how much.

Is this any way to run a bank—let alone a global financial system?

[Demeter]

6. Wolf Richter: What Do They Know That We Don’t? (FOLLOWUP ON MONDAY'S POST)

http://www.nakedcapitalism.com/2013/02/wolf-richter-what-do-they-know-that-we-dont.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Friday evening when no one was supposed to pay attention, Google announced that Executive Chairman Eric Schmidt would sell 3.2 million of his Google shares in 2013, 42% of the 7.6 million shares he owned at the end of last year—after having already sold 1.8 million shares in 2012. But why would he sell 5 million shares, about 53% of his holdings, with Google stock trading near its all-time high?

“Part of his long-term strategy for individual asset diversification and liquidity,” Google mollified us, according to the Wall Street Journal. Soothing words. Nothing but “a routine diversification of assets.”

Routine? He didn’t sell any in 2008 as the market was crashing. He didn’t sell at the bottom in early 2009. And he didn’t sell during the rest of 2009 as Google shares were soaring, nor in 2010, as they continued to soar. In 2011, he eased out of about 300,000 shares, a mere rounding error in his holdings. But in 2012, he opened the valves, and in 2013, he’d open the floodgates. So it’s not “routine.”

Liquidity, Google said. In 2012, he reaped about $1.2 billion from stock sales, and if he can sell this year’s portion at the current price, he’ll reap $2.5 billion. $3.7 billion in total. What exactly would he need that kind of liquidity for? He could buy a Boeing 787, if it ever becomes airworthy again, plus a few castles, dozens of handmade exotic cars…. And it would barely scratch the surface.

Diversification, Google said. Sure, don’t put all your eggs in one basket. Though he didn’t need to diversity from 2008 through 2011, he now needs to diversify urgently. The landscape has changed. And he is reacting to it...He could diversify into treasuries, for example, which would guarantee him a loss after inflation, thanks to the Fed-imposed financial repression that governs our crazy lives. Or he could buy lots of gold or a myriad of other assets that he thinks make more sense than holding Google stock at the current price...So, we’re left wondering if there’s something waiting to happen at Google that prescient execs with a phenomenal understanding of the company and the industry can see on the horizon. Google has plowed a lot of money into startups, green energy, and other mind-boggling projects. He might be worried that they won’t pan out, that they’ll have to be cleared off the balance sheet with a huge write-off. He might be worried about a million things.

Yet the fact that he sold practically nothing during the bull market of 2009-2011 suggests that he may see something beyond Google: the hoped for Great Rotation, for example—from those who know to those who don’t. From the Eric Schmidts to mom-and-pop retail investors. And once that’s accomplished….Small investors lost a bundle in the last crash. At the end of their wits, they got out at the bottom, and stayed out during the subsequent run-up. But now, they’ve been driven to desperation by the Fed’s zero-interest-rate policy, as inflation has hammered their CDs that yield almost nothing. In order to stop losing money slowly but surely, they’re jumping into the stock market once again, buying the very shares Schmidt is selling—or so the smart money hopes—only to face once again the risk of losing a lot of money fast. That was the Fed’s policy every time. They didn’t care in 2000 that the market demolished a bunch of young upstarts that had gotten unjustifiably and unnecessarily rich. Let them crash. They did it again during the financial crisis. Let them crash. Only when it started taking down their cronies, did they get nervous—and handed them trillions.

Mr. Schmidt isn’t alone. Corporate insiders were “aggressively selling their shares,” reported Mark Hulbert. And they were doing so “at an alarming pace.” The buy sell-to-buy ratio had risen to 9.2-to-1; insiders had sold over 9 times as many shares as they’d bought. They’d been aggressive sellers for weeks. That they dumped shares in December, when the sell-to-buy ratio was 8.38-to-1, could have been the result of the fiscal-cliff theatrics, but the latest sell-to-buy ratio was even worse...Instantly, soothing voices were heard: “don’t be alarmed,” they said. But Mr. Schmidt and his colleagues at the top of corporate America, multi-billionaires many of them, are immensely well connected, not only to each other but also to the Fed, whose twelve regional Federal Reserve Banks they own and control.

For the mere public, there have been vague and mixed signals that the Fed might finally stop its drunken printing frenzy—that the only thing it is waiting for is the completion of the Great Rotation of equities from the smart money to mom-and-pop money. Once that’s completed, to heck with the markets. But for Mr. Schmidt and his buddies, the signals might not have been vague and mixed, but clear and actionable....

[Demeter]

8. U.S. 10-Year Note at 10-Month High as Treasury Plans Sale

http://www.bloomberg.com/news/2013-02-06/u-s-30-year-bond-losses-pass-5-as-fed-price-gauge-rises.html

Treasury 10-year note yields fell after reaching almost the highest level since April as the government announced plans to sell $72 billion of notes and bonds next week.

The Treasury called on Congress to pass a longer-term increase to the U.S. debt limit as it said the government will sell its first issue of floating-rate notes within the next year. The 10-year note yield straddled 2 percent for a sixth day. Federal Reserve bond purchases will reach $1.14 trillion before the current stimulus program expires in the first quarter of 2014, according to the median estimate of 44 economists in a Bloomberg survey.

“Two percent is an important pivot point in the market right now,” said Jason Rogan, director of U.S. government trading at Guggenheim Partners LLC, a New York-based brokerage for institutional investors. “There is concern about the sequester and what’s going on in D.C. We also have buybacks almost every day this month, which continue to support Treasuries.”

The 10-year yield fell four basis points, or 0.04 percentage point, to 1.96 percent at 5:17 p.m. New York time, according to Bloomberg Bond Trader prices. It rose earlier to 2.01 percent. The yield reached 2.06 on Feb. 4, the most since April 12. The 1.625 percent security maturing in November 2022 advanced 10/32, or $3.13 per $1,000 face value, to 97 1/32. Yields on 30-year bonds decreased four basis points to 3.17 percent after rising earlier to 3.23 percent. They reached 3.25 percent on Feb. 4, the highest since April 5...MORE

[Demeter]

7. Overhaul of rating agencies bogs down four years after financial crisis

http://www.washingtonpost.com/business/economy/four-years-later-reform-of-rating-agencies-bogs-down/2013/02/06/20be38a4-7095-11e2-ac36-3d8d9dcaa2e2_story.html

The Justice Department’s lawsuit against Standard & Poor’s this week has revived focus on the role of the rating agencies in causing the financial crisis. Yet four years after shoddy mortgage investments bearing top grades nearly took down the country’s economy, government attempts to revamp the rating-agency industry have stalled.

Nearly everyone agrees there needs to be an overhaul of the way complex financial products get rated for their riskiness. But attempts to change the system keep running into the same roadblock: The rating agencies, however flawed, have become so crucial to the workings of Wall Street that no one can live without them.

Experts say that the Justice Department lawsuit is not enough — and that the longer the government delays broad solutions, the more vulnerable the economy is to the risks that took it down in 2008.

The lawsuit “may help the government appear to be dealing with the problem and holding the S&P to account, but that isn’t dealing with the core problems,” said Jeffrey Manns, associate professor of law at George Washington University. The key issue, identified by two major government reports on the crisis, is that rating agencies are paid by the very companies whose products they are grading. Watchdogs argue that the agencies’ dependence on Wall Street means they tend to award better grades to products even if they have reason to doubt their safety...MORE

[Demeter]

9. Quietly Killing a Consumer Watchdog

http://www.nytimes.com/2013/02/11/opinion/quietly-killing-a-consumer-watchdog.html?_r=0

If you’d like to know why Republicans are trying to shut down the Consumer Financial Protection Bureau, take a look at three things the agency has already accomplished in its first 18 months:

¶It called a halt to predatory practices by mortgage lenders, ensuring that borrowers are not saddled with loans they can’t afford and preventing brokers from earning higher commissions for higher interest rates.

¶It won an $85 million settlement from American Express, which it accused of deceptive and discriminatory marketing and billing practices.

¶It opened an investigation into questionable marketing practices by banks and credit card companies on college campuses, which often take place after undisclosed financial arrangements are made with universities.

The consumer bureau has taken seriously its mandate to protect the public from the kinds of abuses that helped lead to the 2009 recession, and it has not been intimidated by the financial industry’s army of lobbyists. That’s what worries Republicans. They can’t prevent the bureau from regulating their financial supporters. Having failed to block the creation of the bureau in the 2010 Dodd-Frank financial reform bill, they are now trying to take away its power by filibuster, and they may well succeed.

The bureau cannot operate without a director. Under the Dodd-Frank law, most of its regulatory powers — particularly its authority over nonbanks like finance companies, debt collectors, payday lenders and credit agencies — can be exercised only by a director. Knowing that, Republicans used a filibuster to prevent President Obama’s nominee for director, Richard Cordray, from reaching a vote in 2011. Mr. Obama then gave Mr. Cordray a recess appointment, but a federal appeals court recently ruled in another case that the Senate was not in recess at that time because Republicans had arranged for sham sessions.

That opinion, if upheld by the Supreme Court, is likely to apply to Mr. Cordray as well, which could invalidate the rules the bureau has already enacted. The president has renominated Mr. Cordray, but Republicans have made it clear that they will continue to filibuster, using phony arguments to keep the agency from operating. Earlier this month, 43 Senate Republicans wrote a letter to the president, vowing to block any nominee until “key structural changes” are made, including a bipartisan commission to run the bureau instead of one director, and Congressional control of its appropriations. (It is now financed with bank fees paid to the Federal Reserve.) These arguments are designed solely to give Congress more opportunities to stop financial regulation. A board evenly divided between the parties would quickly reach a stalemate and become inoperative, much as the Federal Election Commission has become. Besides, board members can be filibustered as easily as a director.

Other bank regulators, like the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, are not subject to the appropriations process, as a shield against political interference. Congress does, however, control the budgets of the Securities and Exchange Commission and the Commodity Futures Trading Commission, and House Republicans have voted to strip those agencies of money needed to regulate derivatives and curb abuses. The consumer bureau was enacted by law, and now Republicans are using backdoor methods to destroy it. There is no greater argument for Senate Democrats to ban filibusters of presidential nominees, particularly when the future of an entire agency is at stake.

[Demeter]

10. CISPA about to become law: we list the companies that back it…and introduce its new friend, ‘RIOT’

http://darkernet.in/cispa-about-to-become-law-we-list-the-companies-that-back-it-and-introduce-its-new-friend-riot/

It is reported that the Cyber Intelligence Sharing and Protection act (CISPA) will become law in less than 48 hours time. Rumour has it that the White House plans to introduce an executive order on cyber security after the State of the Union address on Wednesday. Apparently, the order has been in the works for months, following a spate of cyber espionage and hacking attacks. We wait to see what happens. Meanwhile, we also report that CISPA has a friend, called RIOT (see below for more details and video above).

CISPA was combatted by many prominent persons as well as organisations such as the Electronic Frontier Foundation, which played a leading role in the campaign to ensure the bill never became law. Another opponent was the late Aaron Swartz via the Demand Progress organisation. Unlike Swartz, CISPA is very much alive and a threat to all Americans. Around 800 companies have, crucially, provided backing to CISPA – these are listed below.

A. CISPA’s new friend

To complement CISPA, there is RIOT, the new product from the defence company, Rayethon, and which is featured in the above video. RIOT will use GPS and other technologies to track people anywhere in the world. It also boast predictive capabilities (work out the most likely location the target will go to next). RIOT will basically search, analyse and organise all social network content globally. To see more on RIOT, click here . Note, the RIOT (Raytheon Information Overlay Technology) Content Management Framework development team are Patrick Mao, Ruben Quintero, and Brian Urch.

B. CISPA summarised

The CISPA bill will be the same as the version that passed the House last spring, but which was defeated on the Senate floor in August because the Upper House was hammering out its own cyber security bill. In essence, CISPA will allow for the voluntary sharing of Internet traffic between private companies and the government. CISPA will enable companies to hand over users’ private browsing information to the Government, allowing authorities to spy upon American citizens rather than simply track down cyber threats.

MORE

[Demeter]

11. The secret of their success: The Nordic countries are probably the best-governed in the world

THEN WHAT HAPPENED TO SWEDEN TRUCKLING TO THE US OVER ASSANGE? AND NORWAY WITH THE MASSACRE OF THE CHILDREN OF CONNECTED PEOPLE?

http://www.economist.com/news/special-report/21570835-nordic-countries-are-probably-best-governed-world-secret-their



CECIL RHODES ONCE remarked that “to be born an Englishman is to win first prize in the lottery of life.” Today the same thing could be said of being born Nordic. The Nordic countries have not only largely escaped the economic problems that are convulsing the Mediterranean world; they have also largely escaped the social ills that plague America. On any measure of the health of a society—from economic indicators like productivity and innovation to social ones like inequality and crime—the Nordic countries are gathered near the top (see table).

Why has this remote, thinly populated region, with its freezing winters and expanses of wilderness, proved so successful? There was a time when most of its population would have unhesitatingly praised their government, which for most of the 20th century meant the social democrats in one of their various national guises. The government had provided the people with cradle-to-grave welfare services, rescuing them from the brutal life of their 19th-century forebears, and stepped in to save the capitalist economies from their periodic crises.

But free-marketers have poked holes in the pro-government explanation and offered a powerful alternative. In the period from 1870 to 1970 the Nordic countries were among the world’s fastest-growing countries, thanks to a series of pro-business reforms such as the establishment of banks and the privatisation of forests. But in the 1970s and 1980s the undisciplined growth of government caused the reforms to run into the sands. Free-marketers put the region’s impressive recent performance down to its determination to reduce government spending and set entrepreneurs free.

Government’s role in improving equality is also being questioned. Andreas Bergh, of Sweden’s Research Institute of Industrial Economics, argues that the compression of Swedish incomes took place before the arrival of the welfare state, which was a consequence rather than a cause of the region’s prosperity—and almost killed the goose that laid the golden eggs...

[AnneD]

33. Even their road closures are better.....

Here’s What 27 Tons of Burning Goat Cheese Looks Like


A truck laden with about 27 metric tonnes (or, almost 60,000 pounds) of brunost cheese caught fire in a tunnel in Norway last week, causing a raging fire that burned for five days. The truck driver says he was about 1,000 feet into the tunnel when he noticed his cargo of dark goat cheese was aflame. Officials suspect the high sugar and fat content in the brunost and its arrangement on the truck caused a rapid spike in its temperature, leading to the fire, which badly damaged the interior of the hillside tunnel and left clouds of toxic gasses looming around the tunnel's entrances for days, the BBC reports. The driver escaped from the flaming cheese inferno unscathed, and the tunnel will be closed for a few weeks until it can be repaired. For now, at least, a small part of the country smells like raclette, and citizens are shocked. "I didn't know that brown cheese burns so well," says the director of the Norwegian Public Roads Administration. Head toward the molten dairy center of Norway's fiery goat cheese tunnel of doom, just ahead.


http://newyork.grubstreet.com/2013/01/norway-brunost-fire-tunnel-twenty-seven-tons.html

[Demeter]

12. HHS Delays Basic Health Plan Option Until 2015 By Phil Galewitz

http://capsules.kaiserhealthnews.org/index.php/2013/02/hhs-delays-basic-health-plan-option-until-2015/comment-page-1/#comment-60758

The Obama administration has delayed by one year the rollout of a health program aimed at low to moderate-income people who won’t qualify for the expanded Medicaid program under the federal health law.

Under the so-called Basic Health Program, some states had planned to offer government insurance to people who don’t qualify for Medicaid, but who would be hard pressed — even with federal subsidies — to afford the premiums and cost-sharing of plans offered in the new insurance marketplaces. Those earning up to twice the federal poverty level, or about $47,000 for a family of four, would have been eligible.

The Department of Health and Human Services on Wednesday said it basically ran out of time to put out guidelines to get the program running by 2014.

“HHS expects to issue proposed rules regarding the Basic Health Program for comment in 2013 and final guidance in 2014, so that the program will be operational beginning in 2015 for states interested in pursuing this option.” MORE

YVES SMITH COMMENTS: ObamaCare shaping up to be a policy clusterfuck of epic proportions. Nobody could have predicted…

[Demeter]

13. The Devil is in the Details; Obamacare: A Deception by PAUL CRAIG ROBERTS MUST READ

http://www.counterpunch.org/2013/02/05/obamacare-a-deception/

The article below is the most comprehensive analysis available of “Obamacare” – the Patient Protection and Affordable Care Act. The author, a knowledgeable person who wishes to remain anonymous, explains how Obamacare works for the insurance companies but not for you.

Obamacare was formulated on the concept of health care as a commercial commodity and was cloaked in ideological slogans such as “shared responsibility,” “no free riders” and “ownership society.” These slogans dress the insurance industry’s raid on public resources in the cloak of a “free market” health care system.

You will learn how to purchase a subsidized plan at the Exchange, what will happen when income and family circumstances change during the year or from one year to the next, and other perils brought to you by Obamacare. It is one of the most important articles that will be posted on my website this year. Americans will be shocked to learn the extent to which they have been deceived. The legislation neither protects the patient nor are the plans affordable.

The author shows that for those Americans whose income places them between 138% and 400% of the Federal Poverty Level, the out-of-pocket cost for one of the least expensive (lower coverage) subsidized policies ranges from 2% to 9.5% of Modified Adjusted Gross Income (MAGI), a tax base larger than the Adjusted Gross Income used for calculating federal income tax.

What this means is that those Americans with the least or no disposable income are faced in effect with a substantial pay cut. The author provides an example of a 35 year-old with a MAGI of $27,925. The out-of- pocket cost to this person of a Silver level plan (second least expensive) is $187.33 per month. This cost is based on pre-tax income, that is, before income is reduced by payroll and income taxes. There goes the car payment or utility bill. The lives of millions of Americans will change drastically as they struggle with a new, large expense – particularly in an era of no jobs, low-paying jobs and rising cost of living.

The author also points out that the cost of using the mandated policies will be prohibitive because of the large deductibles and co-pays. Many Americans will find themselves not only with a policy they can’t afford, but also with one they cannot afford to use. Those who cannot afford the insurance, even with a subsidy, will be faced with a costly penalty, and in many cases, this, too, will be difficult, if not impossible, to pay. As each year’s subsidy is based on last year’s income, there will be a substantial year-end tax liability for those who must repay the subsidy in whole or part because their income increased during the year. The stress alone from such a regressive scheme is, without a doubt, not conducive to good health and well-being.

Diets will worsen for millions of Americans as they struggle with a new large expense. Thus, the effect of Obamacare will be to worsen the health of millions. Indeed, a “glitch” in the legislation allows millions to be priced out of coverage. http://www.huffingtonpost.com/2013/01/30/obamacare-glitch-priced-out-of-health-care_n_2585695.html?view=print&comm_ref=false

Alternatively, Americans might be able to acquire health insurance coverage but have no doctors willing to treat them. http://www.californiahealthline.org/road-to-reform/2013/access-denied-implications-of-medi-cal-pay-cut.aspx#

AND THE ARTICLE HASN'T EVEN GOTTEN STARTED...MUCH MORE AT LINK

[Roland99]

31. The sooner HR 676 is passed, the better this nation will be.

[Demeter]

32. AMEN!

[Demeter]

15. Is this the year Wall Street completes its purchase of Florida’s Court System?

http://www.bankruptcylawnetwork.com/is-this-the-year-wall-street-completes-its-purchase-of-floridas-court-system/

For the fourth year in a row, an anti-consumer, Anti-American bill, backed by the very powerful mortgage servicing industry, is cruising through the Florida House of Representatives, and this time, it looks like it could actually become law! It has already passed through a very important committee. After 4 years of trying, it appears Wall Street has finally purchased enough of our state legislators to enact a bill that will eliminate due process and fundamental justice in Florida foreclosure cases. Rep. Kathleen Passidomo’s HB 87, perversely named Florida Fair Foreclosure Act, makes it much easier for mortgage companies to foreclose on residential mortgages by literally eliminating a homeowner’s right to fight the foreclosure.

I could see such a law in China, North Korea, or Cuba, but I never thought I would see such an Anti-American bill proposed by Florida’s Republican Party.

Fact: The proposed bill shifts the burden of proof to the defendant

The basic tenant of civil jurisprudence is that the plaintiff has the burden of proving its case, just as the basic tenant in criminal jurisprudence is that an accused is presumed innocent until convicted.

As Americans, we have earned our “Day in Court.” However, HB 87 actually shifts the burden to homeowners to present evidence that they shouldn’t have their house taken away. The plaintiff no longer needs to present evidence at all. Under the proposed bill, a bank files a civil complaint alleging the necessary elements of a foreclosure. The Court then sets a “Show Cause” hearing, wherein the homeowner must disprove the allegations...Yes, the Court must assume the mortgage industry is telling the truth, despite the fact that the entire country knows mortgage companies have been caught lying in nearly every foreclosure every filed in the United States in the last decade or so. This should only make sense to Lance Armstrong...

[Demeter]

16. A breakthrough speech on monetary policy By Anatole Kaletsky (BETCHA IT'S IGNORED)

http://blogs.reuters.com/anatole-kaletsky/2013/02/07/a-breakthrough-speech-on-monetary-policy/

Wednesday night may have marked the “emperor’s new clothes” moment of the Great Recession, in which the world suddenly realizes its rulers are suffering from a delusion that doesn’t have to be humored. That delusion today is economic fatalism: the idea that nothing can be done to break the paralysis in the global economy and therefore that a “new normal” of mass unemployment and declining living standards is inevitable for years or decades to come.

That such economic fatalism is nonsensical is the key message of a truly historic speech delivered on Wednesday by Adair Turner, chairman of Britain’s Financial Services Authority and one of the most influential financial policymakers in the world. Turner argues that a virtually surefire method of stimulating economic activity exists today and that politicians and central bankers can no longer treat it as taboo: Newly created money should be handed out to the citizens or governments of countries that are mired in stagnation and such monetary financing of tax cuts or government spending should continue until economic activity revives.

The idea of distributing free money to end deep recessions has been promoted theoretically by serious economists since the 1930s, when it was one of the few practical policies that Keynesians and monetarists agreed on. John Maynard Keynes proposed burying money in disused coal mines to be dug up by unemployed workers, while Milton Friedman suggested dropping money out of helicopters for citizens to pick up. Friedman also argued in a 1948 paper that governments should rely solely on printed money to finance their regular cyclical deficits. More recently, as conventional policies to revive growth have faltered, with widespread disappointment about the impact of zero interest rates and quantitative easing, proposals for distributing money directly to citizens have been quietly gaining traction among critics of orthodox central banks. I discussed this trend, sometimes described as “quantitative easing for the people,” in several columns last year.

A simple thought experiment shows why such “helicopter money” policies, which Turner calls overt monetary financing (OMF), would be far more effective than the conventional QE practiced by central banks today...Consider the U.S. Federal Reserve. At present the Fed prints $85 billion of new money monthly and distributes it to banks and Wall Street investors by buying government bonds. And the Fed has promised to continue this monthly “quantitative easing” until such time as unemployment drops and is clearly and sustainably declining to more normal levels. Now suppose instead that the Fed divided its $85 billion monthly money production into 300 million checks of $283 each and sent these to every man, woman and child in America. Suppose, moreover, that the Fed promised to keep sending out these checks, worth more than $1,000 a month for a four-person household, until the United States reached its unemployment target – and the Fed chairman added that he would increase the checks to $1,500 or $2,000 a month for that household if $1,000 monthly proved insufficient. There can be little doubt that this deluge of free money would stimulate consumer spending and revive employment – and no doubt that it would be infinitely more effective than distributing money to bond investors and banks through QE...MORE

[Demeter]

17. For Shame, Wealthy America: Some Facts About the Victims of Your Greed Paul Buchheit

http://truth-out.org/buzzflash/commentary/item/17797-for-shame-wealthy-america-some-facts-about-the-victims-of-your-greed

Yes, you've caused people to suffer. You've taken from the poor and the middle class for thirty years, from Reagan to Obama, using a variety of strategies to redistribute wealth to the top. Yet you insist that the middle class should accept cuts in Social Security to pay off the deficit...Wealthy America, you've taken so much that one out of five American families has negative wealth -- no assets, and household debt of $27,000. Yet you still want them to give up their Social Security benefits. It's not shame you should feel, but loathing...Here is the effect of your funds transfer: In 1983 the poorest 47% of America owned $750 billion dollars, $15,000 per family, 2.5 percent of the nation's wealth....In 2009 the poorest 47% of America owned ZERO PERCENTof the nation's wealth (their debt exceeds their assets). Your thirty-year redistribution of wealth has most severely impacted four particularly vulnerable parts of American society:


1. Children

One out of every five American children now lives in poverty. ...The poverty level for U.S. children is up 50 percent since 1973. It's an epidemic in the black community, where, shockingly, close to half the children under the age of six live in an impoverished household. And worse yet, the percentage of such families receiving assistance has dropped by two-thirds since 1995.


2. The Elderly

While official poverty rates for seniors have declined since 1970, averages are misleading in the face of inequality. The wealth gap was already extreme for the 60+ age group in 1995 and has grown for ALL age groups since that time, with an upsurge since 2005 that according to the Census Bureau's Supplemental Poverty Measure has left one out of six seniors in poverty. The majority of elderly Americans may not be at the official poverty level, but they're still very poor. Sixty percent of women over 65 (and 41 percent of men) have incomes insufficient to cover essential everyday expenses. And as the rest of American adults grow older, half of them are not saving anything for retirement. It would be much worse without Social Security. The median income for seniors is less than $20,000 a year, and even though Social Security provides only an average benefit of $15,000, it accounts for 55 percent of annual income for the elderly. The Center on Budget and Policy Priorities estimates that almost half of American seniors would drop below the poverty line without their Social Security benefits.


3. The Homeless

...Before the 1980s homelessness existed largely as an occasional occurrence of bad luck for a family, perhaps a mother who needed a few days to find a job. Then President Reagan redirected blame for indigence to the poor themselves, and market-driven policies took over. Since 1980 the number of homeless people has doubled or tripled every decade. Up to 3.5 million people -- one out of every hundred Americans -- experience homelessness at some time during an average year. But a survey of the fifty largest U.S. cities determined that almost none of them has sufficient shelter beds for homeless residents...The federal housing budget has dropped from $86 billion in 1976 to $45 billion in 2013. This has occurred despite a study that revealed the cost of supportive housing as less than half the cost of prison accommodations. In Los Angeles, a UCLA study found that more was spent on skid row policing than on homeless shelters.


4. Students

...Tuition at public colleges has nearly doubled in just ten years. The average student loan debt has reached $26,682. Yet the charade of affordability continues. One Ohio college advises students to focus on the "return on investment" from their four years at school. Over half of degree holders are unemployed or working a low-wage job. Even young men and women with advanced degrees have been victimized by false promises, as over 300,000 masters and PhD students now collect food stamps. Colleges have responded by hiring more administrators -- their numbers are up 60 percent since 1993...

[Demeter]

18. Barclays closes controversial tax avoidance unit

http://www.guardian.co.uk/business/2013/feb/09/barclays-closes-tax-avoidance-unit?CMP=twt_fd

The new chief executive of Barclays is to close the bank's controversial tax avoidance unit in a bid to repair its battered reputation, although he still risks inflaming the row over City pay by paying out up to £2bn in bonuses. Antony Jenkins, who took over as Barclays boss when Bob Diamond was forced out as a result of the Libor-rigging scandal, will announce on Tuesday that the tax planning part of the structured capital markets (SCM) division – which has been accused of orchestrating tax avoidance on an "industrial scale" and has generated vast profits for the bank – is to be axed. The tax planning operation is one of several areas that have put been under review by Jenkins to assess if the bank's businesses are ethical and not just profitable. While Barclays will continue to offer straightforward tax planning to customers, it will pledge to no longer devise schemes purely intended for this purpose.

Barclays is also facing calls to restrict bonuses following the £290m Libor rigging fine; a £1bn bill for compensating customers mis-sold payment protection insurance; and a potential multi-million pound fine for mis-selling interest rate swaps to small businesses.

The Financial Services Authority and the Serious Fraud Office are also investigating the way the bank staved off a taxpayer bailout in 2008 by raising funds in the Middle East.

MORE SKULLDUGGERY AT LINK

[Demeter]

19. Is the Euro Crisis Over? By Robert Guttmann

A strange calm has settled over Europe. Following Mr. Draghi’s July 2012 promise “to do whatever it takes” to save the euro, which the head of the European Central Bank followed shortly thereafter with a new program of potentially unlimited bond buying known as “outright monetary transactions,” the market panic evaporated. Since then super-high bond yields have come down to more reasonable levels, allowing fiscally and financially stressed debtor countries in the euro-zone to (re)finance their public-sector borrowing needs a lot more easily than before. Even Greece has been able to borrow in the single-digits for the first time in three years.

This calming of once-panicky debt markets has led to optimistic assessments that the worst of the crisis has passed. Draghi himself declared at the beginning of the new year that the euro-zone economy would start recovering during the second half of 2013. He talked of a “positive contagion” taking root whereby the mutually reinforcing combination of falling bond yields, rising stock markets and historically low volatility would set the positive market environment for a resumption of economic growth across the euro zone. Christine Lagarde, as the head of the IMF part of the “troika” (i.e. ECB, IMF, and European Commission) managing the euro-zone crisis, declared at the World Economic Forum in Davos a few weeks ago that collapse had been avoided, making 2013 a “make-or-break year.”

All this begs the obvious question whether this major shift in mood is justified and as such durable or just a temporary break before the next storm. The answer to this question is unclear, to say the least. It could go either way – the beginning of sustained recovery around the corner or imminent resumption of market panic provoking further stress in the euro-zone system. In favor of the now remarkably widespread optimism among European and non-European financial-market players is the prevailing sense that – painful as the process might have been – several of the debtor countries have made significant progress in their adjustment processes. Specifically, we can see that Ireland, Spain, Portugal or even Greece have been able to lower their current-account deficits substantially to the point where at least the first three of these may end up running current-account surpluses in 2013 – a very significant turnaround which may help their economies recover earlier than thought.

More generally, those deficit countries in the periphery of the euro-zone have gone through an austerity-driven and recession-mediated “internal devaluation” process which in the absence of other adjustment options (via lower exchange- and/or interest rates) has improved their relative labor unit costs and so left them more competitive as a result....BIG EDIT... the recent improvements in market sentiment have once again proven that Europe’s political leaders only act when under severe pressure to do so. The moment the situation relaxes, as it has in recent months, they go back to their old bickering and meandering ways, bringing reforms to a halt. But the euro-zone cannot afford this stop-go pattern of policy-making in the face of a systemic crisis. It will have to undertake far-reaching reform on several fronts beyond what Europe’s leading politicians have been willing to entertain...ANOTHER EDIT....Given the scope of reforms yet to be undertaken, continued deep recession, and prevailing asymmetries within the euro-zone between debtor and creditor countries, it may be too early to see the “end of the tunnel.” Only time will tell!


Read more at http://www.nakedcapitalism.com/2013/02/is-the-euro-crisis-over.html#XdzlAPWcqLruxwFr.99


IN OTHER WORDS, THE EYE OF THE STORM...WATCH OUT FOR THE BACK END! AND THEN, THERE'S THE CIVIL CONSEQUENCES OF ALL THAT AUSTERITY...THE REVOLT OF THE PEASANTS.

[AnneD]

34. As I was scrolling down the screen...

I too thought of a hurricane. The back end is the dirty side.

I think they spread it on thick at Davos. Everyone is lulled into a sense of security. But things will kick up soon, esp if the bond market hits the crapper.

[Demeter]

20. TOM TOLES ADDRESSES THE STATE OF THE UNION

Last edited Tue Feb 12, 2013, 12:52 PM - Edit history (1)

http://assets.amuniversal.com/50cfe4e056b1013015d6001dd8b71c47?width=750.0

[Demeter]

21. POINTY HAIR BOSS SLAPS DOWN HIS UNDERLINGS

[xchrom]

22. Professor Longhair - Go To The Mardi Gras

[xchrom]

23. for Miss AnneD -- queen ida - grand mamou

[AnneD]

35. It warms my heart.....

I am sitting in the office, wearing my beads, polishing off the last of the king cake, and trying to figure out what to give up for Lent...and I am not Catholic. I could give up my tiara.
.
.
.
.
.
.
.
.
Nah

They have a big Mardi Gras celebration in Galveston (and a large Dickens on the Strand Weekend in December-one of the largest and we have had Dickens grand son or great grandson here for the festivities.)

[xchrom]

24. UBS fined for mis-selling AIG fund

http://www.bbc.co.uk/news/business-21423831

Swiss bank UBS has been fined £9.45m by the UK regulator for mis-selling an investment fund from insurer AIG.

The Financial Services Authority (FSA) said the bank had not understood the product it was selling and did not take effective action when the financial crisis struck.

"UBS's conduct fell far short of what its customers deserved" said the FSA's Tracey McDermott.

UBS said "we are pleased that we can put this issue... behind us".

[xchrom]

25. Jamaica in crisis debt-swap plan

http://www.bbc.co.uk/news/business-21423830

Jamaica has announced plans for its second debt swap in three years in the face of a "serious economic crisis".

Prime Minister Portia Simpson Miller is taking measures to reduce its debt, which currently stands at 140% of gross domestic product (GDP), one of the highest ratios in the world.

"If this debt is not reduced, Jamaica faces a dismal future," she said.

The move is aimed at satisfying conditions demanded in a deal with the International Monetary Fund.

[xchrom]

26. Back-to-work scheme breached laws, says Court of Appeal

http://www.bbc.co.uk/news/business-21426928

The government's back-to-work schemes have suffered a setback after Appeal Court judges agreed with a university graduate's claim that unpaid schemes were legally flawed.

Cait Reilly, 24, claimed that requiring her to work for nothing at a Poundland store breached laws on forced labour.

Judges quashed the regulations underpinning the work schemes.

But Miss Reilly's solicitors and the government have clashed on the implications of the ruling.

[xchrom]

27. UK inflation rate unchanged at 2.7% in January

http://www.bbc.co.uk/news/business-21425939

The rate of UK consumer price inflation remained unchanged at 2.7% for the fourth consecutive month in January, official data has shown.

A big rise in the prices of alcohol and tobacco was the biggest factor driving prices up, the Office for National Statistics (ONS) said.

At the same time, there were slower price rises for clothing and footwear.

The rate of Retail Prices Index (RPI) inflation rose to 3.3% in January from 3.1% in December

[Demeter]

28. Don't Panic!

Sometime this week, maybe even today, I have to turn off, unplug, disassemble and move the computer.

The odds that it will work when the process is reversed...well, you know that's unlikely, at best, without considerable blood sweat, toil and tears.

So if you don't see me, that's why.




Or I may have drunk myself insensible to avoid all mention of the SOTU...

[Roland99]

29. Burn some incense, sacrifice a small woodland creature, chant in Gaelic

and cross your fingers and toes!

[Roland99]

30. DJIA regains 14k. Oil over 97.50

Dow 14,003 +32 0.23%
Nasdaq 3,193 +1 0.03%
S&P 500 1,519 +2 0.13%
GlobalDow 2,118 +14 0.69%
Gold 1,650 +1 0.05%
Oil 97.59 +0.56 0.58%
March RBOB 3.0308

[AnneD]

36. Hey Roland....

been a while. You must be working OT.

[Roland99]

37. i pop in once in a while

post some futures and the odd article

funny...now that I'm working from home, it seems harder to get up here and check out stuff!