STOCK MARKET WATCH - Monday, 6 February 2012

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Monday, 6 February 2012[/font]

SMW for 3 February 2012

AT THE CLOSING BELL ON 2 February 2012
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Dow Jones 12,862.23 +156.82 (1.23%)
S&P 500 1,344.90 +19.36 (1.46%)
Nasdaq 2,905.66 +45.98 (1.61%)



[font color=red]10 Year 1.92% +0.02 (1.05%)
30 Year 3.12% +0.01 (0.32%)



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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
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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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Financial Sector Officials Convicted since 1/20/09 = [/font][font color=red]12[/font]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS



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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]

[Cleita]

1. Don't have enough to play the stock market, but I loved your cartoon.

Thanks.

[Tansy_Gold]

2. This thread

is the closest I get to playing the market.

But I do try to pick wicked cartoons, the kind that stick it to the aristos whenever possible. Thanks for appreciating my choice!

[Demeter]

7. You Don't Have to Play the Market to Be Played By It

Keeping informed is the best protection (short of a vow of poverty)

[DemReadingDU]

17. Love your picks in toons!

[just1voice]

37. There is no market to play, it's completely dominated by criminal banks

Plus, the criminal banks work with criminal/fraudulent govt numbers every single day. Any public business that sells stock is price-manipulated, there is no "I think this is a great company that will do well" at all. TV still tries to sell that idea every minute it's on air but it no longer exists, we have a completely manipulated stock market system run by a few "too big to fail" institutions whom do not allow stocks to move in any direction they don't want.

People find that hard to believe even after the entire system collapsed in 2008. There are good businesses that produce/sell good things all over the place but if they're a publically traded company their stock price is manipulated.

[Demeter]

41. Or they are taken over, gutted and LBO'd

so much destruction, no body of law to stop it...

[Warpy]

47. I followed this forum long before I inherited stocks

and it's been great for reinforcement that what I do with them is not crazy.

I don't "play" the stock market. That's the easiest way to be played by the stock market, the advantage stays with the house. I did an intellectual experiment during the Clinton years as a day trader with Monopoly money and found out I wasn't very good at it. Now it's far worse, HFT raking off all the money day traders used to make right off the top.

I never expected to own stocks. Life is weird. It might be weird for you, too.

[Demeter]

3. Home prices dropped in November in most US cities

http://hosted2.ap.org/APDEFAULT/3d281c11a96b4ad082fe88aa0db04305/Article_2012-01-31-Home%20Prices/id-7651c54da5b0479b887ab0bedd2fd788

U.S. home prices fell for a third straight month in nearly all cities tracked by a major index. The declines show that most homeowners are not reaping the benefits from some signs of an improving housing market. Prices dropped in November from October in 19 of the 20 cities tracked, according to the Standard & Poor's/Case-Shiller home-price index released Tuesday. The steepest declines were in Atlanta, Chicago and Detroit. Phoenix was the only city to show an increase.

The declines partly reflect the typical fall slowdown after the peak buying season. Still, prices fell in 18 of the 20 cities in November compared to the same month in 2010. Only Washington and Detroit posted year-over-year increases. Prices in Atlanta, Las Vegas, Seattle and Tampa fell to their lowest points since the housing crisis began. And prices have fallen 33 percent nationwide since the housing bust, to 2003 levels. "The trend is down and there are few, if any, signs in the numbers that a turning point is close at hand," said David M. Blitzer, chairman of the S&P's index committee.

The Case-Shiller index covers half of all U.S. homes. It measures prices compared with those in January 2000 and creates a three-month moving average. The November data are the latest available.

Home values remain depressed despite some hopeful signs at the end of last year. Sales of previously occupied homes rose in the last three months. Homebuilders are more optimistic after seeing more people express interest in buying this year. And home construction picked up in the final quarter of last year, which helped housing contribute to broader economic growth. Home prices tend to follow sales, which are still below healthy levels. And a large number of vacant homes are sitting idle on the market, which means prices will likely stay unchanged for several years, said Paul Dales, senior U.S. economist at Capital Economics. "The most likely scenario in the U.S. is that in 2012 prices will bob around a bit, with one month's gain being reversed the next month," Dales said. "But in general, over the next couple of years, house prices will do nothing more than remain broadly stable." Dales said prices might not rise consistently until 2015. He said lower unemployment and better pay raises are essential to a full housing rebound.

Among other improvements needed:

— The supply of homes for sale must decline further. The inventory fell in November to a seven-month supply, although a healthy supply is about six months.

— Sales need to rise consistently and more first-time buyers must drive the increases. First-time buyers stay longer and invest in their homes, which helps neighboring home values rise.

— More young people and immigrants must buy. Declining immigration and a rise in renting has hampered home sales.

— More than a million homes at risk of foreclosure must be cleared from the market. Many are in limbo because a government investigation into questionable mortgage lending practices, which has dragged on for more than a year.

— Banks must further loosen lending requirements.

MORE

[Loge23]

31. Broken Gears

Housing is a critical cog in the gears that power our economy. This article is like a storm cloud hovering to the west of what is described as a partly sunny day in our "recovery".
I live in Florida, where development is a crucial factor. It's not just guys on roofs setting trusses - it's furniture sales, cars/trucks, appliances, lawn service, swimming pool stuff, house cleaners, people and businesses that support all of this, and so on. In the case of swimming pools, permits are still off about 70% from '07. If housing doesn't recover to pre-boom levels, what used be known as normal, then unemployment doesn't get fixed, and wages remain stagnant. ....and if unemployment doesn't get fixed- and wages don't improve - housing doesn't recover.
We're stuck with broken gears. They may indeed still turn, but nothing happens.

[Demeter]

34. Housing is more than broken--It's been Nuked

Last edited Mon Feb 6, 2012, 07:32 PM - Edit history (1)

and with all the radioactive-cloud over titles, I do not know how we can ever decontaminate real estate in this nation.

It would be more massive than the polio vaccination program of the 50's-60's, the savings bond/stamp sales of WWII and beyond, the Vietnam war protests,

and By God, It Would Be HARD WORK. American law and government don't do HARD WORK anymore. If they can't get people and corporations to voluntarily comply, then they just repeal the law. Problem solved.

[Demeter]

4. Study: U.S. recovering faster than its peers Posted by Ezra Klein

http://www.washingtonpost.com/blogs/ezra-klein/post/study-us-recovering-faster-than-its-peers/2011/08/25/gIQAWuD9cQ_blog.html

?uuid=5rRb3EuFEeGk0SPB0M4ulg

Two years ago, the McKinsey Global Institute looked at the recoveries of 32 countries that had undergone a financial crisis. Their analysis was grim. It was also correct. Contrary to the hopes some held for a quick recovery, MGI warned that financial crises tended to lead to long, slow recoveries as households, businesses and governments dug their way out of debt. But in a report released last week, MGI delivered some sunnier news — at least for the United States. If you look at the 10 largest developed economies in the world, the United States is the furthest along the path to recovery.

Looking back to their sample of 32 past instances with post-financial crisis recoveries, MGI zeroed in on Finland and Sweden’s experiences in the 1990s as the most relevant to our current moment. Those examples “show two distinct phases of deleveraging. In the first, households, corporations, and financial institutions reduce debt significantly over several years, while economic growth is negative or minimal and government debt rises. In the second phase, growth rebounds and government debt is reduced gradually over many years.”

Most economies, the authors say, are barely even in phase one. In the United Kingdom and Spain, for example, total debt is still rising. But not in the United States. Here, “debt in the financial sector relative to GDP has fallen back to levels last seen in 2000, before the credit bubble. U.S. households have reduced their debt relative to disposable income by 15 percentage points, more than in any other country; at this rate, they could reach sustainable debt levels in two years or so.”

?uuid=7Ya0tEuFEeGk0SPB0M4ulg

It’s not been pretty, of course. Two-thirds of that deleveraging has come from defaults on home loans and consumer debt. And it’s not done, either. But if trends continue, we’ll reach the pre-bubble level of household-debt-to-disposable income by 2013. By comparison, the UK is on track to reach pre-bubble levels of household debt by 2021. That’s a rather long time to wait....

MORE

[Demeter]

5. Why Don't We Pay People Enough? 8 Facts About America's Struggling Working People

http://www.alternet.org/story/153856/why_don%27t_we_pay_people_enough_8_facts_about_america%27s_struggling_working_people?page=entire

“Our nation, so richly endowed with natural resources and with a capable and industrious population, should be able to devise ways and means of insuring to all our able-bodied men and women, a fair day’s pay for a fair day’s work.” Franklin Delano Roosevelt, 1937

MORE...AND IT'S VERY DEPRESSING....PUN INTENDED.

[Demeter]

6. Blaming Capitalism for Corporatism By Edmund S. Phelps and Saifedean Ammous

http://www.nationofchange.org/blaming-capitalism-corporatism-1328114007

The future of capitalism is again a question. Will it survive the ongoing crisis in its current form? If not, will it transform itself or will government take the lead? The term “capitalism” used to mean an economic system in which capital was privately owned and traded; owners of capital got to judge how best to use it, and could draw on the foresight and creative ideas of entrepreneurs and innovative thinkers. This system of individual freedom and individual responsibility gave little scope for government to influence economic decision-making: success meant profits; failure meant losses. Corporations could exist only as long as free individuals willingly purchased their goods – and would go out of business quickly otherwise. Capitalism became a world-beater in the 1800’s, when it developed capabilities for endemic innovation. Societies that adopted the capitalist system gained unrivaled prosperity, enjoyed widespread job satisfaction, obtained productivity growth that was the marvel of the world and ended mass privation.

Now the capitalist system has been corrupted. The managerial state has assumed responsibility for looking after everything from the incomes of the middle class to the profitability of large corporations to industrial advancement. This system, however, is not capitalism, but rather an economic order that harks back to Bismarck in the late nineteenth century and Mussolini in the twentieth: corporatism. In various ways, corporatism chokes off the dynamism that makes for engaging work, faster economic growth, and greater opportunity and inclusiveness. It maintains lethargic, wasteful, unproductive, and well-connected firms at the expense of dynamic newcomers and outsiders, and favors declared goals such as industrialization, economic development, and national greatness over individuals’ economic freedom and responsibility. Today, airlines, auto manufacturers, agricultural companies, media, investment banks, hedge funds, and much more has at some point been deemed too important to weather the free market on its own, receiving a helping hand from government in the name of the “public good.” The costs of corporatism are visible all around us: dysfunctional corporations that survive despite their gross inability to serve their customers; sclerotic economies with slow output growth, a dearth of engaging work, scant opportunities for young people; governments bankrupted by their efforts to palliate these problems; and increasing concentration of wealth in the hands of those connected enough to be on the right side of the corporatist deal.


AFTER ACCURATELY DESCRIBING THE SITUATION, AUTHORS THEN PLUNGE OFF THE LIBERTARIAN CLIFFS AND CRASH UPON THE ROCKS BELOW...

[Tansy_Gold]

10. They lost me when they suggested capitalism

"ended mass privation."

It did nothing of the kind, and for anyone to suggest it did means they are living in a cloud cuckoo land.

I can tolerate errors of fact and even errors of logic, but only to a certain point. Even small errors will give me pause and make me wary about accepting the general premise. But when the error of fact is ginormous, I feel justified in dismissing anything and everything associated with the essay, even those parts of it that may be accurate because they are reached via faulty and untrustworthy logic.

meh

[Demeter]

23. It depends what you mean by "Privation"

Capitalism enabled mass-production and mass-distribution. I'm not sure if either has ever been accomplished without the investment of a large sum of money--which is basically what I see as capitalism, where the money comes from individuals.

For socialism's version of capitalism, the money comes from the state--tax revenues, printing press, seizure, whatever.

To the extent that bringing the marketplace to the ends of the earth is a good, capitalism did good.

To the extent that Capitalism instituted "Quality Control" (a favorite term in engineering/manufacturing), standardizing the product (toasters, drugs, anything more complicated than the 17th century) so that it was safe and efficacious, Capitalism did good.

To the extent that Capitalism honored the Workers' contributions and contracts, Capitalism did good.

To the extent that Capitalism contributed its fair share to the Government (socialism) and obeyed government law, capitalism did good.


But what we have now is fraud and piracy, where worker, investor, government and the general public get screwed by a roving band of brothers, the 1%ers. I submit, that isn't Capitalism.

[Tansy_Gold]

29. But.. . . .

In the search for new markets and new sources of supply, capitalism condoned slavery and colonialism and even genocide.

And was it capitalism that instituted quality control, or the necessity of the marketplace? Mass production w/interchangeable parts was an innovation that required quality control, but it didn't require capitalism. Capital yes, capitalism no.

Capitalism hasn't always honored workers' contributions and contracts. If it had, there wouldn't be unions.

Capitalism as an -ism, as an ideology, hasn't done any of these things. People operating under a capitalist model may have, and even governments operating on that basis may have for a while, but the idea that he has the capital makes the decisions, is free to keep or break or make the law, etc., those are all parts of the actual ideology.

Can you tell I'm reading Terry Eagleton?

[Demeter]

35. I agree, Ideology of Capitalism is destroying capitalism

and that's where the government must step in, and hasn't. Instead, it's been screwing over its citizens.

[tclambert]

48. I had the same reaction. Capitalism "ended mass privation?" Um, so all those poor and homeless

people don't exist? Hell, unadulterated capitalism allows slavery. In fact, it favors it.

Then the next paragraph hints that they intend to blame all the problems on government interference somehow. After that, I can't bring myself to read any more of the article.

[Demeter]

8. Biggest Risk to Economy 2012, & What’s the Economy For Anyway? By Robert Reich

http://www.nationofchange.org/biggest-risk-economy-2012-and-what-s-economy-anyway-1328022937


...Tim Geithner is surely correct that the European debt crisis and Iran pose risks to the American economy in 2012. But they aren’t the biggest risk. The biggest risk is right here at home – that most Americans will continue to languish. All of which raises a basic question: Who or what is the economy for? Surely not just for a few at the top, and not just big corporations and their CEOs. Nor can the success of the economy be measured by how fast the GDP is growing, or how high the Dow Jones Industrial Average is rising, or whether average incomes are turning upward.

The crisis of American capitalism marks the triumph of consumers and investors over workers and citizens. And since most of us occupy all four roles – even though the lion’s share of consuming and investing is done by the wealthy – the real crisis centers on the increasing efficiency by which all of us as consumers and investors can get great deals, and our declining capacity to be heard as workers and citizens....The best means of balancing the demands of consumers and investors against those of workers and citizens has been through democratic institutions that shape and constrain markets. Laws and rules offer some protection for jobs and wages, communities, and the environment. Although such rules are likely to be costly to us as consumers and investors because they stand in the way of the very best deals, they are intended to approximate what we as members of a society are willing to sacrifice for these other values.

But technologies for getting great deals are outpacing the capacities of democratic institutions to counterbalance them. For one thing, national rules intended to protect workers, communities, and the environment typically extend only to a nation’s borders. Yet technologies for getting great deals enable buyers and investors to transcend borders with increasing ease, at the same time making it harder for nations to monitor or regulate such transactions. For another, goals other than the best deals are less easily achieved within the confines of a single nation. The most obvious example is the environment, whose fragility is worldwide. In addition, corporations now routinely threaten to move jobs and businesses away from places that impose higher costs on them – and therefore, indirectly, on their consumers and investors – to more “business friendly” jurisdictions. The Internet and software have made companies sufficiently nimble to render such threats credible.

But the biggest problem is that corporate money is undermining democratic institutions in the name of better deals for consumers and investors. Campaign contributions, fleets of well-paid corporate lobbyists, and corporate-financed PR campaigns about public issues are overwhelming the capacities of Congress, state legislatures, regulatory agencies, and the courts to reflect the values of workers and citizens...

[Demeter]

9. Retirees Occupy Century Aluminum By Leo Gerard

http://www.nationofchange.org/retirees-occupy-century-aluminum-1328107450

On Dec. 18, a dozen retirees, men and women in their 60s, 70s, even 80s, began occupying a median strip along Route 33 in front of the closed Century Aluminum smelter in Ravenswood, W.Va. In tents and under tarps, a small group stays overnight, despite hypertension, arthritis and other old age ailments. One has suffered a stroke. These vulnerable people expose themselves to weather extremes although some have no health insurance at all. Century cancelled it. That’s why they’re occupying Century. The retirees labored their entire lives for wages and pensions comparably lower than those of other aluminum workers. They did it believing they made those sacrifices in exchange for good, lifelong health coverage. Over the past two years, however, Century evicted them, about 540 retirees altogether, from the insurance plan. The betrayal burns. Executives at Century, corporate 1 percenters, committed the same sort of treachery that is being condemned by Occupy Wall Street demonstrators representing the victimized 99 percent across the country. Thus the retirees adopted the grandchildren’s protest tactic of encampment.

Century shuttered the 50-year-old Ravenswood smelter in February of 2009, throwing 651 workers out of jobs. Century, headquartered in Monterey, Calif., didn’t go bankrupt though. It still operates aluminum plants in Kentucky, South Carolina and Iceland. And it didn’t immediately cancel promised insurance for retirees. Nine months after the shutdown, it announced it would terminate as of June 1, 2010 health benefits for retirees eligible for Medicare. Then on Nov. 1, 2010, Century told its retirees who weren’t yet eligible for Medicare that it would stop paying for their coverage as of Jan. 1, 2011. This revoking of earned benefits isn’t an isolated incident or a fluke. It is part of a pattern documented by Wall Street Journal investigative reporter Ellen E. Schultz in her new book “Retirement Heist.” The subtitle is, “How companies plunder and profit from the nest eggs of American workers. She describes in gory detail how corporations raided worker pension accounts, siphoning off surpluses that would be needed later to prop up plans damaged by the Wall Street collapse. She provides detailed accounts of executives gouging the funds to pay for their own exorbitant retirement packages. She tells of corporate executives ending retiree health insurance and freezing pensions but deceptively calling the changes improvements, so that CEOs could pump up company profits with money that had been pledged to workers. While breaking promises to workers and violating contracts, these CEO 1 percenters falsely portrayed themselves as beleaguered champions of workers, valiantly attempting to preserve underfunded pensions. Like Costa Concordia Captain Francesco Schettino saving himself while abandoning passengers on his sinking cruise ship, the captains of industry padded their own pockets with pension and health care funds intended for retirees, then deserted the workers. Schultz describes the CEO scams this way in the book:

“In reality, they’re the silent pirates who looted the ships and left them to sink, along with the retirees, as they sailed away safely in their lifeboats.”

Most of the Costa Concordia passengers survived, but more than a dozen drowned. In West Virginia, most of the retirees are still kicking. A leader among the Century occupiers, Karen Gorrell, explained:

“We may have one foot in the grave, but we are kicking like hell with the other.”


...Though Century failed to fulfill its obligation to pay for retiree health care, it handed its last CEO, Logan W. Kruger, $4.9 million in 2010. That’s twelve times more than Americans pay their president, the leader of the free world. Century gave Kruger another $6.2 million to leave last November. Still, he’s suing for $20 million on top of that. Century also is defending against a lawsuit filed for the retirees by the United Steelworkers (USW) union, which represented most of the Century workers. The USW hopes, however, to resolve the dispute outside the courtroom, with the help of the retirees and West Virginia lawmakers. The elderly agitators managed to win the support of the state’s U.S. senators, its governor and its legislature. So last year when Century went begging to the state for $20 million it claimed it needed to re-open the Ravenswood smelter, the lawmakers sent Century away empty handed with a directive to settle with the retirees before seeking reconsideration. Not long afterward, Century booted Kruger, and the new management team is negotiating with the USW and the retirees.

The protesters don’t have what they want yet, and they’re not leaving their tents until they do.

Century gave the retiree occupiers port-o-potties and installed concrete barriers to prevent cars careening on an icy Route 33 from plowing through the encampment.

Very nice gesture. But resuming payment for promised health insurance would be a whole lot better.

[Demeter]

11. Another tiny detail from Switzerland

http://www.golemxiv.co.uk/2012/02/another-tiny-detail-from-switzerland/?utm_source=rss&utm_medium=rss&utm_campaign=another-tiny-detail-from-switzerland

Back in June of last year (2011) I wrote about how there was such a demand for safe deposit boxes in Switzerland that,

…if you want a bank box in Zurich today, they will require that you have a minum of half a million swiss francs on deposit in the bank, before they will even consider you. That is how short of space they are.

The same person,who told me that contacted me today to tell me that the demand for Safe deposit boxes has grown so hugely that in the area bordering Italy, hotels are now renting out their own safety deposit boxes.

First the Greeks now the Italians. Capital Flight in full effect. But don’t worry I am sure Mr Monti has it all under control.

[Tansy_Gold]

13. As always,

the devil is in the details.


(shaking head with dismayed amazement)

[Demeter]

25. That's why we meet here! To get the details

and dive below the propaganda level.

[Demeter]

12. Schneiderman MERS Suit, HUD’s Donovan Remarks Confirm: Mortgage “Settlement” is Stealth Bank Bailout

I THINK YVES WILL BE WRITING ANOTHER BOOK SOON...THIS POST WOULD QUALIFY AS ONE ON ITS OWN...

In case you had any doubts about what the mortgage settlement was really about and why banks that were so keenly opposed to it are now willing to go ahead, the news of the last two days should settle any doubts.

As we had indicated earlier, one of the many leaks about the settlement showed that there had been a major shift its parameters. Of the $25 billion that has been bandied about as a settlement total for the biggest banks, comparatively little (less than $5 billion) is in cash. The rest comes in the form of credits for principal modifications of mortgages.

Originally, that was to come only from mortgages held by banks, meaning they would bear the costs. The fact that this meant that whether a homeowner might benefit would be random (were you one of the lucky ones whose mortgage had not been securitized?) was apparently used as an excuse to morph the deal into a huge win for them: allowing the banks to get credit for modifying mortgages that they don’t own.

The first rule of finance (well, maybe second, “fees are not negotiable” might be number one) is always use other people’s money before your own. So giving the banks permission to modify loans they don’t own guarantees that that is where the overwhelming majority of mortgage modifications will take place, ex those the banks would have done anyhow on their own loans. And the design of the program, that securitized loans will be given only half the credit towards the total, versus 100% for loans the banks own, merely assures that even more damage will be done to investors to pay for the servicers’ misdeeds. ...


BUT WAIT! IT GETS WORSE! SEE LINK FOR FOLLOWUP

...The Obama Administration may have decided that investors have acted enough like patsies, given how they have failed to react to rampant servicer abuses, that they judge the risk of investor litigation and a related PR embarrassment to be small. But this battle is not yet over. The rumblings I am hearing from investor-land remind of the sections of the Lord of the Rings when the Ents were finally roused. It isn’t yet clear that investors will act, but if they do, the Administration will be unprepared for the vehemence of their response.

http://www.nakedcapitalism.com/2012/02/schneiderman-mers-suit-and-huds-donovan-remarks-confirm-that-mortgage-settlement-is-a-stealth-bank-bailout.html

[Tansy_Gold]

14. Link missing???? n/t

[Demeter]

26. Oooops!

It was late, and I was working in the dark, and we were watching Cocoon, which always makes me cry...

[Demeter]

15. Everything is fine

http://www.golemxiv.co.uk/2012/01/everything-is-fine/

NOT

...Greece is heading for a blow out with its bond holders. Greece wants/has to have it’s private bond holders accept at least a 50% ‘haircut’ on what they are owed. The bond holders have said ‘No!’ to accepting their share of the losses. The ECB has come clean that it will not accept a loss on the Greek bonds it now holds either. If it did so it would put a large dent in its ability to claim all is fine with the ECB and it can keep lending and printing on any scale for any length of time.

Portugal is now openly muttering about how it needs another 30B or so bail out. Ireland is looking to run out of its own cash in about 6 weeks at which point it will have to once again tap in to its credit line from the ECB and IMF.

Which brings up the ECB and its now fairly clear plans to issue/print another 650B to 1T in new Euro debt in what it calls its LTRO (Longer Term Refinancing Operations). More on this later.

And not to be out-done in competitive printing and currency manipulation Mr Bernanke just announced that the Fed would be buying up more bonds again in what the markets are already calling QE 3...

AND THE HITS JUST KEEP ON COMING!

[Demeter]

44. Things Are Not O.K. By PAUL KRUGMAN

http://www.nytimes.com/2012/02/06/opinion/krugman-things-are-not-ok.html

In a better world — specifically, a world with a better policy elite — a good jobs report would be cause for unalloyed celebration. In the world we actually inhabit, however, every silver lining comes with a cloud. Friday’s report was, in fact, much better than expected, and has made many people, myself included, more optimistic. But there’s a real danger that this optimism will be self-defeating, because it will encourage and empower the purge-and-liquidate crowd. So, about that jobs report: it was genuinely good, certainly compared with the dreariness that has become the norm. Notably, for once falling unemployment was the real thing, reflecting growing availability of jobs rather than workers dropping out of the labor force, and hence out of the unemployment measure. OH, REALLY? THAT'S NOT WHAT WE HEARD ELSEWHERE!

Furthermore, it’s not hard to see how this recovery could become self-sustaining. In particular, at this point America is seriously under-housed by historical standards, because we’ve built very few houses in the six years since the housing bubble popped. The main thing standing in the way of a housing bounce-back is a sharp fall in household formation — econospeak for lots of young adults living with their parents because they can’t afford to move out. Let enough Americans find jobs and get homes of their own, and housing, which got us into this slump, could start to power us out.

That said, our economy remains deeply depressed. As the Economic Policy Institute points out, we started 2012 with fewer workers employed than in January 2001 — zero growth after 11 years, even as the population, and therefore the number of jobs we needed, grew steadily. The institute estimates that even at January’s pace of job creation it would take us until 2019 to return to full employment. And we should never forget that the persistence of high unemployment inflicts enormous, continuing damage on our economy and our society, even if the unemployment rate is gradually declining. Bear in mind, in particular, the fact that long-term unemployment — the percentage of workers who have been out of work for six months or more — remains at levels not seen since the Great Depression. And each month that this goes on means more Americans permanently alienated from the work force, more families exhausting their savings, and, not least, more of our fellow citizens losing hope. So this encouraging employment report shouldn’t lead to any slackening in efforts to promote recovery. Full employment is still a distant dream — and that’s unacceptable. Policy makers should be doing everything they can to get us back to full employment as soon as possible. Unfortunately, that’s not the way many people with influence on policy see it.

Very early in this slump — basically, as soon as the threat of complete financial collapse began to recede — a significant number of people within the policy community began demanding an early end to efforts to support the economy. Some of their demands focused on the fiscal side, with calls for immediate austerity despite low borrowing costs and high unemployment. But there have also been repeated demands that the Fed and its counterparts abroad tighten money and raise interest rates....What’s the reasoning behind those demands? Well, it keeps changing. Sometimes it’s about the alleged risk of inflation: every uptick in consumer prices has been met with calls for tighter money now now now. And the inflation hawks at the Fed and elsewhere seem undeterred either by the way the predicted explosion of inflation keeps not happening, or by the disastrous results last April when the European Central Bank actually did raise rates, helping to set off the current European crisis. But there’s also a sort of freestanding opposition to low interest rates, a sense that there’s something wrong with cheap money and easy credit even in a desperately weak economy. I think of this as the urge to purge, after Andrew Mellon, Herbert Hoover’s Treasury secretary, who urged him to let liquidation run its course, to “purge the rottenness” that he believed afflicted America. And every time we get a bit of good news, the purge-and-liquidate types pop up, saying that it’s time to stop focusing on job creation...

[banned from Kos]

20. LA Times today - Kamala Harris comes back to mortgage settlement

http://www.latimes.com/business/money/la-fi-mo-california-settlement-20120205,0,3172322.story

Yves will add Ms. Harris to her shit list.

[Demeter]

28. Why Do Dangerous Financial Criminals Roam Free?

http://www.alternet.org/economy/153997/why_do_dangerous_financial_criminals_roam_free/?page=entire

Prosecutors like Eric Schneiderman need cops on the beat to put financial crooks behind bars. But thanks to Bush, these cops are missing in action...American Public Media's "Marketplace" had a recent segment focused on why it has taken so long to bring criminal prosecutions related to the financial crisis. Reporters observed that at the beginning of the crisis, the Obama administration wanted to calm the financial industry rather than impose accountability. They speculated, along with Tea Party and Occupy Wall Street participants, many of whom have been calling for prosecutions, that Obama’s creation of a new group to prosecute mortgage fraud led by New York Attorney General Eric T. Schneiderman was likely to be politically motivated. And they indicated that financial crimes are complex and prosecutors need time to develop their cases.

But here's what they didn't say: A major reason the prosecutions don’t exist is that President George W. Bush took the cops off the beat.

Think about street crime. Imagine, for example, a protection racket in which gangs extort payment from fearful shopkeepers. Prosecutors rarely initiate criminal prosecutions; indeed, they may not even know that the crime is occurring. The police pound the beats that keep them aware of the increase in crime, respond to complaints, investigate, determine that a crime may have occurred that warrants attention, create a file and send it to the prosecutor’s office. In routine cases, the prosecution proceeds on the basis of the police report alone. In more complex cases, the prosecutor may supplement the police investigation. But prosecutors rarely initiate cases. Even when a task force is appointed to target crime in a particular sector, it typically involves prosecutors working with the police. The prosecutors simply don’t have the skills or the manpower to detect crime, conduct investigations and make the record necessary to prosecute. So where were the police in the current financial crisis? The FBI did investigate and warned in 2004 that an epidemic of mortgage fraud was underway. The Bush administration took the FBI’s white-collar experts, however, and reassigned them to terrorism cases. The inquiries under way in 2004 – and the public cries of alarms that accompanied them – largely disappeared. The cops were literally yanked off the beat.

In the early part of the increase in subprime lending, state attorneys general were bringing cases, and calling attention to predatory lending practices. Financial conglomerates complained to the Bush administration. In 2003, the Office of the Controller of the Currency (OCC) relied on a clause from the 1863 National Bank Act to preempt all state predatory lending laws. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious that all 50 state attorneys general, and all 50 state banking superintendents, challenged the new rules and in 2009, the Supreme Court invalidated the OCC action. By then, however, the damage had been done. Not only could the states not prosecute the mortgage brokers involved in the predatory practices that underlay the financial crisis, they stopped investigating them – in effect, taking the state cops off the beat.

Worst of all, however, was the wholesale elimination of effective supervision by the banking regulatory agencies. During the savings and loan crisis, those regulatory agencies made 10,000 criminal referrals. During the current crisis, the Office of the Comptroller of the Currency and the Office of Thrift Supervision made none, though they had authority over some of the worst actors in the mortgage crisis.
The Bush administration stacked the agencies with anti-regulatory officials who did not believe they should ever make criminal referrals, no matter how egregious the conduct. The officials thought that they should be “cheerleaders” for the industry and they turned a blind eye to practices that would have generated regulatory action in other administrations. Their practices are the equivalent of your neighborhood patrolman saying it’s not his job to tell the prosecutors the local mob has created a protection racket or to do anything to stop it. Complementing the front line banking agencies’ refusal to see crime unfolding before their eyes was the decision of the Federal Reserve Board not to look. Tim Geithner testified before Congress that he “had never been a regulator.” But at the New York Fed, Geithner had regulatory authority over bankholding companies such as Citicorp, the parent company of Citibank, and other parts of the mortgage market. The Fed chose not to exercise that authority because Chairman Alan Greenspan didn’t believe in regulation. (See Joseph Stiglitz, Freefall, p. 270.) Greenspan’s views are the equivalent of saying that there is no need to put cops on the beat because the market will guarantee that crime doesn’t happen. When the cops are taken off the beat, criminals multiply. And without the investigations documenting the practices, it is easy not to recognize the criminal practices underlying the mortgage crisis. The prosecutorial group that President Obama recently appointed has to play catch-up – it has to go out and create cases from scratch. While the Financial Crisis Inquiry Commission has documented some of the abuses, there were remarkably few regulators on the ground over the course of the last decade creating the records and making the referrals that ordinarily lay the foundation for effective prosecutions. That foundation doesn’t exist because the regulatory officials who are supposed to oversee the financial sector – the cops who police financial crime – were and to a large extent still are missing in action. If we want crooks behind bars -- and if want to stop future financial crimes -- we need to rebuild this foundation by appointing regulators who believe in the mission and have a proven record of success.

******************************************************************************

June Carbone is the Edward A. Smith/Missouri Chair of Law, the Constitution and Society at the University of Missouri-Kansas City. She is co-author, with Naomi Cahn, of "Red Families v. Blue Families: Legal Polarization and the Creation of Culture."

*******************************************************************************

SO, THE HOPES OF A NATION AND THE STABILTY OF THE ECONOMY REST ON SCHNEIDERMAN. I HOPE HE HAS SOME HOMIES TO BRING TO THE FIGHT.

[Demeter]

33. Plan B – How to loot nations and their banks legally

http://www.golemxiv.co.uk/2011/12/plan-b-how-to-loot-nations-and-their-banks-legally/

Is there a plan B? That question is usually asked of governments regarding their attempts to ‘save’ the banks domiciled in their country. But has anyone asked if the banks have a plan B? Does anyone think that if our governments fail to keep to their austerity targets and fail to keep bailing out the banking sector, that the banks will just shrug and say, “Well, thanks for trying” and accept their fate? Or do you think the banks might have a Plan B of their own?

First let’s be clear about Plan A. That plan is to enforce an era of long-term austerity cuts to public services, in part to cut public expenditure so as to free up money for spending on the banks, but perhaps more importantly to further atrophy public services so that private providers can take over. A privatization of services which will bring great profits and cash flow to the private sector and to the banks who finance them, and a further general victory for those who feel that private debts rather than public taxes should be what underpins our national life and social contract. Plan A therefore requires that governments convince their populace that private debts should be taken on to the public purse and that once taken on, the contracts signed by governments on behalf of the tax payers/citizens, are then sacrosanct and above any democratic change of mind. If governments can hold their peoples to this,then the banks are ‘saved’ with the added bonus that democracy and the ‘Rights’ it once guaranteed will all have been redefined as subordinate to finance and its contracts, and our citizenship will have become second to one’s contractual place in a web of private debts. Debts to the private lenders will become more important than taxes to the public exchequer. And as they do the State will wither away, leaving free-market believers and extreme libertarians exactly where they have always wanted to be – in charge – by dint of being rich. It is, in my view, a bleak future which I once described as A Toxic Debt Wasteland.

BUT it does all depend on governments being able to suppress discontent and to outlaw opposition in the sense of saying to people you may disagree but we have now declared these debts and their repayment to be outside democratic control and immune to any attempt to rescind or repudiate the agreed debt contracts. As the severity of the austerity cuts to social services (health, education, pensions etc) becomes painfully clearer to people and the ‘necessity’ for them is ‘regretfully’ extended year after year, it will become harder and harder to justify, let alone impose, such suffering. We will enter an era of vicious sectarian blame. We are already in it, but it will get much darker. The banks and those whose wealth and power is tied to them, would obviously prefer Plan A to succeed. It makes governments do all the dirty work and it would profit the banks far more in the long run. If you want to bleed a man – kill him and you get about 5 litres/quarts. But strap him to a gurney with a catheter in his arm and a drip feed in his nose, and he will bleed for you for as long as his system can stand it. That is Plan A. But what if it fails?
I cannot believe the banks, with everything at stake, have not thought it prudent to have a plan B. So here are my thoughts on what that plan could be. Let me say now, I do not think this plan was a long term conspiracy. I do not think the end game was in mind when the first elements were put in place. It has, I think, been constructed opportunistically. But the end result is no less dark and threatening. What I offer from here on is thinking out loud. I obviously have no proof at all that there is a plan B. All I can hope to do is show you the elements which I think could make a Plan B for the banks. Then my argument is that if the mechanism I describe could work, if I have not simply misunderstood something, then I think the banks will surely have thought of it before me. And so it either already exists or it will. I think there are scraps of information that suggest it does exist and the collapse of MF Global might even be the first example of Plan B in action. The MF Global case certainly contains all the clues. MF Global imploded when it could not get the short term funding it needed. There were two kinds of funding MF Global relied upon for its liquidity/cash flow: repo and hypothecation. For those not familiar, Repo is when a bank or brokerage ‘sells’ an asset for cash but with the agreement that it will re-purchase – hence ‘repo’ – the asset at an agreed date for an agreed price. It is not really a sale but a loan. Repo is the oxygen the financial world breathes. Repo is a $10 Trillion market....The other main source of the essential short term funding was Hypothecation. This is when a bank or brokerage pledges an asset to a ‘lender’ in return for cash but the asset remains in the possession of the borrower. What the ‘lender’ gets is hypothetical control of the asset. Although the asset never actually changes hands, the new ‘owner’s’ hypothetical control of the asset allows her to do what she wishes with the asset. Including re-hypothecating the asset to another bank or brokerage. If she does so then the hypothetical control passes to yet another ‘owner’. Even though physically it remain where it started. Like repo – hypothecation and re-hypothecation are truely massive parts of modern debt-based banking. So the first thing the MF Global case tells us is that what happened is not due to some peripheral, parochial rogue trader-esque, isolated problem. What happened was as a result of a mechanism right at the very heart of the financial system.

In the MF Global collapse what ZeroHedge, and following them, I and others wrote about, was the way in which not only did MF Global go bankrupt, but so also did some of their clients when they found the money they thought MF Global was holding for them, went unaccountably missing. Client’s money went missing because it was ‘mingled’ with the brokerage’s money when it should not have been. Brokers should keep them separate. But it seems in the ‘re-hypothecation’ of assets it was mingled. Former CEO of MF Global, Mr Corzine has sworn under oath he knew nothing about his co-mingling nor the irregularities with his company’s re-hypothecation. It has been rumoured the client’s money may now be, possibly, in the hands of JP Morgan. This hint of illegality has grabbed everyone’s attention. But I think it is actually the legal part of the story not the possibly illegal part which is by far the more important.

In my opinion the key to the bank’s Plan B is in understanding why any money/assets were taken from MF Global after it had gone bankrupt and how exactly it went under in the first place. We all know MF Global had huge holdings of dicey European sovereign debt. But those debts have not become worthless so what caused MF to collapse? . The answer to all these questions lie in a change to Bankruptcy laws that happened around the world between 2002 and 05. This might seem like a detour into nerd city but it is not. It is the key. When a company declares bankruptcy there is what the Americans call an ‘automatic stay’, which means all the assets left in a company at the moment it goes bankrupt are protected from the rush of creditor’s demands until appointed auditors can sort out who should get what. The automatic stay prevents a first come first served disorderly looting where those with the most muscle getting everything and everyone else getting nothing. As we are all painfully aware now, there is a legal pecking order to who gets paid before who, with Senior bond holders at the top. But, in America culminating in 2005 with the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) the order was changed. And that change is the crucial event. At the time the law was being passed few were aware of this change and even fewer were aware of how important it would become. At the time the furore was all about changes to personal bankruptcy. The Credit Card industry (AKA Banks) had spent more than a decade and its rumoured as much as $100 million lobbying to make bankruptcy much harder and more punitive for ordinary debtors.

An article from 2005 in the Boston Globe quoting a very senior Republican Senator, gives a flavour of what was then being said about ordinary people who fell into debt....Senator Orrin Hatch (R-UT) has said that millions of Americans are bankrupt or near-bankrupt because “they run up huge bills and then expect society to pay for them.”

After 4 years of bailing out banks who did exactly that the irony is enough to gag on.

But what was not talked about was an amendment which was put into the bill and, as far as I know little debated. Don’t let the word ‘amendment’ mislead you. Amendments are generally not there as refinements and improvements on the original idea. Whenever a bill goes through Congress every lobby group and industry with something it wants done, gets their tamed/owned/ political friends to tack on the change in the law that suits them in return for supporting the original bill. The bill emerges from this process festooned with ‘amendments’ to other vaguely related laws. Amendments are the price of getting the original bill passed. They are often little understood, written by and for the benefit of the sponsoring lobby group and can be far more influential than the bill they are smuggled in on. This is certainly the case here.

According to a scholarly article in the American Bankruptcy Law Review,

“the provisions [in the amendment] were derived from recommendations from the President’s Working Group and revisions espoused by the financial industry”

The President at the time was Bush and one of the most vociferous sponsors of the amendment was none other than Senator Leach whose other claim to fame was the Gram-Leech-Bliley Act which repealed most of the Glass Steagal Act of 1933 whose repeal virtually assured that the present debt crisis would happen. When bankers play pocket billiards, Senator Leach is what they prod their balls with. Ribaldry aside Senator Leach can certainly be described as one of the principle architects of our present global misery. But I digress.

What was this amendment? The amendment exempted repos (and hypothecated and re-hypothecated assets) and a whole range of derivatives from the automatic stay. It also allowed lower quality assets to qualify for the exemptions. Which means the special bankruptcy treatment given repos and derivatives means that repo lenders and parties to derivative contracts can keep the collateral if their trading partner becomes insolvent. This exempts them from the “automatic stay” rule in bankruptcy, which prohibits most creditors from trying to collect ahead of others.

Or as the official report from the US Financial Crisis Inquiry Commission said,

under a 2005 amendment to the bankruptcy laws, derivatives counterparties were given the advantage over other creditors of being able to immediately terminate their contracts and seize collateral at the time of bankruptcy. (p. 48)

So when a bank goes bankrupt, BEFORE even the most senior bond holders, the repo lenders and derivatives traders can remove, or keep all the assets pledged to them. This amendment which was touted as necessary to reduce systemic risk in financial bankruptcies also allowed a whole range of far riskier assets to be used, making them too immune from the automatic stay in the event of bankruptcy. Which meant traders flocked to a market where risky assets would be traded and used as collateral without apparent risk to the lender. The size of the repo market hugely increased and riskier assets were gladly accepted as collateral because traders saw that if the person they had lent to went down they could get your money back before anyone else and no one could stop them. It also did one other thing. Because the repo and derivatives traders ran no risk – they could get their money out of a failing bank before anyone else, it meant they had no reason at all to try to stop a bank from going under. Quite the opposite. All other creditors – bond holders – risk losing some of their money in a bankruptcy. So they have a reason to want to avoid bankruptcy of a trading partner. Not so the repo and derivatives partners. They would now be best served by looting the company – perfectly legally – as soon as trouble seemed likely. In fact the repo and derivatives traders could push a bank that owed them money over into bankruptcy when it most suited them as creditors. When, for example, they might be in need of a bit of cash themselves to meet a few pressing creditors of their own.

The collapse of both Bear Stearns, Lehman Brothers and AIG were all directly because repo and derivatives partners of those institutions suddenly stopped trading and ‘looted’ them instead.

THERE'S MORE...AND THE COMMENTS ARE MANY TIMES MORE

[Po_d Mainiac]

16. Comic relief..in case u missed it yesterday

http://silverdoctors.blogspot.com/2012/01/punt-bernank.html

[Demeter]

42. That was Fun!

all I needed was another time-wasting addiction...Thanks, Po

[xchrom]

18. morning -- monday --

[Tansy_Gold]

24. -- and I am heading to Tucson.

Hope to bring back lots of goodies to share with all of you!

SMW may be a bit late getting up this afternoon, depending on when I get home, but it will be there. I have to be back in time to do the day job, so. . . . . no overnighting for this gal!

[xchrom]

30. love, love, love tucson

look forward to seeing your finds!

[xchrom]

19. Danish Credit Crunch Deepens as Retrenching Banks Choke Economy

http://sfgate.bdc.bloomberg.wallst.com/SFChronicle/Story?docId=1376-LYRTM70UQVI901-1OUSAI6CJB8T713AJNIRVIBPBO

Feb. 6 (Bloomberg) -- Denmark’s credit crunch is getting worse as businesses accuse banks of withholding funds and the financial regulator warns that deteriorating asset quality may put more lenders out of business.

“When we ask our companies, small- and medium-sized, they say they are experiencing a credit crunch and it has become worse in the last month,” Karsten Dybvad, chief executive officer of the Danish Confederation of Industry, said in an interview in Copenhagen.

Dybvad’s group, which represents 10,000 Danish firms, wants the financial regulator to give banks more leeway in meeting capital requirements so they don’t call in loans and fuel a vicious circle that’s stifling the $300 billion economy. In a December survey of confederation members, two thirds said they had limited access to financing, while one in five said an absence of funds was the biggest obstacle for growth.

Three Danish banks, including Amagerbanken A/S, failed last year after the FSA required them to restate bad loans, leaving them in breach of capital rules. Two of the failures pushed losses on to senior creditors and exacerbated a funding squeeze that’s frozen most of Denmark’s 120 banks out of debt markets.

[xchrom]

21. U.S. stock futures drop on Greece worries

http://www.marketwatch.com/story/us-stock-futures-drop-on-greece-worries-2012-02-06?dist=beforebell

LONDON (MarketWatch) — U.S. stock futures dropped on Monday, as party leaders in Greece struggled to agree on another dose of painful austerity measures, with the threat of default looming large once again.

Futures on the Dow Jones Industrial Average /quotes/zigman/4222696 DJ2H -0.26% fell 39 points to 12,754 and those on the Standard & Poor’s 500 stock index /quotes/zigman/782502 SP2H -0.29% dropped 5.80 points to 1,333.3.

Nasdaq 100 futures /quotes/zigman/2978008 ND2H -0.27% declined 8.50 points to 2,514.5.

No major U.S. economic data are scheduled for release on Monday, and investors are likely to focus instead on the situation in Greece.

European stocks and the euro fell on Monday after news that the leaders of Greece’s main political parties were still trying to reach agreement on some measures demanded by the troika of international lenders in exchange for a second bailout package. Party leaders agreed on some demands, but there was still disagreement on other issues, such as private-sector wage cuts.

[Roland99]

27. EURUSD down to 1.304

[xchrom]

22. The dark hole of modern capitalism

http://www.japantimes.co.jp/text/eo20120206a3.html

HONG KONG — The International Labor Organization last month put out a stark warning about increasingly wretched employment prospects almost everywhere in the world. It wrote: "The world must rise to the urgent challenge of creating 600 million productive jobs over the next decade".

The report was all but ignored except by the very serious press and the BBC. Perhaps it is not surprising. How did the ILO calculate such a figure? Did they count the unemployed? How can anyone count up to 600 million, especially over 10 years into the future? Is it a case of thinking of the highest number that may scare you?

The ILO rather spoiled its case by adding that, even today, 1.1 billion people worldwide are unemployed or living in poverty. As for its suggestion that "the world" must create new jobs, and "productive" ones at that, what is this "world" and who runs it?

It is right to be critical of sloppy thinking, especially when there isn't one world. But the ILO is on surer ground when it gets away from United Nations-speak and warns of clear and present dangers.

[xchrom]

32. Romania's PM resigns over austerity protests

http://www.aljazeera.com/news/europe/2012/02/20122693818556854.html


Romanians, protesting against austerity measures, have been demanding resignation of Prime Minister [Reuters]

Emil Boc, Romania's prime minister, has resigned after weeks of nationwide protests against a slew of austerity measures and months before a parliamentary election.

"It is the moment for important political decisions. From this point of view, I took the decision to give up the government's mandate," Boc said in a speech after a government meeting on Monday.

Boc enforced the cuts, including slashing public salaries by a quarter and raising sales tax, to complete a $26.24bn International Monetary Fund (IMF) bailout deal and boost the economy after a deep and bitter recession.

Thousands of Romanians have braved freezing temperatures in the last month to protest against Boc and his ally, President Traian Basescu.

[xchrom]

36. The Problem That the Buffett Rule Won’t Fix: Michael Kinsley

http://www.bloomberg.com/news/2012-02-03/the-problem-that-the-buffett-rule-won-t-fix-commentary-by-michael-kinsley.html

As everybody knows by now, Warren Buffett -- class traitor -- pays a smaller share of his income in taxes than does his secretary, Debbie Bosanek. In his State of the Union address last month, President Barack Obama proposed the “Buffett Rule” to rectify this.

The rule would be a phased-in requirement that all taxpayers making more than $1 million a year pay federal taxes of at least 30 percent of their adjusted gross incomes. If your taxes worked out to be less than that, you would owe Uncle Sam the difference.

Who could object? Well, Newt Gingrich -- class clown -- called the idea “stupid.” And Mitt Romney -- class president -- said he doesn’t believe in raising taxes on anybody under any circumstances: a nice, nuanced view, which at least saves us the trouble of arguing about it. It’s really impossible to defend a system where people at the bottom pay 30 percent or 35 percent (including Social Security and Medicare taxes) while people at the top who’ve arranged their affairs correctly -- not all that hard -- pay 15 percent, as Romney did last year. Nevertheless, there are problems with the Buffett Rule, which would become law under a bill introduced Wednesday in Congress.

First, it will affect so few people that it will have no measurable effect on income distribution. Citizens for Tax Justice, a liberal tax reform group, figures that the Buffett Rule would affect about 0.08 percent of taxpayers, or one out of every 1,250. People will be tempted to think that by enacting the Buffett Rule, we will have solved the problem of growing income inequality, when we won’t really have even touched it.

[xchrom]

38. IMF warns Europe downturn could cut China growth

http://hosted.ap.org/dynamic/stories/A/AS_CHINA_IMF_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-02-06-03-26-35

BEIJING (AP) -- A sharp downturn in Europe could cut China's economic growth rate nearly in half, the International Monetary Fund said Monday, adding to warnings about a possible severe global slowdown this year.

The IMF said Beijing should be ready to launch a multibillion-dollar stimulus to ward off a slump in the world's second-largest economy.

The IMF is forecasting 8.2 percent growth this year for China but said that could be reduced by up to 4 percentage points if Europe's crisis causes large declines in credit and output.

"The global recovery is threatened by intensifying strains in the euro area and fragilities elsewhere," it said. "In the unfortunate event such a downside scenario becomes reality, China should respond with a significant fiscal package, executed through central and local government budgets."

[xchrom]

39. Portugal Shopping in the troika era

http://www.presseurop.eu/en/content/article/1484011-shopping-troika-era

"It's a scam to exchange one's car for the metro, and it's more expensive. In the car you go quickly, with the rising price of metro [fares], it's almost the same and I started using my car so rarely that I've found myself with a flat battery," says Diana Ralha, a communications consultant, summing up the feelings of those who have had to adapt their habits to the crisis because their pocketbooks have been hit.

No one voluntarily chooses to take longer to go to work or to spend time at home preparing lunch for the next day at the office. When one adopts such habits it's exactly because one does not have a choice. But if it is out of necessity that many Portuguese are forced to change their life style, it is also necessity that hones their ingenuity and creativity. And some even find a positive side to the changes forced on them.

Obviously, the most notable changes are in shopping habits, a domain where a small tweak can reap major savings. Mariana Távora, a lawyer, has made two changes in her outings to the supermarket. First of all she stopped going once a month. "When I did that," she explains, "because there was always something missing, I systematically had to go back in the middle of the week and I systematically came out with a few extra things bought on impulse. So now, I go shopping once a week".

The second change made by Mariana, and perhaps the most astonishing one, concerns the time of day chosen to do the food shopping. Lunchtime is "risky," she says. "I avoid going at lunchtime because when I'm hungry, I always buy more – and more sweets," she explains, conscious of the efforts she makes to avoid the "risk" of impulse buying.

[xchrom]

40. Low-income families 'struggling' {ireland}

http://www.irishtimes.com/newspaper/breaking/2012/0206/breaking17.html

?ts=1328549441
Table 8 from the 'Minimum Income Standard for Ireland' report. Expenditure - Two parent, two child household

Low-income families and those who are unemployed do not have enough money to achieve a basic standard of living, according to a report published today.

A Minimum Income Standard for Ireland , funded by the Department of Social Protection and carried out by the Policy Institute at Trinity College in conjunction with the Vincentian Partnership for Social Justice, followed an international budget standard to establish the cost of a minimum standard of living for Irish families.

It established the cost of a minimum essential standard of living for individuals and households across the entire lifecycle; from children to pensioners. Subsequently it calculated the minimum income households require in order to afford this standard of living. A minimum essential standard of living is defined by the United Nations as one which meets a person’s physical, psychological, spiritual and social needs.

Representative focus groups were established made up of different household types across the country. They were asked what they needed for a basic standard of living. A distinction was made between needs and wants.

[Demeter]

43. Who would have thought kapusta was the food of the Gods?

When you wake up drooling over the thought of sauerkraut, boiled pork and mushrooms over boiled potato, it's time to go back to the roots of the motherland...

I did it! I made kapusta, and it's divine. I feel so much better!

As a kid, we ate a lot of it, maybe too much, and often it was a bit overcooked. But that's why one leaves home...to do food right!

And the feeling that it's spring continues to grow.

[Demeter]

45. Romney’s Wife Had $3 Million in Secret Swiss Bank Account til 2010; Not Reported Fed Disclosure

Romney’s Wife Had $3 Million in Secret Swiss Bank Account Through 2010; Not Reported in Federal Disclosure Forms

http://www.nakedcapitalism.com/2012/02/romneys-wife-had-3-million-in-ubs-unit-closed-for-helping-us-citizens-evade-taxes.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

...His team apparently timed the release of his tax records with the hope that State of the Union hooplah would dominate news coverage and result in his finances getting less attention than they might otherwise. And that appears to been correct. His failure to divulge information about 23 investments, and more important his use of secret Swiss bank accounts, has been given a free pass. As Citizens for Responsibility and Ethics in Washington director Melanie Sloan observed, “Mr. Romney says the errors are minor, but then again he also claims earning $374,000 in speaking fees isn’t much money.”

This anodyne coverage in a Los Angeles Times article from last week is typical:

Some investments listed in Mitt and Ann Romney’s 2010 tax returns — including a now-closed Swiss bank account and other funds located overseas — were not explicitly disclosed in the personal financial statement the Republican presidential hopeful filed in August as part of his White House bid.

The Romney campaign described the discrepancies as “trivial” but acknowledged Thursday that it was reviewing how the investments were reported and would make “some minor technical amendments” to Romney’s financial disclosure that would not alter the overall picture….

The campaign has emphasized that Romney has paid all required U.S. taxes on his foreign funds….

Among the assets omitted is a Swiss bank account in Ann Romney’s blind trust that held $3 million until it closed in 2010. The account was listed on a financial disclosure Romney filed in 2007, but it was mistakenly named as an asset held by the couple, not as part of Ann Romney’s trust. A campaign spokeswoman said Thursday that Romney will file amendments to both his 2007 and 2011 financial disclosures to correctly identify the bank account.

That account was at UBS. Pretty much anyone who follows the financial press known of the pitched battle between the US government and first UBS, then Swiss banking regulators, over Swiss bank secrecy. The US engaged in a series of prosecutions that led one UBS unit that catered to wealthy individuals to be shuttered as part of a deal in which UBS also turned over the names of several thousand US customers that the US suspected of engaging in tax evasion. This case effectively ended Swiss bank secrecy; the efforts of the Swiss to avoid divulging the names of its customers was front page news in the Financial Times for the better part of two years...MUCH MORE REAL DIRT AT LINK

AT LEAST WE KNOW HE'S A CROOK BEFORE THE ELECTION

[Demeter]

46. Europe’s fiscal strategy is self-defeating

There are three ways to read the eurozone’s focus on austerity.

The first is that its leaders genuinely think that the current crisis is rooted in non-observance of the stability pact. But it is hard to believe that this could apply to countries such as Spain or Ireland, which always stuck to the rules.

The second is that treaty-based discipline is the precondition for a fiscal union and the issuance of eurobonds. But is it wishful thinking enough to commit to retrenchment without any certainty that the next step will come?

The third is that consolidation in southern Europe is the cornerstone of a broader strategy of economic reforms, which in turn will contribute to competitiveness, writes Jean Pisani-Ferry

Read more >>
http://link.ft.com/r/KC2844/OR0TK1/6ADGM/IIFCDH/FK1KJG/N9/t?a1=2012&a2=2&a3=6

THE FACT THAT THE EURO IS A TURKEY WHOSE GOOSE IS COOKED NEVER DAWNS UPON THEM....DENIAL, EUROPEAN BRANCH.

[Demeter]

49. MF Global trustee has traced most missing funds

http://www.marketwatch.com/story/mf-global-trustee-has-traced-most-missing-funds-2012-02-06?siteid=YAHOOB

A trustee seeking to distribute customer securities overseen by bankrupt MF Global Inc. said Monday that a majority of the cash that disappeared from the commodities broker has been found.

“The trustee’s investigators have now traced a majority of the cash transactions, totaling more than $105 billion, made in and out of MF Global Inc. in the last week before bankruptcy and are completing the process of tracing the remaining transactions,” the trustee said. “These included liquidation of customer securities, proprietary positions and other items. The securities included complex instruments, such as off-balance sheet repurchase transactions involving sovereign-debt securities and derivative structures.”

New York-based MF Global filed for bankruptcy protection on Oct. 31 after disclosing sizable exposure to derivatives and other investments related to billions of dollars in European sovereign debt.

The four-page statement gives a feel for a three-month investigation into how $1.2 billion in customer funds went missing. The statement discusses transactions that took place prior to the company’s bankruptcy filing, noting that it executed securities transactions totaling more than $100 billion during its final week of operations. ...