STOCK MARKET WATCH -- Tuesday, 2 June 2015

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Tuesday, 2 June 2015[font color=black][/font]

SMW for 1 June 2015

AT THE CLOSING BELL ON 29 May 2015
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Dow Jones 18,040.37 +29.69 (0.16%)
S&P 500 2,111.73 +4.34 (0.21%)
Nasdaq 5,082.93 +12.90 (0.25%)


[font color=red]10 Year 2.18% +0.07 (3.32%)
30 Year 2.94% +0.07 (2.44%) [font color=black]


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[font size=2]Market Conditions During Trading Hours[/font]
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(click on link for latest updates)
Market Updates
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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
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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
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Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
Wall Street on Parade
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[font color=black][font size=2]Handy Links - Essential Reading:[/font][/font]
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Matt Taibi: Secret and Lies of the Bailout


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[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
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LegitGov
Open Government
Earmark Database
USA spending.gov
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[font color=black][font size=2]Handy Links - Videos:[/font][/font]
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Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
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[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison
6/4/12 Matthew Kluger, lawyer, sentenced to 12 years in prison, along with co-conspirator stock trader Garrett Bauer (9 years) and co-conspirator Kenneth Robinson (not yet sentenced) for 17 year insider trading scheme.
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."
8/22/12 Doug Whitman, Whitman Capital LLC hedge fund founder, convicted of insider trading following a trial in which he spent more than two days on the stand telling jurors he was innocent
10/26/12 UPDATE: Former Goldman Sachs director Rajat Gupta sentenced to two years in federal prison. He will, of course, appeal. . .
11/20/12 Hedge fund manager Matthew Martoma charged with insider trading at SAC Capital Advisors, and prosecutors are looking at Martoma's boss, Steven Cohen, for possible involvement.
02/14/13 Gilbert Lopez, former chief accounting officer of Stanford Financial Group, and former controller Mark Kuhrt sentenced to 20 yrs in prison for their roles in Allen Sanford's $7.2 billion Ponzi scheme.
03/29/13 Michael Sternberg, portfolio mgr at SAC Capital, arrested in NYC, charged with conspiracy and securities fraud. Pled not guilty and freed on $3m bail.
04/04/13 Matthew Marshall Taylor,fmr Goldman Sachs trader arrested, charged by CFTC w/defrauding his employer on $8BN futures bet "by intentionally concealing the true huge size, as well as the risk and potential profits or losses associated."
04/04/13 Matthew Taylor admits guilt, makes plea bargain. Sentencing set for 26 June; faces up to 20 years in prison but will likely only see 3-4 years. Says, "I am truly sorry."
04/11/13 Ex-KPMG LLP partner Scott London charged by federal prosecutors w/passing inside tips to a friend in exchange for cash, jewelry, and concert tickets; expected to plead guilty in May.
08/01/13 Fabrice Tourré convicted on six counts of security fraud, including "aiding and abetting" his former employer, Goldman Sachs
08/14/13 Javier Martin-Artajo and Julien Grout charged with wire fraud, falsifying records, and conspiracy in connection with JP Morgan's "London Whale" trade.
08/19/13 Phillip A. Falcone, manager of hedge fund Harbinger Capital Partners, agrees to admit to "wrongdoing" in market manipulation. Will banned from securities industry for 5 years and pay $18MM in disgorgement and fines.
09/16/13 Javier Martin-Artajo and Julien Grout officially indicted on charges associated with "London Whale" trade.
02/06/14 Matthew Martoma convicted of insider trading while at hedge fund SAC (Stephen A. Cohen) Capital Advisors. Expected sentence 7-10 years.
03/24/14 Annette Bongiorno, Bernard Madoff's secretary; Daniel Bonventre, director of operations for investments; JoAnn Crupi, an account manager; and Jerome O'Hara and George Perez, both computer programmers convicted of conspiracy to defraud clients, securities fraud, and falsifying the books and records.
05/19/14 Credit Suisse, which has an investment bank branch in NYC, agrees to plead guilty and pay appx. $2.6 billion penalties for helping wealthy Americans hide wealth and avoid taxes.
09/08/14 Matthew Martoma, convicted SAC trader, sentenced to 9 years in prison plus forfeiture of $9.3 million, including home and bank accounts







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

[Demeter]

1. That cartoon is so true

that I have lost the will to post.

Maybe some supper, chocolate, and a hot bath will help...

Sorry, Tansy. Cleaning that car took a lot out of me, and politics and economics took the rest. Will do better later....if possible.

[Hugin]

2. I'm having that problem too.

I'm so tired of trying to explain to people that more than $0.50 of every Dollar in their pocket -> RIGHT NOW <- already belongs to the 1%. Before they have even spent it.

That's not counting the rest which ends it's short life in the Economy belonging to the same 1% eventually anyway. Hell of a tax they have going there. A tax that you and everyone has very little to show for, including the 1% who, if they let even the smallest part of that remain in circulation, would actually be richer in QoL.

Stunning.

:sigh:

[Demeter]

3. It frosted again, last night

Just a touch.

[DemReadingDU]

23. This is June! n/t

[Demeter]

30. Really? I hadn't noticed

Last edited Tue Jun 2, 2015, 03:47 PM - Edit history (1)

It warmed up pretty nicely today, lots of sun, not too much traffic (probably half of it was police...WTF?)

Supposed to be cool 50F tonight, though.

I was sent on a wild goose chase by some of the guys who drive auto parts...they couldn't give directions to save their lives. I was wandering Ypsilanti for an hour, trying to get to an address I'd never been before. My nerves are shot and I'm hitting the chocolate.

It actually was very simple to find....but not following these clowns' directions!

Ypsi is a strangely built city. There are one-way randomnesses, special ramps to factories that no longer employ anyone, a scarcity of useful directional signage, and lots of pothole reconstruction. Streets swap route numbers back and forth, and once you hit the township, all bets are off.

But then again, it took me quite a while to acclimate to Ann Arbor, when I moved in. Ann Arbor is built on the elbow macaroni model: you will be heading west on a major artery, and suddenly find yourself going north...

I grew up in Detroit, where the grid reigns and 90 degree angles are the norm, where every mile is a major road, and there are no cul de sacs.

I learned to drive in Lowell, Massachusetts, which is my first recommended target for a nuclear holocaust of urban renewal, once the population has been relocated to someplace built after 1950...

But Ypsi, there's a company town! It sure wasn't built for people or government.

Need to find something to do to regain my equilibrium.

[Demeter]

4. Is Another Crisis Looming? by Sam Gindin

SEEING AS NONE OF THE PREVIOUS ONES HAVE BEEN STOPPED, WHO NEEDS ANOTHER? IT'S THE SAME OLD, SAME OLD...

https://www.jacobinmag.com/2015/05/federal-reserve-secular-stagnation-investment-recession/

There’s much talk of stagnation in the American economy. But radicals shouldn’t assume capitalism is on its last legs.

CAPITALISM WILL BE ON ITS LAST LEGS WHEN ORDINARY PEOPLE DECIDE THEY HAVE HAD ENOUGH

Has the economy recovered, or is it about to sink into another crisis? Do the shenanigans in finance that we regularly read about play a role in developing a stronger capitalism, or do they cover up failures that will soon blow up in their faces? These can be mind-numbing questions, but they’re questions that activists, in particular, can’t ignore.

Profits are a particularly critical indicator of the state of a capitalist economy because they are generally understood to drive investment. Investment in turn has a determining effect on jobs, wages (to the extent that an increase in jobs increases workers’ bargaining power), and a growing tax base that can support social programs. Today, however, this link between profits and investment seems broken: while profits are booming, investment is stubbornly lagging. How are we to understand this? For some, there is a simple answer. They square the circle by arguing that profits are actually not doing all that well. But the statistical contortions involved in making high profits disappear is a hard sell, with all the news of corporations sitting on rapidly growing hoards of cash. The head of the Bank of England (and former head of the Bank of Canada), Mark Carney, called this “dead money,” lamenting the refusal of corporations to put their profits back to work in the economy.

Another explanation receiving a great deal of attention was recently summarized by Mike Whitney in Counterpunch. He points to the reorientation of corporations to a “madcap buyback binge” of their stock which “has gotten so crazy that buying back their own stock actually exceeded profits in two quarters of 2014.” The corporate stampede to purchase their own stocks, in conjunction with the rapid rise in corporate dividends, has two significant implications. First, it seems to leave less funds for investment and innovation. Second, the increased demand for stocks artificially raises their prices and as circumstances change this leaves the stock market vulnerable to another devastating crash. For Whitney, the increase in stock prices is obviously not a reflection of the actual strength of the American economy because he takes it as self-evident that the US economy is “dead in the water.” The underlying culprit in making the stock market boom possible is the US Federal Reserve, as the Fed’s easy money policy (the so-called quantitative easing) encourages further borrowing — in addition to the funds available through corporate profits — to finance the stock buybacks. This has “led the country to the cliff-edge once again where the slightest uptick in interest rates is going to send the economy into free fall.”

But why is the Fed “steering the country from one financial catastrophe to the next”? Because, Whitney argues, it is part of the Fed’s commitment to ensure that — as he titles his article — “The Rich get Richer.” Since wealth in the US, and especially stocks, are notoriously unequally distributed (the top 10 percent owns 90 percent of stocks), higher stock prices sustain and increase that inequality.

The appeal of these kinds of narratives is not just the strange attraction of the Left to predictions of an economic Armageddon just around the corner. Whitney’s argument also provides simple yet powerful talking points. If the story oversimplifies the role of the Fed, it is spot on in attacking a key justification for the inequalities brought on by high corporate profits and the outrageous salaries of their executives and managers. Those inequalities are allegedly a condition for delivering jobs and general social welfare. However with corporations not actually reinvesting those profits to any degree commensurate with their profits, we end up without the jobs or social programs, and with even worse social inequality and greater economic insecurity. Consequently, the radical issue posed is that if corporations are failing to adequately invest the surplus, why not — at a minimum — tax their socially unproductive profits and have the state use this revenue to undertake investment? It is remarkable, and a sign of the Left’s weakness, that popular sentiment has not been mobilized in this direction to any significant degree...

AUTHOR PROCEEDS TO GUM THE ISSUE TO DEATH...

[Demeter]

5. Chicago PMI Unexpectedly Crashes: New Orders, Production and Employment Down by More Than 10%

Looking for signs of strength? You will not find them in today's Chicago PMI report.

The Bloomberg Consensus estimate was for a 53.1 expansion reading. Instead, the PMI came in at 46.2, well below the bottom of the consensus range of 51.0 to 54.0. Readings below 50.0 indicate contraction.

New Orders, Production and Employment Down by More Than 10%

For details, let's turn to the Chicago ISM Report that shows Business Barometer Back into Contraction in May.

The Chicago Business Barometer fell sharply back into contraction in May, reversing all of April’s gain and casting doubt on the strength of the widely expected bounceback in the US economy in the second quarter. The Barometer fell 6.1 points to 46.2 in May from 52.3 in April. All five components of the Barometer weakened with three dropping by more than 10% and all of them now below the 50 breakeven mark.

April’s positive move had suggested that the first quarter slowdown was transitory and had been impacted by the cold snap and port strikes. May’s weakness points to a more fundamental slowdown with the Barometer running only slightly above February’s 5½-year low of 45.8. The three month average, although little changed on the month at 48.3, is significantly down from 61.3 in Q4 2014 and barring a sharp rebound in June points to continued sluggish growth in the second quarter.

The decline was led by a 13.8% fall in New Orders to 47.5 from 55.1 in April, pushing it into contraction for the third time this year. In line with the lower order intake, both Production and Employment Indicators suffered double-digit losses in percentage terms between April and May, with the latter falling to the lowest since April 2013. Order Backlogs declined more moderately, remaining in contraction for the fourth consecutive month.

There was further evidence that the period of oil driven softer prices has run its course. Prices Paid jumped sharply back into expansion in May to the highest since December.

Chicago PMI

image:


Telling Stats

Unlike strict manufacturing PMI reports, the Chicago PMI is a survey of manufacturing and non-manufacturing (services), tracking all aspects of the Chicago economy. Here is one more telling stat from the report: "42% of companies said their current inventory level was too high compared with 12% in a comparable question asked in November 2014. 53.2% said stock levels were about right, with less than 5% reporting them as too low." So don't go looking for an inventory rebuild to lead the way out of this slump.

Recession Call

I don't believe this is a "Chicago Only" problem. But it could be an indication that Illinois will be harder hit by the next recession than other areas. Nationally, economists are looking for close to 3% annualized growth for second quarter. I am sticking with my recession call made back on January 31.


Read more at http://globaleconomicanalysis.blogspot.com/2015/05/chicago-pmi-unexpectedly-crashes-new.html#SXQBcSA7feRzmz8R.99

Mike "Mish" Shedlock

[Demeter]

6. Five Chicago Suburbs Headed for Bankruptcy (More Illinois Cities Will Follow) Mike "Mish" Shedlock

Illinois House Bill 298 would allow Illinois municipalities to file for Chapter 9 bankruptcy. That bill is endorsed by Governor Bruce Rauner, and currently rests in the house rules committee.

As soon as Illinois passes Bill 298, a number of Illinois cities are highly likely to file bankruptcy as noted by Bond Buyer in Illinois' Candidates for Municipal Bankruptcy.

If HB298 was enacted, which local governments might use the new bankruptcy option? To help answer this question, our team reviewed audited financial statements that all but the smallest municipalities must file. Most of these financial audits can be found on the state comptroller’s local government Finance Warehouse.

Among the indicators we considered were government-wide unrestricted net position and general fund balance. The first indicator shows the degree to which assets held by the government entity as a whole exceed its liabilities and are not locked up in buildings and other illiquid forms. The second indicator, general fund balance, focuses more narrowly on the government’s main fund – which is roughly analogous to an individual’s checking account. Low or negative general fund balances were cited in the bankruptcies of Vallejo and Stockton, California. It is worth noting that the five municipalities we identified are all located in Cook County, which also faces fiscal challenges. Our list does not include Chicago. Although that city’s financial struggles have made frequent headlines, several of its smaller suburbs appear to be in much greater fiscal distress. The five communities we identified are: Maywood, Sauk Village, Blue Island, Country Club Hills and Dalton.

Read more at http://globaleconomicanalysis.blogspot.com/2015/05/five-chicago-suburbs-headed-for.html#HF4AXfjugm2W9umR.99

[Fuddnik]

24. That's a scary drop.

And a wake up call.

[Demeter]

7. CHINA: Manufacturing hub starts work on first zero-labor factory

http://en.people.cn/business/n/2015/0504/c90778-8886783.html

A manufacturing hub in South China's Guangdong province has begun constructing the city's first zero-labor factory, a signal that the local authorities are bringing into effect its "robot assembling line" strategy.

Dongguan-based private company Everwin Precision Technology Ltd is pushing toward putting 1,000 robots in use in its first phase of the zero-labor project, China National Radio reported. It said the company has already put first 100 robots on the assembly line.

"The 'zero-labor factory' does not mean we will not employ any humans, but what it means is that we will scale down the size of workers by up to 90 percent," said Chen Qixing, the company's board chairman.

After the work on smart factory started, Chen predicted that instead of 2,000 workers, the current strength of the workforce, the company will require only 200 to operate software system and backstage management. Under the current pressure of labor shortage, calls to use smart robots in cities around the Pearl River Delta (PRD), including Foshan and Dongguan, are becoming louder....MORE

[Demeter]

8. Madoff trustee to recoup $35.4 mln from Merkin funds

http://finance.yahoo.com/news/madoff-trustee-recoup-35-4-152837806.html

The trustee seeking money for Bernard Madoff's victims will receive $35.4 million in a settlement with two funds once run by Wall Street hedge fund manager J. Ezra Merkin. According to settlement papers filed late Friday with the U.S. bankruptcy court in Manhattan, the payment will be made by the Ariel Fund Ltd and Gabriel Capital LP feeder funds, through their receiver Bart Schwartz. In exchange, the trustee Irving Picard will deem valid about $367.9 million of the funds' claims against the former Bernard L. Madoff Investment Securities LLC. Ariel and Gabriel Capital will be entitled to $179.5 million of "catch-up" distributions. The accord requires court approval, and the funds did not admit wrongdoing. Picard is still seeking an additional $280 million from Merkin, his Gabriel Capital Corp, and his Ascot Fund Ltd and Ascot Partners LP feeder funds.

Andrew Levander, a lawyer for Merkin, was not immediately available on Monday for comment.

Friday's settlement would add to the roughly $10.7 billion that Picard has recovered for Madoff customers, who he estimates lost about $17.5 billion of principal. It is separate from Merkin's $410 million settlement in June 2012 to resolve New York State's claims accusing him of secretly steering client money to Madoff. Picard had challenged that settlement as having interfered with his exclusive right to seek money for Madoff's victims, but multiple federal courts rejected that contention.

In a lawsuit that began in May 2009, Picard had accused Merkin of sending money to Madoff despite knowing about the swindler's Ponzi scheme. Last August, U.S. Bankruptcy Judge Stuart Bernstein rejected that allegation, but said Picard could argue that Merkin willfully blinded himself to the fraud and ignored red flags. The judge said Picard could try to recoup $315 million, including the $35.4 million in Friday's settlement, transferred to Merkin's funds in the two years prior to the Madoff firm's December 2008 bankruptcy.

Last week, former U.S. Securities and Exchange Commission chair Richard Breeden said roughly 11,000 additional Madoff victims, including feeder fund investors, may recoup some losses through a $4.05 billion fund he oversees.

THE GIFT THAT KEEPS ON GIVING...NO WONDER MADOFF MEEKLY WENT TO PRISON. HE WOULD HAVE BEEN SHOT ON THE STREET!

[Demeter]

9. Norwegian krone books largest 1-day loss against the dollar in 2 years

http://www.marketwatch.com/story/norwegian-krone-books-largest-1-day-loss-against-the-dollar-in-2-years-2015-06-01?siteid=YAHOOB

The Norwegian krone recorded its largest drop against the dollar in two years on Monday after a report showed that manufacturing activity was much weaker than expected in May..

The krone shed 2.4% of value against the dollar, USDNOK, -1.1599% trading at 7.95, its lowest level since April, down from 7.77 krone to the dollar.

The decline began after the NIMA Manufacturing Purchasing Managers’ Index, a widely watched gauge of manufacturing activity in Norway, declined to 46.6 in May from 50.5 in April. Economists had expected a reading of 50.1. Weakening crude oil prices then compounded the krone’s losses...

[DemReadingDU]

10. Another win for the Banks

6/1/15 High Court: Underwater Homeowners Can’t Void Second Mortgage in Bankruptcy
Practice gained prominence after real-estate bubble burst

In a win for banks, the U.S.’s top court Monday ruled that underwater homeowners can’t get rid of a second mortgage by filing for bankruptcy protection.

All nine Supreme Court justices agreed that filing for chapter 7 bankruptcy protection doesn’t give homeowners the power to cancel a second mortgage when their properties aren’t even worth the value of the first mortgage.

The case involved two Florida homeowners who tried to cancel their second mortgages from Bank of America, arguing that because a second mortgage gets paid after the first, it is essentially worthless. Lenders, however, fought to keep the second mortgage liens, arguing that the debt could someday be fully paid once property values rise.

In Monday’s opinion, Justice Clarence Thomas said the court’s decision took into consideration “the constantly shifting” value of real estate.

“Sometimes a dollar’s difference will have a significant impact on bankruptcy proceedings,” he wrote in the nine-page decision.

Consumer advocates said the ruling will make it harder for bankrupt homeowners to get a fresh start.

“Some consumers may be forced to catch up on thousands of dollars of [payments] or lose their homes,” said Carol Colliersmith, an Atlanta bankruptcy lawyer.

more...
http://www.wsj.com/articles/supreme-court-underwater-homeowners-cant-void-second-mortgages-in-bankruptcy-1433173699

[Demeter]

18. My mind just exploded

Okay, if that's the way they want to play it, we will never have a economic recovery. People will have to die to expunge debt, until the Three Stooges invent inheritable debt, that is....

This and the student loan exemption from bankruptcy means debt slavery forever.

No one is going to borrow for any reason, and the economy will collapse like the World Trade Center.

[DemReadingDU]

19. It will collapse

No longer an if, only a matter of when

[Demeter]

11. Hayes Admitted to ‘Price Fixing’ With Gollum in Libor Rig Scheme

http://www.bloomberg.com/news/articles/2015-06-01/hayes-admitted-to-price-fixing-with-gollum-in-libor-rig-scheme



Former UBS Group AG trader Thomas Hayes told prosecutors two years ago that his attempts to rig benchmark interest rates amounted to “price fixing.”

“There was one occasion where there was a very deliberate attempt by me and a guy at” Deutsche Bank AG, to coordinate strategies, Hayes said in a 2013 recording played to a London jury Monday. “We agreed to keep our Libors high and then low. That is basically price fixing, as the U.S. like to call it.”

Hayes, 35, is accused of eight counts of conspiracy to manipulate the London interbank offered rate, the benchmark used to value more than $350 trillion of loans and securities, from 2006 through September 2010. The former trader, who worked at banks including UBS and Citigroup Inc., has pleaded not guilty.

In a series of instant messages and a phone call in 2009, Hayes had agreed with Deutsche Bank’s Guillaume Adolph, who he called “Gollum,” in conversations with his brokers, to align trading positions and move their respective bank’s Libor rates, prosecutor Mukul Chawla said at the start of the second week of the trial.

“I knew I was operating a in a gray area,” Hayes said in the 2013 interview with the Serious Fraud Office. “With the Guillaume thing” Hayes said he “blatantly knew that I shouldn’t have done that.”

[Demeter]

15. Fischer Says Bankers Should Be Punished for Financial Crimes

http://www.bloomberg.com/news/articles/2015-06-01/fischer-says-bankers-should-be-punished-for-financial-crimes



Federal Reserve Vice Chairman Stanley Fischer said bankers who have engaged in wrongdoing should be punished, and he chided the industry for pushing back against financial regulations adopted to prevent another conflagration.

“Individuals should be punished for any misconduct they personally engaged in,” Fischer said in a speech to bankers Monday in Toronto. While massive fines are being imposed on banks, “one does not see the individuals who were responsible for some of the worst aspects of bank behavior, for example in the Libor and foreign-exchange scandals, being punished severely.”

Some of the world’s biggest banks, including Citigroup Inc., JPMorgan Chase & Co., and Barclays Plc, have agreed to pay more than $10 billion to U.S., U.K. and Swiss authorities to settle probes into rigging of foreign-exchange rates. Financial firms have also paid about $9 billion to settle allegations they were involved in rigging the London interbank offered rate, a benchmark used in more than an estimated $300 trillion of securities, from interest-rate swaps to mortgages and student loans...The Fed has been criticized for not being harder on the banks, with Massachusetts Democratic Senator Elizabeth Warren accusing regulators of “stumbling over themselves” to spare bankers from harsher consequences. At the same time, Alabama Republican Richard Shelby, chairman of the Senate Banking Committee, is promoting a bill that would ease regulations on dozens of mid-sized lenders.

Fischer, who leads a committee to avoid the emergence of asset-price bubbles, also said central bankers shouldn’t rule out using interest rates to maintain financial stability. Policy makers want to ensure that six years of near-zero rates don’t lead to a repeat of the U.S. housing boom and subsequent financial crisis.

“I don’t at present see a major financial crisis on the horizon, but whenever you say that you know you’re looking for trouble,” Fischer said in response to an audience question after his speech.

With the costs of the crisis still being felt in the form of persistently slow growth, Fischer warned central bankers against complacency about the risks of another crisis.

“There is now growing evidence that recessions lead not only to a lower level of future output, but also to a persistently lower growth rate,” Fischer, 71, said in a speech that surveyed the lessons of financial crises over the past 20 years.

He cited a “lively discussion” led by former Treasury Secretary Lawrence Summers, who has argued the U.S. could face a period of “secular stagnation.” Others, including economists Carmen Reinhart and Kenneth Rogoff, say the U.S. and other economies are slow to recover from crises fueled by debt.

“It may take many years until we know the answer to the question of whether we are in a situation of secular stagnation or a debt supercycle,” Fischer said to the International Monetary Conference.

Fischer criticized efforts to roll back financial regulation.

“Often when bankers complain about regulations, they give the impression that financial crises are now a thing of the past, and furthermore in many cases, that they played no role in the previous crisis.”

Fischer joined the Fed a year ago. He led the Bank of Israel from 2005 to 2013. He was the International Monetary Fund’s No. 2 official from 1994 to 2001, years that encompassed the Asian crisis, and the World Bank’s chief economist from 1988 to 1990. Fischer didn’t comment on the outlook for monetary policy. Fed officials led by Chair Janet Yellen are considering when to raise their benchmark lending rate, with the next meeting scheduled for June 16-17. Yellen said on May 22 that the central bank plans to raise interest rates at some point this year, even though the economy contracted in the first quarter. She said that “the pace of normalization is likely to be gradual.” A slowdown in the long-run potential growth rate of the economy has lowered the bar that gross domestic product must clear for the central bank to increase rates, according to Fed watchers including Michael Feroli of JPMorgan Chase & Co. Feroli estimated the long-term growth rate at 1.75 percent, which is lower than Fed estimates.

Gross domestic product shrank at a 0.7 percent annualized rate in the first quarter. Since the recession ended in June 2009, GDP has grown at an average annual pace of 2.2 percent.

THE FED'S REAL LEADER HAS SPOKEN!

[DemReadingDU]

20. We need prosecutions and jail for these banksters

If the legal system doesn't do its job, the people will!

[Demeter]

12. Frugality of High Earners in U.S. Shows Long Shadow of Recession

http://www.bloomberg.com/news/articles/2015-06-01/frugality-of-high-earners-in-u-s-shows-long-shadow-of-recession

The nearly rich aren’t spending nearly enough, a trend that’s weighing on U.S. growth.

Six years after the worst recession since the 1930s, Americans who earn $100,000 to $249,999 a year still are “making very careful decisions” when it comes to discretionary purchases, said Pam Danziger, president of Unity Marketing Inc., a luxury research company based in Stevens, Pennsylvania. “That’s smart for them, but it’s certainly not good for the economy.”

These consumers -- Danziger calls them HENRYs, or high earners not rich yet -- are “feeling squeezed” primarily because their spending power is curbed by sluggish income gains, she said. They spent 10 percent less on luxury goods and services in the fourth quarter compared with the same period in 2013, according to figures from Unity Marketing.

Not surprisingly, retailers that cater to these buyers have suffered. Ralph Lauren Corp. and Coach Inc. each has missed analysts’ estimates for sales growth in three of the past five quarters.

Americans who earn $250,000 or more a year also are cutting back. Their luxury spending fell 17 percent in the fourth quarter from a year earlier -- though these consumers make up 2 percent of households, compared with 18 percent for HENRYs, Danziger said.

MORE WHINING AT LINK

[Demeter]

14. Cautious consumers cast doubt on U.S. growth outlook

http://www.reuters.com/article/2015/06/01/us-economy-consumerspending-idUSKBN0OH2DI20150601

U.S. consumer spending growth unexpectedly stalled in April as households cut back on purchases of automobiles and continued to boost savings, suggesting the economy was struggling to gain momentum early in the second quarter.

But after a slump in economic growth in the first quarter, there are signs of a rebound, with other reports on Monday showing manufacturing activity picked up in May for the first time in seven months and construction spending surged in April to a near 6-1/2-year high.

Still, sluggish consumer spending growth this year and muted inflation pressures suggest the Federal Reserve may not raise interest rates until later this year.

The Commerce Department said April's unchanged reading in consumer spending growth compared with analysts' forecasts for a 0.2 percent rise and followed a 0.5 percent increase in March.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, was also curbed by weak demand for utilities such as electricity and natural gas as temperatures warmed up...

[Demeter]

13. MEANWHILE, IN THE LAND OF THE RISING SUN

Jan.-March corporate capital spending up 7.3%

http://the-japan-news.com/news/article/0002190754

Japanese nonfinancial companies’ combined capital expenditures in January-March rose 7.3 percent from a year earlier to ¥13.12 trillion, up for the eighth straight quarter, the Finance Ministry said Monday.

The rise, which overwhelmingly beat the median forecast of a 0.1 percent increase in a Jiji Press survey of think tank estimates, can chiefly be attributed to robust capital spending by automakers benefiting from a weaker yen.

Meanwhile, those companies’ combined sales fell 0.5 percent to ¥343.59 trillion. The sales logged the first year-on-year decline in seven quarters due to a demand surge ahead of the consumption tax hike in April 2014.

The readings for the final quarter of fiscal 2014 mirrored the overall economic trend of moderate recovery, ministry officials said. They offered a similar view in the previous survey in March.

In January-March, manufactures alone posted a rise of 6.4 percent in capital spending...

Wage growth in Japan outpaced inflation in April, 1st time in 2 years

http://mainichi.jp/english/english/newsselect/news/20150602p2g00m0bu071000c.html

Monthly wages paid to workers in Japan marked the first increase in real terms from a year earlier in April after two years of nominal growth falling short of inflation, according to preliminary statistics released Tuesday by the labor ministry.

The rise could raise hopes for a pickup in consumer spending, a major driver of the Japanese economy. It was nonetheless a marginal 0.1 percent, leaving it uncertain whether the uptrend would be sustained. The preliminary data also leaves room for a revision that could result in a contraction.

"We need to monitor whether a plus figure will continue in the months ahead," said an official at the Ministry of Health, Labor and Welfare.

Nominal wages rose 0.9 percent to 274,577 yen per worker in April after a drop in March, the ministry said. Wages increased after spring labor-management negotiations lifted pay scales at many major companies.

Adjusted for inflation, wages grew 0.1 percent, the first rise since April 2013 when they advanced 0.4 percent....

[DemReadingDU]

21. Japan's Pension System Hacked

6/1/15 Japan's Pension System Hacked; 1.25 Million Identification Numbers, Birth Dates, Addresses Compromised

There’s been quite a bit of talk recently about “cyberthreats” to the US. Back in April, Defense Secretary Ash Carter unveiled a new US strategy designed to combat a list of supposed “cyberadversaries” which include (of course) China, Iran, Russia, and North Korea. The Pentagon suggested that Washington may use “offensive” cyberattacks if necessary to “disrupt an adversary’s military related networks or infrastructure so that the U.S. military can protect U.S. interests in an area of operations.”

As it turns out, the US did just that five years ago when Homeland Security tried to deploy a computer virus against North Korea’s nuclear program, an effort which ultimately failed due to, as Reuters puts it, “the extreme isolation of [Pyongyang's] communications systems.”

More recently, the US implicated Chinese hacker spies in a scheme purportedly designed to steal US military secrets from Penn State’s engineering department and "Russain crime syndicates" were blamed for an IRS breach.

As far as Washington’s allies are concerned, Japan is onboard with PM Shinzo Abe and President Obama striking a cybersecurity alliance when Abe visited the capital in April. In a speech to Congress, Abe had the following to say about Chinese hacking: “[We cannot] simply allow free riders on intellectual property.”

In the latest cyber drama, we learned on Sunday that Japan Pension Service staff computers were hacked and 1.25 million cases of personal data were compromised in the process. Reuters has the story:

Japan's pension system has been hacked and more than a million cases of personal data leaked, authorities said on Monday, in an embarrassment that revived memories of a scandal that helped topple Prime Minister Shinzo Abe in his first term in office.

Japan Pension Service staff computers were improperly accessed by an external email virus, leading to the leak of some 1.25 million cases of personal data, the system's president, Toichiro Mizushima, told a hastily called news conference.

He apologized for the leak, which he said involved combinations of names, identification numbers, birth dates and addresses.


more...
http://www.zerohedge.com/news/2015-06-01/japans-pension-system-hacked-125-million-identification-numbers-birth-dates-addresse

[Demeter]

16. At Least 3,900 Medicare Millionaires Revealed in U.S. Data

http://www.bloomberg.com/news/articles/2015-06-01/at-least-3-900-medicare-millionaires-revealed-in-u-s-pay-data

A small group of doctors accounted for a large chunk of Medicare payments once again, data released today by the U.S. government show.

Medicare paid at least 3,900 individual health-care providers at least $1 million in 2013, according to a Bloomberg analysis of data from the Centers for Medicare & Medicaid Services. Overall, the agency said it released data on $90 billion in payments to 950,000 individual providers and organizations. On average, doctors were reimbursed about $74,000, though five received more than $10 million.

The U.S. has been increasing transparency for Medicare, which accounts for the largest portion of federal spending after defense and Social Security. CMS also released information Monday about $62 billion in Medicare payments to hospitals and outpatient facilities in 2013, reflecting more than 7 million discharges.

Monday’s data exclude the privately run program known as Medicare Advantage, which accounted for about 30 percent of beneficiaries last year, and the drug prescription benefits of Medicare Part D. Payments in the drug program were released for the first time earlier this year.

Some payments were sent to organizations rather than individuals. There are about 897,000 active physicians in the U.S., according to the Kaiser Family Foundation....MORE

[Demeter]

17. Patients Get Extreme to Obtain Hepatitis Drug That's 1% the Cost Outside U.S.

http://www.bloomberg.com/news/articles/2015-06-01/hepatitis-cruise-india-trips-among-plans-to-save-on-1-000-pill

This is how far one Express Scripts Holding Co. executive was willing to go to secure inexpensive versions of Gilead Sciences Inc.’s hepatitis C drug Sovaldi, unavailable to U.S. consumers under federal drug import and patent laws.

His plan: Dock a cruise ship flying an Indian flag off the coast of Miami. Stock the ship with versions of Sovaldi sold in India for $83,000 less than the U.S. retail price for 12 weeks of treatment. Ferry U.S. patients to the boat and send them home with the potentially life-saving medicines at a huge discount.

The only wrinkle in his plan wasn’t the absurdity of a pharmacy benefit manager manning and operating a cruise ship full of drugs from India. The problem, after doing some quick research into the idea, was that it would probably violate U.S. drug re-importation laws that limit the value of drugs brought into the country to $1,500 -- the price of one and a half Sovaldi tablets in the U.S., said Steve Miller, chief medical officer at Express Scripts, who came up with the idea.

“I was trying to be as creative as possible,” Miller said in an interview. “This is what the market is demanding, this level of creativity that almost borders on the ridiculous.”

Miller quickly dropped the drug boat scheme, but he says he is still searching for creative ways to save money on the $84,000 Sovaldi, which Express Scripts stopped covering for many patients this year because of the cost. He isn’t alone. A cottage industry of drug distributors, medical tourism agencies and consultants is emerging to offer patients in the U.S. and other developed countries cheap copies of Sovaldi from countries where it is sold for 1 percent of the U.S. price....MORE

[DemReadingDU]

22. That price is obscene!

We are hostages to Big Pharma, and the entire U.S. medical system insurance.

[DemReadingDU]

25. Karl Denninger: There's a way around this....

6/2/15 How To Do It Legally... So do it this way:

Stick the cruise ship full of the drug in International waters, 12 miles offshore. Run a ferry from the US to the ship with the passengers-cum-patients and let them stay on the boat. It goes nowhere, of course; you can leave and return all you want on the ferry service. While on the boat you take your drugs where the US has nothing it can do about it as you never come into the country with them.

Oh, and by the way, that drug re-importation law? It is a blatant dodge around the Sherman and Clayton acts, which would otherwise make such restraint of trade a felony. So how about you sue to get that law thrown out as exactly that -- in violation of long-standing anti-monopoly laws?

interesting comments at link...
https://market-ticker.org/cgi-ticker/akcs-www?post=230202

[Warpy]

26. I love Medicare

and hate the thought of anyone, but especially doctors, using it to get rich quick.

An ambulance ride with EKG, 4 days on a telemetry unit, and treatment for a broken leg have cost me less than one premium for insurance, had I been able to get it which I wasn't, would have cost me.

[mahatmakanejeeves]

27. U.S. factory orders fall for eighth time in nine months

U.S. factory orders fall for eighth time in nine months

Market Pulse
Published: June 2, 2015 10:03 a.m. ET
By Jeffry Bartash Reporter

WASHINGTON (MarketWatch) - Orders for goods produced in U.S. factories slipped 0.4% in April, marking the eighth decline in nine months, the Commerce Department said Tuesday. Economists surveyed by MarketWatch had expected orders to dip 0.1% after a slightly revised 2.2% increase in the prior month. Orders for durable goods -- products meant to last at least three years -- fell 1% in April. Orders for nondurable goods rose 0.2%.

[mother earth]

28. This Is How Little It Cost Goldman To Bribe America's Senators To Fast Track Obama's TPP Bill

It took just a few days after the stunning defeat of Obama's attempt to fast-track the Trans Pacific Partnership bill in the Senate at the hands of his own Democratic party, before everything returned back to normal and the TPP fast-track was promptly passed. Why? The simple answer: money. Or rather, even more money.

Because while the actual contents of the TPP may be highly confidential, and their public dissemination may lead to prison time for the "perpetrator" of such illegal transparency, we now know just how much it cost corporations to bribe the Senate to do the bidding of the "people." In the Supreme Court sense, of course, in which corporations are "people."

According to an analysis by the Guardian, fast-tracking the TPP, meaning its passage through Congress without having its contents available for debate or amendments, was only possible after lots of corporate money exchanged hands with senators. The US Senate passed Trade Promotion Authority (TPA) – the fast-tracking bill – by a 65-33 margin on 14 May. Last Thursday, the Senate voted 62-38 to bring the debate on TPA to a close.

Those impressive majorities follow months of behind-the-scenes wheeling and dealing by the world’s most well-heeled multinational corporations with just a handful of holdouts.

MORE:
http://www.zerohedge.com/news/2015-05-30/how-little-it-cost-bribe-senates-fast-tracking-obamas-tpp-bill

[mother earth]

29. America’s Main Problem: Corruption

Preface: Sadly, in the month since we last posted on this topic, many new examples of corruption have arisen.

The Cop Is On the Take

Government corruption has become rampant:
•Senior SEC employees spent up to 8 hours a day surfing porn sites instead of cracking down on financial crimes
•Nuclear Regulatory Commission workers watch porn instead of cracking down on unsafe conditions at nuclear plants
•An EPA employee who downloaded 7,000 porn files, then spent 2-6 hours each workday watching porn. He's been doing it for years ... but the EPA never fired him. Another EPA employee harassed 16 women co-workers ... and then was promoted to a higher-paying job with more responsibility, where he harassed more women
•NSA spies pass around homemade sexual videos and pictures they've collected from spying on the American people
•NSA employees have also been caught using their mass surveillance powers to spy on love interests, such as girlfriends, obsessions or former wives … and to eavesdrop on American soldiers’ intimate conversations with their wives back home. And see this (“routinely shared salacious or tantalizing phone calls that had been intercepted” … “‘Hey, check this out … there’s good phone sex'”)

AND A WHOLE LOT MORE:
http://www.zerohedge.com/news/2015-05-07/america%E2%80%99s-main-problem-corruption