STOCK MARKET WATCH -- Wednesday, 1 July 2015

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Wednesday, 1 July 2015[font color=black][/font]

SMW for 30 June 2015

AT THE CLOSING BELL ON 30 June 2015
[center][font color=green]
Dow Jones 17,619.51 +23.16 (0.13%)
S&P 500 2,063.11 +5.47 (0.27%)
Nasdaq 4,986.87 +28.40 (0.57%)


[font color=black]10 Year 2.35% 0.00 (0.00%)
30 Year 3.12% 0.00 (0.00%) [font color=black]


[center][/font]

[HR width=85%]

[font size=2]Market Conditions During Trading Hours[/font]
[center]
(click on link for latest updates)
Market Updates
[/center]

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

[/center]

[center]

[/center]

[HR width=95%]

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

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

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


[/center]

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

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

[div]
[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison
6/4/12 Matthew Kluger, lawyer, sentenced to 12 years in prison, along with co-conspirator stock trader Garrett Bauer (9 years) and co-conspirator Kenneth Robinson (not yet sentenced) for 17 year insider trading scheme.
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."
8/22/12 Doug Whitman, Whitman Capital LLC hedge fund founder, convicted of insider trading following a trial in which he spent more than two days on the stand telling jurors he was innocent
10/26/12 UPDATE: Former Goldman Sachs director Rajat Gupta sentenced to two years in federal prison. He will, of course, appeal. . .
11/20/12 Hedge fund manager Matthew Martoma charged with insider trading at SAC Capital Advisors, and prosecutors are looking at Martoma's boss, Steven Cohen, for possible involvement.
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







[HR width=95%]


[center]

[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. There should be a big circle of jerks: banksters, Corporate CEOs and political hacks

not just one man doing the honors: what they would call a circle jerk, in other circumstances....

[Demeter]

2. The Care and Feeding of a Financial Black Hole By Dmitry Orlov

http://www.informationclearinghouse.info/article42280.htm


A while ago I had the pleasure of hearing Sergey Glazyev—economist, politician, member of the Academy of Sciences, adviser to Pres. Putin—say something that very much confirmed my own thinking. He said that anyone who knows mathematics can see that the United States is on the verge of collapse because its debt has gone exponential. These aren't words that an American or a European politician can utter in public, and perhaps not even whisper to their significant other while lying in bed, because the American eavesdroppers might overhear them, and then the politician in question would get the Dominique Strauss-Kahn treatment (whose illustrious career ended when on a visit to the US he was falsely accused of rape and arrested). And so no European (never mind American) politician can state the obvious, no matter how obvious it is.

The Russians have that pretty well figured out by now. Yes, maintaining a dialogue and cordial directions with the Europeans is important. But it is well understood that the Europeans are just a bunch of American puppets with no will or decision-making authority of their own, so why not talk to the Americans directly? Alas, the Americans too are puppets. The American officials and politicians are definitely puppets, controlled by corporate lobbyists and shady oligarchs. But here's a shocker: these are also puppets—controlled by the simple imperatives of profitability and wealth preservation, respectively. In fact, it's puppets all the way down. And what's at the bottom is a giant, ever-expanding, financial black hole. Do you like your black hole? If you aren't sure you like it, then let me ask you some other questions: Do you like the fact that your credit cards still work, or that you can still keep money in the bank and even get cash out of an ATM machine, or that you are either receiving or hope to eventually receive a pension? Do you like the fact that you can get useful things—food, gas, airline tickets—for mere pieces of paper with pictures of dead white men on them? Do you like the fact that you have internet access, that the lights are on, and that there is water on tap? Well, if you like these things, then you must also like the financial black hole, because that's what's making all of these things possible in spite of your country being bankrupt. Perhaps it's a love-hate relationship: you love being able to pretend that everything is still OK even though you know it isn't, and you wish to enjoy a bit more of the business-as-usual before it all goes to hell, be it for a few more days or another year or two; but you hate the fact that eventually the black hole will suck you in, after which point things will definitely... suck.

In the United States, so far the black hole has been sucking in individual families (although it does sometimes suck in entire cities, like Detroit, Michigan, or Bakersfield, California, or Camden, New Jersey). With the help of the fraudulent mortgage racket, it sucks in houses, and spits them out again encumbered with bad debt. With the help of the medical industry, it sucks in sick people and spits them out again, bankrupt. With the help of the higher education racket, it sucks in hopeful young people, and spits them out as graduates, with worthless degrees and saddled with mountainous student debt. With the help of the military-industrial complex, it sucks in just about anything and spits out corpses, invalids, environmental damage, terrorists and global instability. And so on.
But the black hole can also suck in entire countries. Right now it's busy trying to suck in Greece, but it's having a hard time with it, because Greece is, of all things, a democracy. This has the black hole's puppets in quite a state at the moment, and starting to clamor for “regime change” in Greece, so that Greece can be made to capitulate before the black hole gets hungry. The way the black hole sucks in entire countries is as follows. If the black hole doesn't have enough to suck in for a period of time, it gets hungry and makes the financial markets go into free-fall. The financial instruments of countries that happen to be farther away from the black hole—out on the periphery—fall faster. In search of a “safe haven,” money floods out of these countries and into the “core” countries that are clustered tightly around the black hole—the US, Germany, Japan and a few others. The black hole gobbles up this money, but is then hungry for more. But since the periphery countries are now financially too weak to resist, they can easily be turned into black hole fodder. This is done by saddling the country with a foreign debt it can never repay, then forcing it to keep making payments against this debt by making it a condition for maintaining a financial lifeline—keeping the banks open, the ATMs stocked, the lights on and so on. To be able to make the payments, the country is forced to dismantle its society and economy through the imposition of austerity, to privatize everything in sight turning it into collateral for more loans, and to surrender its sovereignty to some transnational organizations, such as the IMF and the ECB, which are directly involved in the care and feeding of the black hole.

Who is in charge of all this? you might ask. If all there is is the black hole, the puppets charged with its care and feeding, and its hapless victims, then who is making the decisions? Well, it turns out that the black hole is sentient. But it is also very, very stupid. And the way is enforces its will is by destroying the minds of its puppets—by making them unable to understand certain things. However, stupidity is a double-edged sword, and in enforcing its will in this manner the black hole also thwarts its own purpose. For example, some time ago the black hole happened upon a rather large item it wanted to suck in, but couldn't. The item is called Russian Federation. It controls a huge territory that is full of all sorts of natural resources the black hole would love to turn into loan collateral and suck in. The problem is that it is full of Russians, who are a difficult people for the black hole's puppets to deal with. They keep telling the puppets to please keep their toes on the other side of that red line over there, and if they don't then click goes the safety on their guns, precluding further discussion. This situation calls for negotiation, but the black hole, which, as I mentioned, is very, very stupid, has just one negotiating tactic. It makes its demands, and then waits for the other side to capitulate. If that doesn't work, it applies pressure: imposes sanctions, attacks the currency, complicates financial transactions, arrests the country's foreign assets and so on—and waits for the other side to capitulate. And if that doesn't work either, then the country gets bombed to rubble by NATO or, if NATO doesn't want to come along, by the US alone. That generally works, but in the case of Russia it doesn't. But the black hole, if you recall, is very, very stupid, so it keeps trying anyway. As it does, the minds of its puppets get really warped, to a point where they don't understand what's going on at all. For example, everybody knows by now that pressuring Russia doesn't work: according to Newton's Third Law, every action produces an equal and opposite reaction, and Russia is big enough that pushing it doesn't cause it to move at all—it just causes whoever is pushing it to hurt themselves. It's like trying to shift the Earth's orbit by jumping off a chair while keeping your knees locked—which is a good ploy if you are clamoring for medical attention. In fact, the Russians are rather grateful for the sanctions, because now they have a reason to finally get serious about investing in domestic economic development and self-sufficiency. But the puppets, having had their minds warped by the black hole, cannot see that, so they just keep pushing, wrecking their own economies in the process...

Since the sanctions don't work, it is time to exercise the military option. Doing so requires concocting a casus belli—a reason to go to war. The black hole does this by hallucinating: Russia invaded Crimea!—sure, a few hundred years ago, and has been there ever since, most recently based on an international agreement, but never mind! (Oh, and legally Crimea was never actually made part of the Ukraine because Nikita Khrushchev botched the paperwork when handing it over.) OK, never mind that, but then Russia invades the Ukraine!—on every day that has the letter “D” in it, but it's very sneaky and withdraws its troops before anybody can snap a single picture of them there. OK, never mind that either, but then Russia is poised to invade Estonia, Latvia and Lithuania, and maybe Poland too. Invade how? You mean like take a bus to the music festival in Jūrmala? Consider it done, but the festival is already over and the invading music fans are back home. OK, never mind that either. But the puppets keep saying “Russian aggression!” over and over again. It's the brain damage caused by proximity to the black hole. Look at this poor guy, for instance. He keeps flapping his lower jaw, going “Russian aggression! Russian aggression!” while trying to self-soothe by fondling the rump of his imaginary pet cow. God help him. Back to the real world: the poor puppets are unable to understand that there is no military option when it comes to Russia: it's a nuclear power with an excellent strategic deterrent, a well-defended territory, and no aggressive intentions against anyone. But the puppets, with their warped minds, cannot see that, and so they pile various kinds of obsolete military junk along Russia's borders, and are even threatening to bring into Europe the entirely obsolete Pershing medium-range nuclear missiles. They are obsolete because the Russians now have the S-300 system with which to shoot them all down. The military option just isn't going to work, but don't tell that to the puppets—they cannot absorb such information without sustaining further neurological damage.

Back to Greece: tiny Greece certainly isn't mighty Russia, but it nevertheless refused to capitulate to the demands of the black hole. It was asked to completely wreck its society and its economy as a condition for maintaining its financial lifelines from the IMF and the ECB. Most inconveniently for the black hole and its puppets, Greece is not some obscure “third world” country peopled by dark-skinned people you wouldn't want your daughter to marry, but a European nation that is the cradle of European civilization and democracy. Greece managed to elect a government that tried to negotiate in good faith, but the puppets don't negotiate—they demand, threaten and cause damage until they get their way—or until their heads explode. This one will be interesting to watch. If the black hole does succeed in sucking in Greece, then which country is next? Will it be Italy, Spain or Portugal? And, as that process continues, at what point will enough people say that enough is enough? Because when they do, the black hole will shrivel up. It's not a real black hole that's made up of incredibly dense matter—so dense that its gravitational field traps even light. It's a fake black hole, made up of everyone's combined greed. It has greed at its core, and fear all around it, and it sustains itself by feeding on fear. If it can continue sucking in people, families and entire countries, it can keep the greed at its core alive, but if it can't, then the greed will also turn to fear, and it will shrivel up and die. And I hope that when it dies all of its brain-damaged puppets will snap out of it, realize how deluded they have been, and go find something useful to do—farm sheep, grow vegetables, dig for clams...

Dmitry Orlov is a Russian-American engineer and a writer on subjects related to "potential economic, ecological and political decline and collapse in the United States," something he has called “permanent crisis” http://cluborlov.blogspot.co.uk

[Demeter]

3. Greece Over the Brink PAUL KRUGMAN

http://www.nytimes.com/2015/06/29/opinion/paul-krugman-greece-over-the-brink.html?rref=opinion&module=Ribbon&version=context&region=Header&action=click&contentCollection=Opinion&pgtype=article


It has been obvious for some time that the creation of the euro was a terrible mistake. Europe never had the preconditions for a successful single currency — above all, the kind of fiscal and banking union that, for example, ensures that when a housing bubble in Florida bursts, Washington automatically protects seniors against any threat to their medical care or their bank deposits.

Leaving a currency union is, however, a much harder and more frightening decision than never entering in the first place, and until now even the Continent’s most troubled economies have repeatedly stepped back from the brink. Again and again, governments have submitted to creditors’ demands for harsh austerity, while the European Central Bank has managed to contain market panic. But the situation in Greece has now reached what looks like a point of no return. Banks are temporarily closed and the government has imposed capital controls — limits on the movement of funds out of the country. It seems highly likely that the government will soon have to start paying pensions and wages in scrip, in effect creating a parallel currency. And next week the country will hold a referendum on whether to accept the demands of the “troika” — the institutions representing creditor interests — for yet more austerity.

Greece should vote “no,” and the Greek government should be ready, if necessary, to leave the euro.

To understand why I say this, you need to realize that most — not all, but most — of what you’ve heard about Greek profligacy and irresponsibility is false. Yes, the Greek government was spending beyond its means in the late 2000s. But since then it has repeatedly slashed spending and raised taxes. Government employment has fallen more than 25 percent, and pensions (which were indeed much too generous) have been cut sharply. If you add up all the austerity measures, they have been more than enough to eliminate the original deficit and turn it into a large surplus. So why didn’t this happen? Because the Greek economy collapsed, largely as a result of those very austerity measures, dragging revenues down with it. And this collapse, in turn, had a lot to do with the euro, which trapped Greece in an economic straitjacket. Cases of successful austerity, in which countries rein in deficits without bringing on a depression, typically involve large currency devaluations that make their exports more competitive. This is what happened, for example, in Canada in the 1990s, and to an important extent it’s what happened in Iceland more recently. But Greece, without its own currency, didn’t have that option.

So have I just made the case for “Grexit” — Greek exit from the euro? Not necessarily. The problem with Grexit has always been the risk of financial chaos, of a banking system disrupted by panicked withdrawals and of business hobbled both by banking troubles and by uncertainty over the legal status of debts. That’s why successive Greek governments have acceded to austerity demands, and why even Syriza, the ruling leftist coalition, was willing to accept the austerity that has already been imposed. All it asked for was, in effect, a standstill on further austerity. But the troika was having none of it. It’s easy to get lost in the details, but the essential point now is that Greece has been presented with a take-it-or-leave-it offer that is effectively indistinguishable from the policies of the past five years. This is, and presumably was intended to be, an offer Alexis Tsipras, the Greek prime minister, can’t accept, because it would destroy his political reason for being. The purpose must therefore be to drive him from office, which will probably happen if Greek voters fear confrontation with the troika enough to vote yes next week.

But they shouldn’t, for three reasons. First, we now know that ever-harsher austerity is a dead end: after five years Greece is in worse shape than ever. Second, much and perhaps most of the feared chaos from Grexit has already happened. With banks closed and capital controls imposed, there’s not that much more damage to be done. Finally, acceding to the troika’s ultimatum would represent the final abandonment of any pretense of Greek independence. Don’t be taken in by claims that troika officials are just technocrats explaining to the ignorant Greeks what must be done. These supposed technocrats are in fact fantasists who have disregarded everything we know about macroeconomics, and have been wrong every step of the way. This isn’t about analysis, it’s about power — the power of the creditors to pull the plug on the Greek economy, which persists as long as euro exit is considered unthinkable. So it’s time to put an end to this unthinkability. Otherwise Greece will face endless austerity, and a depression with no hint of an end.

STILL WAITING FOR EQUAL ELOQUENCE ON THE FOLLY OF TPP AND ITS RELATIVES....

[Demeter]

4. German Finance Minister Schaeuble: Greece is staying in the euro no matter what

Donatien Alphonse François, Marquis de Sade (2 June 1740 – 2 December 1814) (French: [maʁki də sad]), was a French aristocrat, revolutionary politician, philosopher and writer, famous for his libertine sexuality. His works include novels, short stories, plays, dialogues and political tracts; in his lifetime some were published under his own name, while others appeared anonymously and Sade denied being their author. He is best known for his erotic works, which combined philosophical discourse with pornography, depicting sexual fantasies with an emphasis on violence, criminality and blasphemy against the Catholic Church. He was a proponent of extreme freedom, unrestrained by morality, religion or law. The words sadism and sadist are derived from his name.

Sade was incarcerated in various prisons and in an insane asylum for about 32 years of his life; 11 years in Paris (10 of which were spent in the Bastille), a month in the Conciergerie, two years in a fortress, a year in Madelonnettes, three years in Bicêtre, a year in Sainte-Pélagie and 13 years in the Charenton asylum. During the French Revolution he was an elected delegate to the National Convention. Many of his works were written in prison...

HE HAS SINCE BEEN REINCARNATED BY A MAN WHO HAS YET TO FACE PRISON....BUT MAY END UP ON A LAMP POST, FIRST....

http://www.businessinsider.com/german-finance-minister-wolfgang-schaeuble-on-grexit-greece-is-staying-in-the-euro-2015-6

Germany's Finance Minister Wolfgang Schaeuble just bucked the trend in the Eurogroup, by saying that Greece can stay in the eurozone even if it says "No" to the bailout package in Sunday's referendum.

Schaeuble told lawmakers in Berlin that Greece would stay in the euro regardless of the outcome of the July 5 referendum, according to Bloomberg.

He also reportedly said in the closed-door meeting that the European Central Bank would do what is necessary to support the euro.

That contrasts with what other members of the Eurogroup negotiating with Greece have said. European Commission President Jean-Claude Juncker said yesterday that a "No" vote would be akin to Greece committing suicide...

I RATHER SUSPECT IT WOULD INSTEAD BE A MERCY KILLING, EUTHANASIA FOR THE EURO AND FREEDOM FOR ITS SLAVES.

AND NEW DECORATIONS FOR THE LAMP POSTS, IF THE TECHNOCRATS HAVEN'T SENSE ENOUGH TO FLEE...

[Demeter]

5. Whoops! We forgot to include the VAT in the TPP

http://thehill.com/blogs/congress-blog/economy-budget/245880-whoops-we-forgot-to-include-the-vat-in-the-tpp

According to U.S. Trade Representative Michael Froman, the Trans-Pacific Partnership (TPP) has a big benefit: With a signed TPP, American-made goods will finally enjoy tariff-free access to consumers in countries like Vietnam, Malaysia, and Singapore. However, some tariffs will not be dropped immediately, but instead will be phased out over a number of years. Nevertheless, from a purely sales perspective, it’s a smart pitch, and one that’s designed to appeal to Americans’ sense of fair play. It’s a theme picked up by almost every Republican House fast-track (TPA) and TPP backer, as well as the few Democrat backers. Currently, the United States imposes no tariffs on roughly 80 percent of goods from TPP countries. And yet, U.S. exports often run into a brick wall when trying to reach overseas customers. For example, Vietnam slaps 70 percent tariffs on U.S. cars, Malaysia tacks a 50 percent duty on U.S. motorcycles, and Japan adds 189 percent on U.S. shoes. President Obama has seized on this tariff disparity as a key selling point for the TPA/TPP. Unfortunately, his breezy sales patter studiously avoids serious fundamental barriers facing American exports in global trade. These barriers led to the failure of the president’s ‘Initiative to Double Exports in Five Years, 2009-2014,’ which only achieved roughly 50 percent of its goal, and demonstrated convincingly that rhetoric and appeals to foreign consumers don't equal export growth.

It should be evident that America’s trading partner governments are not particularly keen to receive more U.S. goods and services, but are mainly interested in exporting their wares to the lucrative U.S. market. Additionally, most of the “95 percent of consumers living outside the United States,” especially in countries like Malaysia, Vietnam and other ‘fast growing’ Asian markets, aren’t consumers in any sense that Americans would understand. 80 percent of the world’s population lives on less than $10 a day, meaning that American-made cars, motorcycles, and shoes are luxury items far beyond their reach, tariffs or not.

Most significantly, the TPP does not address a massive cost to U.S. goods and services that has a chokehold on our export levels: foreign Value-Added Tax (VAT) schemes. The United States is one of only a handful of nations worldwide that does not charge a VAT on incoming manufactures and services. But 10 of the 11 TPP member states do, which means that, even with tariff-free access, high barriers remain: U.S. exporters will still face a 19 percent surcharge in Chile, 15 percent in Peru, and 16 percent in Mexico — countries with which we already have free trade agreements — or 15 percent in New Zealand and 8 percent in Japan. Only tiny Brunei, population 425,000, lacks a VAT. The double whammy of a country’s VAT tax is that it not only jacks up the cost of American goods and services entering that foreign market, but also it rebates the amount of the VAT to the country’s exports, making them more competitive against their American counterparts. Add the effect of a VAT to that of currency manipulation and it’s no wonder that the United States has been running massive trade deficits all these years. The Obama administration and the Congress have failed to consider the VAT barrier in the TPA and in the underlying TPP. For decades, Congress and U.S. negotiators tried to tackle the VAT issue in trade talks, but unsuccessfully. The result: every time a trade agreement reduced tariffs it was undercut by our trading partners’ raising their VATs to compensate for tariff cuts. Unlike with currency manipulation, the administration doesn’t even have a ‘quiet diplomacy’ approach to address VAT inequality. That’s one big reason why the TPP is projected to grow the U.S. economy by a measly 0.4 percent by 2025.

The Froman-Obama-Republican hype on tariff reduction is a sales job that Congress shouldn’t buy. Congress must reject TPA until it addresses the massive market-distorting effects of foreign Value Added Taxes, one of the biggest obstacles facing American exporters in 21st century trade.

Kearns is president of the U.S. Business & Industry Council (USBIC), a national business organization advocating for domestic U.S. manufacturers since 1933.

ISN'T THAT CONVENIENT! THIS IS OBVIOUSLY NOT ABOUT TRADE BARRIERS IN THE SLIGHTEST...SO WHAT IS IT ABOUT? IN A WORD: FASCISM; GLOBAL DOMINATION BY CORPORATE POWER.

[Punx]

17. The utter cynicism of this stuff never fails to surprise me.

Would have thought I would have gotten used to it by now. Was just explaining to a co-worker a couple of hours ago how the VAT tax works as a tariff.

[Demeter]

20. It's the Arrogance that annoys me

They think we are idiots. The discovery that we aren't will be disillusioning, to say the least.

[Punx]

21. No shortage of that.

And their arrogance will be their downfall.

I often tell people around me that I don’t have time to waste listening to people who think I am stupid, especially the media. And much less vote for those who do, which includes all Republicans, and many Democrats unfortunately.

Still, sometimes I feel like a lot of us here are too aware of things for our own good. Maybe it would be a blessing to be blissfully ignorant, just grazing though life until someone puts me in a chute and hits me over the head with a sledgehammer. Never saw it coming.

[DemReadingDU]

22. and most people don't want to know what we know

Besides, it's more fun to plan the latest party!

[Demeter]

6. Iceland Just Jailed Seven Bank Executives for Market Manipulation

http://bullhorn.nationofchange.org/iceland_jailed_bank_executives_for_market_manipulation

In one of the biggest cases of its kind, seven executives from the Kaupþing bank have been handed prison sentences for market manipulation today.

According to The icelandmonitor: “By fully financing share purchases with no other surety than the shares themselves, the bank was accused of giving a false and misleading impression of demand for Kaupþingi shares by means of deception and pretence.”

They were accused of trying to artificially inflate share prices in 2008 by using the bank’s funds to buy shares.

The Iceland Reveiew reported: The court case began in late April, and the hearings were the most wide-ranging and complex in Icelandic legal history. Over 50 witnesses were called, and testimony lasted for many weeks. They were quizzed on the nine defendants’ suspected illegal trade in their own bank’s shares in the lead up to its collapse. Charges laid by the Special Prosecutor claimed that the widespread illegal trade was carefully choreographed and highly deceptive.

By jailing these executives of Iceland’s failed Kaupthing Bank, the country showed the world how to deal with corrupt banks.

more at: http://www.nationofchange.org/2015/06/27/iceland-just-jailed-seven-bank-executives-for-market-manipulation/

[Demeter]

7. Bitcoin Is Unsustainable Written by Christopher Malmo

http://motherboard.vice.com/read/bitcoin-is-unsustainable?trk_source=homepage-lede

The year is 2018. After a rough Greek exit from the eurozone, economic malaise has spread to Italy, Portugal, Spain, and France. Nervous citizens across Europe look for a way to get their money out as currency traders hammer the weakening euro, banks impose withdrawal limits, and their purchasing power plummets.

Enter Bitcoin.

Compared to the euro, the peer-to-peer decentralized electronic currency has now become a relatively stable digital asset. Fiendish buyers trade their euros en masse online for Bitcoin, and soon, depositors worldwide join them. The price of Bitcoin rises, prompting more user adoption by spenders and speculators, and recognition from governments and populations alike...The above scenario sounds like a nice piece of prepper-bait from conspiracy site infowars.com. But could (or should) Bitcoin actually take over? Some of the more enthusiastic Bitcoin advocates argue that the currency is ready for prime time—in other words, ready to replace national currencies, or perhaps replace global banking’s creaking clearinghouses. Would this be good for the world?

From an environmental point of view, it certainly wouldn’t be good news. Unfortunately for Bitcoin advocates, the currency uses too much electricity right now—way too much: According to my calculation, a single Bitcoin transaction uses roughly enough electricity to power 1.57 American households for a day. All that energy expenditure has an important purpose: it secures Bitcoin from attacks by speculators, criminals, and other evil-doers by raising the price of the computer power needed to gain control of all transactions on the network. The computers that make up the Bitcoin economy’s backbone are constantly ensuring security and verifiability for the network by solving cryptographic puzzles. This process is called “mining.” Those who participate in this network maintenance are rewarded in Bitcoin, incentivizing them to bulk up their machines so they can mine more efficiently. There is potential for Bitcoin to become more efficient by stuffing more transactions into the mining process. But at the end of the day, if Bitcoin sees increased adoption and price and many more useful transactions, power consumption is almost guaranteed to grow.

Motherboard has previously covered how big Bitcoin mining operations can get. So how much electricity are we talking about? Let’s take this Bitcoin mine in China as an example of the scale of today’s operations. It is supposedly running at 6 PH (quadrillion hashes) per second, according to a Chinese Bitcoin company CEO posting in a Bitcoin forum, with the aim to scale up to 12 PH per second. That would give it about 3.3 percent of the total power on the Bitcoin network. Because the Bitcoin network is set up to dole out around 3,600 BTC per day to miners, this mine would rake in about 118.8 BTC per day, or more than $30,000USD at the time of writing. That’s not a bad haul when your electricity costs are among the lowest in the world at 3 to 6 cents per kw/h, about a third of US prices.

Bitcoin’s power usage per transaction isn’t remotely sustainable as a wholesale replacement for the conventional financial system

Computer cooling firm Allied Control estimates the total power consumption of the Bitcoin network at 250 to 500 Megawatts. Looking at the total hashrate, which is the number of calculations the network can perform per second, and applying a generous miner efficiency of 0.6 watts per gigahash, we can estimate our own back-of-the-envelope Bitcoin network constant power draw at just under 215 MW, although this figure is always in flux (it’s important to note that many of the variables in my calculation are constantly changing slightly). That’s around enough zap to power 173,000 average American households’ daily electricity usage. With about 110,000 transactions per day, that works out to 1.57 households daily usage of electricity per Bitcoin transaction. Yes, every time you buy something in Bitcoin, you could be using as much electricity as 1.57 American families do in a day.

“The actual figure is likely worse, given that a large number of transactions are exchanges and miners moving bitcoins around and other low-value ‘dust’ transactions,” said Matthew Green, a cryptography expert at Johns Hopkins University. “So each transaction where there’s an exchange of goods or services happening is really representing even more electricity.”

As climate change becomes a more pressing concern for humanity every day, this huge level of energy use is difficult to justify for a currency wanting to improve on the current arrangement.

“It appears there are significant challenges to ensuring that Bitcoin’s growth minimizes environmental impacts,” offered Jeremy McDaniels, a financial system sustainability expert with the UNEP. “Energy footprints could be an issue of major scale-up is achieved.”

There is hope that Bitcoin may be able to reduce its footprint, however.

One important thing to understand is that the electricity demands of Bitcoin mining won’t scale up linearly with increased usage or transactions. Bitcoin miners use special hardware to guess over and over at solutions to computational problems for each “block,” which records transactions into a permanent ledger. The first problem-solver “wins” the block and the reward: brand new bitcoins. Bitcoin can currently handle up to 360,000 transactions per day given current limitations built into the technology, according to Jorge Stolfi, a computer science professor from Campinas University in Brazil, so there’s some headroom left before things bog down. It would be possible to bring down the average power cost of each transaction by modifying the underlying Bitcoin protocol, but that’s no easy feat. The Bitcoin community is currently debating a big change that would mean the network could theoretically handle about 7.2 million transactions a day on a comparable level of electricity consumption, according to Stolfi. That would require a majority of the people mining Bitcoin to agree to the change, however. Keeping power consumption high in general also makes the network more secure by making it harder for any one entity to gain control. “The right way to think about this is that the energy expenditure provides a level of protection against attacks—it establishes a price floor, currently in the many millions, to launch a 34 percent or 51 percent attack (where an attacker can block transactions and double spend bitcoins as they please),” Emin Gun Sirer, a Cornell professor and blogger at Hacking Distributed, explained in an email. However, that same level of security could be maintained while allowing for more transactions, he said, shrinking the cost per transaction.

All that needs to happen, then, is to expand the userbase so we have more transactions, right? Unfortunately for Bitcoin, if user adoption spikes, so will price—and so must power consumption. Bitcoin mining leads to an arms race among miners to grab a slice of the fixed rewards doled out by the network, Stolfi said. The higher the financial rewards, the more miners will invest in powerful equipment to keep up with the competition. The Bitcoin protocol will continue to increase the difficulty of the cryptopuzzles to keep rewards constant, continuing the arms race until the last block is mined.

That makes Bitcoin about 5,033 times more energy intensive, per transaction, than VISA


The bottom line? Price = energy. “The total revenue of the mining industry is Bitcoin price times BTC revenue in USD/day, independently of anything else; and the electricity consumption, also in USD/day, is some large fraction of that,” concludes Stolfi.

MORE

[Demeter]

8. Puerto Rico's Dance With Default Embraces A Fickle Partner: Wall Street

http://www.huffingtonpost.com/2015/07/01/puerto-rico-wall-street-default_n_7701460.html?utm_hp_ref=business&ir=Business

Puerto Rico may stave off default by making a last-minute payment to creditors on July 1, but the island’s economic future rests on the whims of Wall Street. Gov. Alejandro Garcia Padilla threw investors and market-watchers for a loop Sunday when he deemed Puerto Rico “unable” to pay its debts of more than $70 billion. His comments put a spotlight on the island's troubling relationship with investors who own that debt.

“One of the real issues there, and this is going to be the crux of the problem, are not only the bond insurers, but also some of the hedge funds that got involved," said Jon Mousseau, executive vice president at Cumberland Advisors, who spoke in Washington on Tuesday during a panel discussion about economic hardships facing Greece and Puerto Rico.

“Most of the hedge funds signed non-disclosure agreements with Puerto Rico so that they can get access to data, and basically bargaining chips in return for loaning them more money," Mousseau said. "That non-disclosure agreement means they more or less have information that we don’t have, and it means that they cannot trade with anybody else other than themselves.”

If Mousseau’s description sounds strange, it’s because it is. As Puerto Rico has piled up debt to cover budget shortfalls, it has increasingly turned to private investors for financing. That makes the debt crisis in Puerto Rico different from the one in Greece, where government debt is mainly in public hands. Puerto Rican administrations have managed to continue their access to private capital by striking deals that include an array of stipulations, including preventing the disclosure of details to potential financial competitors.

“I’m not sure that’s helping them right now, because they’ve actually wanted to go to Puerto Rico and say we will lend you more money if you do A, B, and C," Mousseau added. "Puerto Rico wants none of that. That includes reducing payroll, cutting benefits, et cetera, and they don’t want to do that.”

Garcia Padilla on Monday night defiantly pushed for “shared sacrifice” between Puerto Rico and bondholders -- a position making creditors nervous. Longtime investors in Puerto Rico, including mutual funds Franklin Templeton Investments and OppenheimerFunds, fought the island’s 2014 efforts to restructure debt. Oppenheimer -- with its $4.5 billion exposure to Puerto Rico, according to Morningstar -- let it be known it’s not thrilled about Garcia Padilla’s new plan to restructure.

“We strongly believe the Commonwealth has the ability to provide essential services to its citizens, grow the economy and repay what bondholders are due,” Oppenheimer said in a statement on its website. “We are disheartened that Governor Padilla, in a public forum, has called for negotiations with other creditors, representing and including the millions of individual Americans that hold Puerto Rico municipal bonds.”

Oppenheimer said it’s “ready to defend” its agreements with the commonwealth. Other firms with deep ties to the island, including BlueMountain Capital Management, aren’t taking chances, hiring law firms like Gibson, Dunn & Crutcher, known for aggressive litigation against Argentina on behalf of bondholders. Investors' competing interests have set the tone for handling Puerto Rico's mounting economic woes for the past year. A collective of financial institutions calling itself the Ad Hoc Group, which manages about $410 billion in assets and owns almost $4.2 billion in Puerto Rico debt, a has actively supported congressional action on legislation that would allow Puerto Rico to file Chapter 9 bankruptcy. The group, which includes Fir Tree Partners, Brigade Capital Management and Monarch Alternative Capital, is heavily invested in general obligation bonds. Bankruptcy legislation would benefit the group's investments. But those invested in Puerto Rico's state-owned power authority, for example, argue that bankruptcy would put their holdings at risk.

Matt Faber, of Municipal Market Analytics, said Puerto Rico faces tougher odds than debt-burdened cities on the U.S. mainland. The reason, Faber said, is hedge funds that have “a lot of conflicting positions.” Faber characterized Puerto Rico’s situation as “strange,” because investors are more interested in making the value of their holdings increase than in helping the island. Hedge funds are pushing for reforms to help Puerto Rico's economy, Faber said, but “it doesn’t necessarily mean that it’s advice that’s in the best long-term interest of Puerto Rico. It is troubling.”

[Demeter]

9. 6 best part-time jobs for retirees By Catey Hill

http://www.marketwatch.com/story/6-best-part-time-jobs-for-retirees-2015-07-01?siteid=YAHOOB

If you’re retired and the golf/beach/travel rotation is beginning to get old — and you’d love a little extra dough — you may be considering something your younger, cubicle-bound self never thought you would: going back to work (though only part-time). And now is a better time to do this than it has been in years, as an increasing number of employers plan to hire part-time help this year — and many of these jobs offer good pay and other perks that retirees desire. You’re not alone in your want — or need -- to work in retirement: 72% of adults age 50 and older say they want to keep working after they retire, and nearly half (47%) of current retirees say they either have worked or plan to work during retirement, according to a survey of more than 7,000 adults conducted by Merrill Lynch Bank of America Corp. released last year. And it isn’t just lip service to the notion of working in retirement: While just 32% of people 55 and up were working in 2000, 40% were in 2014, according to data from the Bureau of Labor Statistics.

Working in retirement isn’t just about the money (though, let’s be serious, most of us could use a little extra). The most popular reason for working in retirement is to “stay mentally active” for 62% of retirees and 51% of older adults cite it as one of the top reasons they are working in retirement, according to the Merrill Lynch Bank of America survey. Earning extra money is the second most popular answer, with 31% of retirees and 51% of older adults citing it as a top reason. Of course, most of us don’t want to re-enter that 9 to 5 grind (after all, retirement is about taking it down a notch — or two), so here’s the good news: the number of employers looking for part-time workers will grow this year. Nearly one in four employers say they expect to hire part-time workers over the next year, up six percentage points from last year, according to CareerBuilder.com’s 2015 U.S. Job Forecast survey of more than 2,100 hiring managers. And because retirees often don’t need health care thanks to Medicare, part-time and project-based jobs, which don’t tend to have health benefits associated with them, have an appeal to this group that they won’t for many other groups.

Not only do retirees tend not to want to work full-time, they also want good pay that reflects their years of experience, flexibility so they can travel, and/or jobs that allow them to give back. With that in mind, MarketWatch asked leading career experts to tell us what some of the best part-time jobs are for retirees.

Adjunct professor

There are more jobs than ever for non-tenure track, or adjunct, professors. In 1969, just 21.7% of college faculty were adjuncts; now more than two-thirds are -- and you don’t always need a Ph.D. to get these positions. In fact, retirees’ decades of workplace experience can lend itself well to the position of adjunct professor. While the pay for these jobs is mediocre (the median, per-course pay for part-time faculty is just $2,700, according to a study by the Coalition on the Academic Workforce), Lauren Griffin, a senior vice president with Adecco Staffing, notes that many retirees will find this kind of work rewarding. Plus, the hours you’re required to be on campus are typically few, and once you’ve taught a course once or twice, your workload will decrease as you don’t have to spend quite as much time developing the materials. To get this job, look at the career section of the websites of universities in your area; now that online education is becoming much more popular, you may also want to explore that avenue.

Project-based consultant

Still gun shy about hiring full-time help, many companies are looking for consultants to help with projects in fields ranging from law to HR to marketing and project management. Thanks to their decades of work experience, retirees are a good fit for this position, says Griffin. Pay is good -- sometimes upward of $50 or even $100 an hour for those with lots of relevant experience -- and once the project is over, you’re completely off duty and free to travel or relax. To find jobs like this, Griffin says that networking (in person and online) -- with old colleagues, alumni associations, industry groups, etc. -- is key, because sometimes these jobs aren’t posted; if you’re near retirement but still working full time, talk to your current employer about making a transition like this one, says Griffin.

Accountant/bookkeeper

While this may not be the most exciting job on earth, there are lots of freelance and part-time positions in this field (many small businesses simply don’t need someone doing this full time) and the pay is decent, says Niki Badminton, Freelancer.com’s regional director for North America. Roughly one in four bookkeepers, accountants and auditing clerks work part-time, the median pay is nearly $17 an hour (more for those with more experience and experience doing more complicated types of accounting) and the number of jobs in the field through 2022 is projected to grow 11%, according to the Bureau of Labor Statistics. Some of these jobs will be posted online, but it’s important to go to small-business networking and related events, as well as tap your online network, to find jobs like this.

Event coordinator/planner

While you may not have had a career as an event planner, by the time you’re 50-plus, you’ve probably planned dozens of events in your life -- family weddings, birthday parties, and more -- with the photos to prove it. You can use this wealth of event-planning knowledge to find work or even start your own event coordinating/planning business. To find a job, you’ll need to tap your network of friends and family (use social media to let people know the services you’re now offering) and may even consider doing an event for a friend pro bono to build up your portfolio. You can also sign up for a site like TaskRabbit.com, which has an entire section on party and event planning. Pay may be low at first, but it does rise with experience, and the median hourly wage isn’t bad, at $22 an hour.

Patient advocate

The patient care and home health care fields are growing rapidly, says Mary Lorenz, the corporate communications manager at CareerBuilder -- and if you know where to look, this job might be a good option for retirees. While home health aide jobs may require too much physical labor for a retiree and nursing jobs require that plus a lot of additional certification, patient advocate positions don’t require either -- and these jobs can be rewarding because you get to help sick people navigate the daunting world of medical care. A patient advocate will make appointments for clients, fill out insurance and other paperwork, negotiate costs for medical care and generally make sure the patient is informed about his care and is getting good care. While there are programs to help you get certified as a patient advocate, they aren’t always required, especially if you work for an individual or family that you know already (if you’re retired, you likely know at least a few families who could use your help). Median pay is $15 an hour, more if you have hospital administration or related experience.

Tutor

Becoming a tutor is a great option for retirees, says Nicole Williams, founder of career firm WORKS -- thanks to flexible hours, the ability to work near your home and the chance to help young people. You can teach any number of subjects from math to writing to piano (whatever you are good at) and pay can be decent (sometimes it’s as low as around $9/$10 an hour, sometimes upward of $20 an hour, depending on your knowledge base and experience). Retirees hoping to start up this business should see if their children’s friends might have young children in need of some tutoring help, as well as doing some in-person networking at family-focused events.


THEY DIDN'T LIST UBER, FUDDNIK. I WONDER WHY....

[Demeter]

10. IT'S ALL GREEK TO ME

Greece seeks Eurogroup, ECB support after default (IMF)

http://www.reuters.com/article/2015/07/01/us-eurozone-greece-idUSKBN0P40EO20150701

Greece was appealing to its euro zone partners and the European Central Bank on Wednesday to keep it afloat after defaulting on its debt to the International Monetary Fund and losing frozen international bailout money.

Athens was due to put new proposals for a two-year loan agreement and a debt rescheduling to Eurogroup finance ministers after hinting that leftist Prime Minister Alexis Tsipras might be willing to scrap a referendum on bailout terms.

Finance Minister Yanis Varoufakis told colleagues the ruling Syriza party might even urge Greeks to vote "yes" in Sunday's plebiscite if Athens is granted a loan, participants said.

An opinion poll published on Wednesday showed the "no" camp in the lead after Tsipras urged voters to reject conditions he called humiliating, but it also showed the gap had narrowed after the government had to shut the banks and impose capital controls....

Greece's July 20 repayment to ECB moves into focus DEFAULT, STAGE TWO

http://www.reuters.com/article/2015/06/30/greece-eurobonds-idUSL8N0ZG1QR20150630

With Greece set to miss a 1.6bn repayment to the IMF on Tuesday, market participants have turned their attention to a payment to the European Central Bank due in July, particularly as a failure to meet that could trigger cross-default clauses.

The beleaguered nation, rated Caa2/CCC-/CCC, is due to make a 3.49bn payment to EU institutions led by the ECB on July 20. This is just two weeks after it is scheduled to hold a referendum on whether or not to accept the EU's terms for renewing a bailout package.

A renewal of the existing bailout would free up 7.2bn of funds for making those repayments. Without this, it is possible that Greece would head towards a default and an exit from the eurozone.

A failure to pay the IMF on Tuesday would put Greece in arrears, but as this does not trigger any cross-default clauses, it will not affect any of Greece's debt to private creditors or to EU institutions...Going into arrears on the IMF payment does give Greece's main creditors, the European Financial Stability Facility, the option to accelerate payments on some of the loans dispersed to the country....


WHO OWNS GREEK DEBT? CLICK TO SEE GRAPH
http://twitter.com/ianbremmer/status/615900053006364672/photo/1

[Demeter]

11. OVERTIME: FINALLY, A BREAK FOR THE MIDDLE CLASS ROBERT REICH

http://robertreich.org/post/122870778845

The U.S. Department of Labor just proposed raising the overtime threshold – what you can be paid and still qualify to be paid “time-and-a-half” beyond 40 hours per week – from $23,600 a year to $50,400. This is a big deal. Some 5 million workers will get a raise. (See accompanying video, which we made last month.) Business lobbies are already hollering this will kill jobs. That’s what they always predict – whether it’s raising the minimum wage, Obamacare, family and medical leave, or better worker safety. Yet their predictions never turn out to be true.

In fact, the new rule is likely to increase the number of jobs. That’s because employers who don’t want to pay overtime have an obvious option: They can hire more workers and employ each of them for no more than 40 hours a week. It’s high time for this change. When the overtime threshold was at its peak a half-century ago, more than 60 percent of salaried workers qualified for overtime pay. But inflation has eroded that old threshold. Today, only about 8 percent of salaried workers qualify. Overtime pay has become such a rarity that many Americans don’t even realize that the majority of salaried workers were once eligible for it.

We just keep working longer and harder, for less. A recent Gallup poll found that salaried Americans now report working an average of 47 hours a week—not the supposedly standard 40—while 18 percent of Americans report working more than 60 hours a week. Meanwhile, corporate profits have doubled over the last three decades – from about 6% of GDP to about 12% – while wages have fallen by almost exactly the same amount. The erosion of overtime and other labor protections is one of the main factors worsening inequality. A higher overtime threshold will help reverse this trend.

Finally, a bit of good news for hard-working Americans.

[This post is drawn from a piece co-authored with Nick Hanauer with the help of the Center for American Progress.]

[Demeter]

12. Affordable Housing Crisis Grows Across the Country as Apartment Rents Skyrocket

MORE OF THE USUAL BAD NEWS FOR WORKING STIFFS

http://www.nakedcapitalism.com/2015/07/affordable-housing-crisis-grows-across-the-country-as-apartment-rents-skyrocket.html

By Steve Steven Rosenfeld who writes about America’s retirement crisis, democracy and voting rights, and campaigns and elections. He is the author of “Count My Vote: A Citizen’s Guide to Voting.” Originally published at Alternet

On Monday, New York City took a dramatic step that highlights just how out of control rental housing costs have become in the Big Apple and in many cities nationwide. For the first time, New York froze rents for one-year leases on a million rent-stabilized apartments.

“Today’s decision means relief,” Mayor Bill de Blasio told reporters. “We know tenants have been forced to make painful choices that pitted ever-rising rent against necessities like groceries, child care and medical bills.”

Landlords balked and citicized City Hall, calling the move an “unconscionable, politically driven decision.” But Rent Board chair Rachel Godsil was having none of it. Her staff had found that landlord incomes had grown for nine years in a row, including by 3.4 percent last year, while costs only grew by 0.5 percent. In contrast, a majority of most stabilized renters faced continuing income stagnation.

New York City’s struggle with affordable rental housing is part of a nationwide trend that has seen rental housing costs skyrocket in recent years as the housing market has mostly recovered from the 2008 recession, which was in part fueled by real estate speculation and Wall Street aggressively repackaging and reselling risky high-interest mortgages....MORE

[Demeter]

13. Will the US Keep Winning Indefinitely? With ISDS Trade Panels, That Is

http://www.nakedcapitalism.com/2015/06/will-the-us-keep-winning-indefinitely-with-isds-trade-panels-that-is.html

By Kenneth Thomas. Originally published at Middle Class Political Economist

Now that Congress has given the President fast-track Trade Promotion Authority, the first agreement to be considered under these rules (no amendments allowed, up or down vote in 90 days) will be the Trans-Pacific Partnership (TPP). As you know from previous columns, one of the most worrying aspects of the TPP is its expansion of investor-state dispute settlement (ISDS), wherein private firms can bring their disputes with governments not to courts, but to international arbitration (usually through units of the World Bank or the United Nations), where legal precedent doesn’t matter and appeal is all but non-existent. Moreover, as the Consumers Union has long argued (recent example here), arbitration has a well-known pro-business bias. That’s why so many of your agreements with cable TV providers, financial services companies, and many more have fine print requiring mandatory arbitration, keeping you from getting your day in court if something goes wrong.

The response from the U.S. Trade Representative’s (USTR) office has been, “Not to worry! The United States has never lost an ISDS case.” The linked document goes on to claim that worldwide, only 1/4 of corporate plaintiffs have won cases against governments. But a new analysis by the International Institute for Sustainable Development (IISD),* using the same data source the USTR cites, comes to a very different conclusion based on its most recent update, the 2015 World Investment Report from the United Nations Conference on Trade and Development (UNCTAD). Moreover, we can see that countries with even more trustworthy court systems than that in the U.S. have lost ISDS cases. The Rule of Law Project, an initiative of the American Bar Association, has ranked 102 countries on the administration of justice and freedom from corruption, and puts the United States at #19 with a score of 0.73. Yet #14 Canada (0.78) has already lost ISDS cases, and both Canada and #10 Australia (0.80) are currently on the hook for major new cases (Eli Lilly and Philip Morris, respectively), that would overrule decisions by the countries’ respective Supreme Courts. So, even if governments have only lost 25% of ISDS cases, it’s unlikely U.S. luck will hold out indefinitely, if countries with better court systems are losing.

But it’s worse than that. UNCTAD’s database of known ISDS cases and their outcomes shows that in all cases decided through the end of 2014, the investor won 27% of the cases compared to 36% won by the state (see Figure III.10, p. 116). But another 26% of the cases are listed as “settled,” which often (but not always) means the respondent agrees to make some payment to the plaintiff to keep the case from going to arbitration. Public Citizen has a list of ISDS cases under prior U.S. trade agreements with examples of settlements that do and do not contain payments (see, for instance, NAFTA cases against Canada).

Moreover, as IISD attorney Howard Mann argues, if we separate out cases between jurisdictional determinations and determinations on the merits of the case, things look even worse for states. While only 71 of 255 cases (this excludes the “settled” cases) were concluded by a decision of the tribunal having no jurisdiction, Mann points out that all 255 cases effectively had decisions on jurisdiction, i.e., cases with final decisions had to have rulings that the arbitrators had jurisdiction. In that case, Mann says, “Investors, therefore, have won 72 per cent [184/255] of jurisdictional determinations.” And of the decisions on the merits of the cases, investors won 111, or 60%, of the remaining 184 cases. This calculation suggests that states are losing ISDS disputes at a much higher rate than normally portrayed. As if that’s not bad enough, the new World Investment Report finds that in 2014, of the 15 ISDS cases decided on their merits, states lost 10 (2/3) of them. In 2013, it was even worse for states, with investors winning 7 of the 8 cases decided that year (p. 126). If these higher proportions continue, obviously the proportion of investor victories will increase beyond the current 60% total.

Bottom line: The threat to regulation, democracy, and the rule of law posed by investor-state dispute settlement is very real. The U.S. Trade Rep’s reassurances that the U.S. has never lost in ISDS don’t even make it likely that will continue into the future. We need to pressure Congress to vote down the TPP when negotiations conclude.

* Important disclosure: I have consulted for IISD several times since 2007 on investment incentive issues.

[Punx]

18. I call BS on whether the US has ever lost a case.

Dolphin safe tuna anyone? Perhaps it’s a technicality as it was US companies that lost the ability to print “Dolphin Safe” on their cans of tuna vs. Mexican producers. In any event US consumers didn’t “Win”.

And what about the recent “Meat Labeling” case. Are US consumers “winners here”?

My questions don’t change the more important Bottom line in the OP of course.

[Demeter]

14. HAPPY JULY, EVERYONE!

Seeya later, alligator!

[Fuddnik]

15. I'll send you an alligator!

Maybe an Everglades python to boot.

[Demeter]

19. I know just the person to give it to!

I've got the perfect recipient...better make it a large one, so it stands a chance of surviving (and overcoming). I've got a score to settle....

[mother earth]

16. Don't know who Elena is, but she's spot on, lol, or should I say trickle down on?

K & R for another great SMW.