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Tansy_Gold

(17,815 posts)
Thu Aug 13, 2015, 06:04 PM Aug 2015

STOCK MARKET WATCH -- Friday, 14 August 2015

[font size=3]STOCK MARKET WATCH, Friday, 14 August 2015[font color=black][/font]


SMW for 13 August 2015

AT THE CLOSING BELL ON 13 August 2015
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Dow Jones 17,408.25 +5.74 (0.03%)
[font color=red]S&P 500 2,083.39 -2.66 (-0.13%)
Nasdaq 5,033.56 -10.83 (-0.21%)


[font color=red]10 Year 2.19% +0.01 (0.46%)
30 Year 2.86% +0.01 (0.35%) [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
Credit Union Tracker
Daily Job Cuts
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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=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
08/03/15 Former City (London) trader Tom Hayes found guilty of rigging global Libor interest rates. Each fo eight counts carries up to 10 yr. sentence.







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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]


32 replies = new reply since forum marked as read
Highlight: NoneDon't highlight anything 5 newestHighlight 5 most recent replies
STOCK MARKET WATCH -- Friday, 14 August 2015 (Original Post) Tansy_Gold Aug 2015 OP
Many confused by tax filing requirements could lose their ACA tax credits Demeter Aug 2015 #1
I've long felt that the current tax system, in reality, is... MattSh Aug 2015 #27
Unless you want to really stick it to the 99%, that is Demeter Aug 2015 #28
Shadow Banking Draws Canadians Where U.S. Banks Are Warned Away Demeter Aug 2015 #2
The Fed Is on Thinner Ice Than It Realizes, and It May Be Setting Us Up for Recession Demeter Aug 2015 #3
China is putting the Fed in a tough spot By Matt Egan Demeter Aug 2015 #13
China central bank says no basis for further yuan depreciation, will monitor cross-border flows Demeter Aug 2015 #14
Turbulence and Stability in Financial Markets: China in Recent Times Demeter Aug 2015 #15
China's Yuan Rate Rises for First Time Since Devaluation Demeter Aug 2015 #25
What the Latest Currency 'War' is All About By Pepe Escobar Demeter Aug 2015 #29
Peter Schiff Says Impending U.S. Dollar Collapse should be Getting Attention, not China’s Devaluatio Demeter Aug 2015 #30
THURSDAY WAS Left-Handers Day – toast your angry, creative, fearful southpaw friends Demeter Aug 2015 #4
Why Aluminum Is a Big Headache for Top Commodity Traders Demeter Aug 2015 #5
Hedge Funds Bloodied by China Crash in Worst Month Since 2011 Demeter Aug 2015 #6
China Air Pollution Kills 4,000 People a Day: Researchers Demeter Aug 2015 #7
Can We Interest You in Teaching? Frank Bruni Demeter Aug 2015 #8
Greek ruling party heads toward split before bailout vote Demeter Aug 2015 #9
Greece agrees steps to tackle banks' bad loans Demeter Aug 2015 #12
Will the Germans Derail the Tentative Greek Third Bailout? YVES SMITH Demeter Aug 2015 #16
Greek PM faces biggest party revolt yet as bailout approved Demeter Aug 2015 #23
EU Said to Have Reservations on Greek Debt Sustainability Demeter Aug 2015 #24
SEC is dealt fresh blow as NY judge halts enforcement case Demeter Aug 2015 #10
UK regulator wins $12 mln High Court 'layering' market abuse order Demeter Aug 2015 #11
The Decline in Market Liquidity By Jérémie Cohen-Setton Demeter Aug 2015 #17
Best SMW 'toon... Ever. Hugin Aug 2015 #18
Weekend Economists: MattSh Aug 2015 #19
Thanks! DemReadingDU Aug 2015 #26
OK, I'm going to go with this... MattSh Aug 2015 #32
Kunstler: Potemkin Party Demeter Aug 2015 #20
The Outrageous Ascent of CEO Pay ROBERT REICH Demeter Aug 2015 #21
Oil price slump pushes Saudi Arabia to fund raise with $US5.3b bonds sale Demeter Aug 2015 #22
Study: Germany made €100bn profit on Greek crisis Demeter Aug 2015 #31
 

Demeter

(85,373 posts)
1. Many confused by tax filing requirements could lose their ACA tax credits
Thu Aug 13, 2015, 08:25 PM
Aug 2015
http://www.pnhp.org/news/2015/august/many-confused-by-tax-filing-requirements-could-lose-their-aca-tax-credits

IS THIS A GREAT COUNTRY OR WHAT?



About 1.8 million households that got financial help for health insurance under President Barack Obama's law now have issues with their tax returns that could jeopardize their subsidies next year.

Consumers who got health care tax credits are required to file tax returns that properly account for them, even if they are unaccustomed to filing because their incomes are low. Unless they follow through, "they will not be able to receive tax credits to help lower the cost of their health insurance for 2016," Lodes explained (Lori Lodes, communications director for the Centers for Medicare and Medicaid Services).

Treasury officials said 1.8 million households are at risk of losing subsidies for next year, and that number breaks down as follows:


  • About 710,000 households that have not filed a 2014 tax return, although they were legally required to account for health insurance tax credits that they received.

  • Some 360,000 households that got tax credits and requested an extension to file their returns. They have until Oct. 15.

  • About 760,000 households that got tax credits and filed their tax returns omitted a new form that is the key to accounting for the subsidies. Called Form 8962, it was new for this year's tax filing season.


The 1.8 million households with tax issues represent 40 percent of 4.5 million households that had tax credits provided on their behalf and must account for them.

"What the IRS is doing here is sending these people a not-so-gentle reminder that they need to file or they will put their subsidy at risk," said Mark Ciaramitaro, vice president for tax and health care at H&R Block, the tax preparation company. He cautioned that many consumers will find the process cumbersome, so they should waste no time getting started.

http://hosted.ap.org/dynamic/stories/U/US_HEALTH_OVERHAUL_TAX_CONFUSION

MattSh

(3,714 posts)
27. I've long felt that the current tax system, in reality, is...
Fri Aug 14, 2015, 09:43 AM
Aug 2015

the accountant full employment act.

There was and is no need for a tax system to be anywhere near as complex as this is.

 

Demeter

(85,373 posts)
28. Unless you want to really stick it to the 99%, that is
Fri Aug 14, 2015, 11:32 AM
Aug 2015

There isn't any reason for public health care to be this complicated, either.

And here we are.

 

Demeter

(85,373 posts)
2. Shadow Banking Draws Canadians Where U.S. Banks Are Warned Away
Thu Aug 13, 2015, 08:27 PM
Aug 2015
http://www.bloomberg.com/news/articles/2015-08-07/shadow-banking-draws-canadians-where-u-s-banks-are-warned-away

Canada’s largest money managers are joining the ranks of America’s shadow banks.

Public Sector Pension Investment Board, Canada’s fifth-largest pension plan, said last month it intends to open a loan-origination business in New York by year-end. That follows the Canada Pension Plan Investment Board’s $12 billion deal to acquire General Electric Co.’s business that lends to smaller companies.

The Canadians are part of a wave of institutions unencumbered by U.S. regulation searching for higher returns in the market for risky loans to American companies. Bank supervisors there are pressuring the biggest lenders to pull back from deals that load up companies with too much debt, seeking to avoid a credit bubble that could damage the U.S. economy.

“Whenever you have regulatory constraints and it closes down a market, it provides opportunities for those who fall outside the regulatory constraints,” said Alan White, professor of investment strategy at University of Toronto’s Rotman School of Management...

OPPORTUNITIES TO LOSE ONE'S SHIRT?
 

Demeter

(85,373 posts)
3. The Fed Is on Thinner Ice Than It Realizes, and It May Be Setting Us Up for Recession
Thu Aug 13, 2015, 08:31 PM
Aug 2015
http://www.bloomberg.com/news/articles/2015-08-13/the-fed-is-on-thinner-ice-than-it-realizes-and-it-may-be-setting-us-up-for-recession

The soft landing already happened, and raising rates could make things worse...Have members of the Federal Reserve already engineered a soft landing? And are they even asking that question? The thought came to me while reading Barry Ritholtz's recent piece on policy normalization:

Today, the panic is a receding memory. Interest at zero is an emergency setting. Why do we still have a Fed policy designed for an economy that needed life-support?


I believe monetary policymakers generally concur with Ritholtz. They see zero interest rates as an artifact of the financial crisis. The economy today resembles normality—and so, too, should monetary policy. Hence the push to raise rates this year, possibly as early as the next meeting in September.

Consider instead that zero—or at least, very low—short-term rates reflect the realities of the new normal for economic growth. In this scenario, quantitative easing was the Fed's emergency policy setting. And by ending quantitative easing, the Fed has already normalized policy.

Monetary policymakers will resist this interpretation. They do not believe that tapering and ending the bond-buying program reflects a tightening of policy. Regardless of what they believe, however, real interest rates rose at the suggestion that QE has a short half-life:

MULTIPLE SUPPORTING GRAPHS AT LINK, AND CONCLUSION

The Fed doesn't see things this way. It doesn't believe it has engineered the soft landing just yet. It expects that interest rates will need to rise farther to tame inflationary pressures. In fact, the Fed believes that the economy will evolve in such a way that it can raise short-term rates back to levels comparable to the old normal.

Financial markets participants, however, are not on the same page. They see the Fed staying persistently lower than Federal Open Market Committee meeting participants anticipate.

I would argue that financial markets are signaling that a soft landing has already been achieved and that much additional tightening will risk tipping the economy back into recession. The Fed staff is stuck in between; at least that is the story told by the accidental release of staff forecasts. The staff envisions a near-term policy path that better resembles what is expected by financial markets, although the staff, like FOMC participants, can't shake its faith that eventually rates will return to something more like the historical norm.

MORE, PLUS VIDEO INTERVIEW AT LINK
 

Demeter

(85,373 posts)
13. China is putting the Fed in a tough spot By Matt Egan
Thu Aug 13, 2015, 09:15 PM
Aug 2015
http://money.cnn.com/2015/08/12/investing/china-yuan-fed-rate-hike/index.html

VIDEO AT LINK

China is complicating Janet Yellen's life.


Before U.S. investors went to bed on Monday night, there was growing confidence that the Federal Reserve chief was getting ready to announce the first interest rate hike in nearly a decade. Most bets were on a September move. But on Tuesday, China happened. The country threw a serious curve ball by unexpectedly devaluing its currency. The move suddenly muddied the outlook for the global economy, raising questions about the Fed's ability to raise rates next month.

China's yuan has taken its biggest two-day tumble in decades and stock markets around the world are in turmoil. U.S. investors fear the weaker yuan will make goods sold by companies like Apple (AAPL, Tech30) and Coach (COH) less attractive to Chinese consumers. It could also hurt already-weak demand for raw materials like iron ore and copper.

Others say it will lower prices of Chinese imports, which adds deflationary pressures on the U.S. economy...If the global stock market deteriorates further, it could cause Yellen and other Fed officials to put off an interest rate hike beyond September. It's unlikely the Fed wants to add fuel to the fire.

MORE
 

Demeter

(85,373 posts)
14. China central bank says no basis for further yuan depreciation, will monitor cross-border flows
Thu Aug 13, 2015, 09:17 PM
Aug 2015
http://www.reuters.com/article/2015/08/13/us-china-yuan-cenbank-idUSKCN0QI07F20150813

China's central bank said on Thursday that there is no basis for further depreciation in the yuan currency given strong economic fundamentals, in a bid to reassure jittery global financial markets after it devalued the currency earlier in the week.

The People's Bank of China (PBOC) said that the country's strong economic environment, sustained trade surplus, sound fiscal position and deep foreign exchange reserves provide "strong support" to the exchange rate CNY=CFXS.

The PBOC also said that it will monitor "abnormal" cross border flows.

China's yuan fell for a third day on Thursday, after the PBOC shocked markets by pushing its official guidance rate down 2 percent on Tuesday, the sharpest adjustment in the history of China's foreign exchange market.

The PBOC said at the time that the move was a one-off depreciation, but sources involved in the Chinese policy-making process told Reuters that powerful voices within government were pushing for the yuan to go still lower, suggesting pressure for an overall devaluation of almost 10 percent.

FIND OUT WHO WINS...WATCH OUR THREAD!
 

Demeter

(85,373 posts)
15. Turbulence and Stability in Financial Markets: China in Recent Times
Thu Aug 13, 2015, 09:18 PM
Aug 2015
http://triplecrisis.com/turbulence-and-stability-in-financial-markets-china-in-recent-times/

Liberalisation of financial markets, as observed in different parts of the world economy, has never contributed to stability—avoiding unforeseen and unbridled movements in prices and quantities—in those markets. Discontinuation of state-level restraints, in deregulated markets, always generates an atmosphere of uncertainty, which itself has been instrumental in generating turbulence, and then leading to crises. Crises in different financial markets across the world are usually preceded by booms, fed by destabilising financial activities in opened-up markets.

The current downslide in China’s stock markets has followed this familiar pattern, with the crash that took place between June and July 2015 foreshowed by an unprecedented boom which came with the fast pace of liberalisation in the financial sector.

Major economic reforms in China, initially launched during the regime change led by Deng Xiao Ping in 1978, continued to be reinforced steadily over the years which followed. As it happened, China could not avoid a downturn in the stock exchanges during the global crisis of 2008, and the Shanghai Composite Index (SSE) dropped sharply from 6000 to 2000 between 2007 and 2009. Efforts on the part of the state to revive the economy by injecting a sum of $585 billion (nearly one-fifth of China’s GDP in 2008), along with other measures, worked to bring about an economic recovery, and the SSE composite index was quick to move above 3000 by 2010.

However, the stimulus, while reviving growth, could not dispel the disruptive forces as financial markets were further opened up. A major cause was the delinking of the renminbi from the dollar. The currency (which had been linked to the dollar since 2005 at a fixed rate of 8.3 RMB/dollar) was subject to moderate appreciation in the coming years, excluding some short periods of depreciation. The latter were related to the expectations of further depreciation of RMB , fueled by developments which included provisions for private holdings of dollars from 2007 and the two-way floating of RMB since 2011, causing leads and lags in trade settlement. Despite the disturbances in the financial market, the current exchange rate of the RMB, hovering since the second quarter of 2015 around 2.2 RMB to the dollar, reflects a rather steady pattern of an appreciating renminbi which in turn is supported by official moves. Here comes the very unique relation between the state and the market in China, with the former continuing to retain its prerogatives in the deregulated markets, especially relating to finance.

The ongoing crisis in China’ s stock market wiped out, in less than a month between June and July 2015, more than $3 trillion of stock holders’ wealth, caused by a 33% drop in stock prices. The Shanghai composite Index (SCI) declined from 4277 to 3806 between June 15 and July 15, 2015. The downslide in China’s stock prices in less than a month has been even sharper that the post-Lehman-Brothers’ crisis on Wall Street, when U.S. stocks fell by 41% over a much longer period, between October 2008 and March 2009....MORE
 

Demeter

(85,373 posts)
25. China's Yuan Rate Rises for First Time Since Devaluation
Fri Aug 14, 2015, 08:12 AM
Aug 2015
http://www.bloomberg.com/news/articles/2015-08-14/pboc-yuan-reference-rate-rises-for-first-time-since-devaluation

The yuan halted a three-day slide after China’s central bank raised its reference rate for the first time since Tuesday’s devaluation and said it will intervene to prevent excessive swings.

The onshore spot rate rose 0.11 percent, strengthening in the final minutes of trading for the third straight day and paring its drop for the week to 2.8 percent. The People’s Bank of China said Thursday there’s no basis for depreciation to persist and that it will step in to curb large fluctuations. It raised its daily fixing by 0.05 percent on Friday, after three cuts of more than 1 percent each.

China’s first major devaluation since 1994 surprised global investors and fueled concern authorities are struggling to combat a slowdown in the world’s second-largest economy. Policy makers are trying to balance the need for financial stability with a desire for stronger exports and the yuan’s inclusion in the International Monetary Fund’s basket of reserve currencies.

“The PBOC sent its signal and people understand it’ll be very difficult to go against the PBOC’s will,” said Ken Peng, a Hong Kong-based strategist at Citigroup Inc., the world’s biggest currency trader. “The central bank will frequently intervene in the foreign-exchange market in the next three months because it needs to ensure the yuan is stable.”

YOU HAVE BEEN WARNED--MORE AT LINK
 

Demeter

(85,373 posts)
29. What the Latest Currency 'War' is All About By Pepe Escobar
Fri Aug 14, 2015, 12:13 PM
Aug 2015
http://sputniknews.com/columnists/20150812/1025667927/yuan-devaluation-reserve-currency.html

It took the Bank of China to devaluate the yuan on two consecutive days — moving within the 2 percent band that it's allowed to — for the proverbial global financial banshees to go completely bonkers. Forget the hysteria. The heart of the matter is that Beijing has stepped on the gas in a quite complex long game; to liberalize the yuan exchange rate; allow it to free float against the US dollar; and establish the yuan as a global reserve currency. So this is essentially exchange rate policy liberalization — not a currency "war", as the frenetic spin goes from Washington/Wall Street to Tokyo via London and Brussels.

Let's check some expert reaction

Former Morgan Stanley non-executive chairman in Asia, Stephen Roach, delivers the predictable Goddess of the Market orthodoxy, warning about the "distinct possibility of a new and increasingly destabilizing skirmish in the ever-widening global currency war. The race to the bottom just became a good deal more treacherous."

A note written by a group of HSBC analysts is more realistic; "The depreciation pressure on Asian currencies from China's action should fade as the nation isn't aiming at engineering a much weaker yuan. Doing so would contradict the goal of promoting greater global use of the yuan."

But it's Chantavarn Sucharitakul, the Bank of Thailand's assistant governor, who hits the nail on the head Asia-wide; "The long-term impact must be assessed as to whether greater flexibility of the yuan could benefit China's economic reform, while the depreciating yuan could be positive for China's economic growth, which would benefit regional trade as well."

The Bank of China itself, in a statement, stresses it will allow the markets to have more influence over the yuan exchange rate. And crucially, it also stresses there is no economic basis for the devaluation, pointing to China's enormous current account surplus and humongous foreign exchange reserves. As Beijing interprets it, keeping a strong link to the US dollar has interfered with China's being competitive with its top trading partners — Japan and Europe. So now it's time to rock the (wobbly) boat. Thus the "currency war" hysteria — because the practical result, in the medium term, will be a new boost to Chinese exports. When the US embarks on perennial quantitative easing (QE), that's OK. When the EU does QE as well, that's OK. But when the Bank of China decides it's in the best interest of the nation to let the yuan go down a bit instead of infinitely up, that's Armageddon.

Just do the math

Having the yuan track close to the US dollar served China very well — until now. QEs in the EU and Japan led to a weaker euro and a weaker yen — while the yuan remained stable against the US dollar. Translation; since over a year ago, in June 2014, the yuan's real exchange rate has been the world's strongest, increasing by 13.5 percent. That was more than that of the US dollar (12.8 percent). It was not hard for Beijing to do the math; the strong link with the US dollar was eroding China's competitiveness with top trading partners Japan and Europe. Yet a simple 2 per cent devaluation may not be enough to boost China's exports. After all the yuan appreciated more than 10 percent over the past year relative to China's top trading partners. Thus the inside word in Beijing about "powerful voices inside the government" pushing for the Bank of China towards an overall 10 per cent devaluation of the yuan. Now that would certainly boost exports. So the devaluation this week — which has generated so much hysteria — seems to point towards a few more devaluations further on down the road.

This being China, where planning ahead is a matter of years, not a day-to-day frenzy as in Goddess of the Market territory, the whole game is about turning the yuan into an official global reserve currency...A team of IMF experts has recently been to Shanghai, talking to officials at the Chinese central bank and China Foreign Exchange Trading System, which oversees currency trading in China, to establish whether the yuan can be part of the special drawing rights (SDR) basket. Not surprisingly, the IMF itself praised the recent devaluation; "China can, and should, aim to achieve an effectively floating exchange rate system within two to three years." And the IMF also admits that, "a more market-determined exchange rate would facilitate SDR operations in case the Renminbi were included in the currency basket going forward." So this is what it's all about; Chinese adjustments with an eye to get the yuan ready to qualify for reserve currency status. The IMF's final decision is expected to be made by the end of 2015 or by the fall of 2016.

An internationalized yuan established as a global reserve currency implies a "market-determined" exchange rate policy. That's what the Bank of China is ultimately aiming at. The rest is a tempest in a (US dollar) teacup.
 

Demeter

(85,373 posts)
30. Peter Schiff Says Impending U.S. Dollar Collapse should be Getting Attention, not China’s Devaluatio
Fri Aug 14, 2015, 12:15 PM
Aug 2015

OR, HOW IT LOOKS FROM THE OTHER SIDE OF THE EXCHANGE....

LONG AND COMPLEX AND INCLUDES VIDEO---SEE LINK!

http://www.informationclearinghouse.info/article42618.htm

 

Demeter

(85,373 posts)
4. THURSDAY WAS Left-Handers Day – toast your angry, creative, fearful southpaw friends
Thu Aug 13, 2015, 08:43 PM
Aug 2015

YOUNGER DAUGHTER GAVE ME A BEAUTIFUL BOOK ON LEFTIES FOR MY LAST BIRTHDAY...SHE'S ALSO A LEFTIE!

http://www.theguardian.com/us-news/2015/aug/13/left-handers-day-brain-research-creative-anger

The 10-15% of Americans living in opposition to the right-handed world are a curious bunch whose brains have been found to work differently in many ways...Thursday markED Left Handers Day, a chance for 10-15% of the US population to share their pride as lefties and raise awareness about the issues faced by those living in a right-handed world. Ink smudges and a lack of suitable scissor options have always plagued left-handed people, but according to scientists, those are only minor peculiarities compared to the underlying psychological differences at play. Over the past few years, numerous studies have been conducted on elusive left-handers, with results ranging from absurd to alarming.

Lefties are more affected by fear

A study at Queen Margaret University in Edinburgh discovered that left-handed participants showed more symptoms found in patients suffering from post-traumatic stress disorder after watching an eight-minute clip from Silence of the Lambs than right-handed participants did.

Lefties get angrier

A study in The Journal of Nervous and Mental Disease suggested that those who are left-handed are more prone to negative emotions. It also found that when processing emotions, lefties have a greater imbalance in activity between the left and right brains. However, the study was extremely small, with only 55 participants. (It could also be argued that left-handed participants were angrier because of the right-handed world they live in.)

Lefties are more inhibited

Despite the previous study that suggests a short fuse, a study from Abertay University in Scotland claims that those who favor their left hand are actually more shy, embarrassed and anxious. Researchers tested 46 left-handers and 66 right-handers and found that lefties agreed more with statements like “I worry about making mistakes” and “criticism or scolding hurts me quite a bit”.


“Left-handers are more likely to hesitate whereas right-handers tend to jump in a bit more,” head researcher Dr Lynn Wright told the BBC. “In left-handers the right half of the brain is dominant, and it is this side that seems to control negative aspects of emotion. In right-handers the left brain dominates.”


Lefties are more creative

Research in the American Journal of Psychology provided evidence that left-handed people are better at divergent thinking, a thought-process method where one explores many possible solutions. Another study found an increased cognitive flexibility (switching between thinking about two concepts, or thinking about multiple concepts simultaneously) among the ambidextrous and the left-handed. A New Yorker article pointed out that a large number of architects, musicians, and art and music students are left-handed.

Lefties hear things differently


A study from Georgetown University medical center found that people who are using their left hands when listening may more easily hear slowly changing sounds like syllables or intonation, whereas someone using their right hand would more easily hear rapidly changing sounds like consonants.

Lefties process multiple stimuli faster than righties

Research conducted in 2006 at the Australian National University and published in the journal Neuropsychology suggested that those who favor their left hand might make use of both hemispheres in their brain for some tasks that right-handed people use only one for. Lead researcher Dr Nick Cherbuin told AM ABC that the connection between the left and right brain is “somewhat larger and better connected in left-handers”. Which means, in theory, lefties have an advantage when playing sports and video games.


TAKE A LEFTIE TO LUNCH!

HOW MANY OF US ARE OF THE SINISTER PERSUASION? LOG IN BELOW!
 

Demeter

(85,373 posts)
5. Why Aluminum Is a Big Headache for Top Commodity Traders
Thu Aug 13, 2015, 08:46 PM
Aug 2015
http://www.bloomberg.com/news/articles/2015-08-13/why-aluminum-is-a-big-headache-for-top-commodity-traders

When carmakers, can manufacturers or telecom companies need to buy metals such as copper and aluminum, they pay a premium to market prices set on the London Metal Exchange to reflect the cost of getting raw materials when and where they want them.

Those premiums, while a small percentage of the cost of metals, are vital for commodity traders, who buy from producers and sell to end users. In recent months those margins have plummeted, threatening profits at traders including Glencore Plc and Noble Group Inc.

Take aluminum. A growing oversupply in China, the top producer, coupled with new rules about releasing stockpiles from LME warehouses have left traders with unsold inventory and premiums have collapsed....Traders, who loaded up with metal when premiums were higher, are feeling the impact of the slump, according to Uday Patel, manager for aluminum markets at Wood Mackenzie Ltd. in London.

MORE
 

Demeter

(85,373 posts)
6. Hedge Funds Bloodied by China Crash in Worst Month Since 2011
Thu Aug 13, 2015, 08:47 PM
Aug 2015
http://www.bloomberg.com/news/articles/2015-08-13/hedge-funds-bloodied-by-china-crash-in-worst-month-since-2011

What China giveth, China taketh away.

After riding a market boom to return almost six times the global industry average in the first five months of this year, Greater China-focused hedge funds crashed to earth with the stock rout in July, their worst month since September 2011. Funds run by Pine River Capital Management, EJF Capital LLC, Top Ace Asset Management, Zeal Asset Management and Springs Capital (Hong Kong) were among those that lost money.

“Sizable losses were widespread in July among China-focused managers because of the sharp correction in the mid- and small-caps in Hong Kong, in which some stocks were down 30 percent to 40 percent in a day,” said Max Gottschalk, Asia chief executive officer of Gottex Fund Management Holdings, which farms out money to hedge funds.

Signs of an economic slowdown in China contributed to a selloff that wiped as much as $4 trillion off the country’s stock-market value since mid-June and caused a 14 percent plunge in the benchmark Shanghai Composite Index last month. The decline preceded a yuan devaluation that sparked the currency’s biggest slide in more than two decades and further roiled foreign-exchange, commodity and bond markets worldwide in the second week of August.

Among the larger funds focusing on the region, the roughly $1.2 billion Pine River China Fund lost 6.3 percent in July, according to an investor update. The Pine River fund, helmed by Dan Li, lost money for a second straight month and had its largest peak-to-trough net asset value decline since inception between May 15 and July 15, according to the update.

The Pine River China Fund, started in September 2013, remains up 6.9 percent this year. The hedge fund made 30 percent for investors in 2014...MORE
 

Demeter

(85,373 posts)
7. China Air Pollution Kills 4,000 People a Day: Researchers
Thu Aug 13, 2015, 08:49 PM
Aug 2015
http://www.bloomberg.com/news/articles/2015-08-13/china-air-pollution-kills-4-000-people-a-day-researchers

Air pollution is killing an average of 4,000 people a day in China, according to researchers who cited coal-burning as the likely principal cause.

Deaths related to the main pollutant, tiny particles known as PM2.5s that can trigger heart attacks, strokes, lung cancer and asthma, total 1.6 million a year, or 17 percent of China’s mortality level, according to the study by Berkeley Earth, an independent research group funded largely by educational grants. It was published Thursday in the online peer-reviewed journal PLOS One from the Public Library of Science.

“When I was last in Beijing, pollution was at the hazardous level: Every hour of exposure reduced my life expectancy by 20 minutes,” Richard Muller, scientific director of Berkeley Earth and a co-author of the paper, said in an e-mail. “It’s as if every man, woman and child smoked 1.5 cigarettes each hour.”

Chinese authorities have acknowledged the air pollution situation after heavy smog enveloped swathes of the nation including Beijing and Shanghai in recent years. They’ve adopted air quality standards, introduced monitoring stations and cleaner standards for transportation fuel while shutting coal plants and moving factories out of cities....MORE
 

Demeter

(85,373 posts)
8. Can We Interest You in Teaching? Frank Bruni
Thu Aug 13, 2015, 08:58 PM
Aug 2015

MY GRANDMOTHER RETIRED FROM TEACHING ELEMENTARY LEVELS IN THE LATE 70'S. SHE'D COMPLAINED OF THE DETERIORATION OF THE JOB FOR 10 YEARS BY THEN...AND IT HASN'T GOTTEN ANY BETTER SINCE. AFTER 50+ YEARS OF ABUSE, TEACHERS HAVE GIVEN UP THE FIGHT. TEACHING AS A JOB, A CAREER, A LIFE, HAS BEEN TRASHED.

http://www.nytimes.com/2015/08/12/opinion/frank-bruni-can-we-interest-you-in-teaching.html

Teaching can’t compete.

When the economy improves and job prospects multiply, college students turn their attention elsewhere, to professions that promise more money, more independence, more respect...That was one takeaway from a widely discussed story in The Times on Sunday by Motoko Rich, who charted teacher shortages so severe in certain areas of the country that teachers are being rushed into classrooms with dubious qualifications and before they’ve earned their teaching credentials. It’s a sad, alarming state of affairs, and it proves that for all our lip service about improving the education of America’s children, we’ve failed to make teaching the draw that it should be, the honor that it must be. Nationally, enrollment in teacher preparation programs dropped by 30 percent between 2010 and 2014, as Rich reported. To make matters worse, more than 40 percent of the people who do go into teaching exit the profession within five years.

How do we make teaching more rewarding, so that it beckons to not only enough college graduates but to a robust share of the very best of them? Better pay is a must. There’s no getting around that. Many teachers in many areas can’t hope to buy a house and support a family on their incomes, and college students contemplating careers know that. If those students are taking on debt, teaching isn’t likely to provide a timely way to pay it off. The average salary nationally for public school teachers, including those with decades in the classroom, is under $57,000; starting salaries in some states barely crest $30,000.

There’s also the issue of autonomy.
“The No. 1 thing is giving teachers a voice, a real voice,” Randi Weingarten, the president of the American Federation of Teachers, said to me this week. Education leaders disagree over how much of a voice and in what. Weingarten emphasizes teacher involvement in policy, and a survey of some 30,000 teachers and other school workers done by the A.F.T. and the Badass Teachers Association in late April showed that one large source of stress was being left out of such decisions. Others focus on primarily letting teachers chart the day-by-day path to the goals laid out for them, so that they’re not just obedient vessels for a one-size-fits-all script. Hold them accountable, but give them discretion.

The political battles over education, along with the shifting vogues about what’s best, have left many teachers feeling like pawns and punching bags. And while that’s no reason not to implement promising new approaches or to shrink from experimentation, it puts an onus on policy makers and administrators to bring generous measures of training, support and patience to the task.

Teachers crave better opportunities for career growth. Evan Stone, one of the chief executives of Educators 4 Excellence, which represents about 17,000 teachers nationwide, called for “career ladders for teachers to move into specialist roles, master-teacher roles.” “They’re worried that they’re going to be doing the same thing on Day 1 as they’ll be doing 30 years in,” he told me. He also questioned licensing laws that prevent the easy movement of an exemplary teacher from one state to another. Minnesota recently relaxed such requirements; if other states followed suit, it might build a desirable new flexibility into the profession.

Teaching also needs to be endowed with greater prestige. One intriguing line of thought about how to do this is to make the requirements for becoming a teacher more difficult, so that a teaching credential has luster. In the book “The Smartest Kids in the World,” Amanda Ripley noted that Finland’s teachers are revered in part because they’re the survivors of selective screening and rigorous training. Kate Walsh, the president of the National Council on Teacher Quality, told me that in this country, “It’s pretty firmly rooted in college students that education is a fairly easy major.” Too often, it’s also “a major of last resort,” she said.

Dan Brown, a co-director of Educators Rising, which encourages teenagers to contemplate careers in the classroom, said that teaching might be ready for its own Flexner Report, an early 1900s document that revolutionized medical schools and raised the bar for American medicine, contributing to the aura that surrounds physicians today. He also asked why, in the intensifying political discussions about making college more affordable, there’s not more talk of methods “to recognize and incentivize future public servants,” foremost among them teachers. There should be. The health of our democracy and the perpetuation of our prosperity depend on teaching no less than they do on Wall Street’s machinations or Silicon Valley’s innovations. So let’s make the classroom a destination as sensible, exciting and fulfilling as any other.

TEACHERS GET NO RESPECT, NO AUTONOMY, AND NO REALISTIC EXPECTATIONS

 

Demeter

(85,373 posts)
9. Greek ruling party heads toward split before bailout vote
Thu Aug 13, 2015, 09:00 PM
Aug 2015
http://www.reuters.com/article/2015/08/14/us-eurozone-greece-bailout-idUSKCN0QI0W620150814?feedType=RSS&feedName=topNews

Greek Prime Minister Alexis Tsipras' Syriza party looked set to split after the leader of its far-left faction called on Thursday for a new movement to fight a bailout deal that lawmakers are expected to vote on in the coming hours.

With euro zone finance ministers also due to decide on Friday on the bailout, the International Monetary Fund made clear it would participate in the program only if Europe agreed to ease Greece's huge debt burden.

Days after striking a deal with foreign creditors, Tsipras is asking parliament to approve a bailout agreement that pledges tax rises and spending cuts in exchange for 85 billion euros ($95 billion) in fresh loans. It would be Greece's third financial rescue program in five years.

The vote will test the strength of a rebellion by anti-austerity Syriza lawmakers, which could raise pressure on Tsipras to call elections as early as September.

Parliamentary speaker Zoe Konstantopoulou, one of the Syriza hardliners who opposes the deal, snubbed a request from Tsipras to speed up handling of the bailout bill so that it can be voted on well before the euro zone finance ministers meet in Brussels....MORE
 

Demeter

(85,373 posts)
12. Greece agrees steps to tackle banks' bad loans
Thu Aug 13, 2015, 09:12 PM
Aug 2015
http://www.reuters.com/article/2015/08/12/eurozone-greece-banks-loans-idUSL5N10N2HV20150812

Greece will take steps to tackle the mountain of bad loans weighing on its banks as part of its deal with international creditors, a draft of the agreement obtained by Reuters showed on Wednesday. Under a European Banking Authority yardstick, Greek banks' "non-performing exposures" (NPEs) -- which include loans in arrears for more than 90 days (NPLs) and restructured credit unlikely to be repaid -- hit 40 percent of their portfolios last year. The bad-debt load has worsened since then, as Greece sank back into recession and was forced to impose of capital controls, requiring banks to set aside more provisions against the bad loans and constraining them from funding the economy.

Resolving the issue has been one of the major sticking points in talks with creditors. According to the 29-page memorandum of understanding (MOU), a copy of which was obtained by Reuters, Greek authorities commit to changing corporate insolvency laws to rehabilitate viable debtors and speed up the liquidation of non-viable ones. Other reforms include stricter screening to deter so-called strategic defaulters from taking advantage of a home foreclosure protection law and increasing the number of judges to address the backlog of insolvency cases. Greece will also adopt legislation to establish a regulated profession of insolvency administrators.

The Bank of Greece, the country's central bank, will look into the segmentation of NPLs on bank balance sheets and give its assessment of their capacity to deal with each segment by the end of October. By the end of November, the government will take further action to facilitate the resolution of impaired loans, including coming up with specialised court chambers for corporate and household insolvencies. Athens will also set up an independent credit and wealth bureau to help identify debtors' payment capabilities.

"The government will establish a permanent social safety net, including support measures for the most vulnerable debtors and differentiating between strategic defaulters and good-faith debtors," the MOU said.

Further actions require Athens to introduce mechanisms to segment commercial debtors with large sums owed to the state based on their viability status, and legislation to enable the fast-track liquidation of unviable entities by March 2016, aiming to complete the clean-up process by December next year.

The Bank of Greece will agree with banks on targets for NPL resolution and loan restructuring by the end of February next year, and banks will have to report quarterly against key performance indicators.

WELL, WE SHALL SEE, MAYBE
 

Demeter

(85,373 posts)
16. Will the Germans Derail the Tentative Greek Third Bailout? YVES SMITH
Thu Aug 13, 2015, 09:22 PM
Aug 2015
http://www.nakedcapitalism.com/2015/08/will-the-germans-derail-the-tentative-greek-third-bailout.html



As a result of my suffering from a case of Greek deal burnout, you are getting a short assessment of the state of play. But in the spirit of the saying attributed to Pascal, that he wrote a long letter because he didn’t have time to make it shorter, my uncharacteristic brevity on this topic will hopefully be a boon.

Greece and a negotiating team representing the creditors have reached a tentative third bailout deal for €85 billion. The money would come entirely from the European Stability Mechanism. It needs to be approved by the Eurogroup unanimously on Friday to go ahead. If that deal fails to be approved, the fallback is to give Greece a bridge loan to enable it to make upcoming bond payments due (most important, to the ECB on August 20) and the open points would be worked out to conclude the big deal later.

The Germans, in the form of Wolfgang Schabule, are sabre rattling by circulating a memo that beefs about some of the elements of the proposed deal. Even though the Greeks are still committed to meeting lunatic primary surplus targets, that’s not good enough for Schauble & Co. since the goals were adjusted downward from the levels agreed to in June due to the severe fall in the economy as a result of the July bank holiday and the continuation of capital controls. And even though the Greek government is set to pass a raft of painful legislation today, some issues, won’t be resolved until Greece has performed further studies. For instance, the precise labor market reforms will depend on research to be completed by October. That’s apparently too much “trust me” for the Germans. They want all the details nailed down before they hand the big money over.

However, other elements are contributing to the German foot-dragging. The Germans want the IMF in the deal. The IMF has adeptly managed to pull money off the table by revoking a €16.4 billion commitment that was part of the “second bailout” (the excuse was that conditions had changed so much that the agency needed to make a new assessment). The IMF negotiated and blessed this third bailout proposal, but will not decide whether to chip in any funds until the fall. Wanting the IMF in may actually be the biggest driver of the German sulking. But from a financial perspective, the IMF already has plenty of skin in the Greece game via its outstanding loans, so it’s not as if a failure to ante up more means it won’t be involved. And the IMF is always the most senior creditor, so having the IMF participate reduces the Europeans’ exposure but also subordinates them a bit more.

The tone of the media coverage is, in effect, that the Greeks have capitulated so fully that the Germans would look churlish in trying to extract more from the prostrated borrower, particularly since anyone who is not a devout austerian recognizes that the bailout is guaranteed to fail. Requiring a depressed-tending-to-imploding economy to produce a primary surplus is certain to produce continued contraction, particularly since growth in the rest of the world is faltering. Thus the consensus view is that the Germans will make some noise at the Eurogroup but the bailout is likely to win approval....MORE
 

Demeter

(85,373 posts)
23. Greek PM faces biggest party revolt yet as bailout approved
Fri Aug 14, 2015, 08:10 AM
Aug 2015
http://www.reuters.com/article/2015/08/14/us-eurozone-greece-tsipras-idUSKCN0QJ0FI20150814

Greek Prime Minister Alexis Tsipras faced the widest rebellion yet from his leftist lawmakers as parliament approved a new bailout program on Friday, forcing him to consider a confidence vote that could pave the way for early elections.

After lawmakers bickered through the night on procedural matters, parliament comfortably passed the country's third financial rescue by foreign creditors in five years thanks to support from pro-euro opposition parties.

That clears the way for euro zone finance ministers to approve the first batch of aid from the 85-billion-euro package later on Friday, though deep doubts remain in major creditor Germany about whether Athens will fulfill its pledges.

"I do not regret my decision to compromise," Tsipras said as he defended the bailout from euro zone and International Monetary Fund creditors that comes at the price of tax hikes, spending cuts and tough economic reforms. "We undertook the responsibility to stay alive over choosing suicide."

But the vote laid bare the depth of anger within Tsipras's leftist Syriza party at austerity measures as 43 lawmakers - or nearly a third of Syriza deputies - voted against the bailout deal or abstained.

It also left the government with support from within its own coalition below the threshold of 120 votes in the 300-seat chamber, the minimum needed to command a majority and survive a confidence vote if others abstain...
 

Demeter

(85,373 posts)
24. EU Said to Have Reservations on Greek Debt Sustainability
Fri Aug 14, 2015, 08:11 AM
Aug 2015
http://www.bloomberg.com/news/articles/2015-08-13/eu-said-to-have-serious-concerns-on-greece-debt-sustainability

European institutions voiced “serious concerns” about Greece’s ability to repay its debt as Prime Minister Alexis Tsipras prepared for a renewed showdown with party rebels in parliament to try to pass a third bailout.

Greece’s obligations will peak at 201 percent of gross domestic product next year, before dropping to 160 percent in 2022 under a new rescue program, according to European institution projections in a document obtained by Bloomberg. That exceeds the 120 percent level sought in the past by the International Monetary Fund before putting its own money on the line...
 

Demeter

(85,373 posts)
10. SEC is dealt fresh blow as NY judge halts enforcement case
Thu Aug 13, 2015, 09:08 PM
Aug 2015
http://www.reuters.com/article/2015/08/12/sec-judges-idUSL1N10N0UZ20150812

A federal judge in Manhattan has handed the U.S. Securities and Exchange Commission a big defeat over its use of in-house judges, halting its case against a former Standard & Poor's executive because the way SEC judges who handle such cases are appointed is likely unconstitutional. U.S. District Judge Richard Berman issued a preliminary injunction on Wednesday stopping the regulator's civil administrative proceeding against Barbara Duka, the former S&P executive, over her role in an alleged fraud involving mortgage debt ratings. Berman is at least the second federal judge to halt in-house SEC cases because of concern that the regulator's practice of letting staff rather than commissioners appoint its five administrative law judges may be unconstitutional. His decision is significant because many SEC cases arise from activities in the financial services industry in Manhattan, and sets a precedent for judges in his court.

Other defendants suing to stop similar cases include financier Lynn Tilton, whose lawsuit is overseen by Berman's fellow Manhattan judge, Ronnie Abrams. Berman's decision is "gratifying," Duka's lawyer Guy Petrillo said. "Regardless of the courtroom in which we ultimately land, we look forward to vindicating our client, who did nothing wrong."

...The SEC has been pursuing more enforcement cases in-house, using authority it gained through the 2010 Dodd-Frank law. Critics say this deprives defendants of protections they enjoy in federal court, and makes it easier for the SEC to win. Berman said the appointment of SEC judges by staff likely violated Article II of the U.S. Constitution, making it unfair to let its case against Duka proceed.

"The plaintiff has demonstrated irreparable harm along with a substantial likelihood of success on the merits of her claim," Berman wrote.

Duka said the process gives SEC judges job protections that could make it impossible even for the president to remove them. On Aug. 3, Berman gave the SEC seven days to fix the problem, suggesting it could be "easily cured" if commissioners were to appoint the judges. No action was taken...
 

Demeter

(85,373 posts)
11. UK regulator wins $12 mln High Court 'layering' market abuse order
Thu Aug 13, 2015, 09:09 PM
Aug 2015
http://www.reuters.com/article/2015/08/12/britain-financial-fca-idAFL5N10N43C20150812

A British High Court judge has ordered a Swiss investment firm and three Hungarian traders to pay 7.6 million pounds ($11.8 million) for manipulating share prices on UK trading platforms, handing the regulator a victory after a four-year legal battle.

Judge Richard Snowden ruled on Wednesday that the Financial Conduct Authority (FCA) was entitled to permanent injunctions and penalties against Da Vinci Invest, Seychelles-based Mineworld and traders Szabolcs Banya, Gyorgy Szabolcs Brad and Tamas Pornye.

The defendants, four of which were incorporated or resident in Switzerland, the Seychelles and Hungary, used a banned high-frequency trading strategy called "layering" when dealing with 186 UK-listed shares, the court ruled.

Layering won global attention in April when U.S. prosecutors alleged Navinder Singh Sarao, a Briton trading from his parent's home, used the technique to help trigger the May 2010 Wall Street "flash crash" in which nearly $1.0 trillion was temporarily wiped from stock prices.

The FCA said the defendants accessed trading platforms via a broker service called Direct Market Access (DMA), used derivatives and submitted multiple orders to dupe the market about the true supply and demand for shares.

When stocks moved, they cancelling or withdrew those orders and traded in the opposite direction at an artificial price, profiting from the price movement they had created...
 

Demeter

(85,373 posts)
17. The Decline in Market Liquidity By Jérémie Cohen-Setton
Thu Aug 13, 2015, 09:41 PM
Aug 2015
http://www.bruegel.org/nc/blog/detail/article/1697-the-decline-in-market-liquidity/

Jérémie Cohen-Setton, a PhD candidate in Economics at U.C. Berkeley and formerly an economist at HM Treasury.

What’s at stake: There has been a plethora of stories on the apparent decline in trading or market liquidity over the past few months with a growing number of analysts pointing out that it has become harder for buyers and sellers to transact without causing sharp price movements. While the Fed remains unimpressed with these developments, several commentators have argued that the next crisis might come from an abrupt and dramatic re-rating of stocks and bonds.
The Problem with Illiquid Markets

Robin Wigglesworth writes that Wall Street’s latest obsession is bond market liquidity. Lael Brainard writes that these concerns are highlighted by several episodes of unusually large intraday price movements that are difficult to ascribe to any particular news event, which suggest a deterioration in the resilience of market liquidity.

Nouriel Roubini writes that investors’ fears started with the “flash crash” of May 2010, when, in a matter of 30 minutes, major US stock indices fell by almost 10%, before recovering rapidly. Then came the “taper tantrum” in the spring of 2013, when US long-term interest rates shot up by 100 basis points after then-Fed Chairman Ben Bernanke hinted at an end to the Fed’s monthly purchases of long-term securities. Likewise, in October 2014, US Treasury yields plummeted by almost 40 basis points in minutes. The latest episode came in May 2015, when, in the space of a few days, ten-year German bond yields went from five basis points to almost 80. These events have fueled fears that, even very deep and liquid markets – such as US stocks and government bonds in the US and Germany – may not be liquid enough.

Charlie Himmelberg and Bridget Bartlett write that market liquidity is the extent to which investors can execute a fixed trade size within a fixed period of time without moving the price against the trade (which should not be confused with monetary liquidity, access to short-term funding, or liquid assets held on company balance sheets). Steve Strongin writes that one $10 million trade that historically may have taken a day to get done now needs to be split into 20 $500,000 trades that take a week or two to execute. From an investor’s standpoint, that is very uncomfortable because we live in a 24-hour news cycle so information is flowing much faster, but your ability to execute trades is now much slower. It also means that certain types of investment strategies—such as arbitrage strategies that rely on the ability to quickly identify and act on market dislocations—no longer work nearly as well, if they work at all.
Has Liquidity Decreased?

In its latest monetary report to Congress, the Federal Reserve writes that despite these increased market discussions, a variety of metrics of liquidity in the nominal Treasury market do not indicate notable deteriorations.

David Keohane writes that measuring liquidity is by necessity slippery — pick your preferred measure of liquidity (bid-ask, price impact, decline in net-dealer inventories) and we are pretty sure we can point you to a problem with it. But the chart below, on growing market size versus declining turnover, is tantalizing...



MORE

MattSh

(3,714 posts)
19. Weekend Economists:
Fri Aug 14, 2015, 06:26 AM
Aug 2015

I've got this covered for this weekend. Not sure what the theme is though, since this was on a bit of a short notice. If I figure that out in the next few hours, I'll post that here. If not, it will be a surprise!



Expect to see it early AM on Saturday.

MattSh

(3,714 posts)
32. OK, I'm going to go with this...
Fri Aug 14, 2015, 02:50 PM
Aug 2015

Since it's mid August, it's almost "Back to School" time.

But more of a "higher education" thread. Is it worth it, especially at today's prices? Of course, other education posts are certainly welcome!

 

Demeter

(85,373 posts)
20. Kunstler: Potemkin Party
Fri Aug 14, 2015, 06:55 AM
Aug 2015
http://kunstler.com/clusterfuck-nation/potemkin-party/

How many of you brooding on the dreadful prospect of Hillary have chanced to survey what remains of Democratic Party (cough cough) leadership in the background of Her Royal Inevitableness? Nothing is the answer. Zip. Nobody. A vacuum. There is no Democratic Party anymore. There are no figures of gravitas anywhere to be found, no ideas really suited to the American prospect, nothing with the will to oppose the lumbering parasitic corporatocracy that is doing little more than cluttering up this moment in history while it sucks the last dregs of value from our society...I say this as a lifelong registered Democrat but a completely disaffected one — who regards the Republican opposition as the mere errand boy of the above-named lumbering parasitic corporatocracy. Readers are surely chafing to insert that the Democrats have been no less errand boys (and girls) for the same disgusting zeitgeist, and they are surely correct in the case of Hillary, and indeed of the current President.

Readers are surely also chafing to insert that there is Bernie Sanders, climbing in the opinion polls, disdaining Wall Street money, denouncing the current disposition of things with the old union hall surliness we’ve grown to know and love. I’m grateful that Bernie is in the race, that he’s framing an argument against Ms. It’s My Turn. I just don’t happen to think that Bernie gets what the country — indeed what all of techno-industrial society — is really up against, namely a long emergency of economic contraction and collapse. These circumstances require a very different agenda than just an I Dreamed I Saw Joe Hill redistributionist scheme. Lively as Bernie is, I don’t think he offers much beyond that, as if cadging a little more tax money out of WalMart, General Mills, and Exxon-Mobil will fix what is ailing this sad-ass polity. The heart of the matter is that our way of life has shot its wad and now we have to live very differently. Almost nobody wants to even try to think about this.

I hugely resent the fact that the Democratic Party puts its time and energy into the stupid sexual politics of the day when it should be working on issues such as re-localizing commercial economies (rebuilding Main Streets), reforming agriculture to avoid the total collapse of corporate-industrial farming, and fixing the passenger rail system so people will have some way to get around the country when happy Motoring dies (along with commercial aviation). The “to do” list for rearranging the basic systems of daily life in America is long and loaded with opportunity. Every system that is retooled contains jobs and social roles for people who have been shut out of the economy for two generations. If we do everything we can to promote smaller-scaled local farming, there will be plenty of work for lesser-skilled people to do and get paid for. Saying goodbye to the tyranny of Big Box commerce would open up vast vocational opportunities in reconstructed local and regional networks of commerce, especially for young people interested in running their own business. We need to prepare for localized clinic-style medicine (in opposition to the continuing amalgamation and gigantization of hospitals, with its handmaidens of Big Pharma and the insurance rackets). The train system has got to be reborn as a true public utility. Just about every other civilized country is already demonstrating how that is done — it’s not that difficult and it would employ a lot of people at every level. That is what the agenda of a truly progressive political party should be at this moment in history.

That Democrats even tolerate the existence of evil entities like WalMart is an argument for ideological bankruptcy of the party. Democratic Presidents from Carter to Clinton to Obama could have used the Department of Justice and the existing anti-trust statutes to at least discourage the pernicious monopolization of commerce that Big Boxes represented. By the same token, President Obama could have used existing federal law to break up the banking oligarchy starting in 2009, not to mention backing legislation to more crisply define alleged corporate “personhood” in the wake of the ruinous “Citizens United” Supreme Court decision of 2010. They don’t even talk about it because Wall Street owns them.


So, you fellow disaffected Democrats — those of you who can’t go over to the other side, but feel you have no place in your country’s politics — look around and tell me who you see casting a shadow on the Democratic landscape. Nobody. Just tired, corrupt, devious old Hillary and her nemesis Bernie the Union Hall Champion out of a Pete Seeger marching song...I’ve been saying for a while that this period of history resembles the 1850s in America in two big ways: 1) our society faces a crisis, and 2) the existing political parties are not up to the task of comprehending what society faces. In the 1850s it was the Whigs that dried up and blew away (virtually overnight), while the old Democratic party just entered a 75-year wilderness of irrelevancy. God help us if Trump-o-mania turns out to be the only alternative.
 

Demeter

(85,373 posts)
21. The Outrageous Ascent of CEO Pay ROBERT REICH
Fri Aug 14, 2015, 06:57 AM
Aug 2015
http://robertreich.org/post/126288944750

The Securities and Exchange Commission approved a rule last week requiring that large publicly held corporations disclose the ratios of the pay of their top CEOs to the pay of their median workers.

About time.

For the last thirty years almost all incentives operating on American corporations have resulted in lower pay for average workers and higher pay for CEOs and other top executives. Consider that in 1965, CEOs of America’s largest corporations were paid, on average, 20 times the pay of average workers. Now, the ratio is over 300 to 1. Not only has CEO pay exploded, so has the pay of top executives just below them. The share of corporate income devoted to compensating the five highest-paid executives of large corporations ballooned from an average of 5 percent in 1993 to more than 15 percent by 2005 (the latest data available).

Corporations might otherwise have devoted this sizable sum to research and development, additional jobs, higher wages for average workers, or dividends to shareholders – who, not incidentally, are supposed to be the owners of the firm.

Corporate apologists say CEOs and other top executives are worth these amounts because their corporations have performed so well over the last three decades that CEOs are like star baseball players or movie stars. Baloney. Most CEOs haven’t done anything special. The entire stock market surged over this time. Even if a company’s CEO simply played online solitaire for thirty years, the company’s stock would have ridden the wave.

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Demeter

(85,373 posts)
22. Oil price slump pushes Saudi Arabia to fund raise with $US5.3b bonds sale
Fri Aug 14, 2015, 07:15 AM
Aug 2015


http://www.smh.com.au/business/markets/oil-price-slump-pushes-saudi-arabia-to-fund-raise-with-us53b-bonds-sale-20150809-giv88n.html

Saudi Arabia could raise up to 20 billion riyals ($5.33 billion) from bonds on Monday, opening its sale to commercial banks for the first time since it returned to the debt market last month to fill a budget gap caused by falling global oil prices.

Debt-averse Saudi Arabia, the world's top oil exporter, sold bonds last month for the first time since 2007 and plans more sales to help fill a budget deficit which the International Monetary Fund estimates at $US150 billion this year.

Last month's 15 billion riyals worth of notes were sold only to quasi-government funds, but commercial banks will now be included. The banks were briefed two weeks ago by the central bank, the Saudi Arabian Monetary Agency (SAMA), on its plans.

While no firm figure has been disclosed for Monday's sale, several Saudi-based sources at banks or government bodies told Reuters the total value was expected to be between 15 billion and 20 billion riyals, in tranches issued for five, seven and ten years...
 

Demeter

(85,373 posts)
31. Study: Germany made €100bn profit on Greek crisis
Fri Aug 14, 2015, 12:22 PM
Aug 2015
http://www.keeptalkinggreece.com/2015/08/10/study-germany-made-e100bn-profit-on-greek-crisis/

What? I don’t believe it! Really? Germany made a 100 billion euro profit on Greek crisis? No, kidding? HA! And yes, so it is! A study conducted by a German Economic Institute has shown that every time investors got bad news about Greece, they rushed to Germany’s ‘safe haven’ with the effect that the interest rates on German government bonds were falling!

“Greece’s biggest creditor Germany has made a huge profit on the country’s debt crisis over the last 5 years as it saved through lower interest payments on funds borrowed amid investor “flights to safety.”

Each time investors got bad news about Greece, they rushed to the ‘safe haven’ of Germany, with the interest rates on German government bonds falling, according to the study from the private, non-profit Leibniz Institute of Economic Research, Agence France-Presse reported Monday.

The estimated €100 billion Germany had saved since 2010 accounted for over three percent of its GDP, the report said.

“These savings exceed the costs of the crisis – even if Greece were to default on its entire debt,” the study said.

The bonds of countries such as the United States, France and the Netherlands had benefited “to a much smaller extent.”

Germany’s Finance Minister Wolfgang Schaeuble who has always been against writing off the Greek debt pointed to his own government’s balanced budget.

The balanced budget, however, was possible mainly as a result of Germany’s interest savings through the Greek crisis, the study claimed.

Schauble has repeatedly said the Greek debt of €316 billion cannot be restructured within the eurozone. He claimed Grexit might be a solution for the country’s debt ‘haircut.’ (via RT.com)

PS: and I was thinking the whole time, Germany had just the noble motive to save the euro and the euro zone :p
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