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Pale Blue Dot Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 05:52 AM
Original message
STOCK MARKET WATCH, Thursday, December 1, 2011
Source: du

STOCK MARKET WATCH, Thursday, December 1, 2011

AT THE CLOSING BELL ON November 30, 2011

Dow 12,045.68 +490.05 (+4.07%)
Nasdaq 2,620.34 +104.83 (+4.00%)
S&P 500 1,246.96 +51.77 (+4.15%)
10-Yr Bond... 2.08 +0.01 (+0.53%)
30-Year Bond 3.09 +0.03 (+0.98%)



Market Conditions During Trading Hours


Euro, Yen, Loonie, Silver and Gold






Handy Links - Market Data and News:
Economic Calendar    Marketwatch Data    Bloomberg Economic News    Yahoo! Finance    Google Finance    Bank Tracker    
Credit Union Tracker    Daily Job Cuts

Handy Links - Economic Blogs:

The Big Picture    Financial Sense    Calculated Risk    Naked Capitalism    Credit Writedowns
Brad DeLong      Bonddad    Atrios    goldmansachs666    The Stand-Up Economist

Handy Links - Government Issues:

LegitGov    Open Government    Earmark Database    USA spending.gov

Bush Administration Officials Convicted = 2
Names: David Safavian, James Fondren
Dishonorable Mention: former House majority leader, Tom DeLay

Bush Administration Officials Charged = 1
Name(s): Richard Lopez Razo

Financial Sector Officials Convicted since 1/20/09 =
12









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.

Read more: du
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Pale Blue Dot Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 05:53 AM
Response to Original message
1. Today's Reports
Dec 01 08:30 Initial Claims 11/26 395K 390K 393K
Dec 01 08:30 Continuing Claims 11/19 3650K 3650K 3691K
Dec 01 10:00 ISM Index Nov 50.5 51.0 50.8
Dec 01 10:00 Construction Spending Oct 0.2% 0.3% 0.2%
Dec 01 15:00 Auto Sales Dec NA NA 4.27M
Dec 01 15:00 Truck Sales Dec NA NA 5.84M

Read more: http://www.briefing.com/investor/calendars/economic/201...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:31 AM
Response to Reply #1
44. Unemployment Higher than Expected, Imagine that!
Edited on Thu Dec-01-11 08:32 AM by Demeter
________________For_____Actual__Forecast__Consensus___Prior___Revised From

Initial Claims____11/26___402K____395K_______390K________396K____393K
Cont. Claims____11/19___3740K___3650K______3650K_______3705K___3691K

Read more: http://www.briefing.com/investor/calendars/economic/201...
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hamerfan Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 01:42 PM
Response to Reply #44
104. Oh, noes!


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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:52 AM
Response to Reply #1
52. Beige Book Shows Stronger Growth, but Europe a Major Threat
http://www.usnews.com/news/articles/2011/11/30/beige-bo...

The sovereign debt crisis abroad could derail economic recovery in the United States...Recent jobs numbers, slowly growing GDP, and signs of life in the housing sector have all seemed to point to an accelerating recovery. Today came a solid confirmation of that fact in the Federal Reserve's latest Beige Book report. But in a global economy wracked with uncertainty, it is hardly time to celebrate.

The Fed Beige Book report is released eight times per year and provides a periodic snapshot of the country's economic well-being. Today's report characterized economic activity as growing at a "slow to moderate pace" in 11 of 12 Federal Reserve Districts, and also indicated increases in consumer spending and manufacturing activity. The report is a marked improvement over October's Beige Book report, in which Districts described growth as "modest" and "slight."

"Our sense has been that the economy is slowly recovering. When you boil it all down, that's what the Beige Book said," says Mark Coffelt, CFA and president of Empiric Advisers, a financial advisory firm based in Austin, Texas.

Among the more promising indications in the report are increases in residential real estate activity and bank lending, two areas that have been among the biggest drags to economic growth...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:54 AM
Response to Reply #52
53. Have We Turned The Corner on Jobs?
http://www.usnews.com/news/articles/2011/11/30/have-we-...

Two new reports out Wednesday bolster recent indications that the U.S. economy has staved off a double-dip and is entering a stronger recovery...
private payroll firm ADP announced that the private sector added 206,000 jobs in November, the largest gain in 11 months, and well up from October's figure of 130,000. And outplacement firm Challenger, Gray & Christmas reported that the number of planned layoffs in November was 42,474, down slightly from the month before, but down 13 percent from November 2010.

"Today's number represents a pretty notable acceleration of employment that I think is consistent with the notion that the U.S. economy has skirted the back end of the double dip recession and is charting its way through perilous waters towards a gradual upturn," says Joel Prakken, chairman of consulting firm Macroeconomic Advisers. Prakken also noted that strength is "pretty much evident throughout all the slices in the data that we provide." Jobs were added in small, medium, and large firms alike, and in both the goods-producing and service-providing sectors.

The ADP report beat consensus estimates of around 130,000 new private-sector jobs, meaning that Friday's employment report from the Labor Department could also do better than consensus forecasts, at around 120,000 jobs added to the U.S. economy. Friday's report could once again show the public sector taking a bite out of job growth. Labor Department data shows the government losing jobs in 11 of the last 12 months. This year, government has been by far the biggest job-cutting industry, announcing nearly 181,000 cutsalready a 30 percent increase over total announced government cuts in 2010....
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:56 AM
Response to Reply #1
54. U.S. Economy Barely Moving Amid Creeping Disinflation, Beige Book Shows
http://www.forbes.com/sites/afontevecchia/2011/11/30/u-... /

The U.S. economy continues to expand at a slow-to-moderate pace, according to the Feds Beige Book, released Wednesday, but disinflationary pressures still raise a warning flag, Goldman Sachs Shuyan Wu says. Despite a substantial boost to global confidence after global central banks injected U.S. dollar liquidity, the situation seems set for Fed Chairman Ben Bernanke to unleash a third round of quantitative easing to keep a modest recovery from waning in coming months.

Overall economic activity increased at a slow to moderate pace since the previous report across all Federal Reserve Districts except St. Louis, which reported a decline in economic activity, read the first line of the Beige Book, which outlines the general state of the economy as of November 18.

Among the bright spots was an uptick in consumer spending, on the backs of tourism and motor vehicles, and slightly improved bank lending standards. On the face of them, these are bullish signs for auto producers like Ford and General Motors, and online booking service companies like Expedia and Priceline.

But growth remains subpar and downside risk is very real. Bernanke has reiterated that housing and labor markets are a prerequisite for any self-sustaining recovery. Data on the front remains weak. According to the Beige Book, hiring was generally subdued and some firms with open positions reported difficulty finding qualified applicants. The latter point is evidence of structural unemployment, a much harder problem to uproot...
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Pale Blue Dot Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 05:53 AM
Response to Original message
2. Oil rises to near $101 amid global stocks rally
SINGAPORE Oil prices edged higher to near $101 a barrel Thursday in Asia amid a surge in global stock markets after major central banks pledged to lower borrowing costs.

Benchmark crude for January delivery was up 32 cents to $100.68 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 57 cents to settle to $100.36 on Wednesday.

In London, Brent crude was up 40 cents at $110.92 on the ICE futures exchange.

On Wednesday, the central banks of Europe, the U.S., Britain, Canada, Japan and Switzerland reduced the rates that banks must pay to borrow dollars. Separately, China's central bank also acted to release money for lending and help shore up slowing growth by lowering bank reserve levels for the first time in three years.

http://old.news.yahoo.com/s/ap/oil_prices
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Pale Blue Dot Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 05:54 AM
Response to Original message
3. U.S. Futures Decline; S&P May Snap 3-Day Gain
U.S. stock-index futures dropped, indicating the Standard & Poors 500 Index (SPX) will snap its biggest three-day rally in more than two years, as Chinas manufacturing recorded the weakest performance since 2009.

Walt Disney Co., the worlds biggest theme-park operator and owner of ESPN, dropped 0.6 percent in German trading.

Futures on the S&P 500 expiring this month slipped 0.3 percent to 1,242.4 at 10:30 a.m. in London. Dow Jones Industrial Average Index futures also expiring in December lost 20 points, or 0.2 percent, to 12,014.

Chinas purchasing managers index slid to 49 in November, lower than all but two of 18 forecasts in a Bloomberg News survey. Readings below 50 signal a contraction.

http://www.bloomberg.com/news/2011-12-01/u-s-stock-futu...
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rfranklin Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 06:05 AM
Response to Original message
4. 400 Dow Points Arent What They Used To Be...
The S&P 500 has climbed 3 percent or more in a day 36 times in the three years since Lehmans collapse, or about once a month. That compares with 27 times for the nine years before, or about 0.3 times a month, data compiled by Bloomberg show. The Dows intraday move has exceeded 100 points every day in November except one, Nov. 18.

http://www.bloomberg.com/news/2011-11-30/four-hundred-d...
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 07:17 AM
Response to Reply #4
12. Central Banks Treat Fever - Not Bank Disease

11/30/11 Central Banks Treat Fever - Not Bank Disease

The coordinated effort from global central banks to ease lending is like giving aspirin to treat a fever, but not treating the real bank sickness.

appx 1.5 minute video
http://www.thestreet.com/video/11327536/central-banks-t...

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:20 AM
Response to Reply #12
40. Fed leads central banks in effort to ease funding woes
GOOD OLD UNCLE SUCKER WILL SOON BE DRAINING THE BLOOD OUT OF THE PEASANTS TO FILL THE SWIMMING POOLS OF THE 1%...A COMPENDIUM OF PRESS REPORTS:

Central banks step in to stave off new credit crunch

http://www.guardian.co.uk/business/2011/nov/30/central-...

Stock markets surge as fears for the euro force concerted emergency action to aid cash-strapped banks...The world's major central banks announced concerted emergency measures to underpin fragile eurozone banks and prevent the global financial system from freezing up...In a clear sign that policymakers fear the downturn in the eurozone risks spiralling into a fresh credit crunch where banks stop lending they announced "co-ordinated central bank action to address pressures in global money markets".

Stock markets around the world surged after policymakers said they would cut the interest rate on emergency dollar loans to cash-strapped banks by 0.5 percentage points and extend the scheme until February 2013. They will also establish "temporary bilateral liquidity swap arrangements" between one central bank and another, allowing liquidity to be provided at short notice in any currency "should market conditions so warrant".

"At least they've got their finger on the panic button," said Graham Turner, of GFC Economics in London. "There's an awful lot that central banks can do and this shows that they're not going to sit idly by and let the whole thing implode."

...The joint action was reminiscent of autumn 2008, when central banks came together to slash interest rates and inject liquidity into financial markets in the wake of the collapse of Lehman Brothers...Banking analysts have been warning for some time that eurozone banks, which must reconcile their finances before the end of the year, are running short of dollars to pay US creditors...Jeremy Cook, chief economist at foreign exchange company World First, suggested that central bankers had tired of European leaders' failure to fix the euro crisis. "Cutting swap costs is the equivalent of interest rate cuts," he said. "This may have been a signal that the money markets were a short shove away from complete collapse...

Markets soar after central banks act to ease credit crisis

http://www.telegraph.co.uk/finance/financialcrisis/8926...

Stockmarkets soared as six of the world's richest central banks announced a co-ordinated effort to outflank European political deadlock and unlock the financial markets themselves...The US Federal Reserve led a synchronised wave of announcements from the Bank of England, the European Central Bank and the central banks of Canada, Switzerland and Japan that were designed to pump liquidity into the markets.

The six banks said they were cutting the cost of dollar swap lines, effectively halving the price of banks borrowing dollars to fund themselves from 100bps to 50bps above a base rate. They aimed to unblock the flow of money which, compounded by a severe loss of confidence, is threatening to freeze the financial system again. The banks attempted co-ordinated action in September, but on a far smaller scale.

Just a few hours before, the Bank of China unveiled a similar move by cutting its reserve requirements for banks for the first time in three years...

6 Central Banks Act to Buy Time in Europe Crisis

http://www.nytimes.com/2011/12/01/business/central-bank...

TIME FOR WHAT? THE CYNIC MIGHT ASK...TIME TO GET ANOTHER WAR ON, SINCE LIBYA OBVIOUSLY DIDN'T HAVE THE STIMULATIVE EFFECT THEY EXPECTED? TIME TO GET OBAMA BACK IN OFFICE, AND THE GOLDMAN SATRAPS INSTALLED IN THE CAPITALS OF EUROPE?

..."giving Europe more time to wrestle with its debts"...

YEAH, SURE, THAT'S WHAT THEY ARE DOING.... :rofl:

ECB hints at action if euro zone adopts fiscal pact

http://www.reuters.com/article/2011/12/01/us-eurozone-i...

The new head of the European Central Bank signaled on Thursday it was ready to take stronger action to fight Europe's debt crisis if political leaders agree next week on much tighter budget controls in the 17-nation euro zone...Speaking a day after the world's major central banks took emergency joint action to provide cheaper dollar funding for starved European banks, Mario Draghi painted a dark picture of the state of the banking system.

"A new fiscal compact would be the most important signal from euro area governments for embarking on a path of comprehensive deepening of economic integration. It would also present a clear trajectory for the future evolution of the euro area, thus framing expectations," he told the European Parliament. Draghi did not spell out what action the ECB might take (PONIES FOR EVERYONE!), but it is under huge political and market pressure to massively step up purchases of euro zone government bonds or lend money to the IMF to support ailing Italy and Spain. In the short-term, economists expect the central bank to relieve pressure on banks and an economy heading into recession cutting interest rates next week and announcing longer-term cheap liquidity tenders with easier collateral rules. Markets are pricing in a 25 basis point cut to 1.0 percent on December 8 and Draghi said nothing to dissuade them.

In response to lawmakers' comments, he added that the ECB had scope to act within the European Union treaty and the most important thing was to make sure that frozen credit channels started to work again. Draghi, who faces some of the toughest decisions in the currency's 12-year history after just one month in the job, said the ECB was aware many European banks were in difficulty because of stress on sovereign bonds, tight inter-bank funding markets and scarce collateral. "Downside risks to the economic outlook have increased," he said, noting that the ECB's mandate was to maintain price stability "in both directions" -- a rare indication that the bank is concerned about deflation risks as well as inflation.

Two years into Europe's debt crisis, investors are fleeing the euro zone bond market, European banks are dumping government debt, south European banks are bleeding deposits and a recession looms, fuelling doubts about the survival of the single currency...European Union leaders hold a crucial summit on December 9 at which EU paymaster Germany is pressing for an agreement on treaty change to establish coercive powers to veto national budgets in the euro zone that breach agreed rules. That prompted the chief financial officer of the European Bank for Reconstruction and Development, Manfred Schepers, to tell a Dutch newspaper: "There are seven work days left to save Europe."

AND SO FORTH AND SO ON...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:58 AM
Response to Reply #40
55. Commodities Rise to Two-Week High as Fed, Central Banks Boost Liquidity
http://www.bloomberg.com/news/2011-11-30/commodities-ri...

Commodities rose to the highest in almost two weeks after the Federal Reserve cut the cost of emergency funding for banks in Europe as part of a global effort to stem the regions sovereign-debt crisis.

The Standard & Poors GSCI index of 24 raw materials rose 0.7 percent to settle at 658.02 at 4:04 p.m. New York time. Earlier, the measure reached 664.56, the highest since Nov. 17. Industrial and precious metals led the rally. In the two weeks ended Nov. 25, the GSCI gauge dropped 4.5 percent as borrowing costs surged in Europe, imperiling the euro and banks...

Todays central bank intervention supports the argument that governments are likely to try and transition the sovereign- debt crisis by devaluing currencies, James Dailey, who manages $215 million at TEAM Financial Management LLC in Harrisburg, Pennsylvania, said in an e-mail. Devaluing currencies make commodities attractive on a relative basis. I would characterize it as a step in the inflation direction.
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Tansy_Gold Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 06:27 AM
Response to Original message
5. Good morning.
First rec, and back into the insanity. It never ends.
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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 06:48 AM
Response to Reply #5
6. morning miss tansy! nt
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Roland99 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 06:49 AM
Response to Reply #5
7. i'm heading into a different kind of insanity in 48hrs
my wedding day is Saturday! :)

Taking today and tomorrow off (but will probably go into work for a bit today...deadlines and all that :) )

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 07:21 AM
Response to Reply #7
13. Best wishes to you both! May you find a bit of sanity, safety and security together
in these times of peril. United we stand, after all!
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 07:35 AM
Response to Reply #7
16. Congratulations!

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Hotler Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 07:42 AM
Response to Reply #7
20. Wishing you both many fine days together. Being in love is a good thing. eom.
Edited on Thu Dec-01-11 07:42 AM by Hotler
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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 07:58 AM
Response to Reply #7
28. that is so sweet! congratulations!
:toast: :party: :toast:
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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:33 AM
Response to Reply #7
45. Congrats....
and best wishes for a long and happy marriage. Couldn't happen to a nicer guy. :party:
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Hugin Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 09:09 AM
Response to Reply #7
60. Congrats to you and your future spouse, Roland99.
And thanks for some genuine good news in a world of pulp news. :)
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Roland99 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 11:43 AM
Response to Reply #7
86. **Thanks everyone!!**
At work for a few hours...calmer here than running all over! :)

I think the next 50hrs will be the busiest I've ever had in my entire life but it's sooo worth it. I'm sure I'll have a few pics later on for everyone.


Looks like the markets are flat and directionless....

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DoBotherMe Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 11:51 AM
Response to Reply #7
87. Congratulations
and best wishes to you for a wonderful marriage! Dana ; )
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westerebus Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 04:47 PM
Response to Reply #7
111. Best wishes! n/t


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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 06:57 AM
Response to Original message
8. europe: Spanish, French Bonds Climb After Auctions; Euro Strengthens
http://sfgate.adc.bloomberg.wallst.com/SFChronicle/Stor...

Dec. 1 (Bloomberg) -- Spanish and French bonds rallied and the euro strengthened for a second day after the governments sold debt. European stocks fluctuated and U.S. index futures pared losses.

The yield on Frances 10-year note dropped as much as 27 basis points, the most since 1991, and traded 22 basis points lower at 3.17 percent at 7:25 a.m. in New York. Spains five- year yield tumbled 32 basis points to 5.53 percent. The euro appreciated 0.3 percent against the dollar. The Stoxx Europe 600 Index swung between gains and losses, after declining as much as 0.8 percent. Standard & Poors 500 futures slid 0.1 percent, following the stock gauges 4.3 percent surge yesterday.

French borrowing costs declined in its auction of 10-year bonds and Spain sold 3.75 billion euros ($5.1 billion) of debt, the maximum amount planned. European Central Bank President Mario Draghi said the banks program of buying government bonds can only be limited, a day after six central banks made additional funds available to ease strains from the crisis and the Peoples Bank of China cut banks reserve requirements for the first time since 2008.

The French and Spanish bond auctions were well received and priced, Matthias Fankhauser, who helps oversee the equivalent of $100 billion in assets at Clariden Leu in Zurich, said in an interview. Until now, we just had disasters on that front. Some investors feel it would be a good chance to jump into these high yields.
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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 07:37 AM
Response to Reply #8
17. European shares turn negative in choppy trade
http://uk.reuters.com/article/2011/11/10/markets-europe...

Nov 10 (Reuters) - European shares turned negative again on Thursday in choppy trade with the focus firmly on prospects for a new Italian government.

In a sign the political road ahead would not be smooth, however, a senior member of Italy's Northern League party said it would not back a possible new government led by former European commissioner Mario Monti.

A pullback in Italian bond yields after fresh European Central Bank buying was helping support sentiment, particularly in Italy, while the latest Italian debt auction also got away.

At 1050 GMT, the FTSEurofirst 300 .FTEU3 was down 0.2 percent at 964.41 points.
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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 07:39 AM
Response to Reply #8
19. ECB hints at action if euro zone adopts fiscal pact
http://uk.reuters.com/article/2011/12/01/uk-eurozone-id...

(Reuters) - The new head of the European Central Bank signalled Thursday it was ready to take stronger action to fight Europe's debt crisis if political leaders agree next week on much tighter budget controls in the 17-nation euro zone.

Speaking a day after the world's major central banks took emergency joint action to provide cheaper dollar funding for starved European banks, Mario Draghi painted a dark picture of the state of the banking system.

"A new fiscal compact would be the most important signal from euro area governments for embarking on a path of comprehensive deepening of economic integration. It would also present a clear trajectory for the future evolution of the euro area, thus framing expectations," he told the European Parliament.

Draghi did not spell out what action the ECB might take, but it is under huge political and market pressure to massively step up purchases of euro zone government bonds or lend money to the IMF to support ailing Italy and Spain.
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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:02 AM
Response to Reply #8
30. The dash for cash Europes troubled banks are running out of money
http://www.economist.com/node/21541019

USUALLY it is banks that put customers under a microscope before lending them a penny. But in Europe banks are the ones now facing scrutiny before investors, companies and savers will lend them any cash. Faced with an investor strike, banks are putting a halt to new loans and selling or pawning all they can. Unless the investor strike lifts soon, Europe risks a credit crunch. At worst, there may even be bank runs and failures.

In one sense, a slow bank run is already taking place in the market for bank bonds, which in happier times provide the long-term and stable funding that allows bank regulators to sleep peacefully at night. Since July these markets have frozen up almost completely for European banks. Bond issuance has plunged (see chart) and has shifted towards secured bonds, which are backed by assets that investors can grab if the bank defaults.

David Lyon of Barclays Capital, an investment bank, reckons that just 17 billion ($24 billion) in unsecured European bank bonds have been sold since the end of June, compared with 120 billion in the same period a year earlier. In the context of the requirement, this is a paltry amount of funding, he says.

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dixiegrrrrl Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:38 AM
Response to Reply #30
46. Did we not just read that American banks were so stuffed with cash
they were charging customers to deposit money????

and yet we are also reading that the Fed wants to loan money to Europe's banks?

Something does not make sense.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:40 AM
Response to Reply #46
48. All that money stuffed into US banks is Capital in Flight from Europe
The 1%ers in the Old Country are sending their most precious possessions abroad...sometimes, even their children, too!
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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 09:06 AM
Response to Reply #46
59. as someone raised in the 50s -- nothing about modern finance & banking makes
sense to me.

it's all magic now if you ask me.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 09:14 AM
Response to Reply #59
63. It's All FRAUD, is What it is
and the entire government is in on it. Corruption, like a rotting fish, starts at the head and goes down....
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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 09:26 AM
Response to Reply #63
67. +1
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 09:42 AM
Response to Reply #63
76. +++
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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:05 AM
Response to Reply #8
32. Moscow issues Trans-Caspian Project warning
http://www.atimes.com/atimes/Central_Asia/ML02Ag01.html

The Soviet art of socialist realism used to be defined as "socialist in substance, national in form". Threats to prevent the construction of a trans-Caspian gas pipeline by military force are also a form of Kremlin art: bluff in their substance, even if brutal in their form.

Pursuant to President Dmitry Medvedev and the Russian Security Council's October 14 decision to draft proposals on how to resist the European Union's Third Energy Package as well as the EU's Nabucco and trans-Caspian gas pipeline projects, Moscow is undertaking diplomatic and political countermeasures to the EU-planned gas pipeline from Turkmenistan to Europe.

Statements by Medvedev and the Russian foreign ministry


claiming that trans-Caspian pipelines would be unlawful without Russian consent have failed to make that legal case and are seen as purely political. Officially inspired polemics against that project in the Moscow media have also left Ashgabat and Brussels unimpressed. In frustration, Moscow has started hinting at the use of force.

Russian Gas Society president and vice-chairman of the Duma, Valery Yazev (dubbed "Gazprom's chief lobbyist"), has publicly reminded Turkmenistan that it lacks military protection in the Caspian Sea, and it risks a "Libyan scenario" by joining the EU's trans-Caspian project. He dismissed the value of United Nations General Assembly support for Turkmenistan's neutrality and multivector policy.
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dixiegrrrrl Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 10:19 AM
Response to Reply #32
80. Resource wars getting serious, as predicted.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 09:05 AM
Response to Reply #8
58. Finance Ministers Agree to EU Debt Guarantees
http://online.wsj.com/article/SB10001424052970204012004...

European Union finance ministers settled on a plan Wednesday aimed at thawing Europe's frozen wholesale lending market, agreeing that national goverments would work in concert to offer guarantees backing the bonds issued by each nation's banks. But the officials rejected a more ambitions plan that would have created a single "syndicate" in which the 27-nation bloc would jointly issue guarantees to ease European banks' funding troubles. That rejected proposal had been supported by the European Central Bank and other EU institutions.

Guarantees act as insurance policies that banks can buy to protect holders of their debt against default. Governments are eager to get a guarantee program up and running to help banks raise unsecured, long-term fundinga market that has been effectively closed to them for months as global financial institutions have grown increasingly wary of purchasing bonds issued by troubled euro-zone banks...The creation of a syndicate would face large technical and political obstacles that would delay its coming into force, officials said. Moreover, most creditworthy governments have opposed joint guarantees, fearing the plan could undermine their own credit ratings.

But banking-regulation experts have said the current environment calls for something like the syndicate idea, noting that guarantees provided individually by the EU's financially troubled sovereigns will be of little use to those countries' banks. "The failure of the to agree to a credible mechanism to support weak banks in troubled economies is a very serious oversight," said Sony Kapoor, managing director of Re-Define, a financial think tank. "How useful would bank guarantees from member states be if these member states are themselves shut out of financial markets?"

The European Commission, the EU's executive arm, will coordinate the terms under which banks' debts are guaranteed, with a proposal expected Thursday on how much banks should pay their governments for these guarantees. The guarantees' price will bear a relation to the credit-default swap price of each bank in question, people familiar with the matter said. But these people said that the price would be adjusted to avoid levying unfairly high fees on intrinsically strong banks in troubled countries. The decision was made on the second of two days of meetings by European finance ministers here. Now they embark on intensive talks ahead of a Dec. 8-9 European summit, which German Finance Minister Wolfgang Schuble said would be a "decisive event."
...He admitted there were still differences among euro-zone leaders about how to erect firewalls to stem the crisis. "We are losing the confidence of the markets week by week," he said. "The sooner we solve our problems the sooner we will regain confidence."
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 09:09 AM
Response to Reply #58
61. Banks row hampers EU bid to halt credit freeze
http://uk.reuters.com/article/2011/11/30/uk-eu-finmins-...

...The ministers had been due to sign off details of a 106-billion-euro (90.7 billion pound) plan to recapitalise banks, intended to revive confidence among nervous counterparts who have shunned EU lenders. But a backlash from countries like Italy, which can no longer borrow at affordable rates and would struggle to find the nearly 15 billion euros the EBA watchdog said it needed to help its banks, has raised doubts over the programme.

The head of the Italian markets authority Consob questioned the way the EBA (European Banking Authority) had worked out the banks' capital shortfall and said a drive to strengthen their finances risked exacerbating a credit squeeze.

Giuseppe Vegas told la Repubblica daily on Wednesday that Consob is in talks with the Bank of Italy to ask for a reassessment of these rules.

"In Italy there is a banking worry," Vegas said. "Money is not circulating anymore. The main risk is a spread of a credit crunch."...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 09:13 AM
Response to Reply #61
62. EU Ministers Back National Bank Guarantees With Common Rules
http://www.bloomberg.com/news/2011-11-30/eu-ministers-b...

...Against a background of rapidly deteriorating market circumstances and increasing time pressure, a coordinating mechanism should be in place in early 2012 for the guarantees, according to the document. The guarantees should apply from Jan. 1, 2012.

Moodys Investors Service Inc. said yesterday that banks in 15 European nations, including the largest lenders in France, Italy and Spain, may have their subordinated debt ratings cut to reflect the potential removal of government support. The guarantees are needed to help banks continue their lending activities in 2012, the European Banking Authority said last month.

Ministers had agreed that banks should not seek to meet the 9 percent capital threshold through winding up parts of their business or scaling back their activities, Rostowski said.

Deleveraging is not a way to achieve the required level of capital strength, he said.

I'M DEDICATING THE FOLLOWING TUNE TO THE EURO, AND THOSE WHO LIVE OR DIE BY HER...

http://www.youtube.com/watch?v=CzmnF6EfvaE
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 09:35 AM
Response to Reply #62
73.  Obamas morbid fear of EU meltdown

Fears remain about effect of eurozone crisis on the US economy after presidents meeting with leaders of the region in Chicago

Read more >>
http://link.ft.com/r/ZE9K33/U1COGQ/1O51V/5VZYVD/PFBG54/...


PROVOCATIVE HEADLINE, DON'T YOU THINK? WISH I COULD READ THE ARTICLE...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 11:07 AM
Response to Reply #73
83. The Never-Ending Eurofiasco By Mike Whitney
http://www.informationclearinghouse.info/article29547.h...

Imagine if the local fire chief, in the spirit of conservation, decided hed use no more than 1,000 gallons of water to put out any given house fire. Do you think the citizens would support that policy if their town was burned to the ground? And, yet, this is the same approach that eurozone leaders are using to address the debt crisis. The central bank (ECB) has virtually limitless resources (Think: printing press) to defend the debt of the individual states and to act as lender of last resort, but the eurocrats wont hear of it. They refuse to use the ECB as every other central bank in the world is used. Theyd rather reinvent the wheel by creating a funky, improvised emergency fund (European Financial Stabilization Facility or EFSF) thats massively leveraged and which only provides a 20 percent first-loss guarantee on sovereign bonds. So, for example, if Italy goes belly-up in the next year or so and cant repay its debts, then Mr. bondholder gets a whopping 20 cents on the dollar. Such a deal!

Can you see how ridiculous this is?

Look; US Treasuries are backed by the full faith and credit of the United States of America. What are Italian bonds backed by? Or Portuguese bonds? Or Irish bonds? Under this new regime, theyll be partially backed by a dodgy, undercapitalized insurance fund. That ought to shore-up investor confidence. Is this any way to run a multi-trillion confederation of states?

And the EFSF is only part of this latest Eurofiasco. Theres also a special purpose investment vehicle (SPIV) that will be used to attract foreign investment. (Re: China) EU leaders assume that the Chinese are so yield-crazy that theyll scarf up hundreds of billions of these (toxic?) EU bonds to stack atop their cache of USTs. Dream on. Apparently, Nicholas Sarkozy has already been on the horn to leaders in China inquiring about future investments. But, so far, no takers. The truth is, investors are exiting Europe as fast as their two feet will carry them, not lining up to get back in...The good ship Eurozone is taking on water from all sides...

Everything is worse. The Eurozone is imploding, and its imploding because the policies theyre implementing are, well, stupid, which is to say, they wont work. And investors know they wont work which is why they keep fleeing Europe en masse.

Can you blame them?

AND THIS IS FROM OCTOBER....
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 12:35 PM
Response to Reply #73
92. Yves Smith Snipes:
Hah, would serve him right after not getting tough with the banks.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 12:52 PM
Response to Reply #58
99. Does Anybody Who Gets It Believe Central Banks Did All That Much Yesterday?
http://www.nakedcapitalism.com/2011/12/does-anybody-who...

ANOTHER YVES SMITH COMMENTARY...ISN'T IT GREAT TO BE CAUGHT UP AND BE ABLE TO POST A COMPLETE SURVEY ON THE SAME DAY?
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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 06:59 AM
Response to Original message
9. Cotton Crop Reaching Record Makes Goldman Bearish: Commodities
http://sfgate.adc.bloomberg.wallst.com/SFChronicle/Stor...

Dec. 1 (Bloomberg) -- The combination of a record cotton crop and falling consumption will expand global stockpiles by the most since 2005, driving further declines in the price of this years worst-performing commodity.

Harvests will increase 7.5 percent to 123.89 million 480- pound bales (27 million metric tons) in the 12 months ending in July, as demand drops to a three-year low of 114.27 million bales, the U.S. Department of Agriculture estimates. Prices may decline 15 percent to 77 cents a pound on ICE Futures U.S. in New York by the end of next year, from 90.91 cents now, based on the median of 12 analyst estimates compiled by Bloomberg.

Its a double whammy, said James Dailey, who manages $215 million of assets at TEAM Financial Management LLC in Harrisburg, Pennsylvania. Cotton is facing the worst-case nightmare for a commodity, where you have a glut in physical production combined with weakening demand.

Cotton fell 58 percent since reaching an all-time high of $2.197 in March as investors bet that prices would curb demand and encourage supply. Output is rising from Australia to China to India, more than compensating for a U.S. decline caused by the worst crop conditions since the dust bowl era of the 1930s. Speculators in U.S. futures are now the least bullish in 2-1/2 years, Commodity Futures Trading Commission data show.
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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 07:01 AM
Response to Original message
10. U.S. Bank Funds Wont Cover MF Global Shortfall, Trustee Says
http://sfgate.bloomberg.com/SFChronicle/Story?docId=137...

Dec. 1 (Bloomberg) -- MF Global Inc., the futures brokerage that collapsed on Oct. 31, will have a shortfall in customer funds even if all the money in customer accounts at U.S. depository institutions is recovered, the trustee overseeing the firms bankruptcy said.

James W. Giddens, the trustee, has said there may be as much as $1.2 billion in missing funds. MF Global Inc. was a subsidiary of MF Global Holdings Ltd., the New York-based firm run by Jon S. Corzine that failed after making $6.3 billion in wrong-way bets on European sovereign debt.

The trustee has determined that even if he could recover everything that is at U.S. depositories, there will be a shortfall in what MF Global management should have segregated at U.S. depositories, according to a document, dated today, from Giddenss office that was obtained by Bloomberg News. Kent Jarrell, a spokesman for the trustee, confirmed the authenticity of the document, and said it was part of a briefing Giddens gave today in Washington with congressional aides and a lawmaker.

The Commodity Futures Trading Commission, Securities and Exchange Commission, Justice Department and trustees office are investigating the missing client funds.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 07:22 AM
Response to Reply #10
14. A Hole TOO Big to Fill In
Edited on Thu Dec-01-11 07:46 AM by Demeter
even for Uncle Sam.
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Tansy_Gold Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:14 AM
Response to Reply #14
37. I suggest we start filling it with
Jon Corzine.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:22 AM
Response to Reply #37
41. Is He a Big Enough Man for the Job?
Maybe Newt and Limbaugh could help him out...
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Tansy_Gold Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 09:40 AM
Response to Reply #41
75. He may or may not be, but we won't know until we actually see him there. n/t
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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 07:14 AM
Response to Original message
11. Forget Job Creators: The Best Stimulus Is For Shoppers
http://www.theatlantic.com/business/archive/2011/11/for... /

After months of threatening to block another payroll tax break, Republican leadership now says it supports a $250 billion plan to cut Social Security taxes. That makes it a virtual guarantee that the typical family will get to keep an extra $1,500 of its earnings through 2012.

Or does it? Somebody has to pay for this thing -- unless we agree to put it on the national credit card. That means both parties need to find $250 billion lying around. The GOP wants to find the it in spending cuts. The Democrats want to find it in a new "millionaire tax."

The showdown over offsets isn't a sideshow. It is the show. If the parties finish December at loggerheads over paying for the payroll tax break, it won't happen. Instead, there will be another blame game. Democrats will say Republicans blocked a tax break for every working family to protect the richest 0.5%. Republicans will say Democrats insisted on raising taxes on job creators in a recession. Those arguments sound way too realistic for me to believe the payroll tax cut is a done deal.

Let's assume it is a done deal. Is it even a good idea? The payroll tax cut for workers goes like this . Every year, the government keeps about 6 percent of your wages for Social Security. In 2011, the feds only kept about 4 percent. The point was to make you 2 percent richer. Democrats want to extend and expand this tax break by taking down the Social Security to about 3 percent and putting employer payroll taxes at the same level (the Social Security tax is shared by employers and employees). The upshot is that a family making $50,000 a year would would keep another $1,500, and businesses would have higher cash piles to make hires and investments.




*** i thought black friday showed we're stimulated quite enough, thank you.
i understand some duers like this the pay roll tax thingy. it does put some money in pocket.
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Tansy_Gold Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 07:38 AM
Response to Reply #11
18. The payroll tax thingy scares the bejeebers out of me
I'm self-employed, so I get hit with both halves of that equation, but the idea of ANYTHING that even hints and not funding SS scares me. Onc epeople become accustomed to that bit of extra jingle, they will squeal like stuck pigs at any talk of returning it to previous levels.

I notice that Obama is now using the same rhetoric as the right used to use about the estate taxes, etc. -- returning to previous levels constitutes an "increase" and it seems just about every fuckingpolitician in DC is morally opposed to anything that smacks of a tax increase.

Look, I'm in a royal rage over corporations today, and probably will be for the foreseeable future. The only reason I'm going to be coming around to SMW -- other than the fine cast of crazies assembled here -- is to watch for the Crash, with a capital C. And I will cheer and jump up and down when the stockholders and the executives start running for the windows. (Thank you, RUMMYISFROSTED).

It would be tempting for me to say that today I hate the media corporations more than any others, because it is one of the biggest of the bunch who has done a most grievous but perfectly legal harm to me. But I hate the banks and the insurance companies and the for-profit hospitals and the for-profit "universities" and the power companies and all the rest.

$1500 a year is not an insignificant amount to many families, even families of one. But it is a mortgage to the future. I am 63 years old, benefiting from early but reduced social security payments from the fund into which both my husband and I paid all our working lives. And while I understand that under the current "plan," all sums due to the SS trust fund are being paid out of the "general" fund, I can easily imagine the time coming when people now in their 30s and 40s will find that their benefits are reduced due to the "holiday" of the Obama administration.

The Stock Markets, imho, represent the cancerous tumor that is growing on the global economy. As the stock prices rise, they allow The Fucking Filthy Rich to suck more and more of the lifeblood from the working classes. The only way to restore any semblance of health to The Economy is to excise the tumor, cut it out, and that means utterly destroying the concept of "the corporation" as a lifeform.

As our own Demeter wrote recently, "capital" can serve three valuable and essential functions. When it is used as a weapon of mass destruction, however, it must be destroyed.



Tansy Gold
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Hotler Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 07:48 AM
Response to Reply #18
23. Sing it loud sister. I'm right there with you. eom.
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bread_and_roses Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 10:31 AM
Response to Reply #23
82. And so am I - every word (n/t)
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 07:59 AM
Response to Reply #18
29. Did I Say That?
Well, perhaps that conclusion can be drawn...I'd like to take the capital away from those that stole it and misuse it, and return it to its proper purposes.

I'd also like the thieves incapacitated, so that they can never again steal from the public. And a public shaming and loss of freedom as a deterrent to those who would imitate them....

And a pony. Not sure if I can keep one on the patio....
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Tansy_Gold Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:12 AM
Response to Reply #29
35. Yes, you did.
You wrote something about the three legitimate functions of "capital" as a way of "banking" the value of one's labor. One had to do with saving for retirement. I don't remember what the other three were, but it read like purely distilled Marx and it was beautiful.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:26 AM
Response to Reply #35
42. That was the purpose of Money
Medium of exchange of goods and services

Store of labor or goods for future use

Keeping score (hoarding)

--------------------------------

Capital would be money collected for collective use: public works, large-scale endeavors....or stolen and perverted to private and nefarious purposes by the Hoarders.

(This is the only place I get to exercise my vocabulary...it goes right over their heads at board meetings)...
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:11 AM
Response to Reply #18
34. Seems like a stealth way to dismantle social security

Most people think a tax cut it great now, not realizing that when they need social security later, that they didn't pay into the fund.

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Tansy_Gold Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:13 AM
Response to Reply #34
36. Absolutely.
And a lot of people recognized it as that, but the Obama went ahead with it anyway, because he doesn't give a shit. All candy, no heart.
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dixiegrrrrl Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 09:03 AM
Response to Reply #18
57. I am resigned to NO SS for people in their 30/40's.....I fear it will not be there
for those of us who are currently drawing on it!
This chipping away at the funding base for current recipients is another way to declare SS is bankrupt.
Even tho, on paper at least, SOC SEC is fine.
But truth is, TPTB have grabbed every dime of our money they could and are greedily grasping for more.
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 10:03 AM
Response to Reply #57
78. Do people think we will continue to receive those SS checks?

If/when this huge Ponzi global financial bubble bursts, I'm thinking that pensions will be gone, IRAs & 401ks will be gone, SS will be gone, unemployment benefits will be gone, disability checks will be gone, savings accounts will be gone. Everything will have been stolen by TPTB.


As Hotler would say: I have no hope. I see no future.


As Ilargi says at the Automatic Earth:
Are we there yet? No, but we won't be long now. And besides, where we're going there's no milk and honey, so enjoy the ride, enjoy your life, enjoy the day, while you still can.
http://theautomaticearth.blogspot.com/2011/11/november-...


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dixiegrrrrl Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 10:18 AM
Response to Reply #78
79. I have been preparing for the worse since 2007.
Best as I know how.
No debt except mortgage, which is paid 2 months in advance, just in case.
Invested in tools, stocked up on essentials, have an emergency money supply.
when the money becomes worthless, I won't worry about the mortgage anymore.
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 03:22 PM
Response to Reply #79
110. me too, n/t
Edited on Thu Dec-01-11 03:23 PM by DemReadingDU
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 11:26 AM
Response to Reply #78
84. His Discussion of Derivatives is Enlightening and Chilling at the Same time
ZeroHedge piece on derivatives http://www.zerohedge.com/news/707568901000000-how-and-w... :


$707,568,901,000,000: How (And Why) Banks Increased Total Outstanding Derivatives By A Record $107 Trillion In 6 Months

... the Bank of International Settlements reported a number that quietly slipped through the cracks of the broader media.

Which is paradoxical because it is the biggest ever reported in the financial world: the number in question is $707,568,901,000,000 and represents the latest total amount of all notional Over The Counter (read unregulated) outstanding derivatives reported by the world's financial institutions to the BIS for its semi-annual OTC derivatives report titled "OTC derivatives market activity in the first half of 2011."

Indicatively, global GDP is about $63 trillion if one can trust any numbers released by modern governments. Said otherwise, for the six month period ended June 30, 2011, the total number of outstanding derivatives surged past the previous all time high of $673 trillion from June 2008, and is now firmly in 7-handle territory: the synthetic credit bubble has now been blown to a new all time high.

Another way of looking at the data is that one of the key contributors to global growth and prosperity in the past 10 years was an increase in total derivatives from just under $100 trillion to $708 trillion in exactly one decade. And soon we have to pay the mean reversion price.

What is probably just as disturbing is that in the first 6 months of 2011, the total outstanding notional of all derivatives rose from $601 trillion at December 31, 2010 to $708 trillion at June 30, 2011. A $107 trillion increase in notional in half a year. Needless to say this is the biggest increase in history. So why did the notional increase by such an incomprehensible amount?

Simple: based on some widely accepted (and very much wrong) definitions of gross market value (not to be confused with gross notional), the value of outstanding derivatives actually declined in the first half of the year from $21.3 trillion to $19.5 trillion (a number still 33% greater than US GDP).

Which means that in order to satisfy what likely threatened to become a self-feeding margin call as the (previously) $600 trillion derivatives market collapsed on itself, banks had to sell more, more, more derivatives in order to collect recurring and/or upfront premia and to pad their books with GAAP-endorsed delusions of future derivative based cash flows...

There is much more than can be said on this topic, and has to be said, because an increase of that magnitude is simply impossible to perceive without alarm bells going off everywhere, especially when one considers the pervasive deleveraging occurring at every sector but the government. All else equal, this move may well explain the massive surge in bank profitability in the first half of the year.

It also means that with banks suffering massive losses, and rumors of bank runs and collateral calls, not to mention the aftermath of the MF Global insolvency, the world financial syndicate will have no choice but to increase gross notional even more, even as the market value continues to get ever lower, thus sparking the risk of the mother of all margin calls: a veritable credit fission reaction.




Ilargi: I may be wrong, but I still think I detect a notion of surprise and/or anguish in Tyler Durden's assessment. And as far as I can see, there is no need for any of that...Let's just stick with CDS for now. They're the proverbial only game left in town. CDS (and some other derivatives) were invented for one main reason: for financial institutions to hide their debt and losses (or risk). Whatever worthless paper they have in their books, they can take -virtually- out all the risk it poses by buying "insurance", for a fraction of the "value" of that paper. Works miracles for reserve requirements. That's why CDS exist. They free up "assets" to "invest" (take to the casino, everything on red). And why should the banks care about counterparty risk? That's for someone else to worry about (like the Fed and/or other regulatory bodies).

But yes, this game is running thin like so many others. Still, what can they do? Take all the crap on to their balance sheet? They don't have a choice. They need to keep on buying swaps, even if they highly doubt the solvability of the party they buy it from. That's not their responsibility: if the regulators allow that party to write the swaps, they're off the legal hook.

An underlying very interesting question is what part of existing swaps has been "solved". It can't be all that much. After all, the paper the swaps "insured" against will largely still be in the vaults; nobody wants it. Well, unless they sell it for a big loss. But that triggers all sorts of unintended consequences: increased reserve requirements, for one. Price discovery, for another. Better to hang on to the initial swap then. That is, until it expires. And then you buy a new one, even if it costs far more. It's all OTC, so your buddy next door will give you a good deal. What, me, worry? Most important: Look at what happened with AIG, and look at the numbers involved: nobody has that kind of money. Nobody. None of this stuff was ever issued with the idea in mind of an actual (forced) "credit event" pay-out. It was all just an accounting trick from the get-go. But in this case one that can blow the entire global financial system out of the water in one fell swoop. And in one fell day.

Meanwhile, as the mayhem increases, it hard to see how the OTC derivatives markets could be prevented from increasing with it. Simple, only game left in town.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 11:29 AM
Response to Reply #84
85. And then, there's the Bibical Jubilee
Steve Keen. And the debt jubilee.

There's a BBC Hardtalk video that many people have commented on. In it, Professor Keen talks a bout a plan to let the government hand out money to citizens, which they can use to first pay off their debts, and apply to other purchases once the debt is paid. Sort of a debt jubilee, but sort of different....In what I have read so far, and Ill be the first to concede that no matter how much I read, Im sure to miss things too, the focus is on the jubilee idea. But what I took away from it is something else.

On the BBC page where the video is located , there's this text, which -curiously- is not part of the conversation itself:

Economist Steve Keen is one of the few economists to have predicted the global financial crisis and now he says we are already in a Great Depression.

He says the way to escape it is to bankrupt the banks, nationalise the financial system and pay off people's debt.

He admits what he is advocating is radical but says it is time governments gave money to debtors to pay down debt instead of to creditors such as banks who have held onto it.




Ilargi: He's not talking about a "simple" debt jubilee; Keen propagates nothing short of a revolution. The money he wants to hand out will be government issued money, which carries no interest. He wants to bankrupt the banks (and get rid of the Fed, presumably), and let money be issued by governments. No more money issued as debt. It's a miracle the BBC had him on in the first place...Now, for starters, I don't really see how the somewhat romanticized biblical notion of a debt jubilee could be applied to our globalized financial system (I intend to talk a bit more about that soon, need to catch up on my Bible first...). Is Obama supposed to tell Americans, and their banks and other companies, that they won't have to honor their obligations to foreign creditors (yeah, Iceland comes to mind, but then, that's not even the size of Cleveland)? Or is the UN going to declare a planetary jubilee? It makes little sense to me.

Keen's plan does make sense, but it would wipe out the entire global banking system. Which may be a good idea, and much better than what we have today, but it would not be taken lightly or gently by those invested in that system. Who just happen to be the richest and most powerful people on the planet.

Yes, in theory it could be done. And it would solve a lot of the trouble that has become inevitable in the present system. But then again, that present system has all the political power needed to maintain the status quo, and then some. All the power brokers need to do for now is to make sure you're wrung and squeezed through the austerity wringer, and they'll be fine. Here's that Keen video:

http://www.youtube.com/watch?feature=player_embedded&v=...
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 03:22 PM
Response to Reply #84
109. Ilargi has interesting perspective over at TAE

I like to read Stoneleigh too, aka Nicole Foss. She hasn't been writing as much because she is traveling to spread the TAE message.




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Roland99 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 12:04 PM
Response to Reply #18
89. yeah...I like the extra money but I'd rather SS be fully funded on its own
none of this robbing from the general fund (although the general fund has been robbing from SS for years now)
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wordpix Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 01:59 PM
Response to Reply #89
105. my opinion
If you pay into SS, you should get out what you put in.

Personally, I'd prefer to keep the SS $ instead of handing it over to Uncle Sam. I understand some people may want to drink it up, take a vacation to Tahiti every year or buy Jimmy Choo shoes with it and generally be irresponsible about saving for their old age, but I believe I'm the best person to determine what to do with my own $$$ and would like to invest it where it can do me the most good. A greenhouse to provide myself with more food throughout the year and years is one place I'd put it.

As it is, I have to depend on the kindness and largesse of US to give me back my own money when I'm older.
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Loge23 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:20 AM
Response to Reply #11
39. This is a tax-scam shell game.
SS is one of the very few things that the government does well - very well actually. It is a guaranteed return on investment for Americans and we all know we can't get that anywhere else.
So we'll get another $1500 per year which most will spend in vain attempt to "stimulate" the economy. I empathize with those who need that $1500 for basic sustenance, but short-term basic sustenance should not come from a fund designed to provide basic sustenance for the greater good long-term. This is just another erosion of economic equality in the former USA. Basic short-term sustenance for those who are in need could probably be funded with the annual WS bonus pool, let alone additional taxes or tax cuts. That may be an exaggeration, but the point is: they are essentially watering down the social safety net for those who will need it most by underfunding SS in exchange for a unnecessary "tax cut". This is economic flim-flam of the highest order - and it does NOTHING top address the real evil of economic inequality. How many goddamn flat screen TV's will be sold with this lousy extra $1500??
The aforementioned cancer of corrupt capitalism has apparently reached not only the brain of the former USA, but also the soul.
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Hotler Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 02:02 PM
Response to Reply #39
107. +1 n/t
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westerebus Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:29 AM
Response to Reply #11
43. Robbing Peter to pay Paul.
Has anything changed to correct the descent of the standard of living for the 99% by our Representatives in government?

Case closed.
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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 07:35 AM
Response to Original message
15. asia: Nikkei surges as central banks' move calms jitters
http://uk.reuters.com/article/2011/12/01/markets-japan-...

TOKYO, Dec 1 (Reuters) - The Nikkei stock average
surged to a two-week high, breaking above a major resistance
level on Thursday, after the world's central banks took
coordinated action to ease funding strains among banks caused by
the debt crisis in Europe.

The central banks' move to offer cheaper dollar funding
eased worries about an immediate meltdown in the global
financial system, but market players remained cautious about
prospects for resolution of the crisis.

"This just means they expanded emergency measures. The more
important point is whether Europe is going to have a bigger
bailout fund, and that's still up in the air," said Soichiro
Monji, chief strategist at Daiwa SB Investments.

Volume spiked to its highest since Oct. 28, with 2 billion
shares changing hands on the main board, up 29 percent from its
20-day average.
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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 07:52 AM
Response to Reply #15
24. China's manufacturing activity falls to a 32-month low
http://www.bbc.co.uk/news/business-15978863

China's manufacturing activity fell to a 32-month low in November, hurt by a slowdown in the global economy.

China's official Purchasing Managers Index (PMI) fell to 49.0 in November, the lowest level since March 2009.

The industry survey data comes amid concerns that a slowdown in the global economy may dent demand for Chinese goods and hurt its economy.

PMI is a key indicator of manufacturing activity and a reading below 50 shows contraction.
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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 07:53 AM
Response to Reply #15
25. Asian markets up on central banks' move to help lending
http://www.bbc.co.uk/news/business-15978303

Asian stocks have gained after many of the world's biggest central banks unveiled a plan to stimulate lending.

The US Federal Reserve, the European Central Bank, and the central banks of the UK, Canada, Japan and Switzerland will take coordinated action from 5 December.

In a separate move, China also said it would free up money for its banks to lend.

There have been growing fears that a lack of funds will hurt global growth.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 07:42 AM
Response to Original message
21. U.S. Ratchets Up Economic Pressure on Iran By Barbara Slavin
http://www.informationclearinghouse.info/article29787.h...

Under intense pressure from the U.S. Congress and U.S. presidential election politics, the Barack Obama administration Monday declared the Islamic Republic of Iran a "primary money laundering concern" - a designation that stops short of blacklisting Iran's Central Bank but is intended to persuade more foreign governments, banks and companies to curtail business with Iranian financial entities.

Administration officials portrayed the move - coupled with new restrictions on Iran's petrochemical sector and a ban on financial dealings with Iran by Britain and Canada - as a response to an alarming recent report by the International Atomic Energy Agency. The report provides substantial evidence that Iran carried out extensive research into how to make a nuclear weapon prior to 2003 but is less conclusive about a continuing weapons effort.

However, one impetus for the new sanctions is domestic U.S. politics.

Republican candidates for president have singled out the administration's Iran policy as weak even though the Islamic Republic has never faced such stringent and widespread economic sanctions.

I'M SURE THEY HAVE PROOF TO BACK UP SUCH ALLEGATIONS? NO?
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 07:45 AM
Response to Reply #21
22. The Obama Predicament-and the Final Option! Rev. Richard Skaff
http://www.informationclearinghouse.info/article29781.h...

To attack or not to attack Iran? That is the question!

What does president Obama have to do to get re-elected in 2012, and delay the total collapse of the global economic system that has been based on fiat money, black gold (oil), and an elite ponzi scheme that sucked the wealth out of every individual and nation?

Every American president sets the stage for the next one, in order to continue the work in progress that has been set for him by the global corporate elite. Mr. Obama has been a faithful serf to his money masters, and he played his cards carefully and correctly, therefore, he will deserve a second term...However, living beyond our means by financing an empire that we cant afford through borrowing massive amounts of money from the global financial elite embodied in the private Federal Reserve, and accruing more and more debt can go so far before the empire of cards collapses on itself.

As a result, one final option is left for Mr. Obama to get himself re-elected. Like his predecessor, he must engage the United States in a new, contrived, low intensity conflict triggered by a false flag operation at home or abroad. Where else would be better to conduct this crusade than the Middle East where oil is plentiful and war is easier to sell to the American public, because the region has already been demonized through propaganda, and labeled as a perpetual crucible of conflict?
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 01:15 PM
Response to Reply #22
101. Low-intensity? Asia Times is interesting...
... A deep chill is setting in with Iran's ties with Britain. The relationship has been a hugely troubled one historically, the high-water mark in recent history being the coup leading to the overthrow of the government of Mohammed Mossadeq in Iran in 1952, which is commonly attributed to the CIA but was actually the handiwork of MI6. And Iran remembers it. Iran knows better than most countries that Britain continues to be the "brain" behind America's policies - be it toward Iraq, Afghanistan, Syria or Myanmar.

Britain will almost certainly take its grouse over the Iranian snub to the European councils and will seek a "regional" consensus in the Western world to make diplomatic moves against Iran in unison. The predictable pattern will be that given the heightened feelings in London, such countries as Germany that have extensive involvement in Iran will fall in line. All the same, it becomes an occasion to take the temperature on European unity when chips are down over the Iran situation in the coming months. This, in a manner of speaking, will also be the trial run for the Middle East. The lines are being drawn as the night of the long knives begins. Everyone understands it. And for the autocratic regimes in the Persian Gulf, there will be no corner to go and hide in. The hurried visit by King Abdullah of Jordan to Israel shows the panic over the gathering storm. Saudi Arabia's robust efforts to divide the region on Sunni-Shia sectarian lines haven't succeeded. The Arab street will find it difficult to accept the Western push against Iran. That is the thought worrying Abdullah most. What if this mass indignation erupts in Jordan?

...

Tehran estimates that this confrontation may take place within Obama's first term as president - because it may well ensure the success of his bid for a second term. The manner in which the Obama administration jacked up the tensions with Iran almost in parallel with the commencement of his re-election bid hasn't escaped Tehran's attention...

...

The recent statements by Iranian military commanders have warned that Iran has known (and unknown) capabilities to retaliate if attacked. By warning explicitly, it hopes to inject some rational thinking into the US-British-Israeli discourses that are bordering on delusional estimations regarding Iran's policies and choices. But Tehran senses the futility of trying to influence the undergirding of the Obama administration's disposition anymore in the near term.

In the Iranian estimation, Obama is simply not interested in hearing Iran's narrative. His obsessive concern is his 2012 re-election bid, and his campaign interests lie in diverting the locus of the political discourse away from his failings in mending the US economy. A regime change in Syria and a move toward cracking down on the Hezbollah are just the kind of decisive leadership that he needs to project to get over the image that he "leads from the rear"...

/Deep article worth a read... http://www.atimes.com/atimes/Middle_East/ML01Ak02.html
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Hotler Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 02:17 PM
Response to Reply #22
108. It's so fucked up. eom.
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dixiegrrrrl Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 09:16 AM
Response to Reply #21
64. Wells Fargo is an ADMITTED money laundering concern.!
Are we going to blacklist them?

Fortunately, the hypocrisy of our government is becoming widely known.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 09:18 AM
Response to Reply #64
66. Not even gonna prosecute or break them up
too useful for the CIA, is my guess. or there's Congressman money involved...
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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 07:55 AM
Response to Original message
26. south asia: India traders strike against retail reform moves
http://www.bbc.co.uk/news/world-asia-india-15979163

Traders in India are observing a day-long strike in protest at the decision by the government to open the retail market to global supermarket chains.

There have been closures and protests across India although in some cities the strike was only partially observed.

Traders say that the move to allow 51% foreign ownership of multi-brand stores will damage small retailers.

Opposition parties have demanded the move be scrapped. The government says it will benefit farmers and consumers.
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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 07:57 AM
Response to Reply #26
27. India Transparency International corruption index blow
http://www.bbc.co.uk/news/world-asia-india-15979646

India has suffered a new blow to its reputation on corruption, dropping eight places on a key annual list by a leading anti-corruption watchdog.

The Transparency International Corruption Perceptions list ranks a total of 183 nations from a best of 10 to a worst of 0.

India fell from a 3.3 ranking in 2010 to 3.1, dropping from 87th to 95th.

The Indian government has been hit by a number of corruption scandals with a major new bill before parliament.
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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:09 AM
Response to Reply #26
33. Food inflation rises to 8%
http://timesofindia.indiatimes.com/business/india-busin...

NEW DELHI: Food price index rose 8 per cent, at its slowest pace in nearly 4 months, and the fuel price index climbed 15.53 per cent in the year to November 19, government data on Thursday showed.

In the previous week, annual food and fuel inflation stood at 9.01 per cent and 15.49 per cent, respectively.

The primary articles price index was up 7.74 per cent, compared with an annual rise of 9.08 per cent a week earlier.

India's headline inflation has stayed above 9 per cent for the 11th month, despite 13 rate increases by the central bank since March 2010.
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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:49 AM
Response to Reply #26
49. Sensex rallies 360 pts on positive global cues
http://economictimes.indiatimes.com/markets/stocks/mark...

MUMBAI: The Bombay Stock Exchange's Sensex witnessed a sharp pull-back rally on the back of positive sentiments in global equities after the world's top central banks pumped in liquidity to provide support to crumbling European financial system.

However, the benchmarks ended off day's highs as cautious traders resorted to profit booking after the benchmarks hit intermediate resistance levels.

According to analysts, the relief rally triggered by monetary easing may not last long as the pain is not out of the system yet.

"(Problems in Europe) It is not over as yet. The pain was shifting from the banking system to the real economy very quickly and to that extent they had to do something which is what they have done.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:03 AM
Response to Original message
31. Latin American Poverty Levels Fall To Lowest in Two Decades, UN Report Finds
http://www.scoop.co.nz/stories/WO1112/S00021/latin-amer...

Poverty rates in Latin America have dropped to their lowest levels in 20 years, according to a new United Nations report which highlights public spending levels as one of the key factors that has allowed the continent to continue to grow despite the global economic crisis...Between 1990 and 2010, the poverty rate decreased from 48.4 per cent to 31.4 per cent, while the rate of indigence or extreme poverty fell from 22.6 per cent to 12.3 per cent.

The decline in both rates is mainly due to an increase in wages, according to the latest report by the Economic Commission for Latin America and the Caribbean (ECLAC). Public money transfers were also a contributing factor, but to a much lesser extent.

The report, presented yesterday in Santiago, Chile, predicts that the region will close this year with 174 million people living in poverty compared to 177 million in 2010. Poverty and inequality continue to decline in the region, which is good news, particularly in the midst of an international economic crisis, said ECLACs Executive Secretary Alicia Brcena. The report also forecasts that the poverty rate will continue to drop in the next year. However, it states that the indigence rate may have slightly increased (up to 12.8 per cent) because of the rise in food prices.

The report reveals that public spending, and in particular social expenditure, received a significant boost in most countries over the past 20 years. In response to the global economic crisis, the countries opted to temporarily expand public spending rather than to shrink it, which was the action traditionally taken. Although, the emphasis is not always placed on society, expansion still prevented the rise in unemployment and social vulnerability, the report reads. The report spotlights countries that had substantial drops in poverty in the past year, including Peru, Ecuador, Argentina, Uruguay and Colombia...The report also discusses fertility in the continent, observing that over the past 50 years, the fertility rate dropped rapidly, compared with a moderate drop in adolescent fertility. In addition, a chapter on the Caribbean has been included for the first time, which warns of the high level of unemployment and incidence of HIV/AIDS among young people.

For more details go to UN News Centre at http://www.un.org/news


AUSTERITY IS FOR SLAVERY!
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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:19 AM
Response to Original message
38. Morning Marketeers....
:donut: and lurkers. I tend to buy in advance so sometime I don't notice price increases immediately. I am aware that things have gone up, but I had a severe case of sticker shock when I went to replace my liquid laundry detergent. The cost per load was so outrageous I refused to purchase it.

I went back home pondering what to do. Later, I remember reading in one of my save money books that you could make your own laundry powder, but I couldn't recall the recipe or find the book. So I went on line and found it and last night I made my first batch of laundry detergent.

The Recipe:

1 bar of soap grated (they recommended Zote or Zud but you can use what you like-Ivory but I would not use a glycerin soap-I think it needs to be a lye based soap-this is just my scientific intuition. I used a bar of free soap that was scented with laurel oil but I will be using some lavender and sandalwood scented soap in the future. I took my cheese grater, popped in my DVD, Get Shorty, and grated my soap to the rhythm of Booker T and the MG's. I would


2 cups of Borax- the 20 mule team variety.


2 cups of Arm and Hammer WASHING SODA.

Place all the ingredients in a large container and mix thoroughly. Just 1/2 cup will do your laundry (no fillers). Adding a cup of Oxy White will give you a powerful Tide+bleach formula. It cleans just as well as commercial soaps

Now there is a way to make a liquid blend that requires turning on a stove and heating up the soap shavings in water and one day I might do it-but this was so easy and so cheap.

I found all the ingredients at the local Kroger's in the laundry aisle. I haven't cost averaged it out yet, but all the ingredients were way less than the laundry detergent. On one of the videos I saw, the guy broke down the cost. He figured with time and cost, he saved/made about $8 an hour doing this. My guess is that it might be more now. YMMV.

I hope those of you that try this will give some feed back. I am just thrilled that I have saved so much on something I use all the time. I like that I can tailor it to what I want.

Happy hunting and watch out for the bears.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:38 AM
Response to Reply #38
47. Our water is so hard, I'd have to go liquid
I knew a chemist who made all the toiletries, cleaners and such for his household...he had fled Lebanon back in the 60's. Prolonged civil war has a way of teaching people to cope, and to break away from the multinational, piratical corporations.
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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:50 AM
Response to Reply #47
51. Just look it up on You Tube.....
We have hard water here too but I am too busy right now to even heat up water. Even making the liquid detergent is easy bur I can't remember the water amounts off the top of my head.

It is so easy that it is worth taking the time.
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Juneboarder Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 12:02 PM
Response to Reply #38
88. Making soap!
I made my first batch of lye soap a few weeks ago, and it will be ready for use on 12/10. It is REALLY easy to make and there are tons of recipes online for all sorts of variations that have worked for people. I'm going to try your recipe for the laundry detergent this weekend :)

Fun fact: Glycerin is a by-product of making lye soap.
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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 01:28 PM
Response to Reply #88
103. It is so easy as to be sinful....
I will look up some soap recipes, but right now bar soap is still so cheap that it may not cost effective. Did not know that about glycerin...and I love glycerine soaps.

But the detergent is an immediate cost saver and you can make it in 30 minutes tops including a trip to the grocery store. I had a large mouthed plastic container on hand to mix the stuff in.

I got a book that just came out Make this, Buy that. It mainly covered cooking but her point was that some things are good to make. They are cheap or vastly improve the quality of your life. Other items are better to buy because they are too labor intensive to make and it is just cheaper to purchase them. It was a very good book and a thoughtful read. It was one of the few book that I bought new when it was first released in a long time. It has good recipes for some staples that are great.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:49 AM
Response to Original message
50. Global Capital Descends on Berlin Tech Scene
http://www.spiegel.de/international/business/0,1518,800...

As Berlin's tech scene continues to grow, investors are beginning to take notice. Venture capital is flooding into the city and many funds are setting up shop locally. But with German investors still wary of the tech scene following the dot-bomb implosion a decade ago, some wonder if it will be enough...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 08:59 AM
Response to Original message
56. S&P downgrades hit bank funding, counterparty cost
http://www.reuters.com/article/2011/11/30/us-banks-trad...

Banks face a double hit to costs and revenues from a spate of credit rating downgrades, another burden for a sector already struggling because of the European Union's failure to deal decisively with its financial crisis.

Standard & Poor's cut its ratings on 15 big banks such as Bank of America Corp (BAC.N) and Morgan Stanley (MS.N) on Tuesday, as it seeks to give more insight into its methods and repair its reputation after the credit crisis.

While the downgrades were driven by a revision of the agency's internal models and not because of a change in the banks, they will have a real impact on funding costs for the sector, already on edge because of Europe's debt crisis.

"It will likely raise concerns about their short-term funding because they will be sidelined by money-market funds who are the traditional buyers of that short-term paper," said Andrew Fraser, investment director at Standard Life...
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dixiegrrrrl Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 09:34 AM
Response to Reply #56
72. Bank of America stock ( BAC) down again today.
52wk Range: 5.03 - 15.31

rest of the banks have lost at least 50% over the last year.

Love me some good news in the am, yes indeedy.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 01:10 PM
Response to Reply #56
100. BofA, Goldman Sachs, Citigroup Credit Ratings Cut by S&P
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 09:17 AM
Response to Original message
65. Somewhere in the past few days, I've picked up a virus
and it can't be turista, since I haven't been anywhere except Detroit.

So I'm going to stop for a while....
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Fuddnik Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 09:53 AM
Response to Reply #65
77. I had one that laid me out all of last week.
Just now getting over it.

That, and 2 months of mayhem are finally over. The step-kids went back to Detroit and Cleveland last night. Now, I can concentrate on ignoring x-mas. And paying off the cruise tabs and the new floors.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 09:27 AM
Response to Original message
68. A Banker Speaks, With Regret By NICHOLAS D. KRISTOF
http://www.nytimes.com/2011/12/01/opinion/kristof-a-ban...

If you want to understand why the Occupy movement has found such traction, it helps to listen to a former banker like James Theckston. He fully acknowledges that he and other bankers are mostly responsible for the countrys housing mess. As a regional vice president for Chase Home Finance in southern Florida, Theckston shoveled money at home borrowers. In 2007, his team wrote $2 billion in mortgages, he says. Sometimes those were no documentation mortgages. On the application, you dont put down a job; you dont show income; you dont show assets, he said. But you still got a nod. If you had some old bag lady walking down the street and she had a decent credit score, she got a loan, he added.

Theckston says that borrowers made harebrained decisions and exaggerated their resources but that bankers were far more culpable and that all this was driven by pressure from the top. Youve got somebody making $20,000 buying a $500,000 home, thinking that shed flip it, he said. That was crazy, but the banks put programs together to make those kinds of loans. Especially when mortgages were securitized and sold off to investors, he said, senior bankers turned a blind eye to shortcuts.

The bigwigs of the corporations knew this, but they figured were going to make billions out of it, so who cares? The government is going to bail us out. And the problem loans will be out of here, maybe even overseas.

One memory particularly troubles Theckston. He says that some account executives earned a commission seven times higher from subprime loans, rather than prime mortgages. So they looked for less savvy borrowers those with less education, without previous mortgage experience, or without fluent English and nudged them toward subprime loans. These less savvy borrowers were disproportionately blacks and Latinos, he said, and they ended up paying a higher rate so that they were more likely to lose their homes. Senior executives seemed aware of this racial mismatch, he recalled, and frantically tried to cover it up.

MORE AT LINK
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dixiegrrrrl Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 10:28 AM
Response to Reply #68
81. Unwittingly, we actually made out good on the mortgage loan game.
In 2005, when we retired and moved back here to Ala, I had no idea about mortgage loan crimes.
We had a nest egg to buy a house, but no income yet, right after the move, and I was surprised that Countrywide gave us a 30 yr. "jumbo" loan so easily. We had great credit scores and a 30% down payment,
the house cost less than 40% than it would on the West Coast, the mortgage is ridiculously small.
Now I know what happened, of course, and am thinking of challenging BOA about the loan..maybe see about getting a Quiet Title.
But I also know there is no way we could have gotten a loan after 2008 in the same circumstances.
So, it worked for us, at the time.
Naturally the house has decreased re-sale value in today's market, but we did not buy to resell.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 12:50 PM
Response to Reply #68
98. Former Award Winning Chase Banker Describes Predatory Mortgage Lending Practices
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 09:30 AM
Response to Original message
69.  Congress push to relax US securities laws

Critics say package of measures to encourage capital formation that has drawn White House support would make markets more opaque

Read more >>
http://link.ft.com/r/BLH300/JEU30P/XBAN6/TUTVUZ/TUO0EX/...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 12:37 PM
Response to Reply #69
93. Yves Smith Opines:
This is guaranteed to rip off investors and set the US capital markets back 80 years. Which means it is certain to become law.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 09:30 AM
Response to Original message
70. US faces pension bill for AMR restructure


State body warns taxpayers could pay higher premiums to cover airlines $18.5bn burden

Read more >>
http://link.ft.com/r/BLH300/JEU30P/XBAN6/TUTVUZ/2O54PX/...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 09:31 AM
Response to Original message
71.  Buffett makes headlines as he buys local paper

Purchase of the Omaha World-Herald Company, which operates titles in Omaha and Iowa, comes despite investors bleak outlook for the press

Read more >>
http://link.ft.com/r/BLH300/JEU30P/XBAN6/TUTVUZ/62KDTW/...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 09:37 AM
Response to Original message
74. FT investigation: A realm fit for a tsar



After people with links to Vladimir Putin gained control of a St Petersburg bank, it grew rapidly amid questionable transactions that suggest a lack of checks and balances on his rule. Now some are seen by many businessmen and bankers as the core of a new generation of Putin-era oligarchs, combining wealth with links to the countrys top leadership just as their predecessors during the Boris Yeltsin years had done. This is despite Mr Putins pledge nearly 12 years ago to eliminate oligarchs as a class


Read more >>
http://link.ft.com/r/S4XZQQ/2O470Q/EKRAI/U1H2UF/II3PNY/...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 12:26 PM
Response to Original message
90. Fed saves Europe's banks as ECB stands pat MUST READ
http://www.telegraph.co.uk/finance/financialcrisis/8926...

Stripped to essentials, America is once again having to rescue Europe from itself. The interwoven banking and sovereign debt crisis in the eurozone has become so dangerous for the world that the US Federal Reserve has been forced to take emergency action, acting as global lender of last resort to shore up Europe's banking system. That it should have to do so as Germany and the European Central Bank hold back for legal reasons and refuse to commit decisive power adds a strange diplomatic twist.

The move came once it was clear that Europe's prostrate banks would struggle to roll over $2 trillion (1.3 trillion) of debts denominated in dollars. Data from ratings agency Fitch shows that US money markets have slashed funding for French banks by 69pc and German banks by 50pc. Strains have been ratcheting up over the past two weeks. European banks are mostly shut out of the dollar market, or only able to raise money for a week at a time.

The so-called "stress alarm" the euro/dollar three-month cross currency basis swap spiralled down to minus 166 points early on Wednesday, uncannily like the last days before the Lehman crisis metastasized in October 2008. The stress has been rising in lockstep with Italian, Spanish, Belgian and French bond yields for two weeks, but became violent after eurozone finance ministers admitted on Tuesday night that they were unable to leverage Europe's bail-out fund much beyond 600bn (514bn). "Conditions have changed, so it is likely to be less than 1 trillion," said Eurogroup chair Jean-Claude Juncker.

The joint offer of cut-rate currency swap lines by the central banks of the US, Britain, Japan, Canada, Switzerland and the ECB preserves the polite fiction that this was to "ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit", but this was a Fed action to provide cheap dollar funding and head off a lethal crunch in Europe...China took its own precautions perhaps in concert cutting its reserve ratio for the first time in three years to boost liquidity...

SEE THE REST AT LINK

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 12:32 PM
Response to Original message
91. What Does the Fed Know That We Dont?
http://www.zerohedge.com/contributed/what-does-fed-know...


The thought that should be on every investors mind today is Why did the Fed have to stage the coordinated intervention yesterday? Put another way, what exactly does the Fed know that we dont?...The whole thing smells fishy to me. Aside from the fact that the Fed clearly leaked its intentions as early as Monday night (hence the reason stocks rallied while credit markets weakened), theres something peculiar about the fact the Fed chose to do this at the end of November. Why November 30? Why not today or Tuesday? I think the answer is that the Fed stepped in to help its institutional investor/ hedge fund buddies. November was a horrible month for this crowd. And with Bank of America approaching $5 per share (a level which would require many institutions to liquidate due to regulations), the Fed was also helping out its favorite insolvent bank as well.

Aside from this, Europe was approaching the End Game. Germany wont permit the ECB to print nor to issue Euro-bonds. The EFSF plan was dead before arrival, failing to even stage a 3 billion Euro bond auction without having to step in and buy the bonds itself. And the IMF wasnt going to be an option either...Put another way, ALL other bailout options had failed for Europe. The Fed was the lender/ intervener of last resort. That alone should have everyone worried as it indicates just how dire things had become in Europe. However, theres something far more worrisome about the Feds move which is that: IT SOLVES NOTHING.

Europe is facing a solvency crisis. Lowering the cost of borrowing Dollars does absolutely ZERO to help European banks raise capital. All it does is provide even more easy credit which of course is the entire problem to begin with...Banks across Europe are leveraged at an average of 26 to 1. This means that they own 2,600 times more assets (read: loans made to consumers, businesses, etc) than they do equity. At these leverage levels, if the assets fall even 4% in value, youve wiped out ALL equity, rendering the bank bankrupt. In this situation, providing more liquidity to these banks helps in terms of short-term operations, but it does nothing to address the core issue which is too little capital and too much leverage. So this move, as dramatic as it was for the stock market has done NOTHING to solve Europe's solvency crisis. Indeed, we have reports that a large European bank was on the verge of collapse last night. Things are so bad that Germany has drawn up legislation to allow countries to leave the Euro while remaining in the EU.

I believe Germany itself will be using this option in the next few weeks as it realizes that it cannot and will not be able to prop up the Euro any longer (even Germany doesn't have the 1 TRILLION Euros' in capital that European banks need). So do not be fooled. The Fed's move today didn't fix anything. At most its bought the markets a few weeks' time before the whole mess comes crashing down...Neither math nor common sense indicate that this will turn out well. Indeed, when this mess finally comes undone, its going to make Lehman look like a joke. Were now talking about entire countries collapsing, not just private institutions.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 12:42 PM
Response to Original message
94. Foreclosure fraud whistleblower found dead
Edited on Thu Dec-01-11 12:43 PM by Demeter
http://usnews.msnbc.msn.com/_news/2011/11/29/9099162-fo...

A notary public who signed tens of thousands of false documents in a massive foreclosure scam before blowing the whistle on the scandal has been found dead in her Las Vegas home.

NBC station KSNV of Las Vegas reported that the woman, Tracy Lawrence, 43, was scheduled to be sentenced Monday morning after she pleaded guilty this month to notarizing the signature of an individual not in her presence. She failed to show up for her hearing, and police found her body at her home later in the day.

It could not immediately be determined whether Lawrence, who faced up to one year in jail and a fine of up to $2,000, died of suicide or of natural causes, KSNV reported. Detectives said they had ruled out homicide...

...Police said at the time that the alleged scam had thrown into question the legality of most Las Vegas home foreclosures in the past few years, leaving many people living in foreclosed-upon homes that they unknowingly don't actually own. "I would suggest you review your documents and bring them to an expert and an attorney," said John Kelleher, chief deputy attorney general for Nevada's fraud unit.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 12:44 PM
Response to Original message
95. Economy is So Good People are Living in Cars
UsaWatchdog+%28Greg+Hunter%E2%80%99s+USAWatchdog%29" target="_blank">http://usawatchdog.com/economy-is-so-good-people-are-li...

I have never seen, in all my time, so many people holding signs on street corners asking for money, food and work. My wife spotted a couple in their forties living in their car in the middle of a crowded WalMart parking lot. I am seeing more of that, too. I was watching CNBC Monday, and one analyst basically said the economy was good and getting better. He pointed to the great sales numbers on Black Friday. Of course, no one adjusted the sales numbers for inflation. Also, many think the retailers just stole sales from the rest of the holiday shopping season. The number of people living in cars and tents have gone up, and it is not the sign of a healthy economy. The true unemployment rate is nearly 23% (according to Shadowstats.com) if it was calculated the way Bureau of Labor and Statistics reported it in 1994 and earlier. The homelessness phenomenon is making its way into the mainstream media because it is a national problem that is also reflected in the record numbers of people on food stamps. The number is nearly 46 million and growing as the real economy sinks...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 12:47 PM
Response to Reply #95
96. Millions of people to become expendable next year
http://english.pravda.ru/business/finance/29-09-2011/11... /

The experts of the International Labor Organization and the Organization for Economic Cooperation and Development predict that next year a number of developed and developing countries will face mass unemployment and "catastrophic shortage" of jobs. In the alarmist report, the experts urge the countries to take drastic measures to combat unemployment.


Since the beginning of the global financial crisis in 2008, developing and developed countries lost 20 million jobs. By the end of next year additional 20 million jobs could be lost. According to some experts, the number of unemployed worldwide has reached 200 million.
 The current pace of employment growth in the leading countries is inadequate. In the Group of Twenty the increase is approximately 1% per year, while there is need for it to be at least 1.3% in the next four years.

"We must act immediately and stimulate the process of job growth to offset the losses. Stabilization of the employment level should be a priority in macroeconomic policy", wrote the authors of the report.
 However, the report questioned the fact that these figures are achievable, indicating that the increase in the number of jobs in India and China is directly related to the loss of those in Western countries.

The situation in Europe is 
particularly difficult. While Germany is relatively successful in coping with unemployment, the second euro-zone economy, France, is in a difficult situation.
 There is a new concept of "superfluous people" as a result of chronic unemployment. Mostly, these are young people who are the first to lose jobs in downsizing...For example, in Italy, every other unemployed person cannot find a job for over a year, and in South Africa this number is two out of three. The authors point out that youth unemployment is rising in 15 countries out of 20.
According to the estimates of the International Labor Organization, in Russia the number of new jobs is approximately equal to the number of people who get jobs - approximately 600,000. However, the state apparatus and the sector of public services are growing, while the number employed in manufacturing continues to decline. There is still a relatively high level of long-term unemployment, which is nearly the same among the residents of villages and cities. Among the rural population the share of long-term unemployed is 32.8%, among urban - 32.3%...This increases the "underground" employment. According to the ILO, informal employment in Russia is 10% and is nearly one and a half times the rate of unemployment...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 12:49 PM
Response to Reply #96
97. Is a Universal Social Net Good Macro Economics?
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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 02:00 PM
Response to Reply #96
106. "superfluous people" ...
Edited on Thu Dec-01-11 02:17 PM by AnneD
I don't like the sound of that-nor do I like the thought of all these young people with out jobs, careers, or a business. This is all the more reason to help those that can retire do just that, to help make way. We need to work hard at developing green industries and recycling that needs labor and can create new jobs.

The US has always been known to think outside of the box. We need to start funding education and manufacturing in these areas instead of having our energy needs met by our war machine.

Unless of course, the goal is to blow these "superfluous people" off the planet. I wish I were being sarcastic.
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Roland99 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-01-11 01:22 PM
Response to Reply #95
102. "here in my car. I feel safest of all."
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