STOCK MARKET WATCH -- Wednesday, 22 August 2012

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Wednesday, 22 August 2012[font color=black][/font]

SMW for 21 August 2012

AT THE CLOSING BELL ON 21 August 2012
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Dow Jones 13,203.58 -68.06 (-0.51%)
S&P 500 1,413.17 -4.96 (-0.35%)
Nasdaq 3,067.26 -8.95 (-0.29%)


[font color=green]10 Year 1.80% -0.04 (-2.17%)
30 Year 2.90% -0.05 (-1.69%) [font color=black]


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[font size=2]Market Conditions During Trading Hours[/font]
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[font size=2]Euro, Yen, Loonie, Silver and Gold[center]

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[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
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Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
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[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
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The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
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[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
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LegitGov
Open Government
Earmark Database
USA spending.gov
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[font color=black][font size=2]Handy Links - Videos:[/font][/font]
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Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
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[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison
6/4/12 Matthew Kluger, lawyer, sentenced to 12 years in prison, along with co-conspirator stock trader Garrett Bauer (9 years) and co-conspirator Kenneth Robinson (not yet sentenced) for 17 year insider trading scheme.
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."




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

[Demeter]

1. Did she say "Remove your head"?

I'll drink to that!

[tclambert]

21. But, D, he apologized . . .

for a poor word choice--"legitimate rape"--when what he meant was "any rape." He did not apologize for being so incredibly stupid as to think that women really only get pregnant when they want to, and therefore can never, ever justify an abortion, . . . or needing a morning after pill, . . . or needing access to contraceptives. I'm pretty sure his preferred solution is for the woman to just marry her rapist.

P.S. I'm puzzled how you position someone in a guillotine when his head is stuck in his ass.

[Po_d Mainiac]

31. Good question

It does explain his shitty ideas though.

[Demeter]

34. We'll just have to experiment

After, it isn't torture...

[DemReadingDU]

48. If she's pregnant, it wasn't rape

It's how rape is being redefined.

edit
and therefore you wanted the baby so you don't need abortion.

[Demeter]

2. Japan's not happy tonight

[Demeter]

3. Groupon Investors Give Up

http://online.wsj.com/article/SB10000872396390443989204577599273177326912.html?mod=ITP_pageone_0

Some of the early backers of Groupon Inc., including Silicon Valley veteran Marc Andreessen, are heading for the exits, joining investors who have lost faith in companies that had been expected to drive a new Internet boom.

At least four Groupon investors who held stock in the daily-deals company before it went public have sold or significantly pared back their holdings in recent months. Since its initial public offering in November, Groupon has shed more than three-quarters of its stock-market value, or about $10 billion.

Groupon's plunging stock price, and the swooning shares of Facebook Inc. and Zynga Inc., have rekindled memories of the dot-com bust in 2000. Unlike many dot-com era start-ups, the current companies have healthy revenue and in some cases are turning a profit—but their results aren't matching early expectations....

SO GO SULK, THEN

[Demeter]

4. Why Investors See Low Inflation for the Next 10 Years

THEY AREN'T LOOKING IN THE RIGHT PLACES

http://www.businessweek.com/articles/2012-08-19/why-investors-see-low-inflation-for-the-next-10-years#r=nav

Where’s the inflation? Ever since the Federal Reserve Board embraced quantitative easing and other extraordinary measures, critics have charged that rapid inflation was just around the corner. The alarmist calls to worry seem reasonable. A generation of investors has been tutored by Wall Street research that the classic explanation of inflation is “too much money chasing too few goods.” Worse yet, it doesn’t take much imagination to think that the Fed’s historic push on the monetary accelerator could ignite uncontrollable inflation, evoking shades of Germany in the 1920s and Zimbabwe in the 2000s (or prices quadrupling during the Continental Congress of 1775 and 1780).

Yet inflation is dormant. The Consumer Price Index was unchanged for July, and over the past 12 months it has risen at a 1.4 percent annual rate, according to the Bureau of Labor Statistics. That’s well below the Fed’s target range of 2 percent. Even more striking are forward-looking measures of inflation. The gap between nominal 10-year Treasury yields and the yield on 10-year Treasury Inflation Protected Securities says investors anticipate consumer price inflation will average about 2 percent over the next 10 years. A model of inflation expectations developed at the Federal Reserve Bank of Cleveland predicts the inflation outlook may be even better. The model matches inflation expectations from three sources—the Blue Chip forecasts, the Survey of Professional Forecasters, and inflation swap derivatives. The latest reading of 10-year expected inflation is 1.26 percent. “The numbers are all pretty consistent,” says Joseph Haubrich, economist at the Cleveland Fed. “They’re all pointing toward relatively low inflation.”

What gives? For one thing, a global financial flight from Middle East turmoil, the ongoing European debt and currency crisis, the slowing Chinese economy, and other troubling developments have pushed down the yield on safe-haven U.S. Treasuries. For another, price pressures remain contained during a weaker-than-expected recovery with lingering high unemployment. Indeed, it’s underappreciated how the Fed’s unconventional actions have shored up the overall price level. “I think the main effect of the Fed’s actions to date has been to help prevent deflation, which would be an outright decline in wages and prices,” says James Hamilton, economist at the University of California in San Diego.

Thing is, more money flooding the system doesn’t always lead to corrosive and cumulative increases in inflation rates. Sometimes it does, and sometimes it doesn’t. You should see lower unemployment and faster economic expansion before the effect of money growth starts showing up as inflationary pressure. Investors seem confident the Fed at that point has adequate tools to contain inflation. “Inflation might still become a problem, but it would be a manageable one, and certainly much preferable to an economy sunk for decades in recession and deflation,” writes Mark Zandi, chief economist at Moody’s Analytics and author of the forthcoming book, Paying the Price: Ending the Great Recession and Beginning a New American Century...

[Demeter]

5. Courage in Washington Doesn’t Have the Same Meaning By Dean Baker

http://www.nationofchange.org/courage-washington-doesn-t-have-same-meaning-1345554591

Last week Vice President Joe Biden did a courageous thing, he promised an audience in southern Virginia that there will be no cuts whatsoever to Social Security in a second Obama Administration. He used the strongest possible language, telling customers at a local diner: “I guarantee you, flat guarantee you, there will be no changes in Social Security. I flat guarantee you.” That was good to hear from the Vice President. Since the Obama Administration had several times indicated that it would be willing to cut Social Security as part of a “Grand Bargain” on the budget, it was encouraging to hear Mr. Biden make such an unambiguous commitment. While nothing in politics can be taken as 100 percent certain, this is about as good as you get.

On the one hand, Biden’s commitment may not seem very courageous. After all, he is running for office and Social Security is the most popular program on the table. It draws approval ratings close to 80 percent from Republicans, conservatives, and even Tea Party supporters. Backing Social Security in this context might just seem like cheap politics, which it may well be. However, Biden also lives in a city where calling for cuts to Social Security is the way to demonstrate your manhood. The bigger the cuts and the more frequent the calls, the higher your status. And, there are plenty of rewards for those politicians who go down fighting for Social Security cuts. Just check out the salaries for the lobbying jobs of the Blue Dog Democrats who have left office in recent years.

The Washington Post immediately got on the job of applying the peer group pressure to Mr. Biden, running an editorial denouncing his lack of “courage.” The editorial repeated the usual points – the trust fund will go broke in just 21 years. Of course this means that we would only be able to pay 80 percent of scheduled benefits rather than 100 percent, if Congress did nothing. And the amount needed to pay full scheduled benefits is considerably less than the annual cost of the war with Iraq. Did we need more than two decades to figure out where the money is going to come from to pay for that war? To put it another way, if the shortfall was made up entirely through higher payroll taxes, the increase would be a bit more than 5 percent of projected wage growth over the next three decades. Are you terrified yet?

Actually the best part of the editorial was when the Post gave its preferred fixes to the projected Social Security shortfall. One of the items it listed was “tweak the inflation calculator,” which it assured us could be done “with no harm to the safety net.” Hey, who could object to tweaking the inflation calculator if that would save Social Security? In case you missed it, “tweaking the inflation calculator” means reducing the annual cost-of-living adjustment by 0.3 percent. That might seem small, but it adds up over time. After 10 years retirees will see a 3 percent decline in benefits, after 20 years the reduction is 6 percent, and those who live to collect benefits for 30 years would see roughly a 9 percent drop in benefits. This isn’t doing harm to the safety net?

The amazing part of the story is that the Post did not have the courage to tell readers that it is proposing a cut in benefits. Instead this editorial on courage used a euphemism whose meaning would likely not be apparent to many of its readers.

KEEP READING AT LINK FOR THE CONCLUSION: IT'S A CORKER!

[Fuddnik]

12. It's already tweaked to hell already.

Kevin Phillips, in his book "Bad Money" shows how adjustments to the CPI calculations have been used for over 30 years to manipulate COLA increases. He says that if they used the same methods that they used in the '70s, benefits would be nearly double what they are now.

[tclambert]

23. I would like to see one change--remove the income cap.

People with salaries over $106,800 don't pay any additional SS tax. Of course, if your income comes solely from dividends and capital gains (like a certain GOP presidential candidate, perhaps?), you pay NO SOCIAL SECURITY TAX AT ALL.

[Demeter]

6. Anonymous releases how-to instructions on fooling facial recognition

http://rt.com/usa/news/video-surveillance-face-trapwire-237/

Here’s a predicament: you don’t want the government using high-tech face scanning technology to track every inch of your walk to the post office, but you also don’t want to take a sledgehammer to your neighborhood surveillance camera. What do you do?

Don’t worry, concerned citizen! Big Brother may indeed be watching, but that doesn’t mean you have to make his unwarranted surveillance mission easy to operate.

Although little news has developed as of late in regards to TrapWire, a global surveillance operation that RT blew the cover off of nearly two weeks ago, opposition waged at the world-wide intelligence network is still rampant. Now in one of the newest videos uploaded to the Web to make people aware of TrapWire, a person claiming to be involved with Anonymous is trying to spread a YouTube clip that offers helpful suggestions on how to rage against the machine, properly and peacefully.

Last week, hacktivists proposed several campaigns aimed at eliminating TrapWire feeds by rendering the equipment thought to be linked to the intelligence system completely useless. In lieu of smashing camera lenses and spraying surveillance gear in sudsy liquid, though, a new video, “Anonymous – Fighting TrapWire,” offers instructions on how to prevent the acceleration of the surveillance state by means of passive resistance...

VIDEO INSTRUCTIONS AT LINK

[Demeter]

7. INEQUALITY: Number of Americans Living in Poverty Reaches All Time High

http://www.kulturekritic.com/2012/08/news/inequality-number-of-americans-living-in-poverty-reaches-all-time-high/#



The Associated Press reports that “the number of Americans with incomes at or below 125 percent of the federal poverty level – the income limit for qualifying for legal aid - is expected to reach an all-time high of 66 million this year. A family of four earning 125 percent of the federal poverty level makes about $28,800 a year, government figures show.”

The takeaway: Americans are falling into poverty at a rapid rate, and have been for at least the past 8 years. As the rich get richer and the poor get poorer, inequality has risen to an all time high.

As Kulture Kritick previously reported, nowhere has the impact of the Great Recession been felt more than in the black community. There have been two recessions in this country, a White Recession, which is in partial recovery, and a Black Recession, which is still in free fall. For white men, unemployment reached its peak at 9.7 percent. It’s now at 6.9 percent. And white female unemployment is at a stable 6.8 percent. It reached its zenith at 7.3 percent.

Compare that to black male unemployment which is still at a whopping 14.8 percent, and black female unemployment, which is currently at 11.5 percent. So it is a given that embedded in this poverty data is a disproportionate number of black men and women, who are still struggling in this Great Recession. Of course no one talks about this, so it is doubtful that anyone in Congress or the White House will work to do anything about it. As usual, black folk are on their own in this country.

[Demeter]

8. PONZI AUSTERITY (I didn't like the original title)

http://www.nakedcapitalism.com/2012/08/yanis-varoufakis-how-the-ecb-is-complicit-in-a-macro-financial-debacle.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Ponzi growth happens when unsustainable capital flows, wilfully predicated upon funding schemes that Reason knows to be fraudulent, give rise to large spurts of economic activity.

Ponzi austerity, in contrast, is what happens when unsustainable spending cuts, wilfully predicated upon funding schemes that Reason knows to be fraudulent, cause significant drops in economic activity. (Click here for my original piece on Ponzi Growth and how it led to Ponzi Austerity.)

It is an incontestable fact that Europe’s Periphery shifted from Ponzi growth to Ponzi austerity some time after the Crash of 2008. Before the Crash, tsunamis of toxic money, minted and multiplied by US, UK and German banks, flooded the Periphery, causing bubbles in the real estate and public sectors. When that toxic money fizzled out, and capital receded from the Periphery like a vicious tide going out on a grim shore, the Periphery’s states and banks sunk deeply in the mud of irreversible insolvency. So as to delay the inevitable defaults that would strike huge blows on the tittering northern banks, so-called bailouts were arranged on condition of austerity policies that were as unsustainable as the growth whose collapse led to them.

The European Central Bank (ECB) is the only serious institution that the Eurozone has. It was meant to be the guardian of the euro’s credibility but, alas, during both periods (Ponzi growth and Ponzi austerity), the ECB proved incapable of playing this role. When toxic capital flowed disastrously into the Periphery, the ECB whistled in the wind. When it flowed out, causing the collapse that then gave rise to the Ponzi austerity, the ECB was part and parcel of this crime against the peoples and the spirit of Europe. Now that the chickens are coming home to roost, the ECB is pledging to do “all it takes” to save the euro, but fails to back up such strong words with deeds...


MORE AT LINK---EXPLAINS A LOT ABOUT THE EUROZONE MADNESS

[Demeter]

9. Investors in Health Care Seem to Bet on Incumbent

THAT WOULD BE THE HEIGHT OF IRONY--IF OBAMA WERE RE-ELECTED SOLELY ON THE BASIS OF HIS PANDERING TO INSURANCE COMPANIES AND HOSPITALS, WITH A PUBLIC DELUDED THAT THIS WOULD BENEFIT THEIR FAMILIES....

http://dealbook.nytimes.com/2012/08/20/investors-in-health-care-seem-to-bet-on-incumbent/?ref=business

Who is going to win the presidential election? You might want to ask Mark T. Bertolini. He just bet $5.7 billion on President Obama. Mr. Bertolini is the chief executive of Aetna, which on Monday agreed to acquire Coventry Health Care, a huge provider of Medicare and Medicaid programs. His $5.7 billion bet makes a lot of sense if you believe that the Affordable Care Act - otherwise known as Obamacare - will not be repealed. Mitt Romney has pledged to repeal the act "on my first day if elected," so any gamble that Obamacare stays intact could be fairly described as a wager that President Obama will remain in office.

At a time when so many in the business community appear to be supporting Mr. Romney, it is telling that some businessmen and investors expect a different result - and are wagering more than rhetoric; they are staking their wallet on it. It may be counterintuitive, but with the Standard & Poor's 500 up 9.5 percent in the last three months and the stock market over all at its highest point since the financial crisis, there is an argument to be made that investors writ large may be helping the incumbent to win. Intrade, an online market that allows investors to bet on political outcomes and other world events, shows that President Obama is favored to win, 57.3 percent to 42 percent.

"The best single predictor of presidential re-election results that we found was the percentage change in the stock market during the three years that preceded Election Day," Deepak Goel of the Socionomics Institute said in February when he released a study that was recently highlighted by Reuters. The study said that recent performance of the stock market was more important than gross domestic product, inflation and unemployment.

At a minimum, the stock market, which is an indicator of future earnings, seems to be in disagreement, at least somewhat, with the steady drumbeat of C.E.O.'s and investors who have said that President Obama's administration, in the words of Daniel Loeb, the outspoken activist hedge fund investor, "is openly hostile to most businesses and unable to articulate or implement policies to spark growth and reduce unemployment." Mr. Loeb is a frustrated Obama voter who now backs Mr. Romney. But take a look at some of his most recent investments in the health care field. In the last quarter, he reported in Securities and Exchange Commission filings, he picked up shares of Aetna, Cigna, Humana, UnitedHealth and WellPoint, among others. All of those companies stand to benefit while Obamacare remains in force; a repeal of the bill could send those shares reeling...

MORE WHEELING-DEALING REELING AT LINK

[Demeter]

10. Unemployment Less Forgiving As Fewer Receive Benefits

WHO WRITES THESE LOUSY HEADLINES?

http://www.huffingtonpost.com/2012/08/17/unemployment-benefits_n_1795550.html

The share of jobless Americans receiving unemployment insurance is declining as Congress winds down long-term benefits....Congress replaced the missing weeks with drug testing, stricter work-search requirements and leeway for states to run innovative training programs, which no states have tried to do so far.

The Labor Department said Thursday that 5,223 people received Extended Benefits last week -- down from 525,799 the prior year and more than a million at some points in 2010. After August, no state will be eligible for the program...That leaves state benefits, which typically last six months, and federal Emergency Unemployment Compensation, which used to offer 53 weeks of assistance but has been trimmed by Congress as well. (Some states, including Georgia, have even pared back the 26 weeks of state benefits that has been standard since the 1950s.)

Federal unemployment insurance will expire altogether at the end of the year, with benefits stopping abruptly for 2 million Americans, according to worker advocacy group the National Employment Law Project. Despite persistent long-term joblessness -- more than 5 million workers have been unemployed six months or longer -- members of Congress haven't hinted at any plans to preserve the benefits. The National Conference of State Legislatures, for its part, has asked Congress to get on it.

While the unemployed population has fallen by less than 10 percent in the past year, the insurance rolls are down by nearly 25 percent. The latest numbers show 12.7 million unemployed and 5.6 million getting benefits, compared with 13.9 million jobless and 7.3 million receiving aid at the same time last year....

HELL OF A WAY TO RUN AN ECONOMY AND A NATION

[Demeter]

11. Has Teach for America betrayed its mission? (IS THE POPE CATHOLIC?)

http://in.reuters.com/article/2012/08/16/usa-education-teachforamerica-idINL2E8JG0F020120816

When Wendy Kopp, just out of Princeton, founded Teach for America in 1989, she dreamed of recruiting 500 elite college graduates to teach the nation's neediest children. "My dear Miss Kopp," a college advisor told her, "you are quite evidently deranged."

Kopp pressed on, and this fall Teach for America will send a record 10,000 teachers into classrooms from New York to California. The nonprofit boasts $300 million in assets and collects tens of millions a year in public funds, even at a time of steep cuts to education budgets. Secretary of Education Arne Duncan praises it for having "made teaching cool again." And TFA veterans have emerged as the most influential leaders of a bipartisan education reform movement.

But critics, including a handful of disillusioned alumni, contend that policies promoted by TFA-trained reformers threaten to damage the very schools they once set out to save. They argue, too, that TFA's relentless push to expand has betrayed its founding ideals. The organization that was launched to serve public schools so poor or dysfunctional they couldn't attract qualified teachers now sends fully a third of its recruits to privately run charter schools, many with stellar academic reputations, flush budgets and wealthy donors. TFA also sends its rookies, who typically have just 15 to 20 hours of teaching experience, to districts that have recently laid off scores of more seasoned teachers.

Meanwhile, TFA has backed away from a claim that nearly half its teachers achieve outstanding academic gains with students, leaving the pivotal question of its effectiveness unresolved...Camika Royal, who taught for TFA and has worked for them in various capacities for 13 years, says she once believed the organization's goal was to strengthen troubled schools. Now she fears it is feeding a perception that public education is in ruins, and only an elite cavalry can rescue America's children. "I can't stand the self-importance," Royal said.

READ ON AT LINK ABOUT THE FUNDING SCAMS....

[AnneD]

15. Morning Marketeers.....

and lurkers.....

TFA, don't even make me go there. Our head of HR was a TFA toadie. So guess what, they shit canned all the teachers with loads of experience dealing with inner city kids and their problems and replaced them with TFA teachers at 1/5th the salary. After the TFA kids contract is up in 3 years they are leaving in droves for the suburban schools or leaving the profession with school loans paid for. We have no consistency and stability in the classrooms, the students are tested until the joy of learning is beaten out of them, and there is currently a massive brain drain of talent in the district. Also this no experience in HR development and management just left a few months ago with a nice little line on her resume and a district in shambles. Honestly, what large company would put an under 30 yo with zero experience in charge of developing and recruiting their best and beignets workers. They manages to scramble the egg and we are left trying to unscramble it.

At the Nurse in service, they hired 23 new Nurses. Seeing how 1/4 leaves each year for the first three years (same with teaching), the profession and the district are in trouble. I am certain the bulk of us will be going out within the next 4 years if we can make the math work. I sat next to a friend that I helped get time added to her years of service. She said she would probably go out at the end of January ( you get credit for the full year of service). A January retirement time sounds good to me (not this year).

Happy hunting and watch out for the bears.

[Demeter]

13. TOP MARGINAL TAX RATES THROUGHOUT US HISTORY

[Demeter]

14. see you in the morning

if the Lord is willing and the creek don't rise...

As if! I fear it will never rain here again.

[jtuck004]

16. Because we're not as smart as capuchin monkeys?

For the past few years we have all been steeped in the fraud and theft going on at levels way above our pay grade, and the lack of response just takes one's breath away. The Magistrate asked in a post the other day why more people don't get mad? That's a good question.

In the following experiment one monkey watches while another monkey gets a much better reward for the same work, and chaos ensues. The monkey gets so agitated he shakes the bars. Us? With inequality all around us, we're not as smart as monkeys. We have to deal with all our preconceived notions, we look at a situation and spin it so it doesn't hurt our ego if we are complicit. We would rather watch a good crime show and drive our SUV's instead of making sure our economy is sustainable. We have to deal with years of schooling where they taught us to be good employees, not owners, where our learning was always subordinate to someone else's judgement whether they were up to the task or not. We take it like serfs, with the vain hope that somehow, someway the sinking ship is going to heal itself, that someone else must, must have the answer. The monkeys don't have all that baggage. When they see something wrong, they know the time for action is now.

The monkeys have the right idea.

http://www.alternet.org/hot-news-views/hilarious-video-shows-how-monkey-reacts-unequal-pay

Enjoy!

[xchrom]

17. morning...

[xchrom]

18. Markets Are Going Down Everywhere

http://www.businessinsider.com/morning-markets-august-22-2012-8

Red day everywhere.
Following yesterday's losses in the US -- which market a reversal from early-morning gains -- markets are falling everywhere.
One culprit was weak export data from Japan, as the country's trade deficit came in worse than expected.
The Nikkei fell 0.27%.
Shanghai fell 0.5%.
Hong Kong fell 1.0%.
In Europe, markets are down across the board.
Italy is off 0.5%.
Spain is down over 1%. Same with Germany.


Read more: http://www.businessinsider.com/morning-markets-august-22-2012-8#ixzz24Gq0oqTl

[Roland99]

26. US Futures down about 0.2% - 0.3%

[Roland99]

45. US 10-year broke thru the 1.80% floor. Down to 1.762%

keep on a goin'...at least for another month or two

[xchrom]

19. SocGen: Italy Looks 'Perilously Close' To Getting Shut Out Of The Bond Markets

http://www.businessinsider.com/italy-close-to-losing-market-access-2012-8

***SNIP

In answering that Societe Generale's James Nixon points out three key points about Italian debt and its economic growth:

Italy has extremely high debt-to-GDP and to bring this in control, the government is pushing austerity. This austerity along with a credit crunch are hurting economic growth. Nixon projects Italian GDP to decline 2.3 percent in 2012, and 1.4 percent in 2013, and expects it to be flat in 2014. The IMF puts Italy's long-term growth rate at 0.5 percent per annum.

Rising unemployment is impacting consumer confidence and has caused a drop in private consumption.

Finally, to achieve fiscal consolidation Italy is raising taxes on consumption and property, both sectors that are being hit hard by unemployment and tight conditions in the banking sector. "Italy also faces a significant increase in its service costs which, if not addressed, threatens to wipe out all of the consolidation planned for next year."


Read more: http://www.businessinsider.com/italy-close-to-losing-market-access-2012-8#ixzz24GqwQVDr

[xchrom]

20. Manufacturers scale back output plans{uk}

http://www.guardian.co.uk/business/2012/aug/21/uk-manufacturers-output-cbi-industrial-trends


A derelict factory in Stoke-on-Trent. Photograph: Christopher Furlong/Getty Images

Britain's manufacturers have scaled back plans to boost output after their order books were hit by weak domestic demand and a tougher climate for exports, according to the latest snapshot of manufacturing from the CBI.

In its monthly industrial trends survey, the employers' organisation found 15% of firms questioned reported order books above normal, but 36% said order levels were below normal. The balance of -21 was the worst since last December.

Export orders also weakened, with manufacturers reporting a balance of -17. While still above the long-run average of -21, this is the lowest figure reported since January.

Output is expected to be flat over the next three months, with as many firms reporting plans to cut production as those with plans to expand. This represented a decline from the two previous surveys, in which manufacturers expected output to increase.

[xchrom]

22. Borrowing figures prompt co-ordinated growth push across Whitehall

http://www.guardian.co.uk/politics/2012/aug/21/economy-government-borrowing

The government is to unveil a series of measures to promote jobs and growth as ministers move to show they have a credible economic strategy after a slump in corporate tax receipts led to higher than expected borrowing last month.

As fears grow among senior figures in both coalition parties that George Osborne is running out of time to meet his pledge to stabilise the public finances, Whitehall sources have spoken of a co-ordinated growth push in September. There will be a particular focus on liberalising planning laws, guaranteeing more housebuilding and boosting infrastructure projects as Osborne prepares to deliver a crucial autumn statement in November that could presage even deeper spending cuts.

The moves come as the Institute of Directors warns that the government is doing "too little, too slowly" to promote growth. Graham Leach, chief economist at the IoD, called on the government to do more to cut red tape and simplify employment law as a survey found that business leaders were "battening down the hatches" amid fears of a prolonged recession.

In a sign of the government's radical thinking, ministers are drawing up plans to reform the Highways Agency so it can borrow money to pay for a "horizon shift" in spending on roads to boost the economy and reduce congestion and delays.

[Demeter]

24. Whitman Capital Founder Found Guilty of Insider Trading

http://www.bloomberg.com/news/2012-08-20/whitman-capital-s-doug-whitman-guilty-of-insider-trading.html

Whitman Capital LLC hedge fund founder Doug Whitman was convicted of insider trading following a trial in which he spent more than two days on the stand telling jurors he was innocent.

A jury in Manhattan federal court yesterday found Whitman, 54, guilty of two counts of conspiracy for trading on illegal tips about Polycom Inc. (PLCM) and Google Inc. (GOOG), and two counts of securities fraud for trading in Google, Polycom and Marvell Technology Group Ltd. (MRVL) Securities fraud carries a maximum sentence of as long as 20 years in prison.

Prosecutors alleged that Whitman made $900,000 for his Menlo Park, California-based hedge fund based on illicit tips from technology firm insiders, including Roomy Khan, a former Intel Corp. executive who was at the center of the biggest stock-tipping probe in U.S. history. Khan, a witness at Whitman’s trial, twice pleaded guilty to passing inside information to Galleon Group LLC fund manager Raj Rajaratnam.

“Douglas Whitman now joins the grim procession of convicted Wall Street professionals who decided that the rules don’t apply to them,” said Manhattan U.S. Attorney Preet Bharara in a statement yesterday. “The rules do apply.”

LET'S THINK ABOUT THAT FOR A MINUTE...CAPRICIOUSLY, PERHAPS, IF YOU AREN'T PAYING OFF THE RIGHT PEOPLE, MAYBE....IF YOU DON'T FLOOD K STREET WITH MONEY, FOR SURE....

[Demeter]

25. Michael Olenick: Still Looking for a Housing Bottom MUST READ

http://www.nakedcapitalism.com/2012/08/michael-olenick-looking-for-a-housing-bottom.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Every day a growing crescendo of housing cheerleaders posit the end of the foreclosure crisis. We’re flipping our way out of the mess that we flipped ourselves into, is their usual line of reasoning. I’ve looked at national data, local data, and even data on my own block here in Florida. I tried to make the evidence prove the market has found a genuine, sustainable bottom. There are clearly gimmicks giving a temporary boost, a great PR campaign that may or may not be coordinated, and some foreclosure flippers that may do well, until they don’t. But the evidence is overwhelming: home prices are anything but stable....For background, a chorus of the same people that created the housing crisis have been predicting a housing bottom every year or so. They’ve always been right for anywhere from a few days to a few months, then the cycle of foreclosures and lowered home values restarts and causes prices to spiral downwards. This time though, especially in certain micro-markets, there does seem to be measured home price appreciation. Two trends are apparent. One is that banks are delaying foreclosures, or not foreclosing at all despite long-term delinquencies. The other is that private equity firms – flush with cash thanks to Tim Geithner’s religious devotion to trickle-down economics and the resulting cascade of corporate welfare – have been bidding up and holding foreclosed houses off the market. These two factors have artificially limited supply and, combined with cheap mortgages rates, driven up prices. While we can debate whether these strategies represent the best public policy, these policies are obviously not long-term sustainable.

Using data from the Office of the Comptroller of the Currency’s Mortgage Metrics Report, the percentage of seriously delinquent mortgages was 4.8%, 6.5%, 4.8%, and 4.5% in Q1, 2009-2012 respectively. Foreclosures should follow delinquencies somewhat – a vector of non-payment is supposed to lead to a foreclosure – but, at least according to the OCC, this has not been happening. Delinquency rates slowly fell a little but foreclosure activity dropped through the floor. Stranger still, delinquency rates predictably rise and fall in measured movements whereas foreclosure filing volume gyrates wildly...In Q1, 2009 there was a .2% quarterly change in the delinquency rate, from 4.6% to 4.8%, yet a 41.1% spike in foreclosures, from 262,691 to 370,567 (presumably the OCC reports only for the last month in the quarter or the filing volumes make no sense). Similarly, in Q1, 2010, there was .6% decrease in the delinquency rate resulting in an 18.4% bump in foreclosure filings. These non-correlations then reversed. In Q1, 2011 there was a .6% decrease in the delinquency rate but a -11.4% decrease in the foreclosure rate, and in Q1, 2012, a -.5% in the delinquency rate with a -1.8% decrease in the foreclosure filing rate. Putting this in perspective the lowest change in the delinquency rate was a .6% decrease, and the highest a 1.1% increase, whereas the lowest change in the foreclosure rate was a -21.1% decrease and the highest a 85.7% increase. So delinquencies barely budge but foreclosure volumes wildly spike then drop.

Lenders argue the drop in foreclosures is caused by delays in the court system. However, Judge Jennifer D. Bailey, lead foreclosure judge in Miami-Dade County – epicenter of the foreclosure crisis – solidly rebuts that argument. “Here in Miami-Dade County’s Eleventh Circuit, there has been no delay in foreclosure case hearings for nearly two years,” Judge Bailey said in an Aug. 19, 2012 interview with the Miami Herald. “If you want to see a judge to hear your trial or summary judgment, you get a prompt court date.” This coincides with my own observations in foreclosure court, where judges rail at bank lawyers for repeatedly delaying their cases, even when borrowers are in no way contesting their foreclosures. Holding back inventory means that the houses that are put on offer sell faster and at higher prices. That creates an incentive to delay foreclosures or not foreclose at all even when a home is delinquent. Though this seems obvious, the mainstream housing finance community – aided by a freelance “housing analyst,” – uses the faster figures to somehow prove banks are not holding houses. “In 2007, lenders needed a median of 10 months to sell a house they’d just foreclosed on,” reads a report “Fears recede of second crash from ‘shadow inventory,’” by Eric Wolff, published Aug. 28, 2012 in the San Diego/Riverside North County Times. “By 2008, they needed a median of six months. At the end of 2011, they’d reduced that median to four months in North San Diego and Southwest Riverside counties. An article addressing shadow inventory, that does not once use the word delinquencies, is the type of trick the cheerleaders use to drive speculators wild.

Besides lower foreclosure activity, the government is going all out to give away houses to private equity firms. Recently Fannie Mae sold 275 properties across metro Phoenix in one sale to a mystery buyer, according to a report by Catherine Reagor of the Arizon Republic. All Fannie disclosed is the buyer is an LLC, which Fannie apparently helped create, based at 135 N. Los Robles Ave., in Pasadena, CA. Google shows that is the US address of EastWest Bank, a bank whose tagline is “Your Financial Bridge,” presumably between Asian money and Phoenix real estate. Fannie’s decision to sell Phoenix to Asian investors keeps 275 houses off the local market, which drives up prices for Phoenix homes people intend to actually live in, rather than flip. (Update: Nick Timiraos points out by e-mail that Fannie’s address in Pasadena is the same as EastWest’s, and Bloomberg has reported that Colony is the buyer. But this still raises the question of why Fannie cooperate with what appears to be an effort to hide the identity of the buyer. California, a high tax state, does not look as if it was chosen for the domicile of the LLC for tax reasons). Anybody who has been a landlord seems to quickly tire of it so, assuming there isn’t a pending planned mass immigration to Phoenix, these investors will eventually want to cash out by selling these houses. Further, they will want to minimize maintenance expenses while they are renting out these houses, so the eventual sale of these houses will increase supply and prolong the housing crisis. Geithner’s policy of shaking down Main Street to help Wall Street continues to hurt your street....MASSIVE EDIT...Thanks to low lower foreclosures, real-estate speculators buying in bulk, and low interest rates there is enough direct and anecdotal evidence to suggest that we may be seeing a real-estate recovery on paper. Further, these policies are clearly calibrated to bring about a bubble, despite that bubbles are difficult to control and are not, by definition, sustainable: they always eventually pop. Let’s at least hope that when this bubble bursts the new Wall Street bulk buyers are treated with the same ruthless “free market” vigor that the prior owners of these houses were treated with after the last bubble burst. However, I doubt the mystery Asian money buyer, that Fannie sold Phoenix to, will ever be subject to something like the rocket docket.

SEE THE REST AT THE LINK

[Demeter]

27. CUTEST THING I'VE SEEN IN A LONG TIME

[xchrom]

29. get that strawberry!

[Demeter]

40. AND REAL PUPPY LOVE

[Demeter]

28. FOOD FIGHT! FDIC files lawsuit tied to failed bank RMBS investments

http://www.housingwire.com/news/fdic-sues-multiple-banks-over-sale-rmbs-failed-bank

The Federal Deposit Insurance Corp. filed three lawsuits against big banks, alleging the lenders misrepresented the quality of securitized loans sold to the now defunct Texas firm, Guaranty Bank. The FDIC took Austin, Texas-based Guaranty Bank into receivership back in Aug. 2009. This week, the regulator filed multiple lawsuits in Travis County (Austin), suggesting Guaranty suffered major losses from toxic RMBS loans sold and packaged by mega banks and other financial institutions...FDIC, on behalf of Guaranty, claims the banks misrepresented loan-to-value ratios, underwriting criteria and appraisal amounts when selling, packaging and underwriting home loans that became collateral for mortgage securities sold to Guaranty. Specifically, the FDIC alleges the financial firms violated federal and Texas securities laws by failing to fully disclose or truthfully represent the quality of mortgages backing the security certificates.

In the first case, the FDIC accuses Countrywide Securities, Bank of America, Deutsche Bank and Goldman Sachs of playing a role in the packaging, selling or securitization of mortgages sold off to Guaranty Bank for $1.5 billion. The suit says Guaranty Bank acquired 8 certificates in the transaction. The FDIC claims it studied a rough sampling of the securitized loans and alleges more than 60% of the loans packed into each deal contain material untrue or misleading statements. The FDIC is suing for an undetermined amount that is no less than $559.7 million in damages.

The bank regulator also sued Ally Securities, Goldman Sachs, Deutsche Bank Securities and JPMorgan Securities among others. In that suit, the regulator claims, the firms were involved in the packaging, underwriting and sale of eight RMBS certificates valued at $1.8 billion. The FDIC alleged in court records that the "defendants made untrue statements or omitted important information about such material facts as the loan-to-value ratios of the mortgage loans, the extent to which appraisals of the properties that secured the loans were performed in compliance with professional appraisal standards, the number of borrowers who did not live in the houses that secured their loans (that is, the number of properties that were not primary residences), and the extent to which the entities that made the loans disregarded their own standards in doing so." In that complaint, the FDIC is asking for at least $900.6 million in damages.

The regulator also sued JPMorgan Securities, Merrill Lynch, RBS Securities and WaMu Asset Acceptance Corp., making similar claims about 20 RMBS certificates that Guaranty paid $2.1 billion to acquire. The FDIC is requesting at least $677.4 billion in damages.

[Demeter]

30. FOOD FIGHT 2:Public Pension Funds Named to Lead ‘London Whale’ Lawsuit

http://www.bloomberg.com/news/2012-08-21/public-pension-funds-named-to-lead-london-whale-lawsuit.html

Public pension funds from Arkansas, Ohio, Oregon and Sweden will be lead plaintiffs in a group lawsuit against JPMorgan Chase & Co. (JPM) over trades made by Bruno Iksil, known as the “London Whale.”

U.S. District Judge George Daniels in Manhattan ruled today that lawsuits against the New York-based bank should be consolidated into a class action. The pension funds allege they lost as much as $52 million because of fraudulent activities by JPMorgan’s London chief investment office...

[Demeter]

42. FOOD FIGHT 3: Fannie Mae, Freddie Mac clamping down on banks

http://in.reuters.com/article/2012/08/14/us-mortgages-repurchases-idINBRE87D14V20120814

Government-owned Fannie Mae and Freddie Mac are stepping up efforts to find bad home loans that they can force mortgage lenders to buy back from them, providing an increasingly bigger headache to banks. The government-controlled companies are squabbling with banks over who should bear the burden of losses from the housing crunch, in particular loans made between 2005 and 2008, when the market was at its frothiest.

Fannie Mae and Freddie Mac's efforts will translate to higher mortgage losses for banks in the coming quarters. But the end of the fighting may be in sight. Fannie Mae, the larger of the two finance companies, is more than halfway through its review of loans to try to sell back to banks and is mainly focusing on that four-year period, a source familiar with the matter said....In the second quarter, outstanding repurchase requests at Fannie Mae grew by 20 percent to $14.6 billion from the first quarter, according to a filing last week.

Banks can argue about whether they really did follow guidelines, but the impact of buyback requests on lenders is clear. Bank of America Corp, Wells Fargo & Co, PNC Financial Services Group Inc and others set aside more money in the second quarter to cover repurchase requests....Banks believe Fannie and Freddie are nailing them on technicalities. If the two companies bear down too hard on lenders, banks could originate fewer mortgages, further pressuring the housing market...That may already be happening. Bank of America has reduced its mortgage lending and is no longer selling most loans to Fannie Mae. And Fannie Mae and Freddie Mac's regulator is concerned enough that it is thinking of changing the repurchase process to press the companies to look at loans before agreeing to guarantee or purchase them...In addition to repurchase requests from Fannie and Freddie, the banks also face possible losses from loans sold to private investors and those that were insured by bond insurers, who say they shouldn't be on the hook for inappropriately underwritten loans...

MUCH MORE

[Po_d Mainiac]

44. Are we finally going to see the put-back wars?

This tsunami has been a long time overdue.

[Demeter]

32. COUPLE Indicted in Mortgage Fraud Scheme, Max Penalty of 30 Years

http://4closurefraud.org/2012/08/21/fbi-husband-and-wife-indicted-in-mortgage-fraud-scheme-face-a-maximum-penalty-of-30-years-in-prison-for-lying-about-employment-salary-and-residency/

U.S. Attorney William J. Hochul, Jr. announced today that Timothy McCabe, 47, and Theresa Morales, 48, both of Hypoluxo, Florida, were indicted by a federal grand jury for bank fraud. The charge carries a maximum penalty of 30 years in prison, a $1,000,000 fine, or both.

Assistant U.S. Attorneys Maura K. O’Donnell and Kathleen A. Lynch, who are handling the case, stated that according to the indictment, the defendants submitted a fraudulent loan application to a financial institution, JPMorgan Chase Bank, to obtain a $560,000 mortgage on a property in Lewiston, New York. The defendants, who are husband and wife, provided false information in the loan application as to employment, salary, and residency. The defendants conduct resulted in foreclosure on the property.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and with state and local partners to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

The indictment is the result of an investigation by the Mortgage Fraud Task Force of WNY which includes agents and personnel from the United States Secret Service, under the direction of Special Agent in Charge Tracy Gast; the Federal Bureau of Investigation, under the direction of Special Agent in Charge Christopher M. Piehota; the U.S. Postal Inspection Service, under the direction of Inspector in Charge Robert Bethel; the Housing and Urban Development Office of Inspector General, under the direction of Cary Rubenstein, Special Agent in Charge, New York Region; and the Internal Revenue Service, under the direction of Acting Special Agent in Charge Toni Weirauch. The Mortgage Fraud Task Force of WNY is led by the U.S. Attorney’s Office and also includes Veterans Affairs Office of Inspector General and the U.S. Bankruptcy Trustee.

SOURCE: http://www.fbi.gov

Great job fellas…

[xchrom]

33. U.S. Stock Futures Decline As Japan Trade Deficit Widens

http://www.bloomberg.com/news/2012-08-22/u-s-stock-futures-decline-as-japan-trade-deficit-widens.html

U.S. stock futures fell, indicating that the Standard & Poor’s Index will extend yesterday’s drop as Japan posted a wider-than-expected trade deficit and investors awaited the minutes of the last Federal Reserve meeting and data on house purchases.
Dell Inc. (DELL) sank 4.6 percent in German trading after the computer-maker late yesterday cut this year’s profit forecast, as personal-computer sales shrink. Bank of America Corp. (BAC) lost 1.1 percent. Clearwire Corp. (CLWR) may fall after the stock was downgraded by RBC Capital Markets.
S&P futures expiring in September retreated 0.3 percent to 1,408.1 at 7:21 a.m. in New York. U.S. stocks fell yesterday, with the S&P failing to remain above a four-year high, as a slump in technology shares overshadowed optimism euro-area leaders will make progress in resolving the region’s crisis. Contracts on the Dow Jones Industrial Average slipped 30 points, or 0.2 percent, to 13,169 today.
“The market is currently in need of a positive catalyst to push higher, without which it will begin to question whether the recent optimism was justified,” Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers in London, wrote in an e-mail. “The Japanese trade deficit numbers have not helped sentiment.”

[xchrom]

35. Zhou Signals China Rate Cut Possible After Injecting Cash

http://www.bloomberg.com/news/2012-08-22/zhou-leaves-door-open-for-china-rate-cut-after-injecting-cash.html

People’s Bank of China Governor Zhou Xiaochuan said adjustments to interest rates and banks’ reserve requirements are still possible after the central bank stepped up temporary cash injections this month.

“Use of either tool can’t be ruled out,” Zhou said to reporters today in Beijing when asked whether the recent frequent use of reverse-repurchase transactions means the PBOC will make less use of reserve-ratio and interest-rate tools. He didn’t elaborate.
The remarks leave the door open for further monetary stimulus after the PBOC added 220 billion yuan ($34.6 billion) to the banking system via reverse-repurchase agreements yesterday, tempering speculation the reserve-requirement ratio will be reduced. China lowered interest rates in June and July for the first time since 2008 and has made three cuts in the ratio starting in November as economic growth slowed.

Chinese Premier Wen Jiabao said last week that easing inflation allows more room to adjust monetary policy and positive signs are emerging in the economy, expressing confidence after July data showed a further slowdown in growth. State television reported Wen as saying there’s “growing room for monetary policy operation.”

[xchrom]

36. Last Man Standing Means Europe Investment Banks Resist Shrinking

http://www.bloomberg.com/news/2012-08-21/last-man-standing-means-europe-investment-banks-resist-shrinking.html

Europe’s failure to resolve its sovereign-debt crisis will force investment-banking chiefs in the region to consider shuttering entire businesses rather than rely on piecemeal job reductions to revive profit.

Dealmaking fees may drop 25 percent this year from 2009, when the crisis began in Greece, research firm Freeman & Co. estimates. European banks have cut about 172,000 positions since then, according to data compiled by Bloomberg, the same strategy they used after Lehman Brothers Holdings Inc. collapsed in 2008.

The game plan won’t work again as rising capital requirements and declining business alter the investment-banking landscape, investors and analysts say. New rules will reduce return on equity by 6 percentage points from about 14 percent in the first half of 2011, according to consulting firm Bain & Co. Banks that relied on record low interest rates and a flood of cheap funding from the European Central Bank to delay deciding which units to close will be compelled to make choices.

“Investment banks have to shrink and do more than cut a little bit here and there,” said Lutz Roehmeyer, who helps oversee 10 billion euros ($12.5 billion) at Landesbank Berlin Investment in Berlin. “There’s too much politics and too little economics going on. They want to keep certain businesses for as long as possible.”


*** all this says to me is that you can't 'fix' the Financial Houses.

[Demeter]

53. Any competent veterinarian could "fix" them

I'm just saying....

[xchrom]

37. German Stocks Decline As Japan Trade Deficit Wider

http://www.bloomberg.com/news/2012-08-22/german-stocks-decline-as-japan-trade-deficit-wider.html

German stocks declined as Japan reported a wider-than-expected trade deficit and investors waited for meetings of euro-area leaders that may determine whether Greece gets any concessions on the terms of its bailout.
The DAX Index (DAX) dropped 0.7 percent to 7,041.7 at 11:14 a.m. in Frankfurt. The benchmark measure has still rallied 18 percent from this year’s low on June 5 as European Central Bank President Mario Draghi said he would act to preserve the euro. The broader HDAX Index also fell 0.7 percent today.
“The recent slow grind higher in stocks is a good reason for profit taking on a morning where Japan’s trade deficit is highlighting European import weakness,” said Daniel Weston, a portfolio adviser at Schroeder Equities GmbH in Munich.
German stocks climbed yesterday to a five-month high as Spain’s borrowing costs fell at an auction of 12-month and 18- month debt.

[xchrom]

38. Government to increase social security benefit for long-term unemployed{spain}

http://elpais.com/elpais/2012/08/21/inenglish/1345566128_760599.html

The Spanish Cabinet on Friday will approve an increase in the social security payment for people who are out of work and are no longer entitled to unemployment benefits, government sources said Tuesday. If they have at least two members of their family - apart from their spouse - who are financially dependent on them they will now receive 450 euros, up from 399.

The increase is included in a reform of the so-called Plan Prepara program, which was introduced by former Socialist Prime Minister José Luis Rodríguez Zapatero. The scheme will also step up efforts to get the long-term unemployed back to work through retraining, and will be implemented using increased collaboration with the regions.

“The government wants to make it clear that nobody who is really in need should find themselves destitute,” Labor Minister Fátima Báñez said after a meeting with Deputy Prime Minister Soraya Sáenz de Santamaría, Finance Minister Cristóbal Montoro and Prime Minister Mariano Rajoy’s economic advisor Álvaro Nadal.

Nadal said the plan “will improve the employability of its beneficiaries with a view to getting them back into the labor market.”

[xchrom]

39. CHINESE SOLAR INDUSTRY FACES WEAK SALES, PRICE WAR

http://hosted.ap.org/dynamic/stories/A/AS_CHINA_SOLAR_SLUMP?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-08-22-05-21-45


BEIJING (AP) -- Chinese solar panel makers that grew fast over the past decade are suffering big losses due to slumping global sales and a price war that threaten an industry seen by communist leaders as a role model for hopes to transform China into a technology leader.

Another looming challenge: Moves by the United States and Europe toward imposing possible anti-dumping tariffs on Chinese-made solar panels that might further depress sales.

Financial problems are likely to force painful changes in the Chinese industry including possible mergers, bankruptcies, factory closures or layoffs, industry analysts say.

"The next 1 1/2 years will be very challenging," said Frank Haugwitz, a renewable energy consultant in Beijing.

[xchrom]

41. GERMANY STARTS RATIFYING NEW BANK CAPITAL RULES

http://hosted.ap.org/dynamic/stories/E/EU_GERMANY_BANK_RULES?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-08-22-06-31-19

BERLIN (AP) -- Germany has begun the process of ratifying new rules requiring banks to build higher capital defenses against financial shocks - and hopes other European countries will quickly follow suit.

Chancellor Angela Merkel's Cabinet approved draft legislation Wednesday to implement the so-called Basel III rules requiring lenders to gradually increase their highest-quality capital from 2 to 7 percent of the risky assets they hold.

EU finance ministers agreed to adopt the rules in May but negotiations with the European Parliament to finalize details are continuing. German officials want to finish that process soon so the rules can take effect Jan. 1, 2013.

Finance Minister Wolfgang Schaeuble said the German move is "a signal of how important we consider the issue" and added: "I hope our partners in Brussels feel this urgency."

[Demeter]

43. Location, location, location (INTERACTIVE GLOBAL REAL ESTATE GRAPHIC)

http://www.economist.com/blogs/dailychart/2011/11/global-house-prices

[xchrom]

46. German banks seek centralised EU overseer

http://www.irishtimes.com/newspaper/finance/2012/0822/1224322660276.html

GERMAN PRIVATE banks have made a concerted call to centralise all euro zone financial regulation under the auspices of the European Central Bank.

The BDB banking association, representing private lenders such as Deutsche and Commerzbank, said shifting oversight of the euro zone’s 6,000 lenders to the Frankfurt bank would “remove the influence of national politics in supervision”.

“A legally independent unit should be created under the roof of the ECB and overseen politically by the EU level,” wrote the association in a position paper.

It follows a commitment by EU leaders in Brussels at the end of June to create a “banking union” and a call for the European Commission to present a proposal by next month.

[xchrom]

47. How To Succeed in Business Without Adding Value

http://www.inthesetimes.com/article/13704/how_to_succeed_in_business_without_adding_value

Private equity firms claim they help create jobs and improve businesses, but that is not the whole truth

Private equity funds first emerged in the late '70s and '80s as part of an ideological shift toward making the most for shareholders, giving momentum to an early wave of banking deregulation and to changes in the tax code that made financial engineering more profitable. Firms like Bain Capital, spun off in 1984 from the consulting firm Bain & Company, benefited both from the elimination of old controls and from the new rules encouraging globalization and financialization.

Here's how it works: The managers of private equity firms create big investment funds in which they are “general partners.” They pool unregulated private money from a variety of “limited partners,” ranging from public pension funds to rich individuals (including, in the case of Bain, dubious Central American plutocrats operating out of tax havens such as Panama). The general partners then buy a business in what is called a “leveraged buyout,” using more limited-partner capital and a huge loan, but very little of their own money.

The high debt, or “leverage,” greatly multiplies the profit on successes, but also increases financial instability. The loans must be paid off even if business slows–a minor worry for the private equity fund, because it isn't responsible for those payments. Instead, the purchased business owes the debt created to buy it. The interest on this debt is tax-deductible (meaning that these deals are taxpayer-subsidized), but paying down the principal still puts pressure on the acquired businesses. They in turn typically squeeze employees as the easiest, quickest way to meet interest payments and profit targets.

After Bain-style buyouts, employees often face wage and benefit cuts or mass layoffs. Businesses can also use takeovers to renege on implied contracts or to engineer bankruptcies, thus avoiding obligations to workers such as pension payments.

[jtuck004]

54. It would be quite difficult to require a personal fortune be on the line, but

co-ops stop a lot of this. And the Basque do it in Spain,14 million euros, 83,000 employees - they have NEVER lost a job or lost a pension. They don't run grocery stores, they make refrigerators and have other industrial holdings, they provide good jobs. That you have to buy into after a trial period.

The kind of crap these scores of vulture capitalists do is much more difficult with that business model, and they are doing better than most of Spain. It's not the democratic working paradise that the priest who started it all envisioned, but it's a damn site better than working conditions for a lot of other people around them and elsewhere. They are somewhat self-insulated from a lot of this trading crap, able to shuffle hours and assignments and assets to compete.

And every one of the workers I have read about or heard interviewed seemed politically aware of what they were doing. Maybe that's one of the possible outcomes when you live under and fight back against a dictator.

I think about all the millions of 45+ year old folks out there, among the 27 million or so that would like to go back to work tomorrow, and wonder how many will find out that the help they were waiting on is never going to come, that they have worked the last job they ever will, or certainly the last one that lets them have a roof and food they can count on? It doesn't have to be this way, but it's pretty clear that the people who could aren't going to ride to the rescue (if they haven't by now, what kind of fool hangs onto hope?). Maybe their best bet is to help themselves. And that is going to take some organizing and facilitation by outside agitators to overcome their prior learning.

[Roland99]

49. Mortgage Applications Fall as Interest Rates Rise

http://www.mortgagenewsdaily.com/08222012_applications_volume.asp

Rising interest rates dragged refinancing applications down 9 percent during the week ended August 17 according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey. Refinancing prompted 80.0 percent of mortgage applications received during the week compared to 81 percent during the week ended August 11. The Home Affordable Refinance Program (HARP) accounted for 24 percent of refinancing activity, unchanged from the previous week.

The Market Composite Index, a measure of all mortgage application volume, was down 7.4 percent on a seasonally adjusted basis from the week before although it was up a slight 0.9 percent on an unadjusted basis. The seasonally adjusted Purchase Index decreased 0.9 percent and was 3.0 percent higher than during the same week in 2011.

[Roland99]

51. July Existing Home Sales >>>>

* Existing home prices up 9.4% year-on-year
* Forecast: Existing home sales 4.5 mln for June
* July existing home sales up 2.3% to 4.47 million

[xchrom]

50. Russia's entry to World Trade Organization hailed by EU

http://www.bbc.co.uk/news/business-19345844

Russia's entry into the World Trade Organization (WTO) will provide an important boost to European companies, the EU has said.

Russia is the EU's third biggest trading partner, with member countries exporting 108bn euros ($134bn; £85bn) of goods to the country, including 7bn euros worth of cars and 6bn euros of medicines.

Russia finally joined the WTO on Wednesday after 18 years of negotiations.

The country will now lower its import duties, limit its export duties and grant greater access to European companies. It will also introduce a host of other measures to bring it into line with WTO trading procedures.

[Demeter]

52. Abbott & Costello explain the Federal Gov's Unemployment Numbers

COSTELLO: I want to talk about the unemployment rate in America.

ABBOTT: Good Subject. Terrible Times. It's 9%.

COSTELLO: That many people are out of work?

ABBOTT: No, that's 16%.

COSTELLO: You just said 9%.

ABBOTT: 9% Unemployed.

COSTELLO: Right 9% out of work.

ABBOTT: No, that's 16%.

COSTELLO: Okay, so it's 16% unemployed.

ABBOTT: No, that's 9% .

COSTELLO: WAIT A MINUTE. Is it 9% or 16%?

ABBOTT: 9% are unemployed. 16% are out of work.

COSTELLO: IF you are out of work you are unemployed.

ABBOTT: No, you can't count the "Out of Work" as the unemployed. You have to look for work to be unemployed.

COSTELLO: BUT THEY ARE OUT OF WORK!!!

ABBOTT: No, you miss my point.

COSTELLO: What point?

ABBOTT: Someone who doesn't look for work, can't be counted with those who look for work. It wouldn't be fair.

COSTELLO: To whom?

ABBOTT: The unemployed.

COSTELLO: But they are ALL out of work.

ABBOTT: No, the unemployed are actively looking for work. Those who are out of work stopped looking. They gave up. And, if you give up, you are no longer in the ranks of the unemployed.

COSTELLO: So if you're off the unemployment roles, that would count as less unemployment?

ABBOTT: Unemployment would go down. Absolutely!

COSTELLO: The unemployment just goes down because you don't look for work?

ABBOTT: Absolutely it goes down. That's how you get to 9%. Otherwise it would be 16%. You don't want to read about 16% unemployment, do ya?

COSTELLO: That would be frightening.

ABBOTT: Absolutely.

COSTELLO: Wait, I got a question for you. That means there are two ways to bring down the unemployment number?

ABBOTT: Two ways is correct.

COSTELLO: Unemployment can go down if someone gets a job?

ABBOTT: Correct.

COSTELLO: And unemployment can also go down if you stop looking for a job?

ABBOTT: Bingo.

COSTELLO: So there are two ways to bring unemployment down, and the easier of the two is to just stop looking for work.

ABBOTT: Now you're thinking like an economist.

COSTELLO: I don't even know what the hell I just said!

ABBOTT: Now you're thinking like a politician.

[Roland99]

55. +1!

[Roland99]

56. FOMC Minutes released - Signs point to QE3

* RTRS- FED POLICYMAKERS VIEWED U.S. ECONOMIC RISKS TILTED TO DOWNSIDE DUE TO EUROPE STRAINS, U.S. FISCAL CLIFF - FED MINUTES

* RTRS - MANY FOMC MEMBERS SUPPORTED EXTENDING FED'S LATE-2014 INTEREST RATE GUIDANCE, BUT AGREED TO DEFER DECISION TO SEPT MEETING

* RTRS - MANY FED OFFICIALS JUDGED FURTHER POLICY EASING LIKELY WARRANTED "FAIRLY SOON" BARRING SIGNIFICANT UPTURN - AUGUST FED MINUTES

* RTRS- FED OFFICIALS DISCUSSED EXTENDING FORWARD INTEREST RATE GUIDANCE AS ONE OPTION IF MORE ACCOMMODATION REQUIRED -FOMC MINUTES

* RTRS - A NUMBER OF FOMC MEMBERS SAID MODEST ECONOMIC GROWTH LEAVES US ECONOMY VULNERABLE TO SHOCKS, RECESSION RISK -FED

* RTRS - MANY FED OFFICIALS BELIEVED ANY NEW ASSET BUYING PROGRAM SHOULD BE FLEXIBLE, ALLOW ADJUSTMENTS IN RESPONSE TO ECONOMIC CHANGES

* RTRS - MANY FED OFFICIALS BELIEVED A NEW LARGE-SCALE ASSET PURCHASE PROGRAM COULD BOOST US RECOVERY BY LOWERING INTEREST RATES

[Warpy]

57. That must be why the dollar is dropping off a cliff right now.

[Po_d Mainiac]

58. Translation:

We're outa bullets and the the bernanks chopper turned into a hanger queen. But we can sure talk up one hellova plan, or at least squeeze a couple more E/S points up with our heavy breathing.

Hey it ain't our fault it didn't rain and Israel wants to glass over Iran.

But don't worry. The next rape will be legitimate. You won't show a lump.