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Mon Feb 25, 2013, 08:23 PM

STOCK MARKET WATCH -- Tuesday, 26 February 2013

Last edited Mon Feb 25, 2013, 11:11 PM - Edit history (1)

[font size=3]STOCK MARKET WATCH, Tuesday, 26 February 2013[font color=black][/font]

SMW for 25 February 2013

AT THE CLOSING BELL ON 25 February 2013
[center][font color=red]
Dow Jones 13,784.17 -216.40 (-1.55%)
S&P 500 1,487.85 -27.75 (-1.83%)
Nasdaq 3,116.25 -45.57 (-1.44%)

[font color=green]10 Year 1.86% -0.13 (-6.53%)
30 Year 3.07% -0.13 (-4.06%)[font color=black]


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[font size=2]Market Conditions During Trading Hours[/font]


[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]
Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts

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


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

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

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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]

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Arrow 26 replies Author Time Post
Reply STOCK MARKET WATCH -- Tuesday, 26 February 2013 (Original post)
Tansy_Gold Feb 2013 OP
Demeter Feb 2013 #1
Hugin Feb 2013 #2
Tansy_Gold Feb 2013 #3
Demeter Feb 2013 #4
Demeter Feb 2013 #5
Demeter Feb 2013 #6
Demeter Feb 2013 #7
Demeter Feb 2013 #8
xchrom Feb 2013 #9
xchrom Feb 2013 #10
Demeter Feb 2013 #25
xchrom Feb 2013 #11
xchrom Feb 2013 #12
xchrom Feb 2013 #13
xchrom Feb 2013 #14
xchrom Feb 2013 #15
xchrom Feb 2013 #16
xchrom Feb 2013 #17
xchrom Feb 2013 #18
xchrom Feb 2013 #19
xchrom Feb 2013 #20
xchrom Feb 2013 #21
xchrom Feb 2013 #22
xchrom Feb 2013 #23
Demeter Feb 2013 #24
Fuddnik Feb 2013 #26

Response to Tansy_Gold (Original post)

Mon Feb 25, 2013, 09:53 PM

1. The Market tanked worse than I knew, Monday


That extra hundred points in the last hour...when I had to leave....

It's like the convulsions of a sinking ship.

Anyway, survived Monday.

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Response to Tansy_Gold (Original post)

Mon Feb 25, 2013, 10:45 PM


Is that some new fangled bring-'em in name on there, Tansy?

If so, I'm thinking you should alter the case of one or the other part of the word. Like eWATCH, Ewatch, eWatch, or EwAtch.

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Response to Hugin (Reply #2)

Mon Feb 25, 2013, 11:09 PM

3. Good gravy

I'm tryin' to deal with four hysterical dogs because two strange guys are on my roof tearing off old shingles and finding myriad leaks, and you just gotta whine about an extra vowel? SHEESH! Did you never in your entire life make a mistake?

I'll fix it forthwith. I is only human. (sort of).

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Response to Tansy_Gold (Original post)

Tue Feb 26, 2013, 07:39 AM

4. The Secret Rise of 21st Century Democracy By Kevin Zeese JD and Margaret Flowers



If Americans knew the truth about the growth of real democracy in Venezuela and other Latin American countries, we would demand economic democracy and participatory government, which together would threaten the power of concentrated wealth. The seeds of both are beginning to sprout in the US despite efforts to keep Americans ignorant about them. Real democracy creates a huge challenge to the oligarchs and their neoliberal agenda because it is driven by human needs, not corporate greed. That is why major media in the US, which are owned by six corporations, aggressively misinform the public about Chavez and the Bolivarian Revolution. Mark Weisbrot of the Center for Economic and Policy Research writes, "The Western media reporting has been effective. It has convinced most people outside of Venezuela that the country is run by some kind of dictatorship that has ruined it." In fact, just the opposite is true. Venezuela, since the election of Chavez, has become one of the most democratic nations on Earth. Its wealth is increasing and being widely shared. But Venezuela has been made so toxic that even the more liberal media outlets propagate distortions to avoid being criticized as too leftist. Venezuela is a front line in the battle between the elites and the people over US-style democracy, as we described in Part I of this series.

We spoke with Mike Fox, who went to Venezuela in 2006 to see for himself what was happening. Fox spent years documenting the rise of participatory democracy in Venezuela and Brazil. He found a grassroots movement creating the economy and government they wanted, often pushing Chavez further than he wanted to go. Venezuelan democracy and economic transformation are bigger than Chavez. Chavez opened a door to achieve the people's goals: literacy programs in the barrios, more people attending college, universal access to health care, as well as worker-owned businesses and community councils where people make decisions for themselves. Change came through decades of struggle leading to the election of Chavez in 1998, a new constitution and ongoing work to make that constitution a reality.

Challenging American Empire

The subject of Venezuela is taboo because it has been the most successful country to repel the neoliberal assault waged by the US on Latin America. This assault included Operation Condor, launched in 1976, in which the US provided resources and assistance to bring friendly dictators who supported neoliberal policies to power throughout Latin America. These policies involved privatizing national resources and selling them to foreign corporations, de-funding and privatizing public programs such as education and health care, deregulating and reducing trade barriers. In addition to intense political repression under these dictators between the 1960s and 1980s, which resulted in imprisonment, murder and disappearances of tens of thousands throughout Latin America, neoliberal policies led to increased wealth inequality, greater hardship for the poor and working class, as well as a decline in economic growth. Neoliberalism in Venezuela arrived through a different path, not through a dictator. Although most of its 20th century was spent under authoritarian rule, Venezuela has had a long history of pro-democracy activism. The last dictator, Marcos Jimenez Perez, was ousted from power in 1958. After that, Venezuelans gained the right to elect their government, but they existed in a state of pseudo-democracy, much like the US currently, in which the wealthy ruled through a managed democracy that ensured the wealthy benefited most from the economy.

As it did in other parts of the world, the US pushed its neoliberal agenda on Venezuela through the International Monetary Fund (IMF) and World Bank. These institutions required Structural Adjustment Programs (SAP) as terms for development loans. As John Perkins wrote in Confessions of an Economic Hit Man, great pressure was placed on governments to take out loans for development projects. The money was loaned by the US, but went directly to US corporations who were responsible for the projects, many of which failed, leaving nations in debt and not better off. Then the debt was used as leverage to control the government's policies so they further favored US interests. Anun Shah explains the role of the IMF and World Bank in more detail in Structural Adjustment - a Major Cause of Poverty...A turning point in the Venezuelan struggle for real democracy occurred in 1989. President Carlos Andres Perez ran on a platform opposing neoliberalism and promised to reform the market during his second term. But following his re-election in 1988, he reversed himself and continued to implement the "Washington Consensus" of neoliberal policies - privatization and cuts to social services. The last straw came when he ended subsidies for oil. The price of gasoline doubled and public transportation prices rose steeply. Protests erupted in the towns surrounding the capitol, Caracas, and quickly spread into the city itself. President Perez responded by revoking multiple constitutional rights to protest and sending in security forces who killed an estimated 3,000 people, most of them in the barrios. This became known as the "Caracazo" ("the Caracas smash" and demonstrated that the president stood with the oligarchs, not with the people. Under President Perez, conditions continued to deteriorate for all but the wealthy in Venezuela. So people organized in their communities and with Lieutenant Colonel Hugo Chavez attempted a civilian-led coup in 1992. Chavez was jailed, and so the people organized for his release. Perez was impeached for embezzlement of 250 million bolivars and the next president, Rafael Caldera, promised to release Chavez when he was elected. Chavez was freed in 1994. He then traveled throughout the country to meet with people in their communities and organizers turned their attention to building a political movement...Chavez ran for president in 1998 on a platform that promised to hold a constituent assembly to rewrite the constitution saying, "I swear before my people that upon this moribund constitution I will drive forth the necessary democratic transformations so that the new republic will have a Magna Carta befitting these new times." Against the odds, Chavez won the election and became president in 1999.


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Response to Tansy_Gold (Original post)

Tue Feb 26, 2013, 07:46 AM

5. NDAA: Pre-emptive Prosecution Coming to a Town Near You



In the US, due process - one of the defining features of a democratic judicial process - continues to be badly bludgeoned: Obama fights tooth and nail to push through NDAA, which would allow indefinite detention of US citizens, and the definition of terrorism has expanded its unwieldy scope, casting a widening net that ensures more and more people are captured in its snare. The US has pursued "domestic terrorism" by practicing pre-emptive prosecution, that is, going after individuals who have committed no crime but are alleged to possess an ideology that might dispose them to commit acts of "terrorism". Maintaining that it can -and should - be in the business of divining intent, the government decimates crucial elements of the US justice system. Thus, in cases where terrorism is charged, prosecutors need not prove guilt beyond a reasonable doubt. Rather, only the defendant's potential for committing a crime need be established in order to convict. Consider the case of Tareq Abufayyad, a young Palestinian man and recent college graduate who was detained at San Francisco International Airport when he was on his way to unite with his family, all of them naturalised citizens of the US. Tareq was deemed inadmissible merely on the grounds that he had the potential to become a Hamas-operative. FBI Agent Robert Miranda, the lead investigator into the government's case against the Holy Land Foundation, argued before the Immigration Judge presiding over Tareq's case that, because he was a well-educated man from Gaza, a strong-hold of Hamas, Tareq would be "attractive to Hamas" as a future recruit. It's not hard to understand why David Cole, a professor of law at Georgetown University, concluded pre-emptive prosecution as an "inevitably speculative endeavour".

Project Salam, an organisation devoted to monitoring and documenting the US Justice Department's prosecution of terrorism cases, points out that the logic of pre-emptive prosecution - enthusiastically embraced after 9/11 - was derived in significant part from Dick Cheney's infamous "One Percent Doctrine". Ron Suskind explained Cheney's reasoning:

"Even if there's just a 1 percent chance of the unimaginable coming due, act as if it is a certainty…. Justified or not, fact-based or not, 'our response' is what matters."
Commenting on the impact Cheney's policy had on the role of evidence in judicial proceedings, Suskind writes:
"As to 'evidence', the bar was set so low that the word itself almost didn't apply."

Terrorism statutes

For the past 12 years, this wanton policy has been wielded primarily against Muslims in a frenzy of cases brought against US citizens and others in immigration, civil and criminal courts, with anguished and predictable devastation wrought on individuals and their families.
"If they are sufficiently 'Muslim', they are sufficiently 'predisposed'," writes Steve Downs, civil liberties lawyer and founder of Project Salam, in Victims of America's Dirty Wars.
In a telephone conversation with me, however, Downs noted that this policy has recently been extended to apply to those who hold other "ideologies", namely leftists and anarchists. Downs pointed to a handful of cases, including the "Cleveland 5", "RNC 8" and "Nato 3" that suggest the direction in which the policy of preemptive prosecution is going. In the wake of 9/11, many states - including Illinois, New York, New Jersey and Oklahoma - passed terrorism statutes that included their own variations on the definition of terrorism. However, because it is the federal government that primarily handles cases of terrorism, states have rarely employed these laws. Last year, for the first time, Illinois deployed its own statute against terrorism. Illinois' terrorism law states:

"A person commits the offence of terrorism, when with the intent to intimidate or coerce a significant portion of a civilian population; he or she knowingly commits a terrorist act."

The language used is vague, opaque and clearly lends itself to a chillingly broad landscape of prosecutorial action. But most significant, the statute does not require that an unlawful act be committed in order for a charge of terrorism to be brought against an individual in an Illinois court. Indeed, civil rights lawyer Michael Deutsch believes, "The law could theoretically be used against labour strikes, acts of civil disobedience, demonstrations, and so on." In other words, acts that should be protected under the First Amendment are not exempted from the definition of terrorism. We have already seen how the domestic front of the "War on Terror" has effectively turned lawful acts, like contributing to charities in the Middle East, into illegal "material support" of Foreign Terrorist Organisations. Staggering attacks on democracy and liberty continue as a growing list of activities that are framed as terrorism. The only time the Illinois statute has been used was against a group of Occupy activists. On May 16, 2012, days before the NATO summit was scheduled to take place in Chicago, the local police raided an apartment and arrested nine Occupy activists who had come together from around the country to protest the convention. Over the next few days, all but three were released. Those who remained behind bars were: Brian Church, 22, and Brent Betterly, 24, from Florida, and Jared Chase, 27, from New Hampshire...


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Response to Tansy_Gold (Original post)

Tue Feb 26, 2013, 07:51 AM

6. Amazon’s Thuggish Security Force in Germany Shows How Corporations Get Their Way



One of the canards libertarians like to sell is that the state has a monopoly on violence.

They need to get a handle on some basic economic concepts, for starters:

[LI]Economies of scale

[LI]Network effects

[LI]Barriers to entry

Those three alone, which operate in many fields of commerce, means that the natural (tendency) of that industry will be towards fewer and more powerful players, unless something intercedes (such as disruptive technology that changes industry boundaries or regulation). Fewer and more powerful players means oligopoly or monopoly pricing, which even neoclassical economists will admit happens and depict as a Very Bad Thing. This reason alone is why the overwhelming majority of economists that say they are in favor of “free markets” favor regulation to make them work properly. This is one of the many reasons we describe “free markets” as an oxymoron. Concentrated power allows companies to behave thuggishly, sometimes in a literal rather than figurative manner. It is remarkable how, in the US, the story of the physical risks that early labor organizers and protestors took has been virtually airbrushed out of the record. For instance, from Strikebreaking and Intimidation: Mercenaries and Masculinity in Twentieth Century by Stephen Harlan Norwood:

Don’t kid yourself into thinking that this was an isolated incident. This was what the NLRB later described as Henry Ford’s war on unions. Bennett built the world’s largest private army. And it was not as if he was wanting for competition. GM and Chrysler also had their hired goons, but they worked through intermediaries to keep their hands cleaner. Consider this Wikipedia description of Pinkerton:

At its height, the Pinkerton National Detective Agency employed more agents than there were members of the standing army of the United States of America, causing the state of Ohio to outlaw the agency due to fears it could be hired as a private army. Pinkerton was the largest private law enforcement organization in the world at the height of its power.

During the labor unrest of the late 19th and early 20th centuries, businessmen hired the Pinkerton Agency to infiltrate unions, to supply guards to keep strikers and suspected unionists out of factories, and sometimes to recruit goon squads to intimidate workers. The best known such confrontation was the Homestead Strike of 1892, in which Pinkerton agents were called in to enforce the strikebreaking measures of Henry Clay Frick, acting on behalf of Andrew Carnegie, who was abroad; the ensuing conflicts between Pinkerton agents and striking workers led to several deaths on both sides.

And powerful employers intimidating workers with the threat of violence is hardly a thing of the past. As the Independent reports (hat tip Richard Smith):

Amazon is at the centre of a deepening scandal in Germany as the online shopping giant faced claims that it employed security guards with neo-Nazi connections to intimidate its foreign workers.

Germany’s ARD television channel made the allegations in a documentary about Amazon’s treatment of more than 5,000 temporary staff from across Europe to work at its German packing and distribution centres.

The film showed omnipresent guards from a company named HESS Security wearing black uniforms, boots and with military haircuts. They were employed to keep order at hostels and budget hotels where foreign workers stayed. “Many of the workers are afraid,” the programme-makers said.

The documentary provided photographic evidence showing that guards regularly searched the bedrooms and kitchens of foreign staff. “They tell us they are the police here,” a Spanish woman complained. Workers were allegedly frisked to check they had not walked away with breakfast rolls.

Another worker called Maria said she was thrown out of the cramped chalet she shared with five others because she had dried her wet clothes on a wall heater. She said she was confronted by a muscular, tattooed security man and told to leave. The guards then shone car headlights at her in her chalet while she packed in an apparent attempt to intimidate her.

Several guards were shown wearing Thor Steinar clothing – a Berlin-based designer brand synonymous with the far-right in Germany. The Bundesliga football association and the federal parliament have both banned the label because of its neo-Nazi associations. Ironically, Amazon stopped selling the clothing for the same reasons in 2009.

ARD suggested that the name “HESS Security” was an allusion to Adolf Hitler’s deputy, Rudolf Hess. It alleged that its director was a man, named only as Uwe L, who associated with football hooligans and convicted neo-Nazis who were known to police. The programme-makers, who booked in at one of the budget hotels where Amazon staff were housed, said they were arrested by HESS Security guards after being caught using cameras. They were ordered to hand over their film and, when they refused, were held for nearly an hour before police arrived and freed them. The film showed HESS guards scuffling with the camera crew and trying to cover their lenses.

Notice that the goons held the filmmakers and the police “freed” them? That’s unlawful detention.

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Response to Tansy_Gold (Original post)

Tue Feb 26, 2013, 07:58 AM

7. The recession was her fault: Meet Wall Street's scapegoat



You remember Lynndie England. She was the Army Reserve soldier photographed at the Abu Ghraib prison giving the thumbs-up sign in front of a set of naked detainees. A lower-level reservist, she was among the few at Abu Ghraib who actually served prison time. No officers who authorized and directed the torture and detainee abuse, either in that prison, at Guantanamo Bay or anywhere around the world, ever faced trial. But Lynndie England became a symbol for the sorry state of the rule of law in America, where a few small “bad apples” get held to account, and the higher-ups who devised and directed the criminal activity get off scot-free.

There’s a Lynndie England for the financial crisis, too.

Meet Lorraine O. Brown, an individual singled out for actual jail time for her role in the massive mortgage document fraud that plagued this nation. Like England, she stands alone among the multitudes of fraudsters, including those at the highest reaches of the financial industry. Brown was the President of DocX, a company that created and processed mortgage-related documents, first as a stand-alone unit, and later as a subsidiary of the document processing giant Lender Processing Solutions (LPS). And like Lynndie England, Brown committed a series of legitimate crimes. From 2003 until 2009, DocX routinely forged mortgage documents. Brown directed the scheme, whereby low-wage temporary workers would sign the documents in the name of executives at DocX, who were authorized as signers by mortgage servicers. Then, different temporary workers would attach fake notarizations to the documents, attesting to their veracity. This “Surrogate Signer” program allowed DocX to execute thousands of documents per day, increasing their profit margins.

These forged mortgage documents were distributed to county land recording offices and state courts all over the country. After the collapse of the housing bubble, when these documents were put to use in foreclosure or bankruptcy cases, the scheme became apparent when people started comparing multiple mortgage documents with the names of authorized signers like Linda Green, all of which had markedly different handwriting. This scheme was part of the giant bundle of illegal conduct known as foreclosure fraud. According to statements of fact from the Justice Department, from 2003 to 2009 DocX recorded over one million fake documents. That’s probably a low number. DocX wasn’t just forging signatures, they were fabricating entire loan files. During the bubble years, they created a now-infamous mortgage fabrication price sheet, where mortgage servicers, who had trouble proving in court that they owned the homes they wanted to put into foreclosure, could purchase, at low prices, whatever documents they needed. To “Recreate Entire Collateral File,” basically the whole set of documents including the promissory note? That would set a servicer back $95.00.

The larger foreclosure fraud scandal eventually exploded in late 2010, and after over a year of wrangling, the five biggest mortgage servicers – tiny outfits with names like Bank of America, JPMorgan Chase, Wells Fargo, Citi and Ally/GMAC – got their legal liability released in a sweetheart settlement. But Lorraine O. Brown was not so lucky. Her biggest mistake was lying to the FBI, claiming that she never instructed any employee to forge a document or participate in a “Surrogate Signing” program. More important, LPS had closed DocX by this time, making Brown expendable. Chris Koster, the attorney general of Missouri, indicted Brown, DocX and LPS for forgery. But Koster did not attempt to flip the smaller fry to get to the higher-ups, the standard strategy of most criminal prosecutors. Instead, LPS cut a deal with Missouri for a mere $2 million, and in exchange “cooperated” in the Brown investigation. This severed Brown from the parent company, which not only had to know what was happening at DocX, but used basically the same assembly-line mortgage document execution at its other facilities. In a September 2006 newsletter called “The Summit,” managers for LPS, then known as Fidelity National Foreclosure Solutions, openly touted the process that allowed them to “execute 1,000 documents per day.” Brown’s DocX wasn’t the only forgery and fabrication shop in the United States. This was industry practice...Furthermore, evidence of the DocX forgery and fabrication process could be used to reach even higher. Who directly solicited the company for fake documents? The foreclosure mill law firms, which then knowingly submitted them into courts. Who directed the foreclosure mills to do that? The mortgage servicers, which are typically units of the biggest banks. Furthermore, there’s no reason to ever request the “entire collateral file” unless you have no other way to generate evidence to prove underlying ownership of the loan. This speaks to a faulty mortgage transfer process, improper securitizations, and generally fraudulent practices at the heart of Wall Street.

None of that was pursued. Instead, Lorraine O. Brown felt the full weight of US law enforcement....


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Response to Tansy_Gold (Original post)

Tue Feb 26, 2013, 08:01 AM

8. The Financial Instrument That Could Save the Economy - and Why It Hasn't By Ellen Brown, Truthout



Quantitative easing (QE) is supposed to stimulate the economy by adding money to the money supply, increasing demand. But so far, it hasn't been working. Why not? Because as practiced for the last two decades, QE does not actually increase the circulating money supply. It merely cleans up the toxic balance sheets of banks. A real "helicopter drop" that puts money into the pockets of consumers and businesses has not yet been tried. Why not? Another good question.

When Ben Bernanke gave his famous helicopter money speech to the Japanese in 2002, he was not yet chairman of the Federal Reserve. He said then that the government could easily reverse a deflation, just by printing money and dropping it from helicopters. "The US government has a technology, called a printing press (or, today, its electronic equivalent)," he said, "that allows it to produce as many US dollars as it wishes at essentially no cost." Later in the speech, he discussed "a money-financed tax cut," which he said was "essentially equivalent to Milton Friedman's famous 'helicopter drop' of money." Deflation could be cured, said Friedman, simply by dropping money from helicopters.

It seemed logical enough. If the money supply were insufficient for the needs of trade, the solution was to add money to it. Most of the circulating money supply consists of "bank credit" created by banks when they make loans. When old loans are paid off faster than new loans are taken out (as is happening today), the money supply shrinks. The purpose of QE is to reverse this contraction. But if debt deflation is so easy to fix, then why have the Fed's massive attempts to pull this maneuver off failed to revive the economy? And why is Japan still suffering from deflation after 20 years of quantitative easing?

On a technical level, the answer has to do with where the money goes. The widespread belief that QE is flooding the economy with money is a myth. Virtually all of the money it creates simply sits in the reserve accounts of banks.That is the technical answer, but the motive behind it may be something deeper...


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Response to Tansy_Gold (Original post)

Tue Feb 26, 2013, 10:38 AM

9. Happy Birthday, Dear Income Tax


In February 1913, exactly a century ago, the Sixteenth Amendment gave Congress a constitutional green light to levy a federal tax on income. Later that same year, lawmakers made good on that opportunity. An income tax has been part of the federal tax code ever since.

So what can we learn, as progressives, from this first century of income taxation?

Lesson One

Steeply graduated income tax rates can help societies do big things.

A half-century ago, America’s federal income tax rates rose steadily—and quite steeply—by income level, with 24 tax brackets in all. On income roughly between $32,000 and $64,000, in today’s dollars, couples in the 1950s faced a 22 percent tax rate. On income that today would equal between $500,000 and $600,000, affluent Americans faced a tax rate of 65 percent. The highest 1950s tax rate, 91 percent, fell on annual income that would today exceed $3.2 million.

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Response to Tansy_Gold (Original post)

Tue Feb 26, 2013, 10:41 AM

10. Austerity, Italian Style By PAUL KRUGMAN


Two months ago, when Mario Monti stepped down as Italy’s prime minister, The Economist opined that “The coming election campaign will be, above all, a test of the maturity and realism of Italian voters.” The mature, realistic action, presumably, would have been to return Mr. Monti — who was essentially imposed on Italy by its creditors — to office, this time with an actual democratic mandate.

Well, it’s not looking good. Mr. Monti’s party appears likely to come in fourth; not only is he running well behind the essentially comical Silvio Berlusconi, he’s running behind an actual comedian, Beppe Grillo, whose lack of a coherent platform hasn’t stopped him from becoming a powerful political force.

It’s an extraordinary prospect, and one that has sparked much commentary about Italian political culture. But without trying to defend the politics of bunga bunga, let me ask the obvious question: What good, exactly, has what currently passes for mature realism done in Italy or for that matter Europe as a whole?

For Mr. Monti was, in effect, the proconsul installed by Germany to enforce fiscal austerity on an already ailing economy; willingness to pursue austerity without limit is what defines respectability in European policy circles. This would be fine if austerity policies actually worked — but they don’t. And far from seeming either mature or realistic, the advocates of austerity are sounding increasingly petulant and delusional.

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Response to xchrom (Reply #10)

Tue Feb 26, 2013, 11:49 AM

25. You tell them, Dr. Krugman


Their shell game is exposed and busted.

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Response to Tansy_Gold (Original post)

Tue Feb 26, 2013, 10:49 AM

11. JPMorgan Chase to cut up to 4,000 jobs in 2013


NEW YORK (Reuters) - JPMorgan Chase & Co plans to cut about 3,000 to 4,000 jobs in its consumer bank in 2013, representing about 1.5 percent of the company's overall workforce, it said in a presentation On Tuesday.
The cuts will come mainly through attrition, spokeswoman Kristin Lemkau said. JPMorgan Chase had 258,965 employees globally at the end of 2012.
The bank said in its presentation that it is aiming to cut overall expenses by $1 billion (659 million pounds) in 2013.

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Response to Tansy_Gold (Original post)

Tue Feb 26, 2013, 10:51 AM

12. Italy election sparks fresh fears for euro


Italy threatened to pitch the eurozone into fresh turmoil on Monday night as the result of its general election pointed to a hung parliament and confirmed the anti-establishment Five Star Movement, led by a comedian-turned-politician, had exploded on to the national stage.

With almost all the votes counted, the centre-left had a lead in the race for the lower house, the chamber of deputies, where it would be assured an outright majority under electoral rules. It was also reckoned to have more seats in the senate, beating a resurgent right led by Silvio Berlusconi by a narrow margin. However, the figures and estimates given did not include the results of four overseas constituencies.

Neither right nor left had an outright majority in the upper house, where the balance will be held by Beppe Grillo's Five Star Movement (M5S). Grillo has ruled out supporting either side in his drive to sweep away Italy's existing political parties and the cronyistic culture they support – a sentiment he appeared to reiterate after the countby insisting the M5S was not planning on "any stitch-ups, big or small" and lambasting Berlusconi's voters for committing "a crime against the galaxy".

In an audio message broadcast live online, Grillo said that, after his movement's "exceptional" results, the mainstream parties were "finished, and they know it". "We've started a war of generations … They've been there for 25 to 30 years and they've led this country to catastrophe," he said. "We will be an extraordinary force … We will be 110 inside [the parliament] and several million outside."

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Response to Tansy_Gold (Original post)

Tue Feb 26, 2013, 10:54 AM

13. Italy faces post-vote stalemate, spooking investors


(Reuters) - The Italian stock market fell and state borrowing costs rose on Tuesday as investors took fright at political deadlock after a stunning election that saw a comedian's protest party lead the poll and no group secure a clear majority in parliament.

"The winner is: Ingovernability" ran the headline in Rome newspaper Il Messaggero, reflecting the stalemate the country would have to confront in the next few weeks as sworn enemies would be forced to work together to form a government.

In a sign of where that might lead, former prime minister Silvio Berlusconi indicated his center-right might be open to a grand coalition with the center-left bloc of Pier Luigi Bersani, which will have a majority in the lower house thanks to a premium of seats given to the largest bloc in the chamber.

Results in the upper house, the Senate, where seats are awarded on a region-by-region basis, indicated the center-left would end up with about 119 seats, compared with 117 for the center-right. But 158 are needed for a majority to govern.

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Response to Tansy_Gold (Original post)

Tue Feb 26, 2013, 10:55 AM

14. Wall Street opens higher after drop on Italian vote


(Reuters) - Stocks rose on Tuesday, rebounding from the previous session's steep drop over Italian election results as investors bought beaten-down shares.

The Dow Jones industrial average .DJI was up 60.43 points, or 0.44 percent, at 13,844.60. The Standard & Poor's 500 Index .SPX was up 6.19 points, or 0.42 percent, at 1,494.04. The Nasdaq Composite Index .IXIC was up 10.99 points, or 0.35 percent, at 3,127.24.

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Tue Feb 26, 2013, 10:58 AM

15. EU watchdog worries about how banks add up risks


Reuters) - Regulatory action may be needed to end variations in the ways banks add up the risks on their books to determine how big their capital buffers should be, the European Banking Authority said.

As regulators put in place tougher capital requirements, known as Basel III, following the 2007-09 financial crisis, they want to be sure calculations used by banks to meet them are sound.

Faith in figures that banks publish is seen as core to restoring investor and public trust in the financial sector.

The EBA released interim results on Tuesday of its probe into risk-weighted assets on the main banking books of 89 banks, which it did not name, from 16 European Union countries.

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Response to Tansy_Gold (Original post)

Tue Feb 26, 2013, 11:00 AM

16. Italy's political uncertainty hits stocks,


(Reuters) - World stock markets and southern European government bonds sank on Tuesday on fears that political gridlock in Italy would leave its economic reforms in tatters and reignite the euro zone's broader debt crisis.

However, U.S. stocks, which fell in reaction to the Italian election outcome on Monday, were poised to open higher, with investors awaiting testimony by Federal Reserve Chairman Ben Bernanke on future policy direction. .N

But the uncertainty generated by the Italian poll was still rattling most other major risk asset markets, with Italy's 10-year bond yields, which rise as prices fall, up as much as half a point to 4.86 percent, their highest since mid-December.

Investors also sold Spanish and Portuguese debt and sent Brent crude oil prices down to $113 barrel, their lowest level in a month, while safe-haven assets like gold and German government bonds rallied.

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Response to Tansy_Gold (Original post)

Tue Feb 26, 2013, 11:01 AM

17. Germany wants US-EU trade zone negotiations to begin in summer


(Reuters) - German Foreign Minister Guido Westerwelle said on Tuesday that Berlin hoped negotiations between the European Union and the United States on a transatlantic free trade zone could begin this summer.

Speaking at a joint news conference with visiting U.S. Secretary of State John Kerry, Westerwelle said the two sides were "serious" about a trade deal that would boost growth and jobs.

"It would bring growth and jobs. And it could do this without raising new debt. Therefore we are in full agreement that a transatlantic free trade deal needs to come. We are both serious about this," Westerwelle said.

"From the German perspective it would be desirable, if the preparatory work can be completed successfully, that negotiations between Europe and the United States begin in the summer. We see a window of opportunity."

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Tue Feb 26, 2013, 11:17 AM



WASHINGTON (AP) -- U.S. new-home sales jumped in January from the previous month to the highest level since July 2008, a sign that the housing recovery is accelerating.

The Commerce Department said Tuesday that new-home sales rose nearly 16 percent in January to a seasonally adjusted annual rate of 437,000. The percentage increase was the largest in nearly 20 years. And December's sales were revised higher to 378,000 from 369,000.

Steady job creation and near-record-low mortgage rates are spurring more Americans to buy houses. At the same time, the number of previously occupied homes for sale is at a 13-year low. That shortage creates more demand for new homes. Builders began construction on the most homes in four years last year.

Though new homes represent less than 20 percent of the housing sales market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to data from the National Association of Homebuilders.

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Tue Feb 26, 2013, 11:19 AM



WASHINGTON (AP) -- Profits of U.S. banks jumped almost 37 percent from October through December, reaching the highest level in six years as banks continued to step up lending.

The figures are fresh evidence of the banking industry's sustained recovery more than four years after the financial crisis.

The Federal Deposit Insurance Corp. reported Tuesday that banks earned $34.7 billion in the quarter, the highest since the fourth quarter of 2006.

The agency also says banks posted reduced losses on loans in the fourth quarter and set aside almost 25 percent less to cover potential losses than in the final quarter of 2011.

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Response to Tansy_Gold (Original post)

Tue Feb 26, 2013, 11:26 AM

20. Americans anxious about retirement


Even as the economy slowly improves, the vast majority of Americans remain deeply worried about their ability to achieve a secure retirement, according to a new survey.

The poll, to be released by the National Institute on Retirement Security (NIRS) at a conference on Tuesday, found that 55 percent of Americans are “very concerned” that the current economic conditions are harming their retirement prospects. An additional 30 percent reported being “somewhat concerned” about their ability to retire.

The level of anxiety Americans feel about their preparation for retirement has continued to peak in the recession’s aftermath, a finding that the poll’s sponsors said highlights the need for policymakers to bolster the nation’s retirement programs.

“People are anxious about retirement. We know that,” said Diane Oakley, president of NIRS, a Washington-based nonprofit organization. “The question is, how do you get people to act on that?”

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Response to Tansy_Gold (Original post)

Tue Feb 26, 2013, 11:31 AM

21. Bernanke Defends Asset Purchases as Benefits Outweigh Risks


Federal Reserve Chairman Ben S. Bernanke defended the central bank’s unprecedented asset purchases, saying they are supporting the expansion with little risk of inflation or asset-price bubbles.

“We do not see the potential costs of the increased risk- taking in some financial markets as outweighing the benefits of promoting a stronger economic recovery,” Bernanke said today in prepared testimony to the Senate Banking Committee in Washington. “Inflation is currently subdued, and inflation expectations appear well anchored.”

Automatic federal budget cuts set to begin March 1 will put a “significant” burden on the economy if lawmakers can’t avert the reductions, Bernanke told lawmakers in the first day of his semiannual monetary policy report to Congress. He also urged lawmakers to put the budget on a “sustainable long-run path.”

Bernanke and his colleagues on the Federal Open Market Committee are debating whether to curtail $85 billion in monthly bond-buying amid concern the Fed’s record $3.1 trillion balance sheet may encourage excessive risk-taking by investors and complicate the Fed’s exit from easing. Several participants at the Jan. 29-30 meeting said the Fed should be prepared to vary the pace of purchases as the economic outlook changes, according to minutes released last week.

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Response to Tansy_Gold (Original post)

Tue Feb 26, 2013, 11:34 AM

22. Spain “extremely concerned” about Italy jitters as risk premium rises


Spanish Foreign Minister José Manuel García-Margallo on Tuesday expressed “extreme concern” about the uncertainty in Italy in the wake of the general elections there that left the country in a potential political limbo.

That concern also manifested itself in the financial markets as the Spanish bourse fell sharply and the country’s risk premium jumped.

“The [election] result of any country, and much more when we are taking about the third economy in the euro zone, affects all of us,” García-Margallo said. “What has happened is a jump to nowhere that doesn’t augur well either for Italy or for Europe.”

At midafternoon, the blue-chip Ibex 35 index was down 2.64 percent, while the spread between the yield on the Spanish benchmark 10-year government bond and the German equivalent widened 24 basis points to 385 after having hit a high of 412 earlier on, its highest level in several weeks.

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Response to Tansy_Gold (Original post)

Tue Feb 26, 2013, 11:37 AM

23. U.S. Stocks Rise on Better-Than-Estimated Economic Data


U.S. stocks gained, following the biggest slump since November for benchmark indexes, amid better- than-estimated housing and consumer confidence data.

Home Depot Inc. (HD) rallied 5.6 percent as the company raised its dividend and approved a $17 billion share buyback after profit beat analysts’ estimates. Macy’s Inc. (M), the second-largest U.S. department-store chain, gained 3 percent after forecasting earnings that surpassed analysts’ projections.

The Standard & Poor’s 500 Index rose 0.4 percent to 1,493.08 at 10:16 a.m. New York time. The Dow Jones Industrial Average added 82.01 points, or 0.6 percent, to 13,866.18. Trading in S&P 500 companies was in line with the 30-day average at this time of day, according to data compiled by Bloomberg.

“The economic data suggests that there’s further healing going on in the housing market,” Tom Wirth, who helps manage $1.6 billion as senior investment officer for Chemung Canal Trust Co., in Elmira, New York, said in a telephone interview. “This would certainly be a factor to drive U.S. stocks higher.”

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Response to Tansy_Gold (Original post)

Tue Feb 26, 2013, 11:46 AM

24. See Explanation below


This award is for an infinite amount, anything divided by zero is undefined...I guess the point is, the infringement was so egregious, not even math skills were required to figure it out....

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