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Sun Mar 17, 2013, 05:26 PM

STOCK MARKET WATCH -- Monday, 18 March 2013

[font size=3]STOCK MARKET WATCH, Monday, 18 March 2013[font color=black][/font]

SMW for 15 March 2013

[center][font color=red]
Dow Jones 14,514.11 -25.03 (-0.17%)
S&P 500 1,560.70 -2.53 (-0.16%)
Nasdaq 3,249.07 -9.86 (-0.30%)

[font color=red]10 Year 1.94% +0.01 (0.52%)
30 Year 3.17% +0.02 (0.63%)[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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Reply STOCK MARKET WATCH -- Monday, 18 March 2013 (Original post)
Tansy_Gold Mar 2013 OP
Demeter Mar 2013 #1
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Demeter Mar 2013 #3
Demeter Mar 2013 #16
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Demeter Mar 2013 #6
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Tansy_Gold Mar 2013 #14
kickysnana Mar 2013 #15
Demeter Mar 2013 #17
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Fuddnik Mar 2013 #56
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bread_and_roses Mar 2013 #43
Demeter Mar 2013 #46
snot Mar 2013 #52
amandabeech Mar 2013 #54
bread_and_roses Mar 2013 #57
xchrom Mar 2013 #44
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Tansy_Gold Mar 2013 #49
Demeter Mar 2013 #55
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Tansy_Gold Mar 2013 #53

Response to Tansy_Gold (Original post)

Sun Mar 17, 2013, 06:23 PM

1. Look at Gold and Silver Spiking!


I'd say the panic was on...thank you, Angela, for knifing the Cypriots. You really are something...and I'm feeling too lady-like to say what.

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Response to Tansy_Gold (Original post)

Sun Mar 17, 2013, 06:32 PM

2. DRONING ON: As drone monopoly frays, Obama seeks global rules By Tabassum Zakaria





President Barack Obama, who vastly expanded U.S. drone strikes against terrorism suspects overseas under the cloak of secrecy, is now openly seeking to influence global guidelines for their use as China and other countries pursue their own drone programs. The United States was the first to use unmanned aircraft fitted with missiles to kill militant suspects in the years after the September 11, 2001, attacks on New York and Washington. But other countries are catching up. China's interest in unmanned aerial vehicles was displayed in November at an air show . According to state-run newspaper Global Times, China had considered conducting its first drone strike to kill a suspect in the 2011 murder of 13 Chinese sailors, but authorities decided they wanted the man alive so they could put him on trial.

"People say what's going to happen when the Chinese and the Russians get this technology? The president is well aware of those concerns and wants to set the standard for the international community on these tools," said Tommy Vietor, until earlier this month a White House spokesman. As U.S. ground wars end - over in Iraq, drawing to a close in Afghanistan - surgical counterterrorism targeting has become "the new normal," Vietor said.

Amid a debate within the U.S. government, it is not yet clear what new standards governing targeted killings and drone strikes the White House will develop for U.S. operations or propose for global rules of the road. Obama's new position is not without irony. The White House kept details of drone operations - which remain largely classified - out of public view for years when the U.S. monopoly was airtight. That stance is just now beginning to change, in part under pressure from growing public and Congressional discomfort with the drone program...


Strikes by missile-armed Predator and Reaper drones against terrorism suspects overseas began under former President George W. Bush and were expanded by Obama. The ramp-up started in 2008, the last year of Bush's term, when there were 35 air strikes in Pakistan, and escalated under Obama to a peak of 117 in 2010, according to The Long War Journal (http://www.longwarjournal.org/pakistan-strikes.php ). That jump in use of armed drones resulted from the authorization to use "signature" strikes, which allowed targeting terrorism suspects based on behavior and other characteristics without knowing their actual identity, a U.S. official said on condition of anonymity. Caitlin Hayden, a spokeswoman for the White House National Security Council, said the administration is committed to explaining to Congress and the public as much as possible about its drone policies, including how decisions to strike are made.
"We are constantly working to refine, clarify, and strengthen the process for considering terrorist targets for lethal action," Hayden said. The administration recognizes "we are establishing standards other nations may follow," she said.

James Lewis, a senior fellow at the Center for Strategic and International Studies think tank, said other countries, including Russia, have unarmed reconnaissance drones. China says it has an armed drone, but "we don't know if it works," he said. "Getting agreement on the applicability of existing humanitarian law to the new technologies is crucial," he said, because China and Russia do not endorse applying laws of armed conflict to new military technologies. One of the Obama administration's goals is to "regularize" the drone program, making it more a part of accepted U.S. practice in the future, Lewis said. "This is going to be part of warfare." While the Obama administration moves toward refinement and transparency of standards, drone strikes continue to spark outrage in countries where they are conducted. Washington has sought to portray civilian casualties from drone strikes as minimal, but groups collecting data on these attacks say they have killed hundreds of civilians. A U.N. human rights investigator who is looking into drone strikes worldwide said on Friday the U.S. campaign had violated Pakistan's sovereignty.


One focus of U.S. officials' internal debate is whether to shift drone operations to the Pentagon from the CIA. That would allow the CIA to return to more traditional operations of espionage and intelligence analysis, and put the killing of terrorism targets in the hands of the military...


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Response to Demeter (Reply #2)

Sun Mar 17, 2013, 06:38 PM

3. Smart Drones By BILL KELLER



IF you find the use of remotely piloted warrior drones troubling, imagine that the decision to kill a suspected enemy is not made by an operator in a distant control room, but by the machine itself. Imagine that an aerial robot studies the landscape below, recognizes hostile activity, calculates that there is minimal risk of collateral damage, and then, with no human in the loop, pulls the trigger.

Welcome to the future of warfare. While Americans are debating the president’s power to order assassination by drone, powerful momentum — scientific, military and commercial — is propelling us toward the day when we cede the same lethal authority to software.

Next month, several human rights and arms control organizations are meeting in London to introduce a campaign to ban killer robots before they leap from the drawing boards. Proponents of a ban include many of the same people who succeeded in building a civilized-world consensus against the use of crippling and indiscriminate land mines. This time they are taking on what may be the trickiest problem arms control has ever faced.

The arguments against developing fully autonomous weapons, as they are called, range from moral (“they are evil”) to technical (“they will never be that smart”) to visceral (“they are creepy”).

“This is something people seem to feel at a very gut level is wrong,” says Stephen Goose, director of the arms division of Human Rights Watch, which has assumed a leading role in challenging the dehumanizing of warfare. “The ugh factor comes through really strong.”

Some robotics experts doubt that a computer will ever be able to reliably distinguish between an enemy and an innocent, let alone judge whether a load of explosives is the right, or proportional, response. What if the potential target is already wounded, or trying to surrender? And even if artificial intelligence achieves or surpasses a human level of competence, the critics point out, it will never be able to summon compassion...


...Israel is the first country to make and deploy (and sell, to China, India, South Korea and others) a weapon that can attack pre-emptively without a human in charge. The hovering drone called the Harpy is programmed to recognize and automatically divebomb any radar signal that is not in its database of “friendlies.” No reported misfires so far, but suppose an adversary installs its antiaircraft radar on the roof of a hospital?

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Response to Demeter (Reply #2)

Mon Mar 18, 2013, 04:04 AM

16. Covert Drone Warfare, By the Numbers



Drone strikes have also been used in covert wars in Pakistan, Yemen and Somalia.

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Response to Tansy_Gold (Original post)

Sun Mar 17, 2013, 06:45 PM

4. 5 cities where houses are still cheap: Buyers can still find plenty of deals in distressed propertie



Foreclosures and short sales, where homes sell for less than owners owe on their mortgages, accounted for 43% of residential sales last year, according to data released this week by RealtyTrac, a real-estate-data firm. Short-sale purchases increased 4% from a year prior, while sales of homes in pre-foreclosure — that is, in some stage of foreclosure before a home is repossessed — increased 6%.

Fueling these increases are big discounts for the taking. In many markets — including Chicago; Daytona Beach, Fla.; and Santa Barbara, Calif. — buyers were able to purchase distressed properties during the fourth quarter of 2012 at an average discount of 30% to 50% to what they’d pay for a regular, nondistressed home, according to RealtyTrac. In many cases, these discounts are available in markets where real-estate prices as a whole appear to have bottomed out, experts say.

Cheap finds come at a time when many buyers are facing a tightening housing market. Real-estate listings have been dropping, pushing up prices of regular homes in many markets. As a result, listing prices of regular homes have been picking up...

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Response to Demeter (Reply #4)

Sun Mar 17, 2013, 06:55 PM

6. Except for the fact that those short sales are going to hedge funds...


which doesn't help real people.

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Response to Tansy_Gold (Original post)

Sun Mar 17, 2013, 06:54 PM

5. 5 Big Reasons Why Americans Don’t Save Their Money



Imagine your car needs a new transmission. It’s going to cost $2,000. Can you scrape that together within the month? If so, you’re better off than nearly half your fellow Americans.

We’re used to thinking of the nation’s economic woes in terms of unemployment. But even our sobering jobless rate masks a deeper economic sickness. In 2011, the National Bureau of Economic Research reported that 44 percent of Americans say they would have trouble coming up with two grand in 30 days if they needed to. These “financially fragile” households—one medical bill or busted furnace away from bankruptcy—cut across low-income groups and the middle class alike. What unites this huge swath of America is not an employment problem, but a savings problem.

Savings aren’t just important for buffering life’s emergencies; research shows that financial assets, more than income, are a strong predictor of upward mobility. They’re also crucial later in life. In 2010, 75 percent of Americans who were approaching retirement age—many of them in the tidal wave of aging baby boomers—had less than $30,000 in their retirement accounts. According to economist Teresa Ghilarducci, about half of middle-class workers will live out their golden years on a food budget of about $5 a day. So here’s the question: Why don’t Americans save?

1. Because It’s So Easy to Borrow

2. Because We Throw Bones to the Wrong Dog

3. Because So Many of Us Live Off the Financial Grid

4. Because You’re Kind of a Jerk to Your Future Self (Unless You Get to Know Him or Her)

5. Because our D.I.Y. Retirement System Just Doesn’t Work (But Would Improve Dramatically With One Simple Change)


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Response to Tansy_Gold (Original post)

Sun Mar 17, 2013, 07:08 PM

7. Hypocrites: At Least 14 GOP Congress Members Who Oppose Government Borrowing Carry OWN Big Debts



As Congressional Republicans again rally around Rep. Paul Ryan’s (R-WI) budget and its goal of eliminating the deficit in ten years, many are using an old talking point. They claim that the federal government should model itself on the federal government stop spending more money than it takes in. But a ThinkProgress examination of recent personal financial disclosure filings reveals that many of the same lawmakers who are urging the nation to balance its books are themselves in debt and have taken out personal and/or business loans.

Government is nothing like a business and cannot be run as one — its aim is to protect its citizens, not to turn a profit. Businesses and individuals often borrow in the short term to make investments for the long term — mortgages, lines of credits, and other sorts of loans are facts of life for millions of Americans and businesses of all sizes. Start-up businesses rarely break even for the first several years and few people can afford to buy their first home outright or pay for their kids to go to college out of pocket.

Still, many politicians who advocate for cuts to vital programs and a dangerous Balanced Budget Amendment to the U.S. Constitution use the argument that government needs to live with in its means because everyone else does — but have debt of their own. These hypocrites include:

House Budget Committee Member Tom Rice (R-SC)
House Budget Committee Member Diane Black (R-TN)
House Budget Committee Member Scott Rigell (R-VA)
House Budget Committee Member Bill Flores (R-TX)
House Republican Leader Eric Cantor (R-VA)
House Budget Committee Member Vicky Hartzler (R-MO)
House Republican Conference Chair Cathy McMorris-Rodgers (R-WA)
House Budget Committee Member Rob Woodall (R-GA)
House Budget Committee Member Alan Nunnelee (R-MS)
House Budget Committee Member James Lankford (R-OK)
House Republican Whip Kevin McCarthy (R-CA)
House Budget Committee Member Sean Duffy (R-WI)


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Response to Demeter (Reply #7)

Sun Mar 17, 2013, 07:10 PM

8. If Corporations Dodge Taxes, Why Shouldn't You? By Robert Scheer



Go offshore young man and avoid paying taxes. Plunder at will in those foreign lands, and if you get in trouble, Uncle Sam will come rushing to your assistance, diplomatically, financially and militarily, even if you have managed to avoid paying for those government services. Just pretend you’re a multinational corporation.

That’s the honest instruction for business success provided by 60 of the largest U.S. corporations that, according to a Wall Street Journal analysis, “parked a total of $166 billion offshore last year” shielding more than 40 percent of their profits from U.S. taxes. They all do it, including Microsoft, GE and pharmaceutical giant Abbott Laboratories. Many, like GE, are so good at it that they have avoided taxes altogether in some recent years.

But they all still expect Uncle Sam to come to their aid with military firepower in case the natives abroad get restless and nationalize their company’s assets. We still have a blockade against Cuba because Fidel Castro more than a half century ago dared seize an American-owned telephone company. During that same period, we have consistently intervened to maintain the lock of U.S. corporations on the world’s resources, continuing to the present task of making Iraq and Libya safe for our oil companies...

...Think of that perfectly legal and widespread racket when you go to pay your taxes in the next weeks, and consider that you have to make up the gap left by the big boys’ antics. Also, when you contemplate the painful cuts coming because of the sequester that undoubtedly will further destabilize the economy, remember that, as the Wall Street Journal estimated, the tax savings of just 19 of those companies would more than cover the $85 billion in spending reductions triggered by the congressional budget impasse...


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Response to Demeter (Reply #8)

Sun Mar 17, 2013, 07:19 PM

9. Blessings of Low Taxes Remain Unproved By EDUARDO PORTER



The proposition that low tax rates produce higher economic growth has been a central plank of the Republican platform since I was a teenager.

[li]In 1980, “The Blues Brothers” were making the jump from “Saturday Night Live” to cult status on the silver screen when Representative Jack F. Kemp of New York, an economic adviser to President-elect Ronald Reagan, warned that taxes were “strangling the ability of the private sector and the American people to grow and expand and invest and save.” He laid out a plan to cut taxes, pare loopholes in the tax code and curb federal spending.

[li]In 1996 Steve Forbes, the magazine publisher, donned the low-tax mantle just in time for Yahoo’s I.P.O. and La Macarena. Running for the Republican nomination on the promise of a “pro-growth, pro-family tax cut,” he cornered the eventual nominee, Robert Dole, into promising cuts of his own.

Since then, we have had a dot-com bubble and a housing bust. The new standard-bearer for lower tax rates, Representative Paul Ryan of Wisconsin, is for the first time younger than I am. But while the message has not changed, the track record of the last three decades does not bear out the core proposition of Republican economic doctrine. The argument has proved extraordinarily successful. Under Republican presidents, the top income tax rate fell as low as 28 percent, less than half the 70 percent level it was in 1980.

The top corporate income tax rate was 46 percent when President Reagan took office. Today it is 35 percent. Taxes on investment income, which primarily flows to the wealthy, are even lower. In laying out his plan for a balanced budget by 2023, Mr. Ryan has trotted out the same three elements of Mr. Kemp’s formula: drastic curbs on spending, paring loopholes in unspecified ways and cutting tax rates even further, well below the roughly 40 percent top rate on income that was reintroduced by President Obama’s recent tax increase.

“The goal of tax reform should be to curb or eliminate loopholes and use those savings to lower tax rates across the board — not to fund more wasteful government spending,” Mr. Ryan’s budget plan states. Echoing Mr. Forbes, he called the new Republican proposal “a pro-growth tax system that benefits families and businesses.”

Problem is, there is little evidence that tax cutting has worked as advertised. Thomas L. Hungerford, an economist with the Congressional Research Service, got into trouble with Republicans last year when he published a study suggesting that the sharp drop in top tax rates since 1945 did little to lift economic growth but probably did contribute to soaring income inequality. And there’s no clear evidence that lower tax burdens have helped the United States grow faster than other advanced industrial nations with higher tax rates and much heavier tax burdens. Economic growth per person in the United States was a little faster than in France or Australia over the last 40 years. But it was a little slower than in Austria, Germany and the Netherlands, according to data from the Organization for Economic Cooperation and Development, a research organization for the world’s richest countries....


“It’s hard to say for sure what our economic trajectory would have looked like with higher taxes,” said Alan Auerbach, an expert on the economics of taxation at the University of California, Berkeley. “Some of the disappointment that our low taxes haven’t had a more obvious impact comes from overblown claims of tax cut supporters.”

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Response to Demeter (Reply #8)

Sun Mar 17, 2013, 09:13 PM

13. Once Upon a Time, Corporations Paid Taxes



In America today, the New York Times reports, we’re living in “a golden age” — for corporate profits. These earnings have been leaping at a 20 percent annual clip. In fact, to find a year when corporations were grabbing as great a share of America’s income as they’re grabbing now, you have to go back to 1950. But corporate execs in 1950 had cause to mute their celebrating. Unlike execs today, they paid heavy taxes on both their corporate and individual earnings.In 1950, by statute, major corporations faced a 42 percent tax rate on their profits, a rate that would jump the next year to just over 50 percent. The share of profits corporations actually paid in taxes, after exploiting loopholes, averaged about 40 percent throughout the 1950s.

The tax hit on top executive individual incomes would be even heftier. In 1950, General Motors chief Charley Wilson took home more pay than any other U.S. chief executive. Wilson reported $586,100 in income that year, about $5.6 million in today’s dollars. He paid $430,350 of that income — 73 percent — in taxes.

Top corporate executives today operate in a totally different universe. The corporations they run, for starters, face a much smaller tax bill. The top corporate tax rate has dropped to 35 percent, and loopholes have proliferated...


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Response to Tansy_Gold (Original post)

Sun Mar 17, 2013, 07:46 PM

10. House Republicans Unanimously Vote Down Minimum Wage Hike



House Republicans unanimously voted down a measure Friday that would have raised the federal minimum wage, from its current $7.25 per hour to $10.10 by 2015. Six Democrats joined 227 Republicans in voting it down; 184 Democrats voted yes.

The legislation was proposed as a last-minute amendment upon passage of the SKILLS Act, which reauthorizes a jobs training program. The procedural move, known as the motion to recommit, was invoked by Democrats with the instruction that the minimum wage amendment be tacked on to the SKILLS Act, an aide said.

An increase in the minimum wage to $9 was backed by President Obama during this year's State of the Union, and immediately shot down by House Speaker John Boehner (R-OH), who argued that it would drive up unemployment by making it harder for small businesses to hire. Democrats believe it's a winning issue for them, and Rep. George Miller (D-CA), the author of the amendment, offered a glimpse into how they intend to talk about it.

"Even while corporate profits soar and the stock market reaches new highs, the working poor continue to fall further and further behind," Miller said in a prepared statement. "If the Republicans want to take away a priority of service for low income Americans who want to learn new skills for a better job and a better life, the least we can do is make sure these workers get a decent wage."

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Response to Tansy_Gold (Original post)

Sun Mar 17, 2013, 07:51 PM

11. Making a New Economy: Getting Cooperative By David Morgan



A new economy is coming. While Wall Street banks are on a trend of corporate mergers and acquisitions, Main Street businesses are generating community wealth while undergoing a transition of their own. Traditional companies are becoming worker cooperatives, both to sustain during tough economic times and because years of success have enabled these companies to reward their workers. State and local governments are beginning to get wise to this trend, too, adding legislative influence to an already vibrant movement.

Take the example of Zingerman's Community of Businesses, an umbrella company that runs a fleet of food service outfits based in Ann Arbor, Michigan. Over the course of more than 30 years, Zingerman's has become a statewide destination for food lovers, and their owners have become business community luminaries. Nearly 600 employees work in the eight distinct businesses that comprise the Zingerman's Community, generating annual revenues of $46 million. Inc. Magazine once rated Zingerman's among the coolest companies in the States, and the very same leaders whose vision has been so celebrated are now designing a plan to transition Zingerman's to an employee-owned worker cooperative. When the transition is complete, Zingerman's will be among the largest worker co-ops in the United States...


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Response to Demeter (Reply #11)

Sun Mar 17, 2013, 07:53 PM

12. Why Unions Are Going Into the Co-op Business By Amy Dean



“Too often we have seen Wall Street hollow out companies by draining their cash and assets and hollow out communities by shedding jobs and shuttering plants,” said United Steelworkers (USW) President Leo Gerard in 2009. “We need a new business model that invests in workers and invests in communities.”

Gerard was announcing a formal partnership between his 1.2-million-member union and Mondragon, a cluster of cooperatives in the Basque region of Spain.

Mondragon employs 83,000 workers in 256 companies. About half of those companies are cooperatives, and about a third of Mondragon’s employees are co-op members with an ownership stake in their workplace. Mondragon companies do everything from manufacturing industrial machine parts to making pressure cookers and home appliances to running a bank and a chain of supermarkets. With billions of euros in annual sales, Mondragon is the largest industrial conglomerate in the Basque region and the fifth-largest in Spain.

The cooperatives use workers’ cash investments as part of the capital needed to finance new projects, and worker-owner co-op members get to vote on strategy, management, and business planning. The highest-paid managers’ salaries are capped at six to eight times what the lowest-paid workers make—as opposed to the United States, where CEOs now make 380 times more than the average worker.

Building union co-ops

As manufacturing in the United States continues in free fall, the USW is working to bring the Mondragon cooperative model to the Rust Belt. It aims to use employee-run businesses to create new, middle-class jobs to replace union work that has gone overseas...MORE

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Response to Demeter (Reply #12)

Sun Mar 17, 2013, 11:32 PM

14. yes yes yes yes yes yes

yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes yes

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Response to Demeter (Reply #12)

Mon Mar 18, 2013, 12:10 AM

15. They are gong to need some muscle when the banksters, corporate blood suckers come after them.

Even filing false tips to the IRS can cost a company a fortune to prove otherwise. Planting smear stories in the paper. Pirating. Phony contracts, pulled not paid. It is the wild, wild west in business right now.

Good guys enter with a lot of backup cause the government does not have your back. There are a couple businesses with ethics groups but then they can be infiltrated just like the voting, patient groups, occupy, peace, environment.

Koch owns so many of the state legislatures already. The CIA/DHS has money to hurt companies and individuals at will and there is no recourse.

My businessman friend in another country said my postings on Facebook are too pessimistic and I usually only post what will affect people directly and immediately. He posts Beatles and civic events. So I compromised, last night I posted pictures of the rescued abandoned (live) baby seals washing up on the West Coast.

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Response to Tansy_Gold (Original post)

Mon Mar 18, 2013, 04:26 AM

17. A short history of austerity: it almost never works



...Instead, severe austerity tends to turn recessions into depressions, consign millions to the dole or under-employment and lead to frightening political turbulence. The most famous episode of austerity was during the interwar years, as Germany, Britain, France and Japan all fought to stay on the Gold Standard even amid the Great Depression. The deflationary impact of keeping their currencies pegged to gold, along with the austerity policies they followed to do so, was disastrous. In Britain, unemployment jumped from 10.4% in 1929 to 22.1% by early 1932, even while government debt surged. In Germany, the Social Democrats stupidly clung to the orthodoxy of austerity, pushing joblessness up to to 30% by 1932, and opening the door to the Nazis.

In Japan, the Showa Depression saw household incomes more than halve within two years between 1929 and 1931. Tokyo cut spending by nearly 20%, with the military bearing the brunt of the privations. The result was a wave of assassinations of government ministers and bankers and attempted coups. As the political scientist Mark Blyth says in his new book, Austerity: "Austerity didn't just fail – it helped blow up the world. That's the definition of a very dangerous idea." And yet when Europe's crisis began in earnest in 2009, rightwing politicians across the continent adopted the line that the best governments could do was cut spending to encourage the private sector to spend. Two of the leading proponents of the argument, economists Alberto Alesina and Silvia Ardagna were invited to present their ideas to European economy and finance ministers.

Yet as Blyth points out, their counter-examples of successful austerity were nothing of the kind. Ireland's cuts from 1987-9? The economy piggy-backed on the Lawson boom in Britain and a global upswing. As for Australia, Alesina and Ardagna mysteriously ended their happy story just before the worst recession in its postwar history. Even now, austerity merchants scratch around for poster children. There's Latvia, whose cuts over the past few years have been described by IMF boss Christine Lagarde as "a success story … an inspiration for European leaders grappling with the euro crisis". Yet around one in 10 of the labour force have emigrated, a further 16% are unemployed and, on IMF estimates, the country will not get back to its pre-crisis trajectory for another decade...

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Response to Demeter (Reply #17)

Mon Mar 18, 2013, 04:34 AM

18. Threat to the Economy Is Private Debt and Interest Owed on It, Not Government Debt By Michael Hudson



...Steve Keen, William Greider,... Yves Smith and Robert Kuttner – have warned about the economy being strapped by debt. The debt we are talking about is private-sector debt. But most officials ... focus on government debt and budget deficits as the problem – especially social spending such as Social Security, BUT not bailouts to the banks and Federal Reserve credit to re-inflate prices for real estate, stocks and bonds... government deficit spending into the economy is the solution. The problem is private debt. And in contrast to Federal Reserve and Treasury bailout policy, we view the problem not as real estate prices too low to cover bank reserves. The problem is the carrying charges on this private debt, and the fact that debt service is eating into personal income – and also business income – to deflate the economy.

[LI]Mortgage debt... is still leading to foreclosures, evictions, and is depressing the real estate market for most buyers except for all-cash hedge funds. We have been urging a write-down of mortgage debt in line with the debtor’s ability to pay, or to bring debt service in line with current market prices. The administration has bailed out the banks for their bad loans, but has kept the debts in place for most of the population. Its promise of debt write-downs has been empty.

[LI]Student loan debt, now the second largest debt in the US at around $1 trillion, is the one kind of debt that has been growing since 2008. It is depriving new graduates of the ability to start families and buy new homes. This debt is partly a byproduct of cutbacks in federal and local aid to the universities, and partly of turning them into profit centers – financializing education to squeeze out an economic surplus to invest in real estate and financial holdings, to pay much higher salaries to upper management (but not to professors, who are being replaced by part-time, un-tenured help), and especially to create a thriving high-profit, zero-risk, government guaranteed loan business for banks...This is not really “socializing” student loans. Its social effects are regressive and negative. It is a bank-friendly giveaway that is helping polarize the economy.

[LI]The character of the stock market has been turned upside down. Instead of raising equity capital to reduce corporate debt ratios, corporate takeovers are being financed with debt.

[LI]Business debt service is still crowding out the use of corporate cash flow for new tangible investment and hiring. This is especially the case for companies bought in leveraged buyouts for corporate or management takeovers. Shareholder activism is forcing industrial companies to yield financial returns, such as using earnings for stock buy-backs to bid up stock market prices (and thereby increase the value of management stock options). We thus are seeing a buildup of financial capital, not of industrial capital.

The result of the private-sector debt overhang is a self-feeding spiral of debt deflation. Revenue earmarked to pay bankers is not available to spend on goods and services. Lower consumer spending is a major reason why firms are not investing in tangible capital to produce more output. Markets shrink, shopping malls close down, and empty stores are appearing for rent on major shopping streets from New York City to London. Slowing employment is causing a state and local budget squeeze. Something has to give – and it is largely pension plans, infrastructure spending and social programs.

However, the one kind of debt we are not worried about is government debt. That’s because governments have little problem paying it. They do not need to balance their budget with tax revenue, because their central bank can simply print the money. On balance, the overall public debt rarely needs to be paid down. As Adam Smith noted in The Wealth of Nations,no government in history ever has paid off its public debt.

Today, governments do not even have to pay interest on money their central banks create. (Think of the Civil War greenbacks.) Even for borrowing from bondholders, Treasury borrowing costs are now the lowest in history. As for the monetary effect of governments running budget deficits, there is little threat of commodity-price inflation. Price rises are concentrated where special interests are able to indulge in monopoly pricing and rent extraction...The problem is that “fiscal responsibility” is economically irresponsible, as far as full employment and economic recovery are concerned. Less government spending shrinks the circular flow between the private sector’s producers and consumers. That is the essence of Modern Monetary Theory (MMT)...governments from the United States to Europe face a choice: to save the economy, or to save the banks and bondholders from taking a loss by keeping the debt overhead in place and re-inflating real estate prices to a level high enough to cover the debts attached to the property whose underwater mortgages are weighing down the banking system...

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Response to Demeter (Reply #18)

Mon Mar 18, 2013, 04:36 AM

19. What Is Modern Monetary Theory, or "MMT"?



Modern Monetary Theory is a way of doing economics that incorporates a clear understanding of the way our present-day monetary system actually works – it emphasizes the frequently misunderstood dynamics of our so-called “fiat-money” economy. Most people are unnerved by the thought that money isn’t “backed” by anything anymore – backed by gold, for example. They’re afraid that this makes money a less reliable store of value. And, of course, it is perfectly true that a poorly managed monetary system, or one which is experiencing something like an oil-price shock, can also experience inflation. But people today simply don’t realize how much bigger a problem the opposite condition can be. Under the gold standard, and largely because of the gold standard, the capitalist world endured eight different deflationary slumps severe enough to be called “depressions.” Since the gold standard was abolished, there have been none – and, as we shall see, this is anything but coincidental.

The great virtue of modern, fiat money is that it can be managed flexibly enough to prevent *both* deflation and also any truly damaging level of inflation – that is, a situation where prices are rising faster than wages, or where both are rising so fast they distort a country’s internal or external markets. Without going into the details prematurely, there are technical reasons why a little bit of inflation is useful and normal. It discourages people from hoarding money and encourages healthy levels of consumption and investment. It promotes growth – provided that a country’s fiscal and monetary authorities manage it properly.

The trick is for the government to spend enough to ensure full employment, but not so much, or in such a way, as to cause shortages or bottlenecks in the real economy. These shortages and bottlenecks are the actual cause of most episodes of excessive inflation. If the mere existence of fiat monetary systems caused runaway inflation, the low, stable rates of consumer-price inflation we have seen over the past thirty-plus years would be pretty difficult to explain.

The essential insight of Modern Monetary Theory (or “MMT”) is that sovereign, currency-issuing countries are only constrained by real limits. They are not constrained, and cannot be constrained, by purely financial limits because, as issuers of their respective fiat-currencies, they can never “run out of money.” This doesn’t mean that governments can spend without limit, or overspend without causing inflation, or that government should spend any sum unwisely. What it emphatically does mean is that no such sovereign government can be forced to tolerate mass unemployment because of the state of its finances – no matter what that state happens to be....

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Mon Mar 18, 2013, 04:39 AM

20. Obama To GOP: I’m Serious About Cutting The Social Safety Net



President Obama is seeking to push Republicans to work with him on a grand deficit bargain by first assuring them he’s willing to cut entitlements, and then attempting to scrape off enough of them who will in turn agree to raise new revenues.

House Republicans emerged from a rare meeting with Obama on Wednesday afternoon saying he assured them he was serious about cutting programs like Social Security and Medicare in order to reduce the long-term deficit.

“It was a really great first step,” said Rep. Reid Ribble (R-WI). “He did express a willingness to give on entitlements.”

“He focused a lot on entitlements,” said Rep. Rodney Davis (R-IL).


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Mon Mar 18, 2013, 04:42 AM

21. Sequestration NIMBYism Grips GOP



A strange sickness is afflicting congressional Republicans.

Unwilling to team up with Democrats to replace sequestration with a mix of spending cuts and tax increases, and unable to pass a cuts-only sequestration measure on their own, Republicans’ official position is that they’ve made their peace with enduring, across-the-board spending cuts in perpetuity.

But now that those cuts are creating real consequences, individual members are experiencing buyer’s remorse. The only problem is, until they change their underlying position on replacing sequestration, the only thing they can do about it is whine...


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Mon Mar 18, 2013, 04:44 AM

22. Which Members of Congress are Standing Up for Economic Decency, and Which ‘Progressives’ Aren’t



By Norman Solomon

Now we know.

Every member of Congress has chosen whether to sign a letter making a crucial commitment: “We will vote against any and every cut to Medicare, Medicaid, or Social Security benefits—including raising the retirement age or cutting the cost of living adjustments that our constituents earned and need.”

The Democratic Party hierarchy doesn’t like the letter. House Democratic leader Nancy Pelosi has said that cutting Social Security would “strengthen” it, and President Obama’s spokespeople keep emphasizing his eagerness to cut Social Security’s cost of living adjustments. The fact that Social Security has nothing to do with the deficit is beside the austerity point.

Since mid-February, across the country, many thousands of people have sent personal notes, submitted petitions and made phone calls imploring members of Congress to sign the letter, initiated by Congressmen Alan Grayson and Mark Takano.

Twenty-eight members of the House of Representatives have signed the letter. Here are their names: Brown, Cartwright, Castor, Clay, Conyers, D. Davis, DeFazio, Ellison, Faleomavaega, Grayson, G. Green, Grijalva, Gutierrez, A. Hastings, Honda, Kaptur, Lee, Lynch, C. Maloney, Markey, McGovern, Nadler, Napolitano, Nolan, Serrano, Takano, Velazquez and Waters.

If you don’t see the name of your Congress member on that list, you live in a House district without a representative standing up for economic decency.

Especially noteworthy are 49 members of the House who belong to the Congressional Progressive Caucus but have refused to sign the Grayson-Takano letter. In most cases, they represent districts with a largely progressive electorate. In effect, their message is: We like to call ourselves “progressive” but we refuse to clearly stand up to an Obama White House that’s pushing to slash Social Security and Medicare benefits. To see the names of those 49 members of Congress, click here.

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Response to Tansy_Gold (Original post)

Mon Mar 18, 2013, 04:47 AM



Return to your regularly-scheduled lives...

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Mon Mar 18, 2013, 04:56 AM

24. 7 Things You Need to Know About the Shocking Cyprus Bailout Crisis That Has Everyone Freaked Out




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Response to Demeter (Reply #24)

Mon Mar 18, 2013, 04:58 AM

25. POINT 7. How will America be impacted?


International banks like Bank of America and JPMorgan Chase are part of global networks. But deposits in American banks up to $250,000 are insured by the Federal Deposit Insurance Corporation. While banks pay something for their ordinary participation in this program, ultimately it is Uncle Sam – meaning you and me – who are on the hook when the FDIC needs backstopping. So our too-big-to-fail banks look set to profit from the federal government they love to denounce, as anxious depositors around the world move money into insured US banks.


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Mon Mar 18, 2013, 08:15 AM

29. Cyprus' savers bear brunt of unprecedented bailout



...Almost half Cyprus's bank depositors are believed to be non-resident Russians, but most queuing on Saturday at automatic teller machines appeared to be Cypriots..

President Nicos Anastasiades, elected three weeks ago with a pledge to negotiate a swift bailout, said refusal to agree to terms would have led to the collapse of the two largest banks. "On Tuesday ... We would either choose the catastrophic scenario of disorderly bankruptcy or the scenario of a painful but controlled management of the crisis," Anastasiades said in written statement. In several statements since his election, he had previously categorically ruled out a deposit haircut.

"My initial reaction is one of shock," said Nicholas Papadopoulos, head of parliament's financial affairs committee. "This decision is much worse than what we expected and contrary to what the government was assuring us, right up until last night," he told Reuters, without saying whether he would back the measure or whether he thought it would pass. Papadopoulos is vice-chairman of the Democratic Party, a partner in Cyprus's centre-right ruling coalition and whose support in parliament will be crucial to pass any haircut. Parliament was expected to convene from 1600 local (1400 GMT) on Sunday to discuss the emergency legislation. Without parliamentary approval, a haircut cannot take place...THIS MEETING HAS BEEN RESCHDULED..

...The levy breaks a euro zone taboo by hitting depositors. It prompted Spain, considered the next most likely state to seek a sovereign rescue though supported recently by a European Central Bank promise to buy government debt if necessary, to deny savers in other countries risked being similarly penalised.The bailout was specific to Cyprus and its bloated banking sector and "could not be extrapolated to any other country," an economy ministry source in Madrid said. In Brussels, Dutch Finance Minister Jeroen Dijsselbloem said it would not otherwise have been possible to save Cyprus's financial sector which, compared with national economic output, is more than twice as big as the EU average. "As it is a contribution to the financial stability of Cyprus, it seems just to ask for a contribution of all deposit holders," Dijsselbloem, who chaired the ministerial meeting, told reporters...


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Response to Demeter (Reply #24)

Mon Mar 18, 2013, 08:17 AM

30. Anastasiades promises natural gas bonds to depositors




Cypriot President Nicos Anastasiades told his citizens on Sunday that he has chosen the least catastrophic option and confirmed that depositors will get bonds linked to natural gas earnings for the haircut their bank accounts have suffered. He also said he is trying to change the terms imposed on Nicosia for the bailout of the 10 billion euros. In a televised address Anastasiades admitted that Cyprus is undergoing “the most tragic moments since 1974,” in reference to the Turkish invasion that has led to the occupation of the northern third of the island.

“The first option would have led to a disorderly default as a result of the decision by the European Central Bank for the immediate stop of the emergency liquidity assistance to the two major Cypriot banks.

“The second is the option of a very difficult but controlled and manageable situation that will eventually lead to the stabilization of the economy and to a rebound,” said Anastasiades, rendering full account of the disastrous impact on the country a disorderly default would have entailed.

"In recognition of its obligations, the state will offer to those who will keep their deposits in Cyprus bonds equal to half of their contribution now, linked to the future public revenues from natural gas," he said, adding that all this is meant to relieve future generations from the consequences of this generation's mistakes.

Meanwhile the government has not yet announced that Tuesday is going to be a bank holiday although sources confirm that this has been the decision of the cabinet.

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Mon Mar 18, 2013, 05:01 AM

26. Bombshell: Senator Sherrod Brown Questions Obama Nominee on Too-Big-to-Jail Banks



Americans learned for the first time on March 6 of this year that the highest law enforcement agent in our country, Attorney General Eric Holder, weighs economic interests when deciding whether to enforce our Nation’s laws against criminal wrongdoers like the too-big-to-fail banks.

The spectacle of warped law enforcement grew worse today during the Senate Banking confirmation hearing of Mary Jo White to head the Securities and Exchange Commission. Under questioning by Senator Sherrod Brown (D-Ohio), White admitted that even the economy of a foreign country – like Japan – is taken into consideration before bringing a criminal indictment in the U.S. Even worse, White was forced to admit that while working for the U.S. Department of Justice as the U.S. Attorney for the Southern District of New York (from 1993 to 2002), she considered it appropriate to speak with Larry Summers (a Treasury Secretary in the Clinton administration) to weigh the economic impact of bringing an indictment....


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Mon Mar 18, 2013, 05:04 AM



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Response to Tansy_Gold (Original post)

Mon Mar 18, 2013, 05:05 AM

28. Going back to bed


Insomnia, properly used, can be a gift...

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Mon Mar 18, 2013, 08:23 AM

31. IMF Urges More Forceful Action to Repair EU Bank System






The European Union needs to take “more forceful action” to shore up its damaged financial sector, including targeted asset-quality reviews to make sure banks aren’t hiding further problems, International Monetary Fund staff said in a report today.
From French banks with big cross-border exposures to vulnerable German savings banks, Europe’s banking industry faces risks that mean it should press ahead with efforts to build a banking union, the Washington-based IMF said in its first assessment of financial regulation across the 27-nation bloc. The report said “pockets of weak banks” continue to threaten hard-won progress to restore financial stability.

“Moving banks and sovereigns jointly to safety is essential,” the IMF staff said. “This should be accomplished by policy contributions that strengthen banks without weakening public-sector balance sheets or vice versa.”

EU leaders decided last year to create a common euro-area bank supervisor at the European Central Bank as part of efforts to contain the sovereign debt crisis. The EU also raised the prospect of offering banks direct aid from the euro area’s 500 billion-euro ($653 billion) firewall fund as a way to break the cycle of banks and nations exacerbating each others’ woes.

The IMF urged the EU to meet June targets for designing rules for the ECB supervisor and on how banks can apply for direct aid. It also warned that if not well planned, the ECB’s oversight could be hampered by individual nations or conflicts from the central bank’s main policy goals....EU leaders also have set a June deadline for governments and the European Parliament to agree on legislation that sets out how authorities should handle bank failures. In the absence of such a system, the bloc’s nations have injected 1.7 trillion euros into their banking systems since the 2008 collapse of Lehman Brothers Holdings Inc., according to European Commission data....In the staff report, the IMF renewed its call for the EU to press ahead on bank resolution at the same time that the new supervisor takes effect. It urged the EU to create a toolbox, rather than a rigid regime, and it warned that efforts to put creditors in the firing line for losses could fall short of expectations because “only a handful of banks have so far made progress in raising liabilities subject to bail-in” when a bank fails.


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Response to Demeter (Reply #31)

Mon Mar 18, 2013, 08:26 AM

32. IMF tells EU to act boldly and fix the banks



The European Union must be bold in putting its banks on a stabler footing, starting with a tougher health check for lenders this year, the International Monetary Fund said.

The Washington-based watchdog said in its first ever formal study of the EU financial sector as a whole that the bloc had made significant progress but more was needed because financial stability remains fragile.

Its 67-page report published on Friday listed a string of reforms that needed completing this year, with heavy emphasis on banks' coming clean on troubled property loans and other assets.

"In the near term more forceful action is warranted to cement recent gains in market confidence and end the crisis," the IMF said....The report's tone contrasts with steadier nerves in Europe in recent months after European Central Bank President Mario Draghi promised to do all it takes to save the euro. After a stress test last year forced lenders to hold more capital, policymakers' concerns have shifted to repairing national finances as shares in banks make a partial recovery. The IMF said the priority should be on repairing banks' balance sheets and completing the reforms that EU leaders have promised. The fear is that bank balance sheets could get worse if there is no economic recovery...


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Response to Tansy_Gold (Original post)

Mon Mar 18, 2013, 08:31 AM

33. MEANWHILE, BACK IN AMERICA: Yet Another Bank Fined for Magnetar Deal, With Yet More Revealing Emails



As we detailed in 2010 with This American Life and NPR’s Planet Money, Magnetar helped create $40 billion worth of deals. The hedge fund, meanwhile, had taken positions that allowed it to profit when many of those same deals collapsed. Since ProPublica reported on Magnetar's dealings three years ago, there's been a long line of investigations and settlements related to the firm...

Deutsche Bank is the latest financial institution to be fined for not warning investors about the role of the hedge fund Magnetar in creating complex mortgage-backed deals that later failed...A Massachusetts financial regulator fined Deutsche Bank $17.5 million Wednesday, saying that the bank did not disclose the role of a securities unit or Magnetar in structuring one such deal—a collateralized debt obligation known as Carina CDO Ltd. In marketing the deal to investors, Deutsche Bank also did not reveal that Magnetar planned to bet against some of the assets in Carina...Carina was worth $1.56 billion, and went bust in 2007, just a year after it was created. Carina was one of the deals described in ProPublica’s articles.

“There is not a single reference in Carina’s sales and marketing materials relating to conflicts of interest,” wrote Massachusetts Secretary of the Commonwealth William Galvin in an order released yesterday.

In reaching the settlement, Deutsche Bank did not admit or deny the charges against it. That’s also been the case in other settlements related to Magnetar deals. Such settlements now total more than $300 million. A spokeswoman for Deutsche Bank said, “We are pleased to have reached this settlement and put this matter behind us.”

Magnetar has never been charged with any wrongdoing related to the creation of the deals and has always maintained it did not select the assets that went into its CDOs and that it was "market neutral," meaning it would make money whether housing rose or fell. Magnetar has not responded to our latest request for comment. Emails quoted in the order suggest Magnetar and Deutsche Bank’s securities unit working in tandem to structure Carina:


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Response to Demeter (Reply #33)

Mon Mar 18, 2013, 08:38 AM

34. Big Banks Have a Big Problem By SIMON JOHNSON



Simon Johnson, former chief economist of the International Monetary Fund, is the Ronald A. Kurtz Professor of Entrepreneurship at the M.I.T. Sloan School of Management and co-author of “White House Burning: The Founding Fathers, Our National Debt, and Why It Matters to You.”

The largest banks in the United States face a serious political problem. There has been an outbreak of clear thinking among officials and politicians who increasingly agree that too-big-to-fail is not a good arrangement for the financial sector. Six banks face the prospect of meaningful constraints on their size: JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley. They are fighting back with lobbying dollars in the usual fashion – but in the last electoral cycle they went heavily for Mitt Romney (not elected) and against Elizabeth Warren and Sherrod Brown for the Senate (both elected), so this element of their strategy is hardly prospering. What the megabanks really need are some arguments that make sense. There are three positions that attract them: the Old Wall Street View, the New View and the New New View. But none of these holds water; the intellectual case for global megabanks at their current scale is crumbling.

The Old Wall Street view is that there is nothing to see – big banks know what they are doing and pose no threat to the economy. This position was in complete ascendancy before 2007 but is seldom heard today. In part, of course, the financial crisis made this view seem more than a little hard to defend. And any attempt to resurrect this position was completely sunk by the “London Whale” losses suffered by JPMorgan Chase last year. We’ll learn more in the hearing on Friday called by Senator Carl Levin of Michigan, although the chief executive, Jamie Dimon, was not asked to testify. Senator Levin’s Permanent Subcommittee on Investigations is also expected to issue a report. All these details about the London Whale will reinforce the view that even one of our supposedly great risk managers, Mr. Dimon, can lose control of what is happening in his business – on a scale that can matter for overall profits and, potentially, for the economy. The largest banks have become too complex to manage. And when they fail, the consequences are huge for all of us. This point is completely nailed by Anat Admati and Martin Hellwig’s new book, “The Bankers’ New Clothes.”

The New Wall Street view is that there is no too-big-to-fail subsidy. Or perhaps there is a subsidy but no one can measure it. Or perhaps someone can measure it, but not the people who have done so. If the first view ended in tragedy – the crisis and huge job losses of 2008 – this New View is simple comedy. My colleagues at Bloomberg View have written a series of devastating editorials explaining for a broad audience the nature and likely scale of subsidies that very large banks receive. You should read the series, starting with the latest contribution this week, which includes useful links to previous salvos on both sides. The reaction of the industry is running roughly parallel to how church officials originally responded to Galileo’s work. No doubt the bankers in question would like to compel Bloomberg View to renounce its opinions. Fortunately, we have come a long way since 1633. And the banks’ lobbyists are making an uncharacteristic mistake by digging in with this extreme and indefensible view. Ask people in the credit markets if they think lenders to the biggest banks have some degree of downside protection afforded by the government (including the Federal Reserve). I have never heard any reasonable investor deny this reality in private. The big banks are well down the road to acknowledging that there may be a subsidy and the question is how to measure it – and how to assess all the available evidence. All data are complex. The Federal Reserve changes monetary policy on the basis of numbers that are hard to know precisely. What exactly is “core inflation” or the “natural rate of unemployment” at this moment? And whenever people try to bedazzle you with econometrics, go back to the simple numbers and see a powerful story: megabanks have a funding advantage, if you think about it properly and compare apples to apples. SEE LINKS TO SUPPORTING ARTICLES AT ORIGINAL LINK

The New New Wall Street view is that too-big-to-fail exists but that Dodd-Frank will bring it under control. This argument remains the best hope for global megabanks, but even this perspective is now under severe pressure. This position has some powerful adherents, including Ben Bernanke, chairman of the Federal Reserve, and Jerome Powell, a member of its Board of Governors. (I wrote about Mr. Powell’s views in this space last week and about Mr. Bernanke the week before). The problem is that Mr. Bernanke clearly articulated, during the Dodd-Frank debate, that the big financial companies would be pressed to become smaller of their accord. Three years later, there is no sign of actually happening. And now come Richard Fisher and Harvey Rosenblum, knocking hard on the gates of Washington with an op-ed article in The Wall Street Journal on Monday, “How to Shrink the ‘Too-Big-to-Fail’ Banks.” Mr. Fisher is a successful private-sector investor who now heads the Federal Reserve Bank of Dallas, where Mr. Rosenblum is also a senior official. From the heart of the Federal Reserve System – and deeply steeped in private-sector experience – comes a clear statement that too-big-to-fail exists and Dodd-Frank did not end it. Attorney General Eric Holder’s testimony to Congress last week also confirmed the latter point: some banks are so big that the Department of Justice is afraid to bring legal charges against them, for fear of how that would affect the economy. Senator Warren of Massachusetts continues to press this issue relentlessly and very effectively. You should also listen to this Bloomberg radio interview with Arthur Levitt, who acknowledges “too big to jail” about two-thirds of the way through. Mr. Levitt, a former chairman of the Securities and Exchange Commission, is currently an adviser to Goldman Sachs, so I expect he’ll have to walk this statement back.

Most worrying for the big banks, Mr. Fisher is more broadly on the right of the political spectrum. On Friday, he will address the Conservative Political Action Conference. I’m not sure a senior Fed official has ever done this before. Mr. Fisher is not only entirely correct. He is also on a completely convergent path with Senator Brown of Ohio. In fascinating new development on Wednesday, Bloomberg News reported more details on the Fisher-Rosenblum push for a hard size cap on big banks, which would force JPMorgan and Bank of America, for example, to become significantly smaller.

The executives who live well on subsidies at big banks should be very afraid.


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Response to Demeter (Reply #34)

Mon Mar 18, 2013, 08:39 AM

35. Sen. Brown, Vitter React to Banking Industry’s Flimsy Challenge of ‘Too Big to Fail’ Subsidy



Brown and Vitter Passed Legislation to Require Government Watchdog Group to Study the Subsidy that Wall Street Megabanks Receive Over Community Banks Due to their “Too Big to Fail” Status

Monday, March 11, 2013


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Mon Mar 18, 2013, 08:43 AM

36. BLACK SMOKE IN ROME: NO NEW GOVT. Parliamentary gridlock: 5 Star Movement refuses to make deal



Decision by movement founded by comedian Beppe Grillo not to form coalition with left or right raises fears for Italy's future...Not since the 1940s, when ex-Communist partisans arrived in force, has the Italian legislature faced such a challenge to its extravagant ways, traditions, conventions and perhaps even its very existence. The representatives of the Five Star Movement (M5S) – founded on St Francis's feast day in 2009 specifically to draw attention to its respect for the great Umbrian mystic's values – do not really believe in parliamentary democracy in its present form.

But on their first day as lawmakers it was their adversaries who caused deadlock. After a first round of voting, no progress was made towards electing speakers for either house because the members of the two main parties of left and right cast blank votes in protest at M5S's refusal to agree to cross-party deals. The movement, founded by the comedian Beppe Grillo and his social media guru, Gianroberto Casaleggio, won about a quarter of the votes in last month's election and holds the balance of power. But since the M5S wants to do away with Italy's traditionally spendthrift and corrupt parties, it refuses to go into government with either left or right. The resulting gridlock has raised fears for the country's future stability, and that of the eurozone. The only apparent ways forward are either a return to the polls or a non-party government like the one under Mario Monti that the election was intended to replace.

The so-called grillini, or little crickets (Grillo's name means cricket), unexpectedly respected the rule that male Italian lawmakers must wear ties. But that was as much compromise as they were prepared to make...

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Mon Mar 18, 2013, 08:49 AM

37. Europe: Crisis? What crisis? Let's hit Syria By Pepe Escobar



PARIS - The heads of state and government of the European Union (EU) just got together in Brussels for their Spring fashion show, sorry, politico-economic summit. No Gucci/Prada glam here; instead, a stuffy Sartrean huis clos. No pesky, noisy citizens allowed; only these Masters of the (European) Universe. And this after three horrendous crisis years affecting the eurozone. Welcome to the way "democracy" really works in Europe; all major decisions in economic policy, budget and finance, which directly affect over 500 million mostly disgruntled (and millions of unemployed) people, are taken in a cozy heart of darkness...

... For insiders though, everything is fine and dandy. Olli Rehn, the European Commissioner for Economic Affairs, said with a straight face that, "If the six-pack and the two-pack were in place when the euro was launched, we would have never reached such a crisis." So why didn't any Brussels technocrat with a fat salary for life think about it then?

On the other side of the divide, Daniel Cohn-Bendit, the formerly heroic Dany Le Rouge and current co-president of the Greens in the European Parliament, defined the racket as "technocratic austerity". Better yet; the great German philosopher and certified European federalist Jurgen Habermas dubbed it "post-democratic autocracy".

From Paris to Scandinavia, there have been howls of angst about Europe having fallen into a black hole. One just has to hit the streets - and listen to the noise - to see which way the wind is blowing; populism (as in the latest Italian elections), and fascism (in Denmark, for instance, a new poll shows that the extreme right-wing DF party, anti-immigration and anti-EU, is already more popular than the center-left coalition currently in power; horrible news for current Prime Minister Helle Thorning-Schmidt). Facing this Armageddon, the best the technocrat-infested EC can come up with is that we must "reintroduce people" in "the machine". It won't do; the machine has already run amok...

/... http://www.atimes.com/atimes/Middle_East/MID-03-180313.html

Well worth the read. Things will indeed fall apart down here in deep S. Europe, and spread from here, unless some neo-Keynesian stimulation spending comes in soon, which could easily be focused on very useful projects such as developing the vast renewable energy resources widely available across the region, and rationalising transport and settlement and manufacturing distribution... We need financial investment flows to transfer capital and liquidity from the rich North to the needy South of Europe targeted on job creation and long-term climate-change-aware sustainable socioeconomic development projects that will quickly return great benefit to Europe as a whole. - GD

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Response to Tansy_Gold (Original post)

Mon Mar 18, 2013, 08:54 AM

38. Hype about 3D printing & American reindustrialization. Hope is more fun than reform



Summary: Judging from the hype, 3-D printing is the next big thing in the ongoing industrial revolution (especially since the biotech revolution has stalled) — and the US has a great lead. We’re #1! No need for difficult structural reforms! Too bad the story is probably exaggerated, perhaps delusional.


Note the location of 3D printing at the very top of the curve: For a good summary of this promising new technology see this excerpt from “The Hype For 3D Printing Has Really Gone Way Over The Top“, Doug Smock (Former Chief Editor at Plastics World and Modern Mold & Tooling), 18 January 2013:

I love 3D printing (aka additive manufacturing) and have covered it since Chuck Hull at 3D Systems invented this technology in 1986 {stereolithography; first printer in 1992}. In 3D printing three-dimensional objects are made in tiny incremental layers from a digital model. Sometimes machines like printers are used to deposit the layers; other approaches use lasers to fuse powder metals or plastics.

I get tired of what seems to be hype surrounding the process. It seems every 2 weeks there is a “Wow” story in the Economist or the New York Times. They have headlines like this one posted today: “3D printing may shape a new manufacturing revolution“.

It seems like I’ve seen similar headlines for at least 20 years. While there have been many impressive developments, I have not seen a “manufacturing revolution”. … it’s expensive. And for mass production, it’s way too slow a process to be realistic.

… 3D printing works when there are many design changes and volumes are low. It’s the greatest invention ever for prototyping. It works great for dental and some medical applications. It works great for making custom designed, one-off toys and monsters. It works great for custom cranial implants, although many are still machined from stock shapes. Works great for architectural models.

… it will remain a specialized technology for at least the foreseeable future.

About that US lead in 3D printing

There are several dozen companies active in the 3D printing market, including even foreigners. Four in Germany, plus others in Britain, Sweden, France, Austria, Israel, Korea, and China (whose government has identified its importance).

Nor is it clear that any nation has a competitive advantage, or that there are substantial barriers to entry into this field...



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Response to Tansy_Gold (Original post)

Mon Mar 18, 2013, 08:59 AM

39. The SEC’s new boss: The White stuff



AFTER acrimonious debates over Barack Obama’s appointments to head the Treasury, the Department of State and the Department of Defence, there was little energy left in the Senate this week for a fight over who should head the Securities and Exchange Commission (SEC), the agency that oversees America’s securities markets. A confirmation hearing on March 12th for Mary Jo White, the appointee, was perfunctory. It still revealed the scale of the task in front of her.

Ms White ticks many of the obvious boxes for a highly visible job that is now often framed in terms of law enforcement above all else. As a federal prosecutor in New York, she secured the convictions of John Gotti, a famed mobster, and Omar Abdel Rahman, a Muslim cleric, involved in plotting terrorist attacks. Before and after these government stints she was a successful attorney at Debovoise & Plimpton, a New York law firm.

But even some of her strengths are not unequivocal assets. A history of rising upwards by alternating between public and private jobs makes her a striking example of the “revolving door” between government and the private sector (an area where the Dodd-Frank act has required further scrutiny). Her experience in government was heavily marketed when she joined Debovoise; in rejoining government, she will need to be recused from cases concerning many prominent recent clients including Bank of America, UBS, Morgan Stanley and JPMorgan Chase. More conflicts exist because of her husband’s partnership at another law firm, Cravath Swaine & Moore.

In response to a gentle question on the subject during her hearing, Ms White replied: “I’m very scrupulous about these issues.” SEC ethics officials have opined that her conflicts of interest are not unusual in scope or kind compared with those of past SEC chairmen. Given another nudge, she added that as a lawyer she prioritised clients and that “the American public will be my client.” Whatever that means.



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Response to Tansy_Gold (Original post)

Mon Mar 18, 2013, 09:03 AM

40. Australian regulator seeks action on high-frequency trade 'noise'



Australia's corporate regulator called for tighter regulation of financial markets to deal with "noise" from high-frequency trading, while suggesting concerns about computerised transactions and associated crashes were largely unfounded. The Australian Securities and Investments Commission, in a report on the impact of high-frequency trading (HFT) and so-called dark liquidity pools in instant market crashes, said high frequency trading in Australia was relatively small in scale.

"We found public concerns over HFT appear to have been overstated and can be attributed to the increasing use of trading technology by investors generally," ASIC said...ASIC in its report on Monday found high-frequency trading in Australia was dominated by a small group of entities, with the 20 largest accounting for about 80 percent of all HFT turnover, or 22 percent of total equity market turnover. An ASIC investigating task force found order-to-trade ratios in Australia were moderate compared to overseas markets and that the average holding time was 42 minutes, not seconds. But the regulator said it had received feedback from market users that there were too many small and fleeting orders being used, despite a recent reduction, either to get a response from the market or disrupt other trading strategies.

"We concluded that small and fleeting orders are impacting market integrity and efficiency and investor confidence. To minimise this impact, we consider it is appropriate to require these orders to rest for a minimum amount of time in our markets," ASIC said.

...High-frequency trades raised public alarm in May 2010 after a computer error involving a mutual fund triggered a 9 percent "flash crash" in the U.S. Dow Jones industrial average...Several mysterious price spikes in Australia last October also raised concerns, including moves in the share price of Commonwealth Bank of Australia and Australia and New Zealand Banking Group. Australia's government last year ordered a "kill switch" for automated transactions to be in place by June 2014 to halt trading in the event of a flash crash problem.

ASIC Deputy Chairman Belinda Gibson said the volume of dark trading was around 25 percent to 30 percent of all trades executed as a proportion of value.

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Response to Tansy_Gold (Original post)

Mon Mar 18, 2013, 09:04 AM

41. Dear God, It's SNOWING Again!


Fuddnik, can you put me up until the Ice Age is over?

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Response to Demeter (Reply #41)

Mon Mar 18, 2013, 01:46 PM

56. We had a touch of rain as we were leaving Cedar Key this morning.

Back home now. A crab stuffed old crab.

Come on down. There's plenty left. And it's 77 degrees.

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Response to Tansy_Gold (Original post)

Mon Mar 18, 2013, 09:07 AM

42. No-bid U.S. government contracts jump 9 percent, despite push for competition



President Obama in 2009 told federal agencies that no-bid contracts were “wasteful’’ and “inefficient.’’ Four years later, his administration spent more money on non-competitive contracts than ever before.

Federal agencies awarded $115.2 billion in no-bid contracts in fiscal year 2012, an 8.9 increase from $105.8 billion from 2009, according to government data. The jump unfolded even as total contract spending decreased by about 5 percent. Lockheed Martin, Boeing and Raytheon were top recipients of sole-source contracts.

Those top Pentagon vendors and other large contractors can draw on established relationships with procurement officers to claim a greater share of non-competitive work, said Robert Burton, former acting administrator of the Office of Federal Procurement Policy under George W. Bush.

“It highlights a growing problem in the procurement system,’’ said Burton, who represents contractors as a partner at Venable in Washington. “The pie is shrinking, but at the same time, the number of non-competitive awards has increased. That’s a bad combination.”


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Response to Tansy_Gold (Original post)

Mon Mar 18, 2013, 09:20 AM

43. Your are outdoing even yourself, today, Demeter

... too much good stuff here ... aaaarrggghhhhh .... can't keep up. However, I may take tomorrow off - we're supposed to get ugly storm here ... maybe I can catch up with today tomorrow ....

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Response to bread_and_roses (Reply #43)

Mon Mar 18, 2013, 09:30 AM

46. Sorry


I'm wound up. But now I must be going....give you all a chance to catch up.

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Response to Demeter (Reply #46)

Mon Mar 18, 2013, 10:37 AM

52. Just want to say thanks so much, Demeter, for all you do here. You are amazing.

Best news aggregator on the internet, as far as I'm concerned.

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Response to snot (Reply #52)

Mon Mar 18, 2013, 12:46 PM

54. I strongly second snot's post.


Unfortunately, the most important news is the most depressing, and I can't bear to partake of it more than once or twice a week.

This week, however, I will be reading the Cyprus news every day.

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Response to snot (Reply #52)

Mon Mar 18, 2013, 02:08 PM

57. Third-ing that (n/t)

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Response to Tansy_Gold (Original post)

Mon Mar 18, 2013, 09:29 AM



LONDON (AP) -- Stocks around the world and the euro fell sharply Monday as investors fretted over a plan to tax depositors in Cypriot banks as a way to partly fund a bailout of the Mediterranean island nation.

Although Cyprus accounts for only around 0.2 percent of the economic output of the 17 European Union countries that use the common euro, the tax on depositors was a significant policy shift that has stoked fears of bank runs in other troubled European economies. Cyprus residents already emptied virtually all ATMs on the island in a weekend bank run.

"If European policymakers were looking for a way to undermine the public trust that underpins the foundation of any banking system they could not have done a better job," said Michael Hewson, senior market analyst at CMC Markets.

Since the European debt crisis began in late 2009, savers have been spared. But the bailout of Cyprus, agreed to early Saturday, foresees a 6.75 percent levy on deposits below (EURO)100,000 ($130,860), rising to 9.9 percent on those above.

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Response to xchrom (Reply #44)

Mon Mar 18, 2013, 02:09 PM

58. and X - you're running a close second

on the invaluable posts front - thanks

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Response to Tansy_Gold (Original post)

Mon Mar 18, 2013, 09:30 AM



NEW YORK (AP) -- U.S. stock futures slumped Monday after the Mediterranean island nation of Cyprus proposed a hefty levy on bank deposits as a condition for a national bailout. The proposal roiled international markets,

The measures being proposed in Cyprus are stoking fears of bank runs in the other 16 nations that use the euro, though economists saw little chance of similar policies taking effect elsewhere, or even being approved in Cyprus.

Dow Jones industrial futures fell 77 points to 14,356. The broader S&P futures gave up 13.4 points to 1,540. Nasdaq futures shed 21 points to 2,769.50.

Lawmakers in Cyprus postponed the vote Monday on a deposit tax of 6.75 percent on accounts of up to (EURO)100,000 ($131,000) and 9.9 percent over that amount.

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Response to Tansy_Gold (Original post)

Mon Mar 18, 2013, 09:33 AM

47. Cypriot Outrage Over Tax Could Derail Euro-Area Bailout


European policy makers signaled flexibility on the application of an unprecedented bank tax in Cyprus, seeking to overcome outrage that threatened to derail the nation’s bailout. European shares and the euro fell.

While demanding that the levy raise the targeted 5.8 billion euros ($7.6 billion), finance officials said easing the cost to smaller savers was up to Cyprus. A vote on the tax, needed to secure 10 billion euros in rescue loans, was delayed for a second day. Banks may not reopen tomorrow after a holiday today, state-run broadcaster CYBC reported.

“If the government wants to change the structure of the solidarity levy for the banking sector, the government can decide as such,” European Central Bank Executive Board member Joerg Asmussen said today in Berlin. “What’s important is that the planned revenue of 5.8 billion euros remain.”

While Cyprus accounts for less than half a percent of the 17-nation euro economy, the raid on bank accounts risks triggering new convulsions in the financial crisis that began in 2009 in Greece. Moody’s Investors Service said that the move is a significant step toward limiting support for bank creditors across Europe and shows that policy makers will risk financial- market disruptions to avoid sovereign defaults.

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Response to Tansy_Gold (Original post)

Mon Mar 18, 2013, 09:37 AM

48. Suntech Defaults on $541 Million Bond, a First for China


Suntech Power Holdings Co. Ltd. (STP) became the first company from mainland China to default on its bonds after failing to repay $541 million of notes due March 15, breaching terms of other outstanding loans.

The move pushes what was once the world’s biggest solar panel maker into default on credit lines it has with International Finance Corp. and Chinese domestic lenders, Suntech said today in a statement from its headquarters in Wuxi. China Development Bank Corp (SDBZ). has loans to Suntech.

The move opens the way for Suntech noteholders to sue the company in the U.S., where its shares and bonds trade. Last week, Suntech obtained an agreement of holders of 63 percent of the notes to delay exercising their rights until May 15, allowing executives to press ahead with restructuring payments. Some noteholders not involved in those talks are organizing a rival group and have threatened to sue.

Suntech is seeking “a way forward that will take into account the rights and interests of all of its constituents, including shareholders, noteholders, lenders, customers, suppliers and employees,” Chief Executive Officer David King said in the statement. “We are currently exploring strategic alternatives with lenders and potential investors, which could help to set us on a path towards longer term success.”

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Response to xchrom (Reply #48)

Mon Mar 18, 2013, 10:03 AM

49. Translation of CEO King's remarks

"We've got ours, now you go scratch! Ha ha ha ha ha, suckers!"

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Response to xchrom (Reply #48)

Mon Mar 18, 2013, 01:09 PM

55. Who is International Finance Corp?


The International Finance Corporation (IFC) is an international financial institution which offers investment, advisory, and asset management services to encourage private sector development in developing countries. The IFC is a member of the World Bank Group and is headquartered in Washington, D.C., United States. It was established in 1956 as the private sector arm of the World Bank Group to advance economic development by investing in strictly for-profit and commercial projects which reduce poverty and promote development.[1][2][3] The IFC's stated aim is to create opportunities for people to escape poverty and achieve better living standards by mobilizing financial resources for private enterprise, promoting accessible and competitive markets, supporting businesses and other private sector entities, and creating jobs and delivering necessary services to those who are poverty-stricken or otherwise vulnerable.[4] Since 2009, the IFC has focused on a set of development goals which its projects are expected to target. Its goals are to increase sustainable agriculture opportunities, improve health and education, increase access to financing for microfinance and business clients, advance infrastructure, help small businesses grow revenues, and invest in climate health.

The IFC is owned and governed by its member countries, but has its own executive leadership and staff which conduct its normal business operations. It is a corporation whose shareholders are member governments which provide paid-in capital and which have the right to vote on its matters. Originally more financially integrated with the World Bank Group, the IFC was established separately and eventually became authorized to operate as a financially autonomous entity and make independent investment decisions. It offers an array of debt and equity financing services and helps companies face their risk exposures, while refraining from participating in a management capacity. The corporation also offers advice to companies on making decisions, evaluating their impact on the environment and society, and being responsible. It advises governments on building infrastructure and partnerships to further support private sector development.

The corporation is assessed by an independent evaluator each year. In 2011, its evaluation report recognized that its investments performed well and reduced poverty, but recommended that the corporation define poverty and expected outcomes more explicitly to better-understand its effectiveness and approach poverty reduction more strategically. The corporation's total investments in 2011 amounted to $18.66 billion. It committed $820 million to advisory services for 642 projects in 2011, and held $24.5 billion worth of liquid assets. The IFC is in good financial standing and received the highest ratings from two independent credit rating agencies in 2010 and 2011.--wikipedia


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Response to Tansy_Gold (Original post)

Mon Mar 18, 2013, 10:18 AM

50. Euro Falls Most in 14 Months as Cyprus Turmoil Adds Debt Concern


The euro slid the most in 14 months against the dollar after a proposed levy on bank deposits in Cyprus threatened to worsen the European debt crisis.

The 17-nation currency fell to a two-week low versus the yen as the nation postponed a vote on meeting demands by regional finance ministers to raise 5.8 billion euros ($7.5 billion) by imposing losses on its depositors. The euro pared its drop as declines in Italian and Spanish government bonds were limited. The New Zealand dollar and Mexican peso weakened as investors sold higher-yielding currencies.

“The biggest fear right now is that there could be a domino effect, which is pushing the euro down,” Douglas Borthwick, a managing director and head of foreign exchange at Chapdelaine & Co. in New York, said in a telephone interview. “What the market doesn’t understand is that people who take out money may still put it elsewhere in the euro zone, so I would argue that it’s not euro-negative.”

The euro slid 1.1 percent to $1.2928 at 9:35 a.m. in New York, after dropping as much as 1.5 percent, the biggest decline since Jan. 13, 2012. The common currency slumped 1.5 percent to 122.67 yen after falling to 121.15, the weakest level since March 5. The yen gained 0.4 percent to 94.90 per dollar.

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Response to Tansy_Gold (Original post)

Mon Mar 18, 2013, 10:19 AM

51. Homebuilder Confidence in U.S. Unexpectedly Fell in March


Confidence among U.S. homebuilders unexpectedly fell for a second month in March, a sign the residential real-estate market will take time to strengthen.

The National Association of Home Builders/Wells Fargo index of builder confidence dropped by 2 points to 44 this month, due to a decrease in the measure of current sales, a report from the Washington-based group showed today. The median forecast in a Bloomberg survey called for a gain to 47. Readings below 50 mean more respondents said conditions were poor.

“In addition to tight credit and below-price appraisals, homebuilding is beginning to suffer growth pains as the infrastructure that supports it tries to re-establish itself,” David Crowe, chief economist at the builders association, said in a statement. “The road to a housing recovery will be a bumpy one until these issues are addressed, but in the meantime, builders are much more optimistic today than they were at this time last year.”

The group’s gauges of the sales outlook for the next six months and traffic of prospective buyers improved this month, reflecting stable property values, mortgage rates close to all- time lows and job gains. Limited inventories and resilient sales are benefiting builders including PulteGroup Inc. and Lennar Corp., showing housing will contribute to economic growth this year after emerging as a bright spot in 2012.

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Response to xchrom (Reply #51)

Mon Mar 18, 2013, 11:29 AM

53. "Unexpectedly"???

No one expects the Spanish Inquisition, but surely someone, somewhere anticipated. . . . .

Oh, never mind.

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