STOCK MARKET WATCH -- Wednesday, 25 April 2012

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Wednesday, 25 April 2012[font color=black][/font]

SMW for 24 April 2012

AT THE CLOSING BELL ON 24 April 2012
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Dow Jones 13,001.56 +74.39 (0.58%)
S&P 500 1,371.97 +5.03 (0.37%)
[font color=red]Nasdaq 2,961.60 -8.85 (-0.30%)



[font color=red]10 Year 1.97% +0.04 (2.07%)
30 Year 3.13% +0.04 (1.29%) [font color=black]


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

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[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
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Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
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[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
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The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
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[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
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LegitGov
Open Government
Earmark Database
USA spending.gov
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[font color=black][font size=2]Handy Links - Videos:[/font][/font]
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Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
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Financial Sector Officials Convicted since 1/20/09 = [/font][font color=red]12[/font]
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



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

[Demeter]

1. 41 Views, and Not a Single Post (Only 3 Recs?)

Come on, people. We gotta support TG for her faithful service to the cause!

[AnneD]

49. We support her....

some of us are just fashionably late. Tansy always has my vote!

[Demeter]

2. Is high public debt harmful for economic growth?

http://www.voxeu.org/index.php?q=node/7900

Countries with high public debt tend to grow slowly – a correlation often used to justify austerity. This column presents new evidence challenging this view. The authors point out that correlation does not imply causality – it may be that slow growth causes high debt...

AT LAST!

YES, IF THE ECONOMY CRASHES, A DECENT GOVERNMENT WILL TAKE UP THE SLACK IN DEMAND TO KEEP PEOPLE AND DEMAND ALIVE..TELLS YOU WHAT KIND OF GOVERNMENT WE HAVE...THE "FIRE DEPT." IN DC RESEMBLES THAT IN FAHRENHEIT 451...

AND THE DATA HAS SHOWN, WAR CAUSES PUBLIC DEBT. WE HAD A FEW YEARS OF PEACE, AND THE BIGGEST BOOM OF MY ENTIRE LIFE...


It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.
-- Mark Twain

[Demeter]

3. Michael Hudson: Productivity, The Miracle of Compound Interest, and Poverty MUST READ

http://www.nakedcapitalism.com/2012/04/michael-hudson-productivity-the-miracle-of-compound-interest-and-poverty.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Suppose you were alive back in 1945 and were told about all the new technology that would be invented between then and now: the computers and internet, mobile phones and other consumer electronics, faster and cheaper air travel, super trains and even outer space exploration, higher gas mileage on the ground, plastics, medical breakthroughs and science in general. You would have imagined what nearly all futurists expected: that we would be living in a life of leisure society by this time. Rising productivity would raise wages and living standards, enabling people to work shorter hours under more relaxed and less pressured workplace conditions.

Why hasn’t this occurred in recent years? In light of the enormous productivity gains since the end of World War II – and especially since 1980 – why isn’t everyone rich and enjoying the leisure economy that was promised? If the 99% is not getting the fruits of higher productivity, who is? Where has it gone?

Under Stalinism the surplus went to the state, which used it to increase tangible capital investment – in factories, power production, transportation and other basic industry and infrastructure. But where is it going under today’s finance capitalism? Much of it has gone into industry, construction and infrastructure, as it would in any kind of political economy. And much also is consumed in military overhead, in luxury production for the wealthy, and invested abroad. But most of the gains have gone to the financial sector – higher loans for real estate, and purchases of stocks and bonds.

Loans need to be repaid, and stocks and bonds receive dividends and interest. For the economy at large, people are working longer just to maintain their living standards, which are being squeezed. Women have entered the labor force in unprecedented numbers over the past half-century – and of course, this has raised the status of women. Mechanization of housework and other tasks at home has freed them for professional life outside the home. But on balance, work has increased...AND DEBT

[Demeter]

4. Setting the Record Straight: The Housing Bubble Lie ANOTHER MUST READ

http://news.firedoglake.com/2012/04/23/setting-the-record-straight-the-housing-bubble-lie/

Let’s get something straight: we did not have a housing “bubble”, in the usual sense of the word. The mainstream narrative of crazed, greedy, irresponsible homeowner-wannabes driving prices unsustainably high, causing the still ongoing crash is wrong. Yes, we had a housing “bubble” in one sense; prices soared way beyond reality because excess demand fueled irrational bidding wars. The lie deals with why we had a housing bubble. The lie matters because like all problem-defining narratives, it shapes the policy solutions offered. So let’s take a look at the lie.

Consumer Driven Bubbles

The classic example of a demand-driven bubble is Holland’s tulip craze in the 1600s. A much more recent version was the DotCom fever a couple of decades ago. And at the risk of dating myself, the most vivid consumer-good craze of my youth was “Cabbage Patch Dolls” (not that I had one; I wasn’t into dolls.) How did these bubbles happen? Simple. Irrational economic actors, that is, normal people acting as consumers, got a kind of mob/herd madness/fever and outbid each other endlessly, until suddenly reality intruded and they stopped.

But here’s the thing: Houses are not like tulips, shares of stock, dolls, or any other mass-market consumer product. They just cost too much. The only people who can buy a house simply because they want to are cash buyers. No one will argue that cash buyers drove the housing bubble of 2005 onward (or whatever year you want to peg its start.) Cash buyers don’t fuel a foreclosure crisis either, though banks have been known to foreclose on cash buyers anyway.

We didn’t have a housing bubble in the ordinary sense because consumers don’t buy houses; banks buy houses. The housing market cannot undergo a demand-driven bubble without lender collusion and complicity. MORE

[Demeter]

25. The Real Foreclosure Fraud Story: Corruption of the Land Title System

http://news.firedoglake.com/2012/04/19/the-real-foreclosure-fraud-story-corruption-of-the-land-title-system/

George Zornick carries a rebuttal from Eric Schneiderman’s team on yesterday’s damaging expose of the securitization fraud working group. Here’s what it has to say:

• There are 50 staffers “across the country” working on the RMBS working group (the official title).
• DoJ has asked for $55 million for additional staffing.
• The five co-chairs of the working group meet formally weekly, and talk daily.
• There are no headquarters for the working group, but that’s because it’s spread across the country.
• There is no executive director.
• Activists still think the staffing level is too low.

If any of this looks familiar, it’s because it’s EXACTLY what Reuters and I reported a week ago. In other words, it was unnecessary. And it doesn’t contradict what the New York Daily News op-ed said yesterday, either. Like that op-ed, this confirms that there is no executive director and no headquarters for the working group, which sounds more like a central processing space for investigations that could have happened independently, at least at this point.

Meanwhile, if you want actual news, you can go to this very good story at MSNBC, revealing the truth that nobody wants to talk about: the inconvenient detail that the land title and property rights system that has served this country well for over 300 years has been irreparably broken by this gang of thieves at the leading banks.

In a quiet office in downtown Charlotte, N.C., dozens of Wells Fargo’s foreclosure foot soldiers sit in cubicles cranking out documents the bank relies on to seize its share of the thousands of homes lost to foreclosure every week [...]

The Wells Fargo worker, who first contacted msnbc.com via email in late January, told of a wide range of concerns about the foreclosure documents she processes. Some families apparently were denied loan modifications after only cursory interviews, she said. Other borrowers applying for help sent comprehensive personal financial documents to a fax machine that she discovered had been unattended for weeks. Others landed in foreclosure after owing interest payments of as little as $1.18 a day, according to documents she said she reviewed.

“There was one file where they weren’t even past due and they were in foreclosure status,” the loan processor said. “They’re pushing these files and pushing these files….”

Five years into the worst housing collapse since the Great Depression, the foreclosure pipeline that is removing tens of thousands of families from their homes every month rests on a legal process that has been badly compromised by errors, misrepresentation and outright fraud, according to consumer attorneys, state attorneys general, federal investigators and state and federal judges.

I must confess that I don’t throw this in everyone’s face nearly enough. What is being described in this article is the product of a completely broken system. The low-level grunts are being forced to sign off on a quota of loan files every day, and push the paper through the pipeline. Veracity, or even knowledge of the underlying data in the files, is irrelevant. This is precisely what got us into this mess in the first place, and it’s still happening. And these grunts, making $30,000 a year, are given titles like “Vice President of Loan Documentation” to sign off on affidavits attesting to the loan files. That’s basically robo-signing. It’s still happening...MORE

[Demeter]

5. ‘Tainted,’ but Still Serving on Corporate Boards (SHAME!)

http://dealbook.nytimes.com/2012/04/23/tainted-but-still-serving-on-corporate-boards/?ref=business

When David M. Poppe sat down a little over a week ago to write a letter to his investors, he knew he was taking an unusual step.

Mr. Poppe, who manages money for the Sequoia Fund, one of the most well-respected institutional investment firms in the country, made his letter public last Thursday, setting off a debate within the upper echelons of corporate boardrooms.

His letter, which he wrote with his partner, implored his firm’s investors to vote against the re-election of one of Goldman Sachs’s most prominent board members, James A. Johnson, a former chief executive of Fannie Mae. Mr. Poppe characterized Mr. Johnson’s tenure as being “at the center of several egregious corporate governance debacles.” Mr. Johnson also is a board member of Target, and Mr. Poppe also advises his investors to vote against his re-election if he is nominated again.

It may be surprising that the former chief of Fannie Mae still remains the director of a public company as prominent as Goldman Sachs and Target. But perhaps more surprising, many other executives who had tumultuous reigns are also board members of major public companies: Charles O. Prince III, the former chief executive of Citigroup, who resigned under pressure in 2007 amid huge write-downs at the bank, is a director of Xerox and Johnson & Johnson. E. Stanley O’Neal, the former chief executive of Merrill Lynch on whose watch the firm loaded up on subprime debt that almost bankrupted the company, is a director of the aluminum giant Alcoa....MORE

NAMING NAMES AND TAKING NOTES...

[Demeter]

6. MF Customers Press J.P. Morgan for Funds

http://online.wsj.com/article/SB10001424052702303592404577359872845060222.html

Customers of MF Global Holdings Ltd. are pushing regulators to get tougher on J.P. Morgan Chase & Co. about money that went missing from accounts just before the firm's collapse. The move comes as a bankruptcy trustee representing brokerage customers of MF Global has said he is conducting an investigation of J.P. Morgan and had entered "substantive discussions regarding the resolution of claims" against the Wall Street firm.

In a letter set to be sent to regulators and lawmakers on Monday, an MF Global customer group calls for J.P. Morgan to "return hundreds of millions of dollars in MF Global customer funds transferred" to J.P. Morgan in late October. The group, called the Commodity Customer Coalition, urged U.S. officials to "demand" that the New York bank "disgorge all MF Global customer property immediately."

J.P. Morgan is cooperating with the ongoing investigation, has said it did nothing wrong and lost some of its own money in the Oct. 31 bankruptcy because it was a creditor of MF Global.

It isn't clear if settlement talks will result in a payment for customers in coming months or whether trustee James Giddens will decide to sue J.P. Morgan. Mr. Giddens said this month that he might sue former officials and executives of MF Global, led from early 2010 until its bankruptcy-protection filing by Jon S. Corzine, the former Goldman Sachs Group Inc. chairman and governor of New Jersey.

On Tuesday, Mr. Giddens is scheduled to testify in front of a Senate Banking Committee hearing about the lessons from MF Global and how rules could be changed to help prevent a repeat of the problem. Also scheduled to testify are Louis Freeh, the bankruptcy trustee for the parent company, and regulators who helped oversee the brokerage firm that specialized in commodities and derivatives contracts known as futures....The probe into the money missing from customer accounts, estimated by Mr. Giddens at $1.6 billion, is nearing its seventh month. So far, Mr. Giddens has been able to return about 70% of many customers' assets and is pushing to increase that to 80% in coming weeks...MORE

[Demeter]

10. $1.6 billion in missing MF Global funds traced

http://money.cnn.com/2012/04/24/news/companies/mf-global/index.htm

Investigators probing the collapse of bankrupt brokerage MF Global said Tuesday that they have located the $1.6 billion in customer money that had gone missing from the firm. But just how much of those funds can be returned to the firm's clients, and who will be held responsible for their misappropriation, remains to be seen. James Giddens, the trustee overseeing the liquidation of MF Global Inc, told the Senate Banking Committee on Tuesday that his team's analysis of how the money went missing "is substantially concluded."

"We can trace where the cash and securities in the firm went, and that we've done," Giddens said.

MF Global failed last year after its disclosure of billions of dollars worth of bets on risky European debt sparked a panic among investors. About $105 billion in cash left the firm in its last week, Giddens said, as clients withdrew their funds and trading partners called for increased margin payments, leaving the firm scrambling to make good on its obligations. It has since emerged that MF Global tapped customer funds for its own use during this crisis and failed to replace them, in violation of industry rules.

Roughly $700 million of the missing money is now locked up with MF Global's subsidiary in the United Kingdom, where Giddens and his team are engaged in litigation to have it returned to U.S. customers. Giddens said he is "reasonably confident" that these funds will be recovered, though he added that it will be a lengthy process with no guarantee of success.

Another $220 million was transferred inadvertently from the accounts of securities customers to those of commodities customers. That money is now in limbo amid a dispute over which customers it belongs to, said Kent Jarrell, a spokesman for Giddens.

The final $680 million or so was transferred to other financial institutions with which MF Global did business, including a substantial portion that went to JPMorgan (JPM, Fortune 500).

Giddens said his team has "a solid basis for seeking the recovery of some of the funds that were transferred to JPMorgan," and is engaged in ongoing talks on the issue. JPMorgan did not immediately return a request for comment...MORE

[Demeter]

27. Bonuses ruled out for MF Global chiefs (LOUIS FREEH GETS HANDS SLAPPED!)

The trustee overseeing the liquidation of the futures broker has told Congress he will not pay bonuses to executives, reversing a previous stance

Read more >>
http://link.ft.com/r/H60H77/SPWL9B/K91WR/TUCYKL/EX8IEF/QR/t?a1=2012&a2=4&a3=25

&feature=related

[Demeter]

7. Obama Had 10 Times More Money Than Romney for Campaign (APRIL)

http://www.bloomberg.com/news/2012-04-20/romney-had-best-fundraising-month-in-march-with-13-million-1-.html

...Obama reported a bank balance of $104.1 million after raising $35.1 million in March. That included $7.5 million transferred from a joint fundraising account with the Democratic National Committee. Romney finished March with $10.1 million to spend after raising $13.1 million during the month, his best in the campaign.

Through March 31, Obama raised $196.6 million for his re- election, more than twice as much as the cumulative $88.7 million collected by Romney’s campaign.

Obama, as he did in his 2008 campaign, relied heavily on small-dollar donors. Last month, 52 percent of the money going directly to his campaign committee came in amounts of $200 or less. Romney collected 13 percent of his money in those amounts.

The president also increased his large-dollar fundraising. He identified 117 people who brought in at least $500,000 for his re-election, up from 61 at the end of 2011...

[Demeter]

8. Judging by Ireland, Spanish banks to take a lot more credit writedowns

QUERY: HOW COME US BANKS DON'T HAVE TO WRITE DOWN STUFF? THEY JUST TURN IT INTO THE FED FOR READY CASH ON FACE VALUE, NOT MARKET VALUE...

http://www.creditwritedowns.com/2012/04/spain-banks-writedowns-capital.html

Ireland dealt fairly quickly with its property market bubble by effectively and forcefully nationalizing and recapitalizing its banking sector. They clearly still have a serious problem on their hands, but the nation has been aggressive in addressing the issue of distressed real estate loans. In contrast, Spain’s banking system is nowhere close to fully recognizing the full extent of the problem. Not facing the problem however is not going to make it go away.

Reuters: "Banks are not recognising all of their risk. Many of their debtors are property companies with negative equity who can’t even pay the interest on their debt," Fernando R. Rodriguez de Acuna, chairman of the consultancy, told Reuters by telephone.

There are at least 21,000 "zombie [property developers] companies" in Spain that owe banks 126 billion euros, Rodriguez said, basing his estimates on recent data from Spanish mercantile records.

He said the banks were covered for only 67.5 percent of that risk, leaving 40 billion euros of exposure if all the companies filed for bankruptcy.

The fate of the banks is being watched by international investors who fear Spain may be forced to apply for aid as the euro zone debt crisis enters its third year.

One of the issues the banks are dealing with is poor recovery levels on distressed property loans. Recoveries are considerably lower than anticipated.

FT: Repossessed properties in Spain are selling for about half their original value and are likely to continue to fall in value, according to a new report, underlining the parlous state of the real estate market in Europe’s fourth-largest economy. Valuations on properties that were bundled up in securitisation deals and later repossessed are also significantly lower than data from the official housing price index suggest, according to a report from rating agency Fitch due to be published on Thursday.

…

Carlos Masip, Madrid-based director at Fitch, said: “If we view the market today we believe that there will continue to be a downward pressure on property prices. Home prices are still unaffordable for many when compared to income levels, there is a short supply of credit and a huge overhang of unsold properties.”

As discussed earlier, the amount of "recognized" bad debt has spiked. But this is thought to be only a part of the total delinquencies the banking system will be facing soon...MORE

[Demeter]

11. How to construct a 'fiscal club' for the eurozone

Monetary unions are successful mostly when they are also fiscal and, dare I say it, political unions too. Think, for example, of the UK – even if the Scottish Nationalists would prefer a rather different arrangement – or the US. The eurozone doesn’t yet share these credentials. On the evidence of the now-defunct Latin and Scandinavian monetary unions – and, for that matter, the rouble area following the collapse of the Soviet Union – this threatens to be a fatal flaw. This is no longer an issue for the periphery alone: with France and the Netherlands both now under strain, some investors are beginning to wonder whether the eurozone is rotten to the core, writes Stephen King


Read more >>
http://link.ft.com/r/6NPSBB/U1KLXL/JQU4J/YB7XRO/L9ARVS/N9/t?a1=2012&a2=4&a3=24

[Demeter]

9. FBI Seizes Server From Progressive Internet Service Provider

http://truth-out.org/news/item/8642-fbi-seizes-server-from-progressive-internet-service-provider

In an attack on our infrastructure, our movement and the democratic Internet, the FBI seized a server yesterday from one of our cabinets in a colocation facility. The server is owned by our sister organization, Riseup, and is managed by ECN, a progressive technology provider in Italy. While the seizure of any equipment is pernicious and damaging, the pointlessness of this seizure suggests an inclination toward extrajudicial punishment and an attempted crackdown on the very possibility of anonymous speech online.

The FBI has told us they are investigating bomb threats targeting the facilities and people at the University of Pittsburgh. They appear to believe that one of the servers used to transmit these threats was an anonymous e-mail server operated by ECN. Anonymous remailers have no logs or traces of who used them, so the FBI will not get any useful information from the stolen machine. Seizing this machine serves no useful purpose in tracking down or stopping the bomb threats, but it has many serious negative implications. Anonymous e-mail is an important part of the Internet. One of the benefits of Internet technology is the ability to communicate world-wide, and this communication is fundamental to the struggles of the world's people to address many of the world's ills. In a period in which our society has seen massive losses of privacy in which just about everything we do on-line can be tracked, logged, studied and used for all kinds of purposes, anonymous Internet-based communication tools provide shade from the intrusive searchlights of ubiquitous surveillance.

Insiders who reveal government and military malfeasance, corporate whistleblowers, critics within institutions, organizers who fear police repression, and others involved in liberatory struggle can and do use anonymous e-mail. Anonymous e-mail is one of the critical tools of the democracy movement unfolding worldwide, including the Middle East. Without anonymous communications, such movements would have had even greater difficulty organizing and would face greater risks and repression. Without anonymous communications, our already-constrained knowledge of what government and corporations actually do in our name and against our interests would be even more limited. Without anonymous communications, the Internet becomes little more than a caricature of its potential as a tool for building a just global society.

When authorities forcibly remove a computer from an anonymous communications network, they weaken that network and set a precedent for attack on anonymity in general. If we lose anonymous e-mail, we effectively lose the Internet as a tool for organizing and change. The use of anonymous communications for bomb threats is horrible. We at MF/PL have never condoned threats of violence or the use of Internet technology to harm people. Such use runs counter to our vision of the reason the Internet exists and its proper use. We are deeply saddened by the pain caused so many people by these sociopathic activities. However, we cannot stop malicious anonymous e-mail without also destroying the ability to use anonymous e-mail for beneficial purposes. In the other hand, according to the news, the bomb threats continue to arrive at University of Pittsburgh after this outrageous seizure. There is no positive outcome to this action by the FBI...MORE

[Po_d Mainiac]

12. Hey Fudd

That nasty habit u have is getting some scrutiny

Chimps Throwing Poop
http://theeconomiccollapseblog.com/archives/chimps-throwing-poop-and-29-other-mind-blowing-ways-that-the-government-is-wasting-your-money

Anyone remember the 'Golden Fleece' awards?

[Tansy_Gold]

14. Bill Proxmire's Golden Fleece awards? n/t

[Po_d Mainiac]

17. Yup..U win!

U get to start the SMW thread for Thursday!

[Fuddnik]

56. Here, catch!

[AnneD]

62. Calling Dr. Phool calling Dr.Phool.....

Code Brown in Room 425.


Edited to add... when I worked in on the floor or in the nursing home....we use to call code brown or yellow. I had helped with some code browns that would curl your nostril hairs.

Oh, and when some one was circling the drain...they were going to Chicago....those were the days.

[Demeter]

13. CFPB Scrutinizing Bank Overdraft Fees

http://www.nakedcapitalism.com/2012/04/cfpb-cracking-down-on-bank-overdraft-fees.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

...(ELIZABETH) Warren may have given the Administration more than it bargained for. One of the things she said in her numerous hazing sessions before Congress was that the role of the director (CFPB) was not as important as it seemed, that she had set up the agency with a strong culture and staff in each of its divisions, and she had also gone to some lengths to put mechanisms in place to foster communication and coordination across divisions. If that were true, that would mean it would take some time and effort to erode the tough enforcement mindset that she had endeavored to put in place.

It’s too early to reach a definitive judgment, but this Bloomberg story on bank overdraft fees is an encouraging sign that the CFPB may well prove to be a competent, forceful regulator. Admittedly, at this stage the CFPB is only reviewing the practices of nine major banks in the checking account overdraft arena, but they are looking well beyond the fee structures and probing whether the banks engaged in deceptive practices. New regulations require banks to have consumers opt in to overdraft protection programs and to stop the abusive practice of ordering debits from accounts in a way designed to maximize income. Note that for any customer with a credit line, an overdraft service is superfluous and more costly, so the banks are motivated to steer customers to this service.

From Bloomberg:

The inquiry focuses on how financial institutions persuade customers to enroll in what they call overdraft protection programs. Examiners are looking at online and mailed marketing material as well as scripts used by the banks’ customer-service representatives to determine whether they could be confusing to consumers, said the people.

Bureau examiners have conveyed “a tone of skepticism that this is really a good product for borrowers,” said Jo Ann Barefoot of Washington-based Treliant Risk Advisors, who counsels banks on dealing with federal supervisors.

While tighter rules could help U.S. consumers, they also could threaten a major revenue stream for banks already struggling to replace income pinched by new regulations including a cap on debit-card “swipe” fees. Last year bank customers paid $31.6 billion in overdraft fees, down from $33.1 billion in 2010, according to Moebs Services, a Lake Bluff, Illinois-based research firm. About 15 million Americans overdraw their accounts 10 or more times a year, the firm said.

The bureau’s examiners also are reviewing the banks’ justifications for the size of overdraft fees, two of the people said. Large banks charge an average $35 per overdraft, compared with $25 at community banks and credit unions, Moebs reports.

There is also a remarkable lack of information on the customer uptake rate:

Moebs estimates that 77 percent of bank customers have opted in, while the Consumer Bankers Association concluded in an October study that the rate was 17 percent. The Center for Responsible Lending, a Durham, North Carolina-based advocacy group, estimated the opt-in rate at about 33 percent.

Wonder why the Consumer Bankers Association (the industry group) came up with what looks like an awfully low estimate? A high opt in rate for such a crappy product would look to be prima facie evidence of deceptive selling practices.

The CFPB is also taking a hard look at bank servicing and that will prove to be an even more important test of its seriousness. Let’s keep our fingers crossed that the Obama Administration may have, despite its intent otherwise, put an effective regulator in place.

[Demeter]

15. The Burgeoning Student Debt Problem

http://www.nakedcapitalism.com/2012/04/the-burgeoning-student-debt-problem.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Even though other consumer debt-bombs have done more damage, student debt is producing significant social and economic distortions. One is so useful to the authority structure that it seems certain that they will keep this type of bondage in place. Heavy debt loads pressure young people into making conservative choices. If you carry a lot in the way of student loans, you have to worry about employability. That doesn’t simply push graduates into bigger ticket (hence more conventional) career choices; more important, it makes them far less likely to step out of line. In particular, an arrest record, which is often a by product of protesting, is an automatic out with a lot of employers.

But the level of student debt, now estimated at over $1 trillion outstanding, is having an impact on spending. First time home buying is running below the level expected given new household formation, and a big culprit is student debt loads, since many young people are too leveraged to take on a decent-sized mortgage on top of their existing obligations. In addition, the 25 to 39 year old cohort is the top target of advertisers, but the more debt service they have, the less they can buy in the way of goodies.

Adam Levitin has taken his first serious look at student debt. Aside from grumbling at the dearth of academic research, he offers some useful observations. The big one is that the problem is the level of debt: student debt rates are generally pretty favorable, and the loans also offer a lot in the way of payment flexibility.

He also made a modest suggestion:

Why we are financing education via debt? It’s not obvious that we have to do so, and that’s the easiest way to avoid leverage going forward. Milton Friedman proposed equity financing some years back, meaning that the school got a % of future income, rather than a fixed amount. It could be as progressive or regressive as a school wanted.

Yale tried such an experiment in the 1970s, but with poor results–the alumni didn’t pay. Yale didn’t want to sue its alums, and let them convert to debt at a favorable rate. But that’s an easily surmountable problem–we could have education payments rolled into tax bills and collected by the IRS, which would then remit to the schools. Non-payment isn’t stiffing the school. It’s stiffing Uncle Sam, who is much better at collecting. It’s not such a radical idea–Australia collects student loans via its tax service.

There’s an entrenched education bureaucracy that would have a lot of trouble changing to an equity financed system (alumni fundraising would surely suffer, for example). But it would mean that people take the jobs they want, rather than the jobs that pay the student loans. That might be a very good thing for society, even if it would certainly hurt some employers (think those who pay recent graduates outsized “hazard pay”).
http://www.creditslips.org/creditslips/2012/04/some-thoughts-on-the-student-loan-debt-problem.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+creditslips%2Ffeed+%28Credit+Slips%29&utm_content=Google+Reader

[Demeter]

20. Randy Wray: The Job Guarantee and Real World Experience

http://www.nakedcapitalism.com/2012/04/randy-wray-the-job-guarantee-and-real-world-experience.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

There have been many job creation programs implemented around the world, some of which were narrowly targeted while others were broad-based. The American New Deal included several moderately inclusive programs such as the Civilian Conservation Corp and the Works Progress Administration. Sweden developed broad based employment programs that virtually guaranteed access to jobs.

From WWII until the 1970s a number of countries, including Australia, maintained a close approximation of full employment (measured unemployment below 2%) through a combination of high aggregate demand plus loosely coordinated direct job creation. (Often there would be an informal “employer of last resort”, such as the national railroads, that would hire just about anyone.) As Bill Mitchell argues, a national commitment to full employment spurred government to implement policies that created jobs—even if it did not explicitly embrace a national and universal job guarantee/employer of the last resort program.

In the aftermath of its economic crisis that came with the collapse of its currency board, Argentina created Plan Jefes y Jefas that guaranteed a job for poor heads of households. (See Tcherneva and Wray 2005 here) The program successfully created 2 million new jobs that not only provided employment and income for poor families, but also provided needed services and free goods to poor neighborhoods.

For many years Argentina was proclaimed to be the success story of IMF austerity and market liberalization policies, until it experienced an economic meltdown in the winter of 2001-2002. (I won’t deal with causes of the crisis here—but it was the inevitable result of adopting a currency board arrangement. By giving up its own currency, it faced a financial crisis even though its budget deficits always would have met Maastricht criteria.)

MORE

[Demeter]

16. Jamie Galbraith on Inequality and Instability

http://www.nakedcapitalism.com/2012/04/jamie-galbraith-on-inequality-and-instability.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

3 PART VIDEO AT LINK

Real News Network interviewed Jamie Galbraith on his new book, Inequality and Instability, in which he argues the two phenomena are linked...

[Demeter]

18. Bank of America Accord in Lawsuit Is Challenged By GRETCHEN MORGENSON

http://www.nytimes.com/2012/04/21/business/bank-of-america-settlement-in-lawsuit-is-challenged.html?_r=1&ref=business

Lawyers leading a class-action lawsuit in federal court in Manhattan against the directors of Bank of America over its purchase of Merrill Lynch have agreed to settle the matter for $20 million even though damages in the case could reach $5 billion, according to plaintiffs in a parallel suit against the bank’s board in Delaware. Calling the settlement grossly inadequate and the result of collusion (THEM'S FIGHTING WORDS!-DEMETER), the lawyers in the Delaware case have asked P. Kevin Castel, the judge overseeing the New York matter, to order the parties agreeing to the deal to justify its terms.

If the settlement is approved by the Manhattan court, all damage claims made in the Delaware suit would be extinguished. That matter is scheduled to go to trial in October.

The settlement was struck privately on April 12 by lawyers representing two public employee pension funds that had sued the directors of Bank of America for breach of fiduciary duty. The funds are the Louisiana Municipal Police Employees’ Retirement System and the Hollywood (Florida) Police Officers’ Retirement System. At issue in both the federal and state suits is whether Bank of America’s board breached its duty to shareholders in approving the 2008 acquisition of Merrill Lynch for $50 billion and whether it misled investors about the brokerage firm’s weakening financial condition leading up to the purchase. Struck during the depths of the financial crisis by Kenneth D. Lewis, then Bank of America’s chief executive, the Merrill deal generated billions of dollars in losses at the bank. Those losses led to Bank of America’s second request for bailout money under the government’s Troubled Asset Relief Program.

According to the lawyers in the Delaware case, the $20 million deal is inadequate in several ways. First, the amount does not come close to the $150 million fine paid by the bank in 2010 to settle a Securities and Exchange Commission suit over the Merrill deal. Jed S. Rakoff, the federal judge overseeing that matter, said the evidence showed that the bank’s disclosures to shareholders about losses and employee bonuses at Merrill were inadequate. Judge Rakoff had rejected the initial proposal by the bank and the S.E.C. to settle the case for $33 million, calling it a contrivance at the expense of shareholders...
MUCH MORE

[Demeter]

19. Europe’s Lunatics Rise

http://www.nakedcapitalism.com/2012/04/europes-lunatics-rise.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Back in December last year while discussing the ongoing woes of Europe, I suggested that the fiscal compact may never actually be enacted because attempts to do so would have such a disastrous outcome that European nations will inevitably give up. I also mentioned in February that one of the things that could potentially effect any implementation was the European people themselves when they got to have a say about what was going on.

Over the weekend round one of the French presidential elections took place, and the results certainly aren’t pro-compact. In fact, I am not even sure they are pro-Europe:

Far-rightist Marine Le Pen threw France’s presidential race wide open on Sunday by scoring nearly 20 percent in the first round – votes that may determine the runoff between Socialist favorite Francois Hollande and conservative President Nicolas Sarkozy.

Hollande led Sarkozy by about 29 to 26 percent in reliable computer projections broadcast after polling stations closed, and the two will meet in a head-to-head decider on May 6.

But Le Pen’s record score of 18-20 percent was the sensation of the night, beating her father’s 2002 result and outpolling hard leftist Jean-Luc Melenchon, in fourth place on 11 percent. Centrist Francois Bayrou finished fifth on less than 10 percent.

Le Pen, who took over the anti-immigration National Front in early 2011, wants jobs reserved for French nationals at a time when jobless claims are at a 12-year high. She also advocates abandoning the euro currency and restoring monetary policy to Paris.

Le Pen’s policies are as you would expect from a far-Right candidate. Patriotism, protectionism, state control all being high on the list. Le Pen has stated she is determined to re-industrialisation of France, reduce immigration to just 10,000 a year, scrap the European common Agricultural Policy and pull France out of the passport-free Schengen zone amongst many other policies.

Latest results are Hollande 28.8%, Sarkozy: 26.1; Le Pen 18.5%. The big question now is how the votes of failed far-left candidate Jean-Luc Mélenchon and Le Pen will fall. A first round poll suggested that 48% of Le Pen supporters will transfer their vote to Sarkozy, while 24% will opt for Hollande. However, 83% of Mélenchon voters prefer Hollande. At this stage Hollande and Sarkozy are very close going into the final round, but it is the far-Right’s Le Pen that holds the key.

France, however, is not the only nation in Europe where the Right is resurgent...

[Demeter]

22. What a Hollande Victory Would Mean for Merkel

http://www.spiegel.de/international/europe/0%2c1518%2c828537%2c00.html

German Chancellor Merkel has made it clear that she would like to see French President Nicolas Sarkozy win a second term. Indeed, if his challenger François Hollande emerges victorious in the country's upcoming election, she could face isolation in Europe. But a Sarkozy re-election might be problematic, too.

...The election in France could even alter the political landscape ahead of Germany's upcoming federal election in 2013. The center-left Social Democrats (SPD), who are trailing the chancellor in recent polls, desperately need a boost. If Hollande were to win, it would send a signal that social democracy in Europe, and in Germany, is still a force to be reckoned with. That's how party members see it, at least....

[Demeter]

28. Hollande seeks wider EU fiscal pact

Financial markets have been unsettled at the prospect of a victory for the Socialist candidate in the May 6 run-off against Nicolas Sarkozy

Read more >>
http://link.ft.com/r/G8OTZZ/AML46F/A5Q0X/97QFGJ/JEVJE4/ID/t?a1=2012&a2=4&a3=25

AS WELL THEY SHOULD BE

[Demeter]

32. 'Berlin Is Running Out of Allies in Euro Crisis'

http://www.spiegel.de/international/europe/0%2c1518%2c829440%2c00.html

The collapse of the Dutch government, the prospect of Socialist François Hollande as next French president and the surging popularity of far-right parties shows that budget discipline is out of fashion in Europe. Chancellor Angela Merkel is looking increasingly lonely in her fight to save the euro through painful austerity measures, write German commentators....

If the Dutch with their robust economy aren't willing to observe the 15-year-old rule limiting the budget deficit to 3 percent of GDP, many are asking, why should other nations such as Greece, Spain, Portugal and Italy, which have far bigger economic problems?

[Demeter]

21. You can see from the charts just when Helicopter Ben Took Off Tuesday

Last edited Tue Apr 24, 2012, 10:31 PM - Edit history (1)

Where's a drone when you need one?

Firefox just updated itself...I LOVE how the browser hangs so that you have to reboot, and then after the update, it hangs again...if I disappear, you'll know why. And I'll return on Chrome, although it's an inferior product, even when it works.

[girl gone mad]

23. U.K. Returns to Recession in First Quarter on Building Slump

The double dip just got official...

The U.K. economy shrank in the first quarter as construction output slumped, pushing Britain into its first double-dip recession since the 1970s.

Gross domestic product contracted 0.2 percent from the fourth quarter of 2011, when it shrank 0.3 percent, the Office for National Statistics said today in London. The median of 40 estimates in a Bloomberg News survey was for a gain of 0.1 percent. A technical recession is defined as two straight quarters of contraction.

The report will heap further pressure on Prime Minister David Cameron as he faces criticism of his budget cuts and questions about the relationship between senior government ministers and News Corp. It comes at a time when prospects are dimming in the euro region, Britain’s biggest export market.

“This isn’t supportive of the fiscal consolidation program, so the government is likely to be concerned about that,” said Philip Rush, an economist at Nomura International in London. “The data were bad, and that supports the view that the Bank of England will do a final 25 billion pounds of quantitative easing in May.”

http://www.bloomberg.com/news/2012-04-25/u-k-returns-to-recession-in-first-quarter-on-building-slump.html

[Demeter]

24. Jeffrey Sommers: No Exit in EU

http://www.counterpunch.org/2012/04/19/no-exit-in-eu/

Peter Praet, Chief Economist of the European Central Bank, defended the ECB’s policies at Levy Institute’s annual Minsky meeting at the Ford Foundation this past week in New York. In his remarks, he retreaded the EU’s wheels with the same rhetoric of inflation fighting and fiscal tightening that drove the EU off the road and into the ditch to begin with. The effect of his pronouncements of EU intentions was to only further reveal the growing gap between reality and ECB ideology over their inability to successfully address the euro crisis. Europe risks becoming a real lived version of Jean Paul Sartre’s No Exit in which its constituent countries are locked into a dysfunctional currency union for an eternity. Euro entry has been a Faustian bargain. There is presently no exit clause once joining, except exiting the European Union itself. Entry promised membership into a rich club of nations in which Europe’s southern periphery and former Soviet bloc areas to the east would converge with Europe’s richest nations. The devil of membership, however, is in the details. Euro rules preclude a wholesale list of policies historically demonstrated to develop nations. In short, the answer to the question of whether Europe’s periphery is merely in purgatory or eternal damnation rests with whether Europe is willing to undertake a revision of the rules guiding the relationships among its constituent members. The European Central Bank understood the currency union would be complex, but their assumptions regarding rules that create economic development and stability have proven erroneous and mitigate against convergence and growth across Europe.

Among the faulty assumptions is that markets are the best arbiters of risk and worthy investments. This is enshrined in article 123 of Treaty on the Functioning of the European Union. At best, the rule was predicated on the idea that past monetary imprudence (think Zimbabwe or Weimar Germany) of some nations meant governments can’t be trusted with monetary and fiscal independence. Not every country, however, is Zimbabwe with a dictator serving several decades, or a Weimar Germany saddled with inflation-generating war reparation payments. By contrast, nations in the past, from Europe’s richest, to East Asia Tigers, to the US have used domestic credit creation to fund infrastructure that enabled wealth creation beyond the costs of expenditure on that infrastructure. The ideology and group think resident among central bankers, however, says “halt, you can still develop infrastructure, but you must be disciplined by the ‘Father Knows Best’ wisdom of the markets.” This is highly problematic. First, it suggests there is something intrinsic to markets that always makes for better decisions than public sector managers. In effect, we are told that we must pay a fee (de facto tax) to private banks in the form of the higher prices they charge for credit over what states can as the price for the private sector’s ‘superior’ capacities of decision making on investments.

Second, it ignores the evidence from recent decades revealing that private credit has become remarkably inefficient. Private finance is supposed to be a service enabling greater growth in the real economy of production and services. This argument made more sense in the Bretton Woods era following WW II until the 1970s when economic growth was strong and financial institutions comprised some 15% of corporate profits in the US. Yet, since the liberalization of finance from the 1970s, economic growth has continued to diminish in the West, meanwhile in the most liberalized ‘finance gone wild’ economies, like the US, finance now comprises some 40% of corporate profits. The bottom line is that deregulated capital markets in recent decades have taken an ever-increasing share of our economy, while producing less economic growth. Finance no longer enables economic growth by providing a needed service, but instead impose a massive rent seeking tax on the economy.

Lastly, it ignores the different metrics by which markets and states measure investment success. Private markets prefer a quick kill, with profits coming fast and furious. By contrast, states genuinely interested in development need to make infrastructural investments where the benefits accrue to the whole economy. Thus, the benefit, or profit, is harder to capture by a specific interest. Moreover, the time horizon on state investments may be unacceptably long for private investors.

[Demeter]

26. Walmart senior executive quits MetLife board

A top official implicated in the Mexican bribery allegations roiling the retailer has resigned from his post at the insurer to focus on defending his reputation

Read more >>
http://link.ft.com/r/H60H77/SPWL9B/K91WR/TUCYKL/L9AFNW/QR/t?a1=2012&a2=4&a3=25

[Demeter]

44. Wal-Mart took part in lobbying campaign to amend anti-bribery law

http://www.washingtonpost.com/business/economy/wal-mart-took-part-in-lobbying-campaign-to-amend-anti-bribery-law/2012/04/24/gIQAyZcdfT_story.html?wpisrc=al_comboNE

THEY JUST GOT THE CART BEFORE THE HORSE, THAT'S ALL....

[Demeter]

57. Sequoia Fund Manager Campaigns Against Goldman Board Member, Former Fannie CEO Jim Johnson

http://www.nakedcapitalism.com/2012/04/sequoia-fund-manager-campaigns-against-goldman-board-member-former-fannie-ceo-jim-johnson.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

THIS COULD BE THE START OF A NEW FASHION!

[Demeter]

29. Wells Fargo, Terrified to Face Its Victims, Locks Shareholders Out of Annual Meeting

http://www.alternet.org/story/155141/wells_fargo%2C_terrified_to_face_victims_of_its_foreclosure_fraud_and_predatory_lending%2C_locks_shareholders_out_of_annual_meeting?page=entire

On March 24, Wells Fargo, assisted by dozens of Bay Area police, took the unprecedented step of locking more than 100 of its shareholders out of its annual meeting – a meeting they had every legal right to attend. These shareholders had a story to tell, and Wells' Chairman and CEO John Stumpf was not in a listening mood. They'd purchased stock in the bailed-out Wall Street giant, and then travelled from around the country to tell the board how its corporate citizenship had ruined lives and wrought profound economic pain on entire communities.

The previous day, about 150 people had gathered in a church to strategize the day's activities. When Wells foreclosure victims were asked to stand, about 50 people stood up. When victims of predatory lending were asked to stand, another 30 rose to their feet. One woman explained how, after losing her job, she'd fallen behind on her payments. She said Wells Fargo had offered her an agreement that would allow her to keep her home, but had then thrown her out anyway. The day of activism was organized by a broad coalition of groups working under the banner of the “99% Power Movement,” including the Alliance of Californians for Community Empowerment (ACCE), SEIU, Causa Justa, Jobs with Justice and Moveon.org. They were later joined by a rowdy crowd from Occupy San Francisco who filled the streets surrounding the Merchant Exchange Building, where the meeting took place, for several hours as the bankers hunkered down inside.

The shareholders' demands were simple: they called for a moratorium on foreclosures, principal reduction for homeowners who are deep under water and the end of the bank's predatory lending. (According to organizers, “Wells Fargo has operated revolving credit facilities since 2002 with payday lenders across the country such as First Cash Financial and Check into Cash [2002], as well as Dollar Financial and Ace Cash Express [2003]. Within the past 10 years, Wells Fargo has led the way in financing payday lenders, funding well over $1 billion.”) They also called on the bank to divest its 7 percent stake in the GEO Group – one of the nation's largest private prison corporations. Last year, about eight activists had attended the annual meeting. This year, more than 150, with shares in hand, descended on the bank's global headquarters in downtown San Francisco, only to be greeted by throngs of police manning barricades around the building's entrances.

What followed was, literally, a runaround that lasted several hours, as police at one barricade sent shareholders around the block to another, only to be told by officers there that the only way in was at the blocked entrance from which they came. Organizers said that some shareholders – not affiliated with the protests – continued to be let in, a move organizers said was illegal. About 25-30 community shareholders did manage to make it into the meeting before Wells executives declared the room full. But one woman who got in reported that the room was largely empty, and another said that many of those in attendance were Wells Fargo employees (this could not be independently confirmed). The woman also said that as soon as one of the community shareholders attempted to speak, they were immediately threatened with arrest and removed from the building.
MORE

************************************************************************

Joshua Holland is an editor and senior writer at AlterNet. He is the author of The 15 Biggest Lies About the Economy: And Everything else the Right Doesn't Want You to Know About Taxes, Jobs and Corporate America. Drop him an email or follow him on Twitter.

******************************************************************

IF I WERE JOHN STUMPF, I'D EXPECT TO SPEND THE REST OF MY DAYS IN ORANGE...

[DemReadingDU]

34. bankers hunkered down inside

I heard about this on the radio this morning. Perhaps protesting at these shareholder meetings will become a new strategy of the Occupy movement.

[DemReadingDU]

66. Protest over GE tax payments erupts at company's shareholder meeting From The Detroit News: http://

4/25/12 Protest over GE tax payments erupts at company's shareholder meeting

Detroit— While several thousand protesters made noise Wednesday in the city's downtown over feelings General Electric isn't paying enough in taxes, three dozen protestors stood up at the beginning of GE's annual shareholder meeting chanting "pay your fair share"

The group was escorted from the meeting room at the Detroit Marriott at the Renaissance Center by police and security without incident. They continued their demonstration outside in the lobby. A phalanx of security guards formed outside the ballroom to prevent them from re-entering.

The protesters with ties to the "99 percent" movement — made popular last year in light of corporate bank bailouts — made their frustrations known over GE's tax payments outside the building, stretching into nearby Hart Plaza.

Inside the Renaissance Center, security was tight. Shareholders were required to pass through metal detectors, and endure bag searches and wand scans in order to enter the lobby outside the meeting room. Only registered shareholders were allowed in, but it was clear by the union pins some wore that they would bring the protest inside.

A small group of union activists from the Service Employees International Union tried to enter the meeting with proxies from shareholders, but they were turned away by security and police.

GE CEO Jeff Immelt had planned to come out and mingle with investors but that was canceled out of security concerns.

more...
http://www.detroitnews.com/article/20120425/METRO/204250367/Protesters-in-Detroit-voicing-opposition-to-GE%E2%80%99s-tax-payments

[Demeter]

30. DeAnne Julius - Get set for one of the shortest recessions on record (UK--HUMOR, UNINTENTIONAL)

Provided the recessionary rhetoric at home and the dark clouds over the eurozone do not choke off the confidence that is beginning to return to Britain’s high streets and board rooms, this should be one of the shortest recessions on record.

Read more >>
http://link.ft.com/r/M2ZOXX/7AP4DG/7ZY85/IIUB8E/AMTYRP/28/t?a1=2012&a2=4&a3=25

THE DENIAL IS STRONG IN THIS ONE...

[Demeter]

31. YVES' ROUNDUP ON THE LOUISIANA MERS LAWSUIT

http://www.nakedcapitalism.com/2012/04/mers-rico-welborn-banksters.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

LONG AND INVOLVED-- AND BEST HOPE WE'VE GOT TO DATE OF JUSTICE AND REPAIR

[Tansy_Gold]

33. The downfall of MERS could go a long way

to restoring the fiscal health of at least some counties and states.

If the recording fees alone are recovered -- which I've seen estimated in the billions??? -- that could directly benefit many counties hit hardest by the economic downturn.

[Po_d Mainiac]

37. Somehow

(in the event of a judgement against MERS and the banksters) the cost will be shifted to the holders of the securities by the servicers.

Don't ferget where you you heard it first

[Tansy_Gold]

54. Perhaps

But if the money ultimately goes where it should have gone in the first place -- which is the county recorders' and treasurers' offices -- at least that's a start.

And the "holders" of the securities ain't innocent babes either, even if they're public employee pension funds. They were looking for a quick buck at someone else's expense. Ptooie.

[Demeter]

35. $20B Package of Bank of America MSRs Still Hasn't Traded

http://www.nationalmortgagenews.com/dailybriefing/2010_587/bank-of-america-residential-mortgage-servicing-rights-1030065-1.html

A $20 billion package of residential mortgage servicing rights being offered by Bank of America has yet to trade even though the bidding ended about two weeks ago, according to investment bankers familiar with the deal.

[Demeter]

36. The American Conservative: "Extractive Elites" and "Macro-Corruption"

REALITY COMES TO THE RIGHT WING--MUST READ FOR SCHAUDENFREUDE

http://www.angrybearblog.com/2012/04/american-conservative-extractive-elites.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed:+blogspot/Hzoh+%28Angry+Bear%29

[xchrom]

38. Britain in recession, intensifying government woes

http://uk.reuters.com/article/2012/04/25/uk-economy-idUKBRE83O0BY20120425

(Reuters) - The economy has fallen into its second recession since the financial crisis after an shock contraction at the start of 2012, heaping pressure on Prime Minister David Cameron's government as it reels from a series of political missteps.

Britain's Conservative-Liberal Democrat coalition has seen its support crumble after weeks of criticism over unpopular tax measures in last month's budget, and is under further pressure from revelations about its close links with media tycoon Rupert Murdoch.

With local elections taking place on May 3, there could hardly be worse timing for Wednesday's news from the Office for National Statistics that Britain's gross domestic product fell 0.2 percent in the first quarter of 2012 on top of a 0.3 percent decline at the end of 2011.

Most economists had expected Britain's economy to eke out modest growth in early 2012, but these forecasts were upset by the biggest fall in construction output in three years, coupled with a slump in financial services and oil and gas extraction.

[Demeter]

39. U.S. Creates New Spy Service (Because 16 Intelligence Agencies is Not Enough)

http://globaleconomicanalysis.blogspot.com/2012/04/us-creates-new-spy-service-because-16.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed:+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29

...Collectively US intelligence agencies missed 911, Egypt, Libya, events in Iran, and they thought Hussein hid weapons of mass destruction in Iraq. Currently they do not know if Iran is attempting to build nuclear weapons or not. Alternatively, they do know, but do not want us to know what they know because it might make the oil embargo look downright silly.

Occasionally the agencies get something correct, such as finding Bin Laden after nearly a decade of looking. However, given the overall track record, one has to wonder if that discovery was simply an accident as opposed to careful analysis...OR A SELLOUT

Pentagon sets up new spy agency to eavesdrop on a changing world GUARDIAN

http://www.guardian.co.uk/world/2012/apr/24/pentagon-new-spy-agency

The Pentagon is to create a new spy service to focus on global strategic threats and the challenges posed by countries including Iran, North Korea and China. The move will bring to 17 the total number of intelligence organisations in the US. The Defense Clandestine Service is supposed to work closely with its counterpart in the CIA, the National Clandestine Service, recruiting spies from the ranks of the Pentagon's Defense Intelligence Agency (DIA) and deploying them globally to boost the flow of intelligence on perceived long-term threats to US national interests.

US military news website Insidedefense said the defence department had asked Congress for authority for spies to work undercover posing as businessmen when conducting covert operations abroad. The move by the defence secretary, Leon Panetta, emerged in briefings to US journalists. "You have to do global coverage," a senior defence official said, according to the Los Angeles Times. The new service would seek to "make sure officers are in the right locations to pursue those requirements", the Washington Post quoted the official as saying.

The Pentagon argues that the new service is necessary because the DIA spends most of its time and manpower reporting tactical intelligence about battlefields such as Afghanistan, and not enough time looking at strategic issues...

SOUNDS LIKE ECONOMIC HITMEN, THE SEQUEL

[kickysnana]

63. +17

[Demeter]

65. Very Funny

[DemReadingDU]

67. +++++++++++++++++

[Tansy_Gold]

70. You made me

count them!

[xchrom]

40. morning...

[Demeter]

47. Morning, X!

Ah, yes, the unstoppability of Youth.

Somewhere along the way, I lost that, mostly.

When one has to be one's own parent and feed, clothe, house and cleanup after oneself, time and energy available for other things shrink. Unless one is a parasitical "1% Elite" or a psychopath, but that's redundant.

[xchrom]

50. the only thing that the 'wealthy' have that i envy

is 'assistants'.

now that i could use.

[Demeter]

41. Why Wall Street Hates President Obama —By Kevin Drum

http://motherjones.com/kevin-drum/2012/04/why-wall-street-hates-president-obama

A big part of it, I think, is that Obama was not just supposed to make things better: he was supposed to fix things — to bring things back to "normal"....But Obama did not fix things: Wall Street bankers today are a lot poorer than they were in mid-2007. And the Wall Street bankers think that Obama disses them. And the Wall Street bankers know that Obama wants to tax them.

http://delong.typepad.com/sdj/2012/04/why-does-wall-street-dislike-obama-so-much.html

I'm not sure I buy this. My sense is that Wall Street financiers, whatever their other blinders, take a pretty intellectual approach to the macroeconomy, and they know that the economy is doing about as well as they could have hoped back in 2008. The stock market is up, corporate profits are up, and bonuses have rebounded. From a purely self-interested financial point of view, I don't think very many of them are really dissatisfied with the Obama/Geithner/Bernanke regime.

So what is it? My guess is two things. First — and there's no point in pulling punches here — they're a bunch of spoiled brats. Over the past three decades they've gotten accustomed to the kind of deference normally offered to grand viziers of the Sublime Porte, and they're simply enraged at the fact that Obama not only doesn't seem very impressed by their accomplishments, but even criticizes them every once in a while. At this point, they have fully convinced themselves that (a) they weren't responsible for the 2008 crash in any way, (b) it's populist demagoguery to suggest otherwise, and (c) the government should stand with them against the rabble-rousers so that they have the freedom to run the world again. Obama doesn't quite agree — not totally, anyway — and that maddens them.

Which brings us to the second thing: regulation. Like a lot of business people, I think they hate regulation more than they hate reduced profits. They'll fight higher taxes, but in the end, that's a pure money thing and they're accustomed to winning and losing money battles. But regulation wounds them far more. It's a signal that they aren't to be trusted. It's a reminder that someone else can tell them what to do. It makes it harder to earn money from purely financial manipulation. Dodd-Frank and Basel III may, in the end, not be very stringent regulatory regimes, but they're still viewed as unfair punishment. And we all know how children react to punishment they view as unfair. They sulk.

In 2008 Wall Street somehow convinced itself that Obama understood them and would protect them from the mob. In reality, he's mostly done that. But he's only done it 80%, not 100%. That missing 20% is the reason they've turned on him like a pack of rabid dogs.

[Demeter]

42. COMMENT FROM DELONG'S POST

Noah Smith said...

My explanation:

It's all about the bond market.

First of all, the bond market dwarfs the stock market in size. Wall Street firms thus make most of their money from the bond market.

Second of all, Wall Street firms have far more power in the illiquid, opaque, highly complex bond market than they do in the liquid, transparent, simple stock market. Who needs Goldman Sachs to buy equities? All you need is e*Trade.

Third and finally, the bond market depended heavily on fraud/opacity (basically, on tricking people) and on favorable tax treatment during the finance-industry super-boom of the last few decades. New regulation will curb the former and the closing of loopholes may curb the latter. This will leave the U.S. finance industry with very few sources of excess profit indeed.

In other words, simply enforcing reasonable rules will force our finance industry to go back to researching companies and facilitating M&A - pedestrian, low-margin activities that are socially useful but for which they will only be paid as well as software engineers or doctors. What they want is the glory days back - the days when the bond market was a giant cash transfer machine that sucked money out of the rest of the developed world and put it into the pockets of Wall Street employees. But for that to continue, even in some diminished form, would require a government that bent over backward to give the finance industry every regulatory waiver and tax break possible.

In other words, the finance industry hates Obama because he refuses to continue burning America's furniture to keep their bond-market party going.

[xchrom]

43. Caterpillar 1Q profit jumps 29 pct, boosts outlook

http://hosted.ap.org/dynamic/stories/U/US_EARNS_CATERPILLAR?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-04-25-08-01-07

PEORIA, Ill. (AP) -- Caterpillar says its first-quarter profit jumped 29 percent and it's boosting its outlook for the year with U.S. construction firms replacing old gear and global demand booming for mining equipment.

Caterpillar said Wednesday that it generated $1.59 billion net income, or $2.37 per share, during the quarter. That's up from last year's $1.23 billion net income, or $1.84 per share.

The Peoria, Ill., firm says its revenue grew 23 percent to $15.98 billion from last year's $12.95 billion.

Caterpillar Inc. says it now expects to generate earnings per share of $9.50 in 2012. That's up from a previous prediction of $9.25, but Caterpillar didn't increase its revenue forecast.

[Demeter]

45. Jon Corzine Is the Original George Zimmerman MATT TAIBBI

http://www.rollingstone.com/politics/blogs/taibblog/jon-corzine-is-the-original-george-zimmerman-20120424?utm_source=dailynewsletter&utm_medium=email&utm_campaign=newsletter

...To make an obvious comparison: Much like the Trayvon Martin/George Zimmerman case, the outrage here goes beyond the fact of the horrific crime. An equally profound insult in both cases lay in the fact that that serious crime obviously had been committed, and yet authorities refused to act for months. This situation with former Goldman chief and U.S. Senator Jon Corzine and the officials of MF Global involves a less physically savage offense, but the authorities' refusal to act is every bit as incredible....Somebody from MF Global has to be arrested soon. The message otherwise to middle America is so galling that it boggles the mind...

A RIGHTEOUS RANT

[xchrom]

46. US orders for long-lasting goods plunge in March

http://hosted.ap.org/dynamic/stories/U/US_DURABLE_GOODS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-04-25-08-40-44

WASHINGTON (AP) -- Orders for long-lasting factory goods fell by the largest amount in three years last month, mostly because demand for commercial aircraft plummeted. But companies also ordered less machinery and other equipment, a sign manufacturing output may slow.

Orders for durable goods dropped 4.2 percent in March, the steepest fall since January 2009, the Commerce Department said Wednesday. Commercial aircraft orders, a volatile category, fell by nearly 50 percent.

Excluding transportation equipment, orders declined 1.1 percent. That's the second drop in that category in three months.

[Demeter]

48. The Real Bad Guy in the E-Book Price Fixing Case

http://www.slate.com/articles/technology/future_tense/2012/04/e_book_price_fixing_amazon_is_the_real_bad_guy_.single.html

This week, the Obama administration’s Justice Department struck a great legal blow against our open market for books, and indeed against open markets in America. Even though online retailer Amazon has captured more than 50 percent of many key book markets—like the one for e-books—antitrust enforcers brought suit not against this vast and swelling monopolist but against the publishers who are the victims of Amazon’s power.

Their supposed crime? To do what is most normal in any real market: insist on the right to price your own product.

Now this vital marketplace is, for all intents, under the sway of a single boss. One that has a direct interest in stripping capital from publishers. One that has a direct interest in gouging all writers who must ride its rails. One that has a direct interest in suppressing any work of reporting that questions its power, or for that matter the political economic regime that enabled such concentration of power. One that is swiftly capturing direct control over much of the rest of the U.S. economy as well.

On the surface, the DoJ’s action may seem perfectly reasonable. The antitrust enforcers charged that five big publishers conspired with Apple to raise the prices of e-books by creating a new regime in which the publishers, rather than the retailers, priced their books...

[xchrom]

51. Ford faces threat of first strikes since 1970s

http://www.guardian.co.uk/business/2012/apr/25/ford-threat-first-strikes-1970s

Ford is facing the threat of its first outbreak of industrial action since the 1970s after the Unite trade union served notice of a strike ballot at the car manufacturer.

Unite will ballot 2,500 members at Ford UK, whose sites include the east London engine plant that was the recently the subject of the Britcom film Made in Dagenham. In a dispute reminiscent of last year's clash between Unite and Unilever. The union is objecting to Ford's plans to close its final salary pension scheme to newcomers, as well as lowering starter pay rates.

A Unite official said the union "fiercely" opposed the move and warned that the company was close to industrial action. "Ford faces the very real prospect of the first strike since the 1970s. Unite will not stand by and allow Ford to create a two tier workforce on pay and pensions. We urge Ford to return to the negotiating table if it wants to avoid this dispute," said Roger Maddison, Unite's national officer. Unite fears that the move will lead, as at Unilever, to the ultimate closure of the final salary scheme.

Ford employs 15,000 staff across the UK and its employees last went on strike in 1978 in a dispute over pay that became the first in a wave of union walkouts later termed the winter of discontent. The Transport and General Workers Union, the forebear of Unite, was a key player in the strike. As well as Dagenham, Unite is also balloting a number of sites including Southampton, Halewood in Merseyside and Ford's UK headquarters in Basildon, Essex. Made in Dagenham, starring Sally Hawkins and Bob Hoskins, was based on an industrial dispute led by female machinists at the plant demanding equal pay.

Ford said it remained "willing and available" to hold talks with Unite. "The Company has sought to discuss with the Union the financial challenges of its defined benefit pension funds, which are significantly in deficit. Around 80% of all private sector firms have now closed their defined benefit pension funds to new hires. The Company has categorically confirmed that it has no plans to close its pension funds to existing members and that the funds remain open to existing members," the company said in a statement.

[Demeter]

52. TARP: Billions in Loans in Doubt

http://online.wsj.com/article/SB10001424052702303978104577364262736412398.html?mod=WSJ_hp_LEFTWhatsNewsCollection

Hundreds of small banks can't afford to repay federal bailout loans, a top watchdog will warn Wednesday in a report that challenges the government's upbeat assessment of its financial-system rescue.

Christy Romero, special inspector general for the Troubled Asset Relief Program, said 351 small banks with some $15 billion in outstanding TARP loans face a "significant challenge" in raising new funds to repay the government.

Ms. Romero made the comments in her quarterly report to Congress, the first since the Senate approved her appointment in March as special inspector general for the program.

[Demeter]

53. THE MODEST PROPOSAL AND THE DEMOCRATIC DEFICIT (eurozone and EU)

http://yanisvaroufakis.eu/2012/04/18/the-modest-proposal-and-the-democratic-deficit/

...The very structure of the European Union (inter-governmental rather than federal) puts a great distance between citizens and the EU itself. This is why, quite naturally, even though most Europeans are pro-Europe, the EU is rather unloved (and, for some, positively loathed). Then came the Eurozone. A currency union predicated upon a single institution (the ECB) that is, by design, unaccountable and, to boot, geared towards shifting the burden of an economic crisis from the social classes and strata whose actions helped cause the crisis to the weak shoulders of those who never benefitted from the preceding boom. Since such a ‘shift’ causes adverse popular reaction, the ECB is a natural ally of the domestic political forces (especially in the deficit member-states whose population bears the brunt) whose task is to bend the electorate to their will, and to the ECB’s will. To all intents and purposes, an economic crisis in the Eurozone ends up creating a form of neo-neo-colonialism within the world’s most advanced ‘democracy’ – within the EU.

In short, the awful architecture of our common currency, which was never designed to deal with a crisis like the current one, reacts to the unplanned for crisis with savage incursions into the democratic process of the deficit countries, whose populations must be beaten into a pulp until they surrender their spirit to the irrationality of the ‘cure’ (bailouts plus austerity). And since no one can remain free when others within their broader community are turned into slaves (to paraphrase Hegel), the democratic losses of the periphery soon expand to the core, the result being that Greece’s and Ireland’s democratic deficit soon spreads to Germany and Holland, diminishing the democratic processes of the surplus countries. In the end, as we have been witnessing in the Eurozone over the past two years, governments everywhere are misleading their parliaments and their people.

To put it simply, whereas in economic terms when one is in deficit someone else must be in surplus, in political terms we can all end up in a democratic deficit. The galloping Euro Crisis is dismantling the last vestiges of Europe’s democratic processes everywhere. Not just in the periphery. A necessary, though not insufficient, condition for ending this sad dynamic, and redressing the democratic deficit is to put an end to the Euro Crisis in a manner that does not give more discretionary power to the centre, to unelected officials, to ECB-like ‘rulers of the universe’...

MORE...AND LIKE SARTE, "NO EXIT"

[Demeter]

55. George Washington: 2 Years After the BP Oil Spill, Is the Gulf Ecosystem Collapsing?

http://www.nakedcapitalism.com/2012/04/guest-post-the-gulf-ecosystem-is-being-decimated.html

IT'S NOT SOMETHING I'D CARE TO BET AGAINST

[AnneD]

68. The most telling story.....

A fisherman came back from a fishing trip. He kept thinking something wasn't right. It finally dawned on him. He didn't smell 'fishy'. How can you come home from an all day fishing trip and NOT smell fishy. We are hoping Texas and the Laguna Madre can be used to seed La, but things are very perilous. Folks forget that Alaska had a thriving herring industry until the Valdez. Totally killed it and there is still a sheen if you press down on the moss.

[Demeter]

58. Mark Gongloff SEC, CFTC Retreat On Swap Dealer Regulation

http://www.huffingtonpost.com/mark-gongloff/post_3268_b_1434498.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+HP/Business+%28Business+on+The+Huffington+Post%29


...On Wednesday APRIL 18 they undercut new regulations on derivatives, which the detail-obsessed among us might point out didn't just hurt the economy but nearly destroyed it. Just a few years ago. It's just the latest in a growing string of defeats and surrenders by regulators to the same financial industry that helped nearly destroy the economy, and needed massive bailouts as a result. Just a few years ago. Under heavy pressure from the energy industry and other corporate interests, the Commodity Futures Trading Commission and the Securities and Exchange Commission are retreating from a plan to regulate many reaches of the U.S. trade in financial derivatives known as swaps, including the credit derivatives that nearly brought down the financial system.

The CFTC and SEC voted on Wednesday to decide just who, exactly, should be considered a "swap dealer" in this market. Dealers will be subjected to greater regulation and oversight. Non-dealers get a pass. Originally these regulators wanted to say that anybody who handled less than $100 million in swaps per year was not a dealer and thus would be exempt from regulatory oversight. This arbitrary number was far, far too low, cried energy companies and other players in the swaps market. After careful consideration, they thought another arbitrary number, say $3 billion, or maybe $8 billion, would be more reasonable. These companies argued that they dealt in many billions of dollars in swap trades each year -- $3 billion to $8 billion, to be ridiculously precise -- just to hedge their risks of doing business. To subject their trades to the scrutiny of regulators would impose terrible costs that could very well hurt the economic recovery, for goodness' sake.

These groups, using a large and well-supplied army of lobbyists, as Ben Protess of the New York Times noted, cried to regulators that $3 billion -- no make that $8 billion -- was the absolute level of trades that turned one from an innocent bystander in the swaps market into a "dealer" in need of regulation. And the regulators listened, bless 'em, continuing a recent string of victories for the banking industry, among others, to roll back or confuse regulations passed in the wake of that pesky financial crisis. Not only did they make it easier for a swaps trader to be exempt from regulation, but they also left it up to individual companies to decide whether their swaps trades were commercial "hedges," which would also get them off the regulatory hook, Reuters notes.

"This rule is an indefensible defeat for financial reform," Better Markets, a non-profit advocacy group, wrote on its blog on Wednesday. "It is also a poster child for the pernicious effect of industry's army of lobbyists and the influence that the financial industry has at the regulatory agencies."

Americans for Financial Reform, another advocacy group, wrote on Tuesday, in urging the SEC not to raise the trading limit for swaps dealer exceptions:

Under an $8 billion de minimis exemption, a swaps entity could advertise itself as a dealer to the market and conduct 1,600 such transactions a year, without any requirement to register with the either the SEC or the CFTC. Commodity companies able to take advantage of the hedge exemption, or hedge funds and commodity trading desks able to use a possible own book trading exemption, could expand even further without designation.

The regulators argue that an $8 billion limit for swaps dealers will capture all of the too-big-to-fail banks and the bulk of swaps trading in the U.S., and they may yet lower the bar back down to the other arbitrary number floated by the industry, $3 billion. But Wednesday's failure follows the JOBS Act, pushed by President Obama himself, which will strip away investor protections in the name of addressing an imaginary crisis of small companies being unable to raise money from investors in private or public markets. Then there was H.R. 3283, a bill that would create a massive loophole to let banks trade derivatives without having to hold extra capital to protect against losses. That bill is still out there waiting to be passed. Then there is the banking industry's constant, withering assault on the Volcker Rule forbidding banks from taking risky bets with their own money, which banks say is a necessary part of hedging their risks, sort of like the swaps market. As Jesse Eisinger of ProPublica writes today, lobbyists and complicit regulators have managed to so confuse the issue that they have rendered the Volcker Rule meaningless.

What all of these retreats have in common -- and this is not an exhaustive list -- is an industry successfully pleading to the government to loosen some of the fetters placed on them after their past jaw-dropping acts of malfeasance, all in the name of avoiding the hazily defined "costs" such regulations could impose on the economy. What's lost is that these "costs" are almost certainly not going to be higher than the cost of, say, bailing out the entire banking industry, as we have had to do once before and likely will be asked to do again, at the rate we're going. The costs of regulation might not even be higher than the cost of simply bailing out one insurance company, American International Group, which nearly got itself annihilated by massive positions in the very swaps market regulators are taking a pass on fully regulating now.

[Roland99]

59. Today's Economic Reports (Durable Goods) >>>>

* Transport orders sink 12.5% last month
* Durable orders minus transportation drop 1.1%
* U.S. durable goods orders fall 4.2% in March
* Shipments of core capital goods rise 2.6% in March
* Core capital orders dip 0.8% last month


But markets are up on AAPL news. Momo is the game!

[Demeter]

60. Bank of America Faces Bad Home-Equity Loans APRIL 18

http://www.bloomberg.com/news/2012-04-18/bank-of-america-faces-bad-home-equity-loans-mortgages.html

Bank of America Corp., whose home- equity mortgage portfolio exceeds its stock market value, probably will say about $2 billion of junior loans are bad assets tomorrow even as some borrowers are still paying on time....

I CAN'T TAKE TIME TO FIND OUT IF THIS HAPPENED...ANYBODY UP FOR IT?

[Demeter]

61. Romney cites 'vast left wing conspiracy'

http://politicalticker.blogs.cnn.com/2012/04/17/romney-cites-vast-left-wing-conspiracy/?iref=obnetwork

IF ONLY IT WERE SO!

[xchrom]

64. Fresh reports show little evidence of housing rebound

http://economywatch.msnbc.msn.com/_news/2012/04/24/11374835-fresh-reports-show-little-evidence-of-housing-rebound?lite

&width=500

Hopes may be fading for a long-awaited spring rebound in the U.S. housing market.

Two widely watched benchmarks Tuesday signaled that the pace of sales softened and prices fell last month. And a prominent housing economist warned that the market may not stage a major turnaround “in our lifetimes.”

Falling home price were recorded in 20 cities tracked by the Standard & Poor's/Case-Shiller home price index. Prices in the 20 cities fell 3.5 percent year over year, moderating from the previous month's decline of 3.8 percent.

The composite index of 20 cities gained 0.2 percent in February on a seasonally adjusted basis, matching economists' forecasts. But overall, the trend of falling prices has yet to reverse course, according to Maureen Maitland, a Standard & Poor's vice president.

[Demeter]

69. Well, I'm Bushed

(both ways, unfortunately).

Did two days' work to make up for sleeping yesterday....now a cat nap before papers....