STOCK MARKET WATCH -- Friday, 4 January 2013

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Friday, 4 January 2013[font color=black][/font]

SMW for 3 January 2013

AT THE CLOSING BELL ON 3 January 2013
[center][font color=red]
Dow Jones 13,391.36 -21.19 (-0.16%)
S&P 500 1,459.37 -3.05 (-0.21%)
Nasdaq 3,100.57 -11.69 (-0.38%)


[font color=red]10 Year 1.90% +0.07 (3.83%)
30 Year 3.12% +0.07 (2.30%) [font color=black]


[center][/font]

[HR width=85%]

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


[/center]

[font size=2]Euro, Yen, Loonie, Silver and Gold[center]

[/center]

[center]

[/center]

[HR width=95%]

[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
[center]
Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
[/center]

[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
[center]
The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
[/center]

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

[font color=black][font size=2]Handy Links - Videos:[/font][/font]
[center]
Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
[/center]

[div]
[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.



[HR width=95%]


[center]
[HR width=95%]
[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. Thursday was a completely wasted day. Let's fix the Weekend!

I'm not functioning on all cylinders this week. Does anyone have a theme or artist for the Weekend?

[Demeter]

2. Switzerland's oldest bank Wegelin to close after US tax evasion fine

http://www.bbc.co.uk/news/business-20907359

Switzerland's oldest bank is to close permanently after pleading guilty in a New York court to helping Americans evade their taxes. Wegelin, which was established in 1741, has also agreed to pay $57.8m (£36m; 44m euros) in fines to US authorities. It said that once this was completed, it "will cease to operate as a bank". The bank had admitted to allowing more than 100 American citizens to hide $1.2bn from the Internal Revenue Service for almost 10 years.

Wegelin, based in the small Swiss town of St Gallen, started in business 35 years before the US declaration of independence. It becomes the first foreign bank to plead guilty to tax evasion charges in the US. Other Swiss banks have in recent years moved to prevent US citizens from opening offshore accounts.

US Attorney Preet Bharara said: "The bank wilfully and aggressively jumped in to fill a void that was left when other Swiss banks abandoned the practice due to pressure from US law enforcement." He added that it was a "watershed moment in our efforts to hold to account both the individuals and the banks - wherever they may be in the world - who are engaging in unlawful conduct that deprives the US Treasury of billions of dollars of tax revenue". Otto Bruderer, a managing partner at the bank, said it was aware that its previous conduct had been "wrong".


After Wegelin was first indicted by US authorities in February last year, it was declared a fugitive from justice when its executives failed to appear in a US court. The bank had vowed to fight the charges, claiming that because it only had branches in Switzerland, it was bound only by its home country's relaxed banking laws. Jeffrey Neiman, a former US federal prosecutor who was involved in a previous investigation into Swiss banks, said: "It is unclear whether the bank was required to turn over American client names who held secret Swiss bank accounts. "What is clear is that the Justice Department is aggressively pursuing foreign banks who have helped Americans commit overseas tax evasion." It remains to be seen whether US authorities will continue with, or drop, parallel charges against three Wegelin bankers, Michael Berlinka, Urs Frei and Roger Keller.

COMPARE TO THE UBS DEAL...AT LINK

[Demeter]

3. World's 100 richest people got $241 billion richer in 2012

http://www.latimes.com/business/la-fi-billionares-gain-20130103,0,6160422.story

Their aggregate net worth climbs to $1.9 trillion, according to the Bloomberg Billionaires Index, a daily ranking of the world's 100 wealthiest individuals...Of the people who appeared on the final ranking of 2012, only 16 registered a net loss for the 12-month period.

"Last year was a great one for the world's billionaires," said John Catsimatidis, the billionaire owner of Red Apple Group Inc., in an email written poolside on his BlackBerry in the Bahamas. "In 2013, they will continue looking for investments around the world — and not necessarily in U.S. — that will give them an advantage."

SEE LINKS FOR SPECIFICS ON INDIVIDUALS

[Demeter]

20. The Case Against Billionaires

http://truth-out.org/opinion/item/13698-the-case-against-billionaires



It’s time we as a nation have a serious discussion about outlawing billionaires.


...if it were true that the world’s economies rely on their super-rich to do well, as today’s oligarch-inspired, right-wing economics argues, then why are world's "austerity" economies doing so poorly? It’s because billionaires are not job creators, they are somewhere between symbiotes and parasites. That’s not meant as a personal insult against billionaires, many of whom are decent people. But it’s meant as a statement of common sense. If vast fortunes are being hoarded in the hands of very few people who can’t possibly spend that much money in their lifetime or their kid’s lifetime or even their kid’s, kid’s, kid’s, kid’s, lifetime, then it’s essentially being wasted. This is the point billionaire Nick Hanauer was making in his recent TED talk explaining why rich people aren’t job creators (He also said the same thing on The Big Picture with Thom Hartmann). As he said, “There can never be enough super-rich Americans to power a great economy. The annual earnings of people like me are hundreds, if not thousands, of times greater than those of the median American, but we don't buy hundreds or thousands of times more stuff.”


...Wages are a key point. It’s no coincidence that the explosion of billionaires in America has corresponded with the flat-lining of workers’ wages. For most of American history, workers’ wages grew as their productivity grew. This was considered a law of economics. So much so that in 1966, TIME magazine predicted a coming “Leisure Society” in which workers would benefit from increased productivity as a result of automation and technology, and see their wages increase despite working fewer and fewer hours. But right around the time that corporate leaders saw their income tax rates slashed drastically, and began looking overseas for cheaper and cheaper labor, a great rift opened up between productivity and workers’ wages. Productivity went up considerably, as TIME magazine predicted, but wages stayed flat. The Leisure Society never came to be. But the billionaire class did come into being, as corporate leaders sucked more and more wealth from their now far-more-productive workforce while refusing to share any of these gains with their workers or their community. After all, with new low personal income tax rates, there was a lot more incentive for executives to just keep the cash rather than pay their workers well. As a result, the typical hourly wage for an American worker increased a measly $1.23 over the last 36 years, after accounting for inflation. Meanwhile, the top 1% have seen their incomes increase by 275% since Reagan's election. Today, workers’ wages as a percentage of GDP are at an all-time low. Yet, corporate profits as a percentage of GDP is at an all-time high.

...It’s time to put in place a new wealth tax in America. I propose a 100% tax on all wealth over one billion dollars. If you can’t get by on a thousand million dollars, then you probably shouldn’t have access to that much money in the first place. There's nobody who can't make it on a billion dollars. So, any wealth over a billion dollars, a hundred percent of it goes to help the rest of the country have a decent life. That money can lift 49 million Americans out of poverty and move the 46 million Americans on food stamps into the middle class. They will - by the "invisible hand" of human instinct and need - better know how to spend the money and generate economic activity than the billionaire class, which currently has its excess trillions stashed in off-shore bank accounts. This wealth tax would also break up giant monopolies and open up the market for small businesses. We shouldn’t rely just on the Bain Capitals and the Koch brothers to start or buy up new businesses. If the riches of the billionaire class were redistributed (a word progressives should embrace), then more and more Americans could have access to startup capital and earn a living as entrepreneurs.

Trust me, the billionaires can spare it. The total wealth of the average American family is $57,000. Convert that into hundred-dollar bills, and it’s a stack about 2 inches tall. The one-percenters, at an income of around $300,000 a year, earn a stack every year that's about a foot high. But the average wealth of the billionaires on the Forbes 400 list is $4.2 billion. Convert that into a stack of hundred-dollar bills and it would reach over two miles into the sky. It would be a navigation risk to aircraft. It’s time to start funneling the riches produced by the American economy to the real job creators: working class people who are spending money. And the best way to do that is to outlaw billionaires with a 100% wealth tax on all assets over one billion dollars.

We can call it the “No Billionaires Campaign,” and it just might be our best hope to save the American middle class.

[Demeter]

4. Unraveling the Freddie-Fannie Tangle By Cora Currier and Jesse Eisinger

http://www.nationofchange.org/unraveling-freddie-fannie-tangle-1357144836

In the aftermath of the financial crisis, American taxpayers poured $187.5 billion into two huge but poorly understood companies: Freddie Mac and Fannie Mae. Now controlled by the government, the companies play an even larger role in the economy than they did before the crisis and their bailout, but they are riven by conflicts of interest and clashing goals. Are they private companies, only out to increase their profits, or are they instruments of government policy, dedicated to keeping home ownership available? ProPublica has focused on the tensions within Freddie Mac and Fannie Mae, as well as those besetting their regulator, the Federal Housing Finance Agency (FHFA).

NPR's Chris Arnold and ProPublica revealed that Freddie Mac had placed multibillion-dollar bets that pay off only if homeowners stay trapped in expensive mortgages with interest rates well above current rates. Freddie began increasing these bets dramatically in late 2010, the same time that the company was making it harder for homeowners to get out of such high-interest mortgages. The scoop, "Freddie Mac Bets Against American Homeowners," caused an immediate firestorm. As countless media outlets picked up the story, multiple senators criticized the company and wrote to Edward DeMarco, the acting head of the FHFA, calling for an investigation into the transactions and the company's activities. The FHFA responded, saying it had told Freddie not to make any more transactions in the kind of securities at issue, called inverse floaters. The agency said it had "identified concerns regarding the controls, including risk management, surrounding the inverse floaters." The agency did not specify those "concerns," but said Freddie agreed in December that "these transactions would not resume pending completion of FHFA's examination work." The statement also said that Freddie had ceased making the deals earlier in 2011 but did not explain why.

In response to a letter Sen. Robert Casey, D-Pa., sent to DeMarco, the regulator expanded on its reasons for shutting down the transactions a few days later, saying that "the risk associated with these transactions is inconsistent with FHFA's goals of having Freddie Mac reduce its risk profile and avoid unnecessary complexity that requires specialized risk management practices."

In September, the inspector general of FHFA concluded that there was no deliberate or coordinated effort by Freddie Mac to keep homeowners trapped in high-interest mortgages in order to profit from trades pegged to those rates. A firewall is supposed to separate Freddie employees who make trades from those who set policy for homeowners. In its investigation, the inspector general found no evidence that the firewall had been breached — but conceded it had not independently evaluated the integrity of the firewall but instead relied on interviews with employees who said no one had violated the wall...Penetrating Freddie's boardroom, ProPublica exposed the internal debates over the company's refi programs. Many economists were pushing for mass refis, because they said they would reduce foreclosures and boost the economy. But some Freddie board members feared they would cut into company profits. In closed door meetings, two Republican-leaning board members and at least one executive resisted a mass refi policy for an additional reason: They regarded it as a backdoor economic stimulus...Before the financial crisis, the federal government backed roughly 30 percent of mortgages. Now, the government is backing about 90 percent of new mortgages, with Fannie and Freddie backing the lion's share. What do we do about Fannie Mac and Freddie Mac? Should the government keep insuring so many mortgages? And how do we resolve the conflicts of interest and competing goals that beset Freddie and Fannie? A bipartisan centrist consensus is forming to solve the problem by heading down a path that offers the least resistance but could be the most dangerous: returning to what existed before the housing market imploded...

AND THEN, THERE'S ED DEMARCO....SEE LINK

[Demeter]

5. Is Stability Creating Fragility?

http://classic.cnbc.com/id/49943069

BEFORE THANKSGIVING, JPMorgan Chase announced that it had achieved "another major milestone" in the attempt to transform one of the most important markets in the financial system. Almost no one noticed. The reason why no one noticed is because the market in which JP Morgan's milestone was crossed—the tri-party repo market—is almost as obscure as it is important. The tri-party repo market is at the center of our financial markets. It's where cash gets converted into credit that gets used by securities dealers to fund their operations. But its operations are little studied by specialists and academics, much less publicly discussed. The basic mechanics of the tri-party repo market are relatively straightforward. There are, as you can probably guess, three legs that prop up this market.

The first leg are the primary dealers of Wall Street, the banks and securities broker-dealers (as well as some hedge funds) that require cash from investors to fund their securities portfolios.

The second leg are the investors with tons of cash on hand—big banks, mutual funds and money market funds, Fannie and Freddie, and Japan's ministry of finance—who lend it out to the securities dealers.

The third leg are the "clearing banks" that facilitate the deals between the first two. There are two of these: JP Morgan Chase and Bank of New York Mellon.

There is, of course, some overlap between these groups, which makes things confusing. JP Morgan Chase, for instance, is both one of the largest dealers that uses the tri-party market for funding, one of the largest cash investors in the tri-party market, and one of the two clearing banks. Eight of the top 25 dealers that rely on the tri-party market are also investors in the market: Bank of America, Barclays, Deutsche Bank, Goldman Sachs, HSBC, Morgan Stanley, UBS , Wells Fargo. But this overlap can be a bit deceptive. While there is a high degree in concentration among the collateral providing dealers who borrow on the market—the top 10 dealers account for 88 percent of the borrowing—the cash investor side is larger and less concentrated—the 10 ten accounting for less than 60 percent of the cash.

Until very recently, almost all tri-party repos worked like this. At the end of the day a cash investors would choose whether or not to lend its cash out to a dealer. In exchange, it would receive a right to securities that were offered as collateral for the deal. One of the two clearing banks would hold the collateral, do the bookkeeping for the deal, and evaluate the collateral. Contrary to what a lot of people think, the clearing banks do not directly set up the deals between investors and dealers or play the role of broker in these deals. The next morning, the tri-party repos were generally unwound, with the cash investor receiving its cash back and the dealer-borrower getting back the securities. At the end of the day, the deals would need to be set up all over again. (For a detailed description of the operations of tri-party repos, see this Fed study.)

One thing this market did is create enormous exposure for the clearing banks during the day, between the morning unwind and the afternoon rewind. During this period, it was generally the clearing banks that bore the credit risk of the dealers. They were funding the portfolios and holding the collateral until the new tri-party repos could be arranged. The regulators did not like the way this market operated. They worry that even though it functioned well during the financial crisis—with far less strain than other funding markets—it is susceptible to sudden and catastrophic runs that can cause big dealer firms to fail...Under the reforms initially proposed by Task Force on Tri-Party Repo Infrastructure—an industry group sponsored by the New York Fed—the clearing banks would not unwind repos every morning. Instead, new and maturing repos would be settled simultaneously, in the afternoon.

This kind of market reform faced some serious challenges. In the first place, one of the reasons the repo market unwound was that securities dealers needed access to their collateral for trading purposes. If the repos didn't unwind in the beginning of the day, how would the dealers trade the securities they put up as collateral? What's more, putting the unwinds and rewinds together at one point in the afternoon seemed a recipe for chaos. When would anyone have time to count the beans?...The daily unwind is a test of market confidence. It reveals when market participants do or do not have confidence in the credit-worthiness of borrowers and the quality of collateral. What's more, it forces market participants to be keenly attuned not just to their own models but to the likely actions of other similarly situated investors. Eliminating the daily unwind might make the financial system more stable—but it would allow the build up of undetected fragility. It may have, for example, allowed Bear Stearns or Lehman Brothers have continued to operate for longer—which could have made the eventual detection of their weakness even more painful. It might be more profitable to think about what kind of reforms could be put in place to make the system truly antifragile, to borrow a term from Nassim Taleb. An antifragile system would need to gain from disorder, rather than simply conceal the stress...

IT'S MADNESS, I TELL YOU, MADNESS! SEE LINK

[Demeter]

6. How Corporate America Is Turning Into a Cult and Why It's Harming the American Employee

CORPORATE CULTURE HAS ALWAYS BEEN A CULT...

http://www.huffingtonpost.com/ruth-whippman/how-corporate-america-is-_b_2171040.html

I used to work for a large organization. One afternoon, all the staff in my department were herded into a giant conference room, and informed that due to budget cuts within the year over half of us present would lose our jobs. Fresh from a leadership course at the University of Corporate Doublethink, our bushy-tailed manager "reframed" the concept for us. "Don't see this as a negative" he advised. "We like to see this as us empowering you to take on new opportunities."

Over the last decade or so, a growing disconnect has developed between the bizarre and almost cult-like rhetoric and practices that companies use with their staff, and the increasingly grim reality of being an employee in modern day Corporate America.

For example, anyone stumbling upon the Walmart careers website might be forgiven for thinking that Google had malfunctioned and directed them instead to the Scientologists, whose recruitment site features a collection of testimonials virtually indistinguishable in their tone of robotic devotion.

Over at "Walmart People," Lois Givens, Personnel Manager at store number 992 assures us: "If you live your whole entire life according to the Walmart culture and three basic beliefs, life becomes a lot easier." Shana Bailey, Director of Store Operations emotes: "To this day, I continue to grow and learn, and the Walmart family is always there for me every step of the way," while Patricia Graham of the Distribution Centers adds: " Walmart is my Life (capitalization her own). When I think about it, it's amazing how many aspects of my life are touched and made better by Walmart."...

[Demeter]

7. The Expanding Surveillance Society: Getting You to Buy Into Being Monitored

One of my buddies as of 2007 could not get over his disbelief that people shopped online. He was not technologically unsophisticated; indeed, he knews more about the various flavors of PGP and how to send private messages without using encryption than I care to inquire about (no doubt as a result of doing more than a bit of contested business in Russia). He thought it was crazy to give up that much personal information to anyone unless absolutely unavoidable, and certainly not a mere retailer. Cheaper online prices weren’t enough of an inducement for him to make that trade. (I have no idea whether he has changed his mind as of 2012; being a spooky sort, he’s done a disappearing act).

Like it or not, you in the not too distant future are going to have to submit to personal surveillance to get many types of insurance and financial products. And that future is closer than you probably realize.
Matt Stoller wrote in the spring about how the info tech industry is pushing the idea hard and finding a receptive audience:

Profit-driven surveillance does not starts and stop with young adults. It is, in fact, becoming pervasive. The main theme of a recent IBM consulting document on the future of the insurance industry is how much more money an insurance company can make if it tracks and tags its customers. This is particularly true for auto insurance companies, some of whom like Allstate and Progressive are experimenting on new technologies. For instance, IBM suggests that “A “pay-as-you-live” product would trade some location and time-of-day privacy data for lower insurance bills overall.”

IBM is recommending these companies stick a sensor in your car, measure where you go and when, your speed, acceleration and deceleration, etc. The progression over time could be to withdraw traditional insurance products, so that you won’t be able to get an insurance product without sensors attached. As this presentation offers, “The aforementioned rising tide of technology also empowers insurance underwriters to bring their products closer to realtime interaction via sensor networks and enlightened privacy regulations.”…

It’s not just sensors in your car – insurance companies are modeling tighter and tighter risk chunks. IBM goes on, saying that new products “will facilitate “just-in-time insurance” as a person moves through a set of “spaces.” Each step of the journey represents a different risk such as car-to-train-station, train-to-city-station, station-to- office, and so on. Each leg of the trip truly represents a varying amount of risk.” Tracking these movements could require nothing more than downloading an app on a smart phone, or some other device. But it is literally the application of financial engineering to your very liberty, or the toll-boothing of your life.

That future is arriving sooner than you might think. The New York Times cheerfully ignores the privacy implications of having a monitoring device installed in presenting surveillance as a benefit: yes, you can PROVE you are a good driver by letting your insurer snoop and he’ll reward you with a better rate. And this idea will probably get tons of takers, since 93% of all drivers thinks they are above average. Here is how the Times makes this plan sound non-threatening. Headline: “So You’re a Good Driver? Let’s Go to the Monitor”

LAST week, under my car’s dashboard, I installed a small wireless gadget that would monitor my driving. I wanted to see how it felt to have my driving behavior captured, sent to an insurance company and analyzed. More drivers, seeking discounts on auto insurance, are voluntarily doing just that….

Driving data is collected with a device that policyholders must be persuaded to install; it connects to the car’s computer system via a diagnostic port found in all cars since 1996. Such “user-based insurance,” the name for individualized pricing based on data collected from a vehicle, is spreading. Drivewise from Allstate is in 10 states; Drive Safe and Save, from State Farm, is in 16, with 11 more to be added next month; and Snapshot, from Progressive, is in 43….

The Snapshot device records the time of day and distance traveled, along with the vehicle’s speed, second by second. But Progressive deliberately left GPS out of the device so the car’s exact location is not known; otherwise, more drivers might be nervous about using it….

The day after I installed it, I could log on to the Drivewise site and see graphs showing miles driven, the number of incidents of “hard braking” and “extreme braking” sensed by an accelerometer, how many miles were driven at more than 80 miles an hour, and the number of miles driven at what times of day or night. That is all. The device is semiblind by design. It does not know what road I’m traveling or whether I’m stopping for a red light. It also remains oblivious to whether I’m going 70 miles per hour in a 30 m.p.h. zone.

Allstate says the lowest-risk time for accidents is 5 a.m. to 11 p.m. on weekends, with the highest risk from 11 p.m. to 4 a.m. on weekdays and 11 p.m. to 5 a.m. on weekends. So I couldn’t earn the maximum discount if I worked at a job that put me on the road in the highest-risk times.

“There is a very strong correlation between the driving behaviors we’re monitoring and accidents,” Mr. Birchfield says. Allstate says the discount for its participants also averages 10 percent.

I had thought I’d be uncomfortable knowing that the Drivewise gadget was accompanying me everywhere, But that wasn’t the case — perhaps because my driving behavior was translated into charts with innocuous titles like “miles driven” and “braking events.” The data can be used in post-accident investigations and litigation, however, so I wonder how innocuous it would all look in court in the hands of a plaintiff who has sued me.

Now this doesn’t sound that bad, right? Not that much data is collected. But a buddy who runs a small insurer is vehemently opposed to the idea precisely because he has heard both from other insurers and tech vendors where this is going...The entire strategy is to go at this incrementally. This is now a cost savings pitch to drivers who think they are good and don’t mind what looks like a little bit of monitoring to get a price break. But let’s say you are like my privacy conscious buddy, you don’t care, there isn’t a price break big enough to get you to agree to surveillance. Well, guess what? Now the monitoring is to prove you are a good driver. It will then be offered to various higher risk groups, again for price breaks, to carve out the better drivers (say the notorious men under 25, or people who’ve been in accidents). The remaining unsurveyed driver will be in a pool of largely higher risk drivers, so their rates will be higher than they’d have been earlier, encouraging even drivers who aren’t confident in their abilities to get scored. By the time all that segmentation is done, the remaining pool will be small and largely high risk. The insurers can then require them to get monitored as a condition of getting insurance.

And once the surveillance is accepted in this and other areas, rinse and repeat on pushing the margins out: say maybe if you are speeding near certain designated high risk areas (query what those might be) entailing limited use of the GPS. And once that has started, it won’t be long before full tracking is required to get auto insurance. Stoller suggested where this is going, based on the plans of vendors who developed these technologies to track prisoners to find profitable opportunities to use them on the general population:

In fact, whether you are tracked because you get a discount on your auto insurance or whether you have broken some arbitrary rule or fit in a non-mainstream class of person, innovation in technology and autocratic organizational forms means that there will be a whole new category of constraints on freedom.

It is very much like the plain vanilla loan, which could be held by banks, being disaggregated into its component parts and sold to investors with varying degrees of risk. This then led to investors demanding more exotic loan products whose risk attributes they wanted to own. This can happen with human freedom. Based on what you are willing to pay, how much power you have, and your desires, our culture will begin offering extremely granular freedom zones.

Many people think that the current Supreme Court and political arrangement means that America is heading back to a 19th century political economy, with 21st century technological possibilities. Thinking about for profit prison and parole companies combined with GPS is a way to imagine what this might look like. When you layer on the clear trend of insurance companies that seek to track you with sensors, and school districts who want to track kids for accounting purposes, it’s becoming increasingly clear that the systems we’ve set up to run our society are increasingly, well, running our society.

The financial engineering of component parts of freedom, and the removal from the state of the monopoly rights to track and/or restrict movement, represents a novel form of social organization. It could be nothing less than a new form of authoritarianism, a soft version in which there are political choices and a measure of openness, but a jello-like network of corporate cartels holding power. In this society, you’ll get whatever zone of freedom you can pay for, and if you can’t afford any freedom, you won’t get any.

Read more at http://www.nakedcapitalism.com/2012/11/the-expanding-surveillance-society-getting-you-to-buy-into-being-monitored.html#4yXupv02wIpk9t4j.99

[Demeter]

8. KIM Dotcom: We've hit the jackpot

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10849627

A fresh legal bid to throw out the case against Kim Dotcom in the United States is being made after claims of an FBI double-cross. Evidence has emerged showing the Department of Homeland Security served a search warrant on Mr Dotcom's file-sharing company Megaupload in 2010 which he claims forced it to preserve pirated movies found in an unrelated piracy investigation. The 39 files were identified during an investigation into the NinjaVideo website, which had used Megaupload's cloud storage to store pirated movies...When the FBI applied to seize the Megaupload site in 2012, it said the company had failed to delete pirated content and cited the earlier search warrant against the continued existence of 36 of the same 39 files.

The details emerged after the US District Court in East Virginia allowed partial access to the FBI application which led to the shutdown of the Mega family of websites...Mr Dotcom said Megaupload co-operated with the US Government investigation into copyright pirates NinjaVideo and was legally unable to delete the 39 movies identified in the search warrant.

Mr Dotcom said: "We were informed by (the US Government) we were not to interfere with the investigation. We completely co-operated.

"Then the FBI used the fact the files were still in the account of the ... user to get the warrant to seize our own domains. This is outrageous."

He said the revelation was the first insight into the FBI's case against Megaupload and it showed bad faith on the part of the US Government. "Immediately we hit the jackpot - the first little piece of paper is this super-jackpot." New Zealand's district court has ordered the FBI to provide documents relating to its investigation through an order for discovery. It was currently being appealed.

"I understand why the US is working so hard to appeal the discovery decision."

Mr Dotcom said the warrant obliged Megaupload to keep the files. It was among a string of legal requests from law enforcement agencies around the world.

"We have always co-operated. We have responded to takedown requests, we have been a good corporate citizen."

MORE AT LINK

[Demeter]

9. "A GOOD CORPORATE CITIZEN"

The mind boggles at the concept.

[tclambert]

10. Well, there's a lot of pressure on corporations to lie, cheat, and steal.

Fraud, murder, torture, start wars, you know, as long as it makes money, how can you say no? PROFIT! Gotta have it, gotta get it, gotta make it, legally or illegally. Can't let that competition have any advantage. Ultimately, they are competing with their workers and their customers, too, . . . for all the resources in the universe.

[Ghost Dog]

11. The joys of being able to afford to employ a good team

of lawyers...

[DemReadingDU]

32. And where does the government get the money for these lawyers?

taxpayers

[DemReadingDU]

33. U.S. Lied to Get Search Warrants, Megaupload Claims

1/3/13 U.S. Lied to Get Search Warrants, Megaupload Claims


The U.S. government lied to a court to get search warrants for computer servers in Virginia belonging to Megaupload.com., which is accused of orchestrating the biggest copyright-infringement conspiracy in U.S. history, the file-sharing website said.

The U.S. government had sought Megaupload’s cooperation in the investigation and the company agreed, unaware it was the target of the investigation, Megaupload said in a filing yesterday in federal court in Alexandria, Virginia.

“The government then came before this court, ex parte, with a selective, distorted account” to obtain the search warrants, Megaupload said in the filing. “The government deliberately misled the court that signed the search warrants and failed to disclose material exculpatory information.”

Kim Dotcom, 38, the founder of Megaupload, was indicted in what U.S. prosecutors dubbed a “mega conspiracy,” accusing his file-sharing website of generating more than $175 million in criminal proceeds from the exchange of pirated film, music, book and software files. If convicted, he faces as long as 20 years in prison for each of the racketeering and money-laundering charges in the indictment.

Megaupload filed the documents in a request to be allowed to take part in a hearing in Alexandria addressing the validity of the U.S. warrants.

A New Zealand judge ruled warrants used by police in that country to search Dotcom’s home were overly broad and invalid.

more...
http://www.bloomberg.com/news/2013-01-03/u-s-lied-to-get-search-warrants-megaupload-claims.html

[Demeter]

12. I'm serious, though. What would define a good corporate citizen?

Maybe if we could specify one, it could be constructed....

And legislated.

[xchrom]

13. i'm on my mental french vacay.

Mussels in White Wine

http://www.foodnetwork.com/recipes/ina-garten/mussels-in-white-wine-recipe/index.html


Ingredients
3 pounds cultivated mussels
1/3 cup all-purpose flour
2 tablespoons unsalted butter
2 tablespoons good olive oil
1 cup chopped shallots (5 to 7 shallots)
1 1/2 tablespoons minced garlic (5 to 6 cloves)
1/2 cup chopped canned plum tomatoes, drained (4 ounces)
1/2 teaspoon good saffron threads
1/3 cup chopped flat-leaf parsley
1 tablespoon fresh thyme leaves
1 cup good white wine
2 teaspoons kosher salt
1 teaspoon freshly ground black pepper
Directions
To clean the mussels, put them in a large bowl with 2 quarts of water and the flour and soak for 30 minutes, or until the mussels disgorge any sand. Drain the mussels, then remove the "beard" from each with your fingers. If they're dirty, scrub the mussels with a brush under running water. Discard any mussels whose shells aren't tightly shut.

In a large non-aluminum stockpot, heat the butter and olive oil over medium heat. Add the shallots and cook for 5 minutes; then add the garlic and cook for 3 more minutes, or until the shallots are translucent. Add the tomatoes, saffron, parsley, thyme, wine, salt, and pepper. Bring to a boil.

Add the mussels, stir well, then cover the pot, and cook over medium heat for 8 to 10 minutes, until all the mussels are opened (discard any that do not open). With the lid on, shake the pot once or twice to be sure the mussels don't burn on the bottom. Pour the mussels and the sauce into a large bowl and serve hot.

[Demeter]

25. I've never been to France

Take me with you!

[xchrom]

28. oh you and i would have so much fun!

i'd love to show you the beautiful restaurant inside the musee d'orsay.

the painted ceiling is awesome.

[Roland99]

40. That is a nice museum!

Our favorite (well, I do have to say the Louvre was just incredible) was probably Musée du Moyen Age (Musée de Cluny). Esp. the tapestries.

[Demeter]

14. Why Wall Street, Consumerism Won’t Fix the Economy By Kelly McCartney

http://www.nationofchange.org/why-wall-street-consumerism-won-t-fix-economy-1357231347

Thankfully, Congress has walked the U.S. back from the edge of the fiscal cliff with a last-minute, last-ditch bandaid of a bill. Along with $600 billion in new tax revenues, the deal also includes a temporary fix to the farm bill, an end to the payroll tax break, and tax credits for businesses. Both sides of the aisle will take it as a cue to moan and groan about the other. Along the way, they will all throw their vocal support behind Main Street, while putting their real muscle behind Wall Street. So what's a concerned citizen to do?

Stacy Mitchell, a senior researcher at the Institute for Local Self-Reliance, might have the answer.

Back on October 20, 2012, Mitchell gave a TEDx talk in which she highlighted the local economy movement and made the case for Main Street as a means of connectedness: “As remarkable as these trends are, they are unlikely to amount to more than an small sideshow on the margins of the mainstream if the only way we can conceive of confronting corporate power and bringing about a new economy is through our buying decisions… What we really need to do is change the underlying policies that shape our economy. We can’t do that through the sum of our individual behavior in the marketplace. We can only do it by exercising our collective power as citizens.”

[xchrom]

15. UH-OH: It Looks Like The UK Is Sliding Back Into Recession

http://www.businessinsider.com/uk-services-pmi-2013-1


The UK's services PMI contracted to 48.9 in December from 50.2 in November.
Economist were looking for an increase to 50.5.
Here are the key points from Markit:
First reduction in service sector output since December 2010
New business volumes post second successive monthly reduction
Confidence unmoved on November’s 11-month low


Read more: http://www.businessinsider.com/uk-services-pmi-2013-1#ixzz2H0sJFQk2

[Demeter]

16. 5 Controversial Dark Money Groups Told IRS They Would Stay Out of Politics, Then Didn’t

http://www.nationofchange.org/controversial-dark-money-group-among-five-told-irs-they-would-stay-out-politics-then-didn-t-13572223

Five conservative dark money groups active in 2012 elections previously told tax regulators that they would not engage in politics, filings obtained from the IRS show. The best known and most controversial of the groups is Americans for Responsible Leadership, an Arizona-based organization. Not long after filing an application to the IRS pledging — under penalty of perjury — that it would not attempt to sway elections, the group spent more than $5.2 million, mainly to support Republican presidential candidate Mitt Romney. The California Fair Political Practices Commission has accused Americans for Responsible Leadership of "campaign money laundering" for failing to disclose the origin of $11 million it funneled to a group trying to influence two state ballot propositions.

The other groups that filed applications for IRS recognition of tax-exempt status saying they wouldn't engage in politics are Freedom Path, Rightchange.com II, America Is Not Stupid and A Better America Now. Much hangs on these applications, all of which are still pending. The tax code allows social welfare nonprofits to engage in political activities as long as public welfare, not politics, is their primary purpose. If the IRS ultimately decides not to recognize these groups, they could have to disclose their donors. Such decisions, along with IRS' oversight of social welfare nonprofits overall, have come under increasing scrutiny as these groups have assumed an ever larger role in elections, pouring an unprecedented $322 million into the 2012 cycle.

ProPublica has documented how some social welfare nonprofits underreport their political activities, characterizing them to the IRS as "education" or "issue advocacy." Other groups have popped up, spent money on elections and then folded before tax regulators could catch up with them. The IRS sent the applications submitted by the five groups to ProPublica in response to a public records request, although the agency is only required to supply these records after groups are recognized as tax-exempt. (ProPublica also obtained the pending application of Crossroads GPS, the dark money group launched by GOP strategist Karl Rove that spent more than $70 million on the 2012 elections, which we wrote about separately.)

The IRS confirmed that none of the groups had been recognized as tax-exempt and referred ProPublica to its earlier response about Crossroads' application. In that email, the IRS cited a law that says publishing unauthorized tax returns or return information is a felony punishable by up to five years in prison or a fine of up to $5,000, or both....A lawyer for Americans for Responsible Leadership, Jason Torchinsky, cited the same law in an email.

"If you willfully to (sic) print or publish in any manner any information about Americans for Responsible Leadership that you do not lawfully possess — and which may or may not be complete — you will be doing so in violation of (the law) and we will not hesitate to report such unlawful publication to the appropriate law enforcement officials," Torchinsky wrote.

The other groups for which ProPublica obtained IRS applications did not respond to calls or emails for comment. ProPublica has published the applications of all five groups, but redacted parts to omit financial information.

"As we said when we published our story on the Crossroads application, ProPublica believes that the information we are publishing is not barred by the statute cited by the IRS, and it is clear to us that there is a strong First Amendment interest in its publication," said Richard Tofel, ProPublica's president.

Social welfare nonprofits do not need IRS recognition, though most opt to apply for it. They can operate, and spend money on politics, while their applications are under consideration... Americans for Responsible Leadership incorporated in Arizona in July 2011 and applied for IRS recognition last September. By that time, the group had already spent $5,300 on get-out-the-vote efforts for Sen. Orrin Hatch, R-Utah, and given $57,500 to two Republican political committees in Arizona. Nonetheless, its IRS application said the group hadn't spent any money to influence elections, nor would it. It also said the group planned to split its efforts between influencing policy and educating the public, in part by "promoting a more ethical and transparent government." According to Federal Election Commission filings, the group spent more than $5.2 million on campaign activities in October and early November, mostly on phone calls urging the defeat of President Barack Obama. In addition to the millions it pumped into California ballot measures, the group also spent $1.5 million on two Arizona propositions. While the IRS doesn't classify spending on ballot measures as political, California election authorities do. When ProPublica read the group's description of its activities on its IRS application to Ann Ravel, the chairwoman of the California Fair Political Practices Commission, she laughed. "Wow," she said, upon hearing that the group said it would not try to influence elections. "That's simply false." The California commission pressed Americans for Responsible Leadership to identify who contributed the funds it aimed at the California ballot measures, a battle that reached the state Supreme Court. Just before Election Day, the court ordered the group to reveal its donors. So, who were they? Another Arizona social welfare nonprofit, which got its money from a Virginia trade association, which also didn't have to report its donors. California regulators are still trying to peel back the group's layers, to see who's behind the money.

[xchrom]

17. US ECONOMY ADDS 155K JOBS, RATE STAYS AT 7.8 PCT.

http://hosted.ap.org/dynamic/stories/U/US_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-01-04-08-31-21

WASHINGTON (AP) -- U.S. employers added 155,000 jobs in December, a steady gain that shows hiring held up during tense fiscal cliff negotiations in Washington.

The Labor Department says the unemployment rate stayed at 7.8 percent last month. November's rate was revised higher from an initially reported 7.7 percent.

Robust hiring in manufacturing and construction fueled the gains. Construction added 30,000 jobs, the most in 15 months. That likely reflects additional hiring needed to rebuild after Superstorm Sandy and also solid gains in home building that have contributed to a housing recovery.

Manufacturing gained 25,000, the most in nine months.

[xchrom]

18. INDIAN COURT TO RULE ON GENERIC DRUG INDUSTRY

http://hosted.ap.org/dynamic/stories/A/AS_INDIA_POORS_PHARMACY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-01-04-07-44-48

NEW DELHI (AP) -- From Africa's crowded AIDS clinics to the malarial jungles of Southeast Asia, the lives of millions of ill people in the developing world are hanging in the balance ahead of a legal ruling that will determine whether India's drug companies can continue to provide cheap versions of many life-saving medicines.

The case - involving Swiss drug maker Novartis AG's cancer drug Glivec - pits aid groups that argue India plays a vital role as the pharmacy to the poor against drug companies that insist they need strong patents to make drug development profitable. A ruling by India's Supreme Court is expected in early 2013.

"The implications of this case reach far beyond India, and far beyond this particular cancer drug," said Leena Menghaney, from the aid group Doctors Without Borders. "Across the world, there is a heavy dependence on India to supply affordable versions of expensive patented medicines."

With no costs for developing new drugs or conducting expensive trials, India's $26 billion generics industry is able to sell medicine for as little as one-tenth the price of the companies that developed them, making India the second-largest source of medicines distributed by UNICEF in its global programs.

[xchrom]

19. Japan's Growing Sovereign Debt Time Bomb

http://www.spiegel.de/international/world/massive-japanese-sovereign-debt-could-become-global-problem-a-875641.html

Today's Tokyo has become a permanent mecca of consumption, its boroughs seemingly divided according to target markets. The city's Sugamo district, for example, is dominated by the elderly. Escalators in the subway station there go extra slow, while the stores along the Jizo Dori shopping street offer items such as canes, anti-aging cream and tea for sore joints. The Hurajuku neighborhood, on the other hand, is teeming with fashionistas made up to look like Manga characters.

This world of glitter, however, is but an illusion. For years, the world's third-largest economy has been unapologetically living on borrowed cash, more so than any other country in the world. In recent decades, Japanese governments have piled up debts worth some €11 trillion ($14.6 trillion). This corresponds to 230 percent of annual gross domestic product, a debt level that is far higher than Greece's 165 percent.
Such profligate spending has turned Japan into a ticking time bomb -- and an example that Europe can learn from as it seeks to tackle its own sovereign debt crisis. Japan, the postwar economic miracle, has never managed to recover from the stock market crash and real estate crisis that convulsed the country in the 1990s. The government had to bail out banks; insurance companies went bust. Since then, annual growth rates have often been paltry and tax revenues don't even cover half of government expenditures. Indeed, the country has gotten trapped in an inescapable spiral of deficit spending.

The fact that this tragedy has been playing out in relative obscurity can be attributed to a bizarre phenomenon: In contrast to the debt-ridden economies in the euro zone, Japan continues to pay hardly any interest on what it borrows. While Greece has recently had to cough up interest at double-digit rates, for example, the comparable figure for Japan has been a mere 0.75 percent. Even Germany, the euro zone's healthiest economy, has to pay more.

[Demeter]

23. Since this was written by Germans, for Germans, Pay it No Heed

Germany has proven it doesn't know what it's talking about when it talks economics.

The Germans live in fear of hyperinflation. And that's the only tool in their toolbox--a whacking big hammer to beat up people with.

[xchrom]

30. ! a whacking big hammer

they do live in fear of hyper inflation don't they?

[Demeter]

43. Americans Still Waiting for Predicted Hyperinflation By Paul Krugman, (AS ARE GERMANS)

http://truth-out.org/opinion/item/13682-americans-still-waiting-for-predicted-hyperinflation

Some readers may recall the Peter-Schiff-was-right campaign of 2009, a sort of public-relations blitz claiming that Mr. Schiff, an Austrian-oriented commentator, had foreseen the financial crisis. It wasn’t really true even then; still, Mr. Schiff became a fixture of right-wing television shows, constantly warning that expansionary monetary and fiscal policies were about to produce hyperinflation. Well, Cullen Roche, who writes the Pragmatic Capitalism blog, recently caught a TV host actually putting Mr. Schiff on the spot, pointing out that he’s been predicting that hyperinflation since 2008. So where is it?

Good question.

And I’d like to pursue the question a bit more, not just or even mainly about Mr. Schiff’s assertions, but more broadly about the role of predictions — including wrong predictions — in economics. What’s crucial to understand, I think, is that there are two kinds of erroneous predictions. One kind of error, which everyone makes all the time, involves what you might call extraneous forces. If the economist making the prediction didn’t know that there was going to be a war in the Middle East, or a confrontation over the debt ceiling, or whatever, his forecast may well be very badly wrong; too bad, but that doesn’t really speak to his underlying model. And by the way, this exoneration applies even if he should have known what was coming; all this says is that he may not be the right person to listen to for short-run forecasts, which doesn’t necessarily say that he’s wrong about the bigger issues...

Now, the thing about Mr. Schiff and all the other Austrians predicting runaway inflation is that they were right to make this prediction, given their model. If you believe that a recession is caused by a failure on the production side of the economy, the result of past malinvestment or something, you will likely also believe that any attempt to correct this decline by expanding credit will simply result in too much money chasing too few goods, and hence a lot of inflation. By the same token, the failure of high inflation to materialize amounts to a decisive rebuttal of that model. (And no, it’s not because the numbers are fudged; independent estimates don’t differ significantly from official inflation figures.)

More generally, the past five years have seen some really dramatic policy actions — huge expansion of the Federal Reserve’s balance sheet, and in some countries very large deficits or drastic austerity measures. These kinds of actions are, in effect, natural experiments that give economists a lot of information about the validity of different economic models — and the models that have worked are demand-side, more or less Keynesian approaches, while everything else has been wildly wrong. So here’s what should have happened: economists propounding these other approaches should have said, “Gosh, I seem to have been wrong. I need to rethink my approach.”...Oh, and by the way, I have done that. As I’ve written before, I rethought my views about liquidity traps and currency crises after the Asian crisis of the late 1990s; I rethought my views about advanced country debt and deficits after making a wrong prediction in 2003 (although in that case my mistake was in not taking my own model seriously enough). But as far as I can tell, very, very few people have been willing to let the evidence speak.

[xchrom]

46. +1

[xchrom]

21. Scorn for Eastern Berlin's Well-Heeled Newcomers

http://www.spiegel.de/international/germany/gentrification-row-in-berlin-reveals-tensions-over-disparities-between-states-a-875528.html

Few things can stoke the emotions of Berliners as quickly as dropping the word "gentrification". It's never far from people's tongues here in the German capital city. This week the question is whether wealthy southwest Germans -- aka people from the Swabia region -- are driving out residents of the former east in Prenzlauer Berg, a formerly working-class neighborhood.

According to disgruntled locals, they bring with them not just their large salaries and ability to pay higher rents, but also their conservative small town ways -- and, worst of all, their local nicknames for such prized Berlin specialities as the humble white bread roll.
Some grafitti in Prenzlauer Berg now pokes fun of the Swabian invasion, from brutal messages like "Shoot Swabians" or "Swabians Out!" to the more picaresque -- a doctored road sign of a workman digging a grave for Swabians, or a bicycle sign with a "Welcome to Schwabylon" sticker. Of course, in Berlin, the bark often tends to be bigger than the bite.

At the center of this week's debate is Wolfgang Thierse, a long-time neighborhood resident who moved in long before the Wall fell and who also happens to be the vice president of Germany's federal parliament, the Bundestag. Thierse made the outspoken comments in an interview with the Berliner Morgenpost newspaper that ran over the weekend.

[xchrom]

22. Boeing Soars Past Airbus in Deliveries

http://www.spiegel.de/international/business/dreamliner-versus-the-a380-boeing-soars-past-airbus-in-deliveries-a-875579.html

At the last Farnborough Air Show in Britain in July, Boeing came up with a unique idea. For almost 30 years, the company had always left its passenger planes on the ground at major air events where industry representatives meet. At Farnborough, though, a Boeing 787 with Qatar Airways' livery droned over spectators' heads. The performance jibed nicely with Boeing's overall performance, and the company stole the show from Airbus, securing billions of dollars worth of orders.

In fact, 2012 went so well for Boeing that the American company has now surged ahead of its European rival Airbus in deliveries. According to analysts' calculations, Boeing now carries the prestigious title of being the world's largest deliverer of passenger jets. The reason for the success is the 787, or Dreamliner, which had been plagued for years with development and production problems.
With its high share of carbon fiber, particularly in the tail, the 787 was meant to revolutionize aircraft construction. But the first Dreamliners were delivered in 2011, after a three-year delay. Then engine trouble and loose parts on the tail resulted in negative headlines for the company. In December 2012, the American air safety regulatory agency, the FAA, ordered that all US Dreamliners be inspected for fuel leaks.

Now it appears that Boeing has ironed out the initial glitches in its Dreamliner program, though. Between July and September 2012 alone, the company managed to increase its production capacity to deliver 12 of the aircraft. "Boeing has resolved most of the problems it was having with the Dreamliner," said Heinrich Grossbongardt, an independent German aviation expert, and now the company is working hard to fulfill its long list of orders. Boeing has also increased production capacity on its mid-haul 737 jets.

[xchrom]

24. Swiss bank Wegelin to close after US tax evasion fine

http://www.bbc.co.uk/news/business-20907359

Switzerland's oldest bank is to close permanently after pleading guilty in a New York court to helping Americans evade their taxes.

Wegelin, which was established in 1741, has also agreed to pay $57.8m (£36m; 44m euros) in fines to US authorities.

It said that once this was completed, it "will cease to operate as a bank".

The bank had admitted to allowing more than 100 American citizens to hide $1.2bn from the Internal Revenue Service for almost 10 years.

[xchrom]

26. Germany retail sales higher in 2012

http://www.bbc.co.uk/news/business-20908842


Retail sales in Germany rose as much as 2.1% last year as Europe's largest economy took the eurozone debt crisis in its stride, according to the Federal Statistical Office.

But stripping out inflation, turnover at retail stores fell between 0.1% and 0.3% from 2011, Destatis said.

November retail sales also gained from a year earlier, it added.

Germany has mainly escaped the worst effects of the crisis that has threatened to unravel the bloc.

[xchrom]

27. HMRC shames tax criminals in picture gallery

http://www.bbc.co.uk/news/business-20912346


The tax authorities have published the photos of 25 of the UK's biggest tax dodgers convicted in the criminal courts in 2012.

They are among 32 people sentenced to a collective 155 years in jail for tax offences last year.

One is the garlic smuggler Murugasan Natarajan, who jumped bail before being tried and sentenced to six years in jail for dodging £2m of import duty.

Treasury minister David Gauke predicted more convictions in 2013.

[Demeter]

29. Everything he touches is magic!

[xchrom]

31. Geithner Said to Plan Departure Before Debt Ceiling Deal

http://www.bloomberg.com/news/2013-01-03/geithner-said-to-plan-departure-before-debt-ceiling-deal.html

Treasury Secretary Timothy F. Geithner finds himself in a familiar position: eager to resume life outside government and facing contentious negotiations with Congress over raising the federal debt ceiling.

The last time he was in this predicament, in June 2011, President Barack Obama persuaded him to stay. This time, Geithner has indicated to White House officials he wants to carry through with his plan to leave the administration by the end of this month, even if a deal on the debt limit isn’t in place, according to two people familiar with the matter

Geithner’s departure would increase pressure on the president to name his successor at Treasury. White House Chief of Staff Jack Lew remains the leading contender for the Treasury job, according to the people, who requested anonymity to discuss the private talks.

Geithner, 51, is the only remaining member of Obama’s original economic team and was a key figure in the taxpayer- funded bailouts during the 2008 financial crisis. He’s also had a principal role in negotiations with Congress on the budget deal and in past deliberations over the debt ceiling.

[DemReadingDU]

34. Leaving before the ship sinks, n/t

[Demeter]

41. I expect the ship will be in much better shape once Timmeh is out of there

unless The PDB puts Jamie Dimon in his place...

[xchrom]

35. Euro-Area Consumer Prices Rise More Than Estimated on Food

http://www.bloomberg.com/news/2013-01-04/euro-area-consumer-prices-rise-more-than-estimated-on-food-1-.html

Euro-area consumer prices increased more than economists estimated in December as higher prices for food and services offset slower growth in energy costs.

The inflation rate remained at 2.2 percent, the European Union’s statistics office in Luxembourg said today. The median forecast of 34 economists in a Bloomberg News survey was for a decline to 2.1 percent.

The European Central Bank last month lowered its 2013 inflation forecast to 1.6 percent from 1.9 percent and projected prices will increase 1.4 percent next year. The ECB will maintain its benchmark interest rate at 0.75 percent next week, economists forecast in a separate Bloomberg survey.

The euro-area economy has shrunk for two successive quarters and economists foresee a further decline in gross domestic product in the final three months of last year. The ECB estimates contractions of 0.5 percent and 0.3 percent in 2012 and 2013. The ECB yesterday said November lending to households and companies slowed for a seventh month.

[xchrom]

36. Triple-dip recession, here we come{uk}

http://www.guardian.co.uk/business/economics-blog/2013/jan/04/triple-dip-recession-here-we-come


Triple dip here we come. That's the clear message from the latest health check on the services sector from CIPS and Markit. To say the report was a disappointment is an understatement. News that activity fell for the first time since December 2010, when Britain was shivering under a foot of snow, came as a real jolt after the slightly better news from manufacturing earlier in the week.

It is possible, although not likely, that the report was a blip caused by the wet weather. This was, after all, the fourth fall in the survey in a row and – December 2010 apart – was the weakest since April 2009, when the world economy hit rock bottom after the collapse of Lehman Brothers the previous September.

CIPS/Markit say that the reason the services purchasing managers' index dipped below the 50 level that separates expansion from contraction was an unwillingness of firms to invest at a time when their customers were not spending.

This is entirely consistent with the UK's flat-lining performance over the last couple of years. Businesses see no point in buying new plant and machinery until there are signs that consumers are willing to spend more. But household budgets are being stretched by the squeeze on wages and the rising costs of essentials such as food and fuel.

[xchrom]

37. Latest Irish data point to tentative economic recovery

http://www.irishtimes.com/newspaper/breaking/2013/0104/breaking27.html

Another slew of economic data released today pointed to tentative signs of recovery in the Irish economy.

Following on from yesterday’s better-than-expected exchequer figures, data for the Irish services industry showed the sector expanded again in December for the fifth successive month.

The latest NCB Stockbrokers purchasing managers’ index, the most reliable measure of activity in the sector, showed new export orders rose at their sharpest level since September 2006.

The figures also showed the rate of job creation in the sector grew for the fourth successive month to remain at a five-year high.

[xchrom]

38. Euro PMI surveys point to recovery

http://www.irishtimes.com/newspaper/breaking/2013/0104/breaking13.html

Tentative signs emerged in December that the euro zone economy may have passed the worst of its downturn, although a recovery still looks some months away, a business
survey showed today.

Markit's Eurozone Composite PMI, which gauges business activity across thousands of companies, rose in December to 47.2 from 46.5 in November. The headline figure was revised down slightly from an initial reading of 47.3.

While lingering below the 50 line dividing growth from contraction for an 11th month, December's reading was the highest since March last year.

The decline eased among the services firms that make up the bulk of the euro zone's economy, ranging from banks to restaurants, but manufacturers endured an awful end to 2012.

[xchrom]

39. Bailout exit depends on moves in Europe, says IMF {ireland}

http://www.irishtimes.com/newspaper/finance/2012/1220/1224328044407.html

The Irish State’s prospects of exiting its international bailout “depend importantly on the delivery of European commitments”, the International Monetary Fund has said.

Stressing the fragility of Ireland’s position, the fund’s staff said that financial market doubts about the State’s capacity to repay its debt “could easily re-emerge”. It also said risks to economic growth in Ireland “have profound adverse implications for debt sustainability”.

In its latest quarterly report on the Government’s compliance with the terms of the bailout and its assessment of the state of the economy, the IMF sent a strongly worded signal to other members of the troika and euro-zone member states.

“Delivery on European commitments, especially direct bank recapitalisation, is critical,” it said. Doing so “would sever the sovereign’s exposure to contingent liabilities from the banks, reduce public debt directly, resuscitate bank funding conditions and help revive domestic credit and economic growth, and thus underpin successful exit”.

[Demeter]

42. WEE Will probably start late tonight, folks

I've got a 7 PM appointment...and still no idea of a theme.

Shall we boast about our New Year's Resolutions? (Anything but that!)

Post your requests...

[bread_and_roses]

47. I don't really have a request, but what popped into my head

was "The Empire Strikes Back" - somehow it strikes a chord for me in the whole "Fiscal Cliff" craziness ... the "Empire" of course is our Corporate Masters, and all who serve them and their Oligarchic hegemony ...

I'm not invested in it, as I said - take it or leave it - it's just what popped into my head and I post it because I think it's unfair to leave you with no suggestions at all - perhaps the thought will prompt something better in your own head

[Demeter]

44. Washington Doesn't Work? Depends on Who You Ask: People, No; Corporations, Yes

http://truth-out.org/buzzflash/commentary/item/17726-washington-doesn-t-work-depends-on-who-you-ask

GRIM READING

[Demeter]

45. EXAMPLE #1: Banks Near Foreclosure Deal

http://online.wsj.com/article/SB10001424127887324274404578213940871599114.html

Banks are hashing out a $10 billion settlement with federal regulators to halt a lengthy process of reviewing thousands of foreclosure cases for errors, after both sides concluded it was too expensive and not delivering enough assistance, according to people familiar with the discussions.

The potential agreement, which has yet to be completed, came after large banks voiced concerns with a process set up by the Office of the Comptroller of the Currency and the Federal Reserve over foreclosure-related abuses that surfaced more than two years ago, the people said. Industry officials argued to regulators that the process they created to compensate consumers has been taking too long and urged the officials to consider a different approach that would bring the foreclosure reviews to an end, the people said.

The banks were required by regulators in April 2011 to conduct an exhaustive review of foreclosures and to compensate consumers in cases where consumers could demonstrate an error. Banks had already spent around $1.3 billion on consultants hired to manage this process, with another $2 billion to $3 billion in spending expected, the people said. Reviews of some individual borrower files were taking as long as 25 to 30 hours, rather than the eight to 10 hours initially expected, people familiar with the process said.

The OCC realized that this was "a transfer of wealth from the banks to the consultants that was utterly indefensible," said one bank executive, adding that the reviews found "limited instances of actual borrower harm."

SINCE WHEN DOES OCC GET TO DECIDE?

[bread_and_roses]

48. "Horse Owners Protected in Tax Legislation"

Oh Frabjous Day!

The recent fiscal cliff tax legislation passed by Congress and signed by President Obama reinstated an important business investment incentive and substantially increased another incentive program for Thoroughbred owners and breeders and farm owners

The NTRA said Jan. 3 that both incentive programs could have important implications for purchasers of horses, farm equipment, and most other depreciable property in 2013. As a result of the new legislation, bonus depreciation will be reinstated at 50%, just as it was in 2012. The expense allowance will be increased to $500,000 in 2013 and retroactively increased from $125,000 to $500,000 for property purchased in 2012.

Read more on BloodHorse.com: http://www.bloodhorse.com/horse-racing/articles/75342/horse-owners-protected-in-tax-legislation#ixzz2H27gyQbs

Now, as you all know I love TBs - and all horses, for that matter, from the Giant Drafts to the Shetland Ponies. But, you know, there are TOO MANY HORSES already - the problem of "unwanted" horses is huge - TBs and others. That's part of the reason they end up in slaughter lots, or starving, or abandoned ....

And the notion that the UNSPEAKABLE BOOT-LICKERS FOR THE 1-2% - of BOTH Parties - STILL want to slash at Social Security, etc. - not to mention lessen the already underfunded and inadequate "starve-slowly-net" and schools and and and .... but are happy to give horse breeders an expense allowance of $500,000 on their taxes makes me SICK.

[westerebus]

49. Mrs. R-money did send "Thank You" notes to the tea-slackers for her parting gifts...