Economy
Related: About this forumSTOCK MARKET WATCH - Wednesday, 1 February 2012
[font size=3]STOCK MARKET WATCH, Wednesday, 1 February 2012[/font]
SMW for 31 January 2012
AT THE CLOSING BELL ON 31 January 2012
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Dow Jones 12,632.91 -20.81 (-0.16%)
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[font color=green]10 Year 1.79% -0.05 (-2.72%)
30 Year 2.94% -0.06 (-2.00%)
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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]
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Demeter
(85,373 posts)Courtesy of Russ Winter of Winter Watch at Wall Street Examiner
I spotted some interesting commentary on the maturing March 2012 Greek bonds. After buying at 40-45 cents, it seems the hedge funds are trying to unload in a bidless 35-cent market. The ECB has the largest stake, bought at 70 cents. This official holder’s dominance of this market, and refusal so far to participate in haircuts, is making the whole exercise futile and severely subordinates any potential non-official holder or future buyer of European sovereign debt. Reuters reports that the ECB is split and confused on this issue. The IMF’s LaGarde says, “If the level of Greece’s privately held debt is not sufficiently renegotiated, then public creditors will also have to participate.” Apparently, the IMF was also confused as this was retracted or denied. As I wrote in Stick it to the Local Issued Bond Holders, this is one of two serious subordination fiascos, the second being a slew of UK-law non-local issues that restrict collective restructuring actions (see chart at the “Stick it” link).
The always-alert analyst Simon Johnson writes about this issue in Europe:
“We should not underestimate the damage these steps have inflicted on Europe’s €8.4 trillion sovereign bond markets. For example, the Italian government has issued bonds with a face value of over €1.6 trillion. The groups holding these bonds are banks, pension funds, insurance companies, and Italian households. These investors bought them as safe, low-return instruments that could be used to hedge liabilities and provide for future income needs. It was once hard to imagine these could ever be restructured or default.
“Now, however, it is clear they are not safe. They have default risk, and their ultimate value is subject to the political constraint and subjective decisions by a collective of individuals in the Italian government and society, the ECB, the European Union, and the International Monetary Fund (IMF). An investor buying an Italian bond today needs to forecast an immediate, complex process that has been evolving in unpredictable ways. Investors naturally want a high return in order to bear these risks.
“Investors must also weigh carefully the costs and benefits to them of official intervention. Each time official creditors provide loans or buy bonds, the nonofficial holders become more subordinated, because official creditors including the IMF, ECB, and now the European Union continue to claim preferential status.”
The CDS cost on Portugal has blown out to 1350 points, and the 10 year is over 15%, suggesting that it’s exposed in its next financing rounds in May and June. Of course, in a world of gaming the credit insurance rules to avert default so as not have to pay claims and constantly subordinating nonofficial bondholders, one wonders if the hedge funds — let alone banks using LTRO — will be sucked in. About €25 billion in UK-law Portuguese bonds trade out of €104 billion and the ECB hold €20 billon, leaving €59 billion in the hands of local-issue holders, namely Tia Miriam (Aunt Millie) pensions and Portuguese and Spanish banks.
Perhaps anticipating problems ahead, Spain wants the Europe rescue fund to be bigger, thus allowing for even more subordination of non-official holdings. As one can see in my local bond issue article, Spain is a big issuer of UK-law bonds with €318 billion issued out of €505 billion. Against this condition, the ECB will make available a three-year loan (LTRO) at 1% for insolvent banks with tiny slivers of capital to go speculate on financing European debt.
Barclays estimates the European monetary authority purchased a total of €46 billion in Spanish debt since August, 22% of the total investment of its Securities Market Programme (SMP). Barclays also estimates that Italian debt purchases made up 43% (€90 billion) of the SMP, while Greek debt made up 17% (€36B), Portuguese debt made up 10% (€20B), and Irish debt made up 9% (€19B). In the year prior, the ECB plopped down an estimated €77.5 billion on Greek, Irish and Portuguese debt....
IN OTHER WORDS, THIS IS WHERE THEY EAT EVERYONE'S PENSIONS...
AnneD
(15,774 posts)can't remember the country in Europe.
They did this in Argentina-I believe that is when the riots really started.
Demeter
(85,373 posts)If financial regulators want to prove that they’re willing to take the necessary steps to protect the public and not the banks, they will soon have a great opportunity...Public Citizen will send a formal petition to the Federal Reserve Board of Governors and the Financial Stability Oversight Council, asking them to “recognize that the Bank of America Corporation (“Bank of America” or “the bank”) poses a ‘grave threat’ to the stability of the United States financial system and to mitigate that threat, as provided by section 121 of the Dodd-Frank Wall Street Reform and Consumer Protection Act...Under the systemic risk provisions of section 121, federal regulators can order a systemtically important institution that posts a “grave threat” to divest assets, restrict activities and basically shrink in size. While nobody seriously believes that the regulators will act in this manner, it offers a test case on how to apply Dodd-Frank in the crucial area of systemic risk.
“We’re asking them in the simplest of terms to get ahead of any possible crisis in the event of BofA’s instability,” said David Arkush, the director of Public Citizen’s Congress Watch division, in an interview. “They have the authority to break up Bank of America into discrete institutions, some of which may be solvent, some which may need to be liquidated. The current policy of letting behemoth banks limp along in the hopes that things will get better is dangerous and risks a financial crisis.”
No question this has been the modus operandi of the Administration. But in BofA’s case, it hasn’t worked. The company’s stock crashed in 2011 (it’s in a marginally better position now), despite asset sales on their own, and angel investments from the likes of Warren Buffett. BofA’s tremendous liability from the acquisition of Countrywide has significantly damaged the bank. Their takeover of Merrill Lynch has caused legal problems as well; CEO Brian Moynihan will give depositions in three civil suits in the coming days. BofA is already operating under a “Memorandum of Understanding” with the Federal Reserve, and while we don’t know the details, we know that it demands that the company get stronger than it is today. Despite these struggles, BofA remains the second-largest bank holding company in the United States, with holdings that make it “too large and complex to manage or regulate properly,” according to the petition. And “It would be hard to argue that the bank doesn’t pose a grave threat,” as Arkush says.
“Based on publicly available info, Bank of America is in the most serious trouble right now” out of the major banks, Arkush said. So it was the natural place to start in petitioning the government to restrict its size. Simply put, now is the time to make these calls. From the petition:
Fortunately, Dodd-Frank created a systemic risk council with broad powers to break up banks before a Catch-22 like the one described above comes into play....
WELL, THAT WOULD BE GOOD, FOR A START...
Demeter
(85,373 posts)When Mitt Romney tries to avoid scrutiny for his exceptionally low effective tax rate by noting that, in absolute terms, he’s paying “a lot” in taxes, he won’t be fooling most of his political colleagues. It takes a special kind of affluence to reduce one’s tax burden so dramatically. And despite their significant wealth most recent Presidential candidates have paid significantly more in taxes as a percentage of their incomes in the year (or two) before their campaign.
The exception is John Kerry. Though Kerry himself had a modest income (for a politician) his wife, Teresa Heinz, comes from great wealth and, like Romney, made millions in investment income in 2003 — the year she and he both released their tax returns. Together, their effective tax rate was a bit lower than Mitt and Ann Romney paid in 2010.
Both Kerry and Romney are judged against the tax rates George W. Bush put into effect. Bush himself was paying Clinton-era rates, so even though he sold off the Texas Rangers and made a bunch of investment income before he jumped into national politics, he was only able to drag his effective rate down to 20.5 percent.
The other two didn’t make out so well. John McCain and Barack Obama both ended up paying Buffett-rule-esque rates on their 2006 income, despite incomes that put both of them squarely in the top percent of earners.
Demeter
(85,373 posts)U.S. taxpayers have lost $133 billion from TARP — the abominable acronym inflicted on us by former Treasury Secretary Hank Paulson — a new report out this morning shows...“TARP is not over,” Christy Romero, acting inspector general of the Troubled Asset Relief Program, reminds folks of the program through which she derives her own power, prestige and paycheck (PPP).
Congress authorized $700 billion. $413.4 billion was paid out. Only $318 billion’s been paid back, according to a new report from Ms. Romero. So much for the shrill lecture delivered last fall by CNN’s Erin Burnett to an Occupy Wall Street protester: “Taxpayers actually made money on the Wall Street bailout.” But what would you expect from someone engaged to an executive at Citigroup? Getting the rest back will be no easy task: For starters, General Motors stock would have to more than double from $24.28 to $53.98...
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Another trend that’s “not over,” we note, is bank shutdowns. The FDIC swooped in and closed four banks Friday night. (Yes, it’s the return of our own watch list for failed banks and the feds’ attempts to save them…)That makes seven banks for the month of January — an annual pace of 84. Close to last year’s total of 92, but lagging 2010’s peak of 157. (Who knows, maybe things will pick up in the spring!) There is one notable increase: the FDIC’s “loss ratio.” Of the 92 bank failures last year, FDIC losses totaled 20% of the failed banks’ assets. So far this year, it’s 32.9%… nearing TARP territory.
Demeter
(85,373 posts)“The folks at Zero Hedge long ago caught on to Goldman’s pump-and-dump vibe,” Taibbi reports. “Here’s what they said when Goldman upgraded European bank stocks a few weeks ago: Goldman has just started selling European bank stocks to its clients, whom it is telling to buy European bank stocks…Translation: run from European bank exposure. Sure enough, Euro bank stocks plummeted a few days after that Zero Hedge post.
As a result of Goldman’s alleged — albeit unproven — “pump-and-dump vibe,” its recommendations often seem very poorly timed (from the standpoint of its clients), which, of course, would make them very well-timed from the perspective of Goldman’s trading desk. “Goldman is building an impressive résumé of sweepingly bullish predictions that later on, in retrospect, look more like signals to investors that they should have run screaming in the opposite direction,” Taibbi remarks. “A good example might be May of 2008, when Goldman boldly predicted that oil would go to $200 a barrel; oil would go on to peak at $147 less than two months later and crash to the floor soon after… Anyway, every time I read one of these rah-rah predictions, I get this feeling that I’ve seen this movie before.”
Concerning Goldman’s bullish outlook on US stocks, Taibbi remarks, “O’Neill apparently believes Ben Bernanke and the Federal Reserve will resort to another round of money-printing, and finally green-light the long-awaited ‘QE3,’ or third round of ‘Quantitative Easing.’
“The QE programs,” Taibbi continues, “involve the Fed printing hundreds of billions of dollars and pumping them into the marketplace, where they ostensibly stimulate the economy (although recent experience tells us that the money mostly ends up being swallowed by the financial services industry — but that’s another subject for another time). Anyway, Bernanke declined to go ahead with a third QE program in late 2011, but O’Neill apparently thinks we’ll get it in 2012.”
Read more: Goldman Sachs is Probably Not a "Buy" http://dailyreckoning.com/goldman-sachs-is-probably-not-a-buy/#ixzz1l5m7aCDP
Demeter
(85,373 posts)More than half of the derivatives- trading business of Goldman Sachs Group Inc. (GS), Morgan Stanley and three other large banks could fall largely outside the Dodd- Frank Act if they succeed in lobbying regulators to exempt their overseas operations, government records show.
The debate over the reach of Dodd-Frank has been among the most contentious aspects of the regulatory overhaul enacted by President Barack Obama after the 2008 credit crisis. The banks have met with regulators, testified to Congress and filed dozens of letters contending that they will suffer a competitive disadvantage if the regulations apply to their foreign arms. Banking lobbyists have been gaining traction with their argument that a combination of U.S. supervision of their holding companies and foreign supervision of their operations abroad is sufficient to oversee risk to the financial system.
While the banks haven’t publicized how much of their swaps business is overseas, they file quarterly statements to the Federal Reserve. A Bloomberg News analysis of the filings shows that Goldman Sachs had 62 percent of its $134 billion in fair- value derivatives assets and liabilities in non-U.S. branches or subsidiaries for international banking as of Sept. 30, while 77 percent of Morgan Stanley (MS)’s $101 billion was in non-U.S. operations...If overseas operations aren’t subject to U.S. rules or equivalent regulation by other nations, it could impede the goal of preventing another credit crisis, Darrell Duffie, professor at Stanford University’s Graduate School of Business, said in a telephone interview.
“Not only is that neglectful from a viewpoint of systemic risk as it sits today, but it’s also an incitement to move the risk abroad,” Duffie said.
MORE AT LINK...LIKE WHERE THE BODIES ARE BURIED...
AnneD
(15,774 posts)was nothing more than a sheep to be shorn. I only keep that in the market that I have to.
Thank you again SWT for validating my cocerns early in the game. This is why I am at the place I am today. I am not living large but I am doing far better than most.
Demeter
(85,373 posts)Amazon fourth quarter sales fell short of market expectations and the group said it might make a loss in the first quarter, causing its shares to tumble almost 9 per cent in after-hours trading
Read more >>
http://link.ft.com/r/R5WAEE/MS8K5A/06MUC/SPGCW2/7A9SZX/B7/t?a1=2012&a2=1&a3=31
THIS MAY BE AS CLOSE AN ADMISSION OF FAILURE FOR CHRISTMAS AS WE WILL SEE...
Demeter
(85,373 posts)The commodities hedge fund industry has suffered its worst year in more than a decade as the sector’s top managers recorded heavy losses amid volatile markets
Read more >>
http://link.ft.com/r/P75VYY/HYLM1J/SUO9T/PFTTCK/2ODY6J/OS/t?a1=2012&a2=1&a3=31
Tansy_Gold
(17,860 posts)AnneD
(15,774 posts)My pantry full of commodities is paying off. I don't need to shop for at least a month now. I just get fresh veggies now or catch really good sales.
I am paid off in the dividends like peace of mind and lower food prices on the good stuff.
Demeter
(85,373 posts)Unemployment in the eurozone reached a new record last month, in a further sign of the currency bloc’s faltering economic recovery.
Joblessness in the 17 countries that use the euro rose to 10.4 per cent at year end, according to seasonally-adjusted data from the European Union’s statistical arm. The 0.1 percentage point increase from November’s estimate compares to an unemployment rate of 9.5 per cent a year earlier.
A small fall in Germany, from 5.6 to 5.5 per cent, was offset by rises in much of the debt-laden periphery of the eurozone, including a 0.4 percentage point rise in Portugal to 13.6 per cent.
Read more >>
http://link.ft.com/r/IOCBMM/HYL7LT/YGZ3O/97DDR1/AMRRFS/ZH/t?a1=2012&a2=1&a3=31
Demeter
(85,373 posts)European banks are preparing to tap the emergency funding scheme for up to twice as much as was supplied in December’s €489bn debut auction
Read more >>
http://link.ft.com/r/IOCBMM/97JGWE/87I64/FKSS11/16K4ZD/GX/t?a1=2012&a2=1&a3=31
THIS PROBABLY REFLECTS THE REPORT THAT US BANKS AREN'T WILLING TO LEND TO EUROBANKS ANY MORE.
Demeter
(85,373 posts)Kweku Adoboli denies two charges of fraud and two charges of false accounting, and will face a full trial later in the year
Read more >>
http://link.ft.com/r/IOCBMM/97JGWE/87I64/FKSS11/YB472B/GX/t?a1=2012&a2=1&a3=31
Demeter
(85,373 posts)Overcapacity, shrinking margins and competition from Asia have joined forces to underline the industry’s decline
Read more >>
http://link.ft.com/r/IOCBMM/97JGWE/87I64/FKSS11/62QYWT/GX/t?a1=2012&a2=1&a3=31
LORD, WHAT FOOLS THESE MORTALS BE!
Demeter
(85,373 posts)The French president has boldly given Germany’s Angela Merkel a starring role in his bid for re-election
Read more >>
http://link.ft.com/r/XYEWFF/QNCDBD/K91WR/62WKIO/U1ZVO5/OS/t?a1=2012&a2=1&a3=31
IF WAR IS DECLARED ON IRAN, ALL ELECTION BETS ARE OFF
Demeter
(85,373 posts)Surging borrowing costs in Portugal have raised the spectre of a second full-fledged contagion crisis in the eurozone, eclipsing the latest efforts by European Union leaders in Brussels to agree on Europe's bail-out machinery and a strategy for Greece...Yields on Portuguese 10-year bonds hit a fresh record of 17.38pc on Monday even though the country is already shielded by a €78bn (£65.2bn) package from the EU, European Central Bank (ECB) and International Monetary Fund "troika" and does not have to tap the markets this year.
Reports also emerged on Monday night that European banks were gearing up to ask the ECB's emergency funding scheme for up to twice as much in funds as the central bank supplied in its debut €489bn auction last month.
The news reveals the extent of the liquidity squeeze on banks – with some chief executives looking to tap the ECB for up to triple the amount they originally borrowed, when the three-year money auction takes place on February 29...
Demeter
(85,373 posts)European governments moved toward a confrontation over a second rescue package for Greece, just as a dimming fiscal outlook in Portugal opened a new front in the debt crisis.
Bargaining with Greece over a debt writedown and its economic management came as European Union leaders signed off on key planks of the strategy to end the financial crisis. They agreed to accelerate the setup of a full-time 500 billion-euro ($659 billion) rescue fund and endorsed a German-inspired deficit-control treaty. Stocks and the euro rose.
Euro leaders left a Brussels summit late yesterday with no accord over how to plug Greece’s widening budget hole and German Chancellor Angela Merkel voicing frustration with the Athens government’s failure to carry out an economic makeover.
“Greece’s debt sustainability is especially bad,” Merkel told reporters. “You have to find a way through more action by the Greek government, more contributions by private creditors, for example, in order to close this gap.”
MORE ANGUISH AT LINK
Demeter
(85,373 posts)Twenty-five of the EU's 27 member states have agreed to join a fiscal treaty to enforce budget discipline. The Czech Republic and the UK refused to sign up. UK Prime Minister David Cameron said his government would act if the treaty threatened UK interests. He still has "legal concerns" about the use of EU institutions in enforcing the fiscal treaty, he said. The Czechs cited "constitutional reasons" for their refusal, France's President Nicolas Sarkozy said. Czech President Vaclav Klaus, a Eurosceptic, may be reluctant to sign the treaty, analysts say.
The goal is much closer co-ordination of budget policy across the EU to prevent excessive debts accumulating. Germany - the eurozone's biggest lender and most powerful economy - was particularly keen to get a binding treaty adopted to enforce budget rules.
The treaty will empower the European Court of Justice to monitor compliance and impose fines on rule-breakers. The treaty also spells out the enhanced role of the European Commission in scrutinising national budgets...
MORE MADNESS AT LINK
Demeter
(85,373 posts)WONKY ECONOMIC LESSON ON MONEY SUPPLY DRYING UP IN EUROPE...READ IT AND STRETCH YOUR MIND!
Demeter
(85,373 posts)The dilemma Europe now faces is complicated -- not least because the European Union comprises 27 separate sovereign nations and the euro area, where the chief problems lie, is a currency union that has 17 members itself. Beyond that, the euro is flawed both in design and in execution. It hearkens back to the gold standard and its fixed exchange rate system which necessitated a deflationary policy response to the deep downturn of 1929, ending in the Great Depression and World War II. Unless drastic action is taken, we will soon find ourselves in another Great Depression....the problem is this: no state can have a fixed exchange rate, free flow of capital and independent monetary policy at the same time. Therefore, fixed exchange rate systems always end in trade imbalances that can last for decades and across business cycles, creating so-called debtor or deficit states and creditor or surplus states. This is not a problem during an economic boom. However, if boom turns to bust, the debtor states will become distressed as cash flows supporting debts decline.
In a currency area with a national government like Canada or the United States, the central government alleviates these crises by making transfer payments like unemployment insurance to individual states. A state like Florida or California that is hit hard doesn't go bust easily. But in the euro area there is no fiscal agent making these counter-cyclical transfers; the individual states are on their own. And so the resulting crisis is more severe. The fact is the euro can't work across business cycles without fiscal transfers because some debtor state will always face crisis after each and every business cycle downturn. Put simply, the euro's institutional design was flawed right from the start. In fact, one of its chief architects, Tommaso Padoa-Schioppa, called the euro "a currency without a state." It gets worse because official euro budget policy virtually guarantees a deflationary response to every business cycle. The euro designers chose the Stability and Growth Pact, which sought to keep government debt below 60 percent of Gross Domestic Product (GDP) and deficits below 3 percent, to prevent large government deficits. And this is the thinking driving euro area policy now. Unfortunately, this approach means that the public sector must cut just when the private sector is cutting too, intensifying downturns, sucking money out of the economy and making the potential for national bankruptcy much greater.
Good Solutions v. Bad Solutions
Of course, the central bank could alleviate this problem by providing national governments with liquidity. Indeed, central banks were founded over 300 years ago specifically to finance budget deficits. The Bank of England was formed in 1694 to help England raise the funds to create a navy to rival France's after England's crushing military defeat by France ended the Nine Years' War in 1690. This kind of funding is out for the euro area. The Lisbon Treaty, the present European Constitution, forbids the European Central Bank from lending to governments, as the euro's designers believed that doing so would weaken the currency. Therefore, faced with a recession in which some euro nations invariably will have balance of payments deficits, those euro area governments must meet private sector cuts with public sector cuts or face insolvency. This guarantees crisis. Moreover, such an insolvency would boomerang back to the surplus countries which are the deficit countries' creditors. And so both debtors and creditors have strong motivations to make sure no insolvency occurs. This is exactly why we have seen bailout after bailout in the euro area; a national insolvency could end in a cascade of further national and bank insolvencies, creating a global Depression of untold magnitude. A global Depression is the scenario Europe's policymakers fear, and rightly so...However, the cutting solution -- so-called internal devaluation and austerity -- is not really a solution. This policy is politically unsustainable as unemployment mounts, economic output contracts and national insolvency threatens Europe nonetheless. For quite a while, I have been saying there are three options for the euro zone: monetization, default or breakup. That said, the political costs of breakup are still impossibly high. So I expect some combination of monetization (the creation of money by the central bank) and default.
Austerity Leads to Default, But Transfer Unions Give Stability
...I don't think the Europeans can keep this from spiraling out of control without creating the dreaded "transfer union" that so many are set against. A transfer union is simply an arrangement in which the stronger parts of a national economy subsidize the weaker parts, just like in the United States, where more economically robust states like New York transfer money to other states through higher taxes, for example, paid to the federal government. These funds can then be distributed in the form of unemployment benefits and other subsidies that help stabilize those weaker economies when they get hit by hard times. Can Europe accept a transfer union? I hope so. Everyone would win if they can. Transfers across nations would protect the credit rating and solvency of everyone. Germany and the Netherlands could continue to maintain economic growth through export and peripheral economies like Spain and Ireland can regain some measure of economic growth by foregoing drastic austerity plans. Most importantly, this generation now entering the employment market will not have to bear the tremendous social cost of high unemployment that would follow them and limit their earning capacity for decades into the future. Ordinary Europeans had no idea the euro would join countries at the hip this way and have every reason to feel tricked into the single currency. But this is done and cannot be undone. Let's remember as well that all national economies are transfer unions, even Germany, where there have been trillions of euros in transfers from west to east and south to north over just the past two decades. Despite the reality of transfer unions, many Europeans are not politically ready for a United States of Europe even though the euro's existence practically mandates it. Europe needs to get ready though. A transfer union means a mild loss to pay for a rainy day in the form of those vital economic stabilizers (again, things like unemployment benefits) that are needed during downturns. Defaults in Italy or Spain, on the other hand, mean the collapse of the entire financial system and a global Depression. The choice is clear.
Demeter
(85,373 posts)In his State of the Union speech, the President said:
And that’s why I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low rates. No more red tape. No more runaround from the banks. A small fee on the largest financial institutions will ensure that it won’t add to the deficit and will give those banks that were rescued by taxpayers a chance to repay a deficit of trust.
I found this interesting, and can’t wait to see the legislation that the Prez is going to offer up.
I have written four articles on the topic of a Mega ReFi (SEE LINKS AT ORIGINAL ARTICLE). The first one was back in August. At first I thought there might be something behind all this talk. Now, five months later, I think it's all gas. We’re not going to see any big ReFi plan until after the next election. These are the issues as I see it:
In my opinion DeMarco has lived up to that. He has taken steps that have reduced the risks and the ultimate costs that the taxpayers face with Fannie and Freddie (F/F) . It’s for that same reason that he has not allowed F/F to be the agencies of the Administration’s economic plans. These plans would force F/F to reduce interest rates on outstanding mortgages. As some of those mortgages are in inventory at F/F, the ReFi will result in additional losses. More importantly, the ReFi’s will require a waiver of many existing representations, and warranties of existing borrowers. In the end, there would have been a cost to all of this. The plan was for F/F to absorb the costs over time, and therefore kick the can down the road. (Why the President said there would be no cost)...DeMarco has nixed those plans. I’m amazed by this. DeMarco has been beaten up by the likes of Elijal Cummings (the new wanna-be Barney Frank of housing, ....only in America…) ...But even the President can’t bend Ed DeMarco. The reason, I believe, is that Mr. DeMarco has “protection”.
A year ago, the Administration tried to junk DeMarco. It wanted its own guy in charge of the old Agencies. It wanted Ed out of the way so that they could conduct economic policy (quietly) using F/F's $6 trillion of power. I thought the appointment was a shoo-in at the time. That was not the case. The appointment was squashed by one of the strongest hands in D.C. - Senator Richard Shelby (R. Al) put his thumbs down. Without Shelby's support in the Senate, no appointment was going through. So DeMarco kept his job, and the Administration's plans got checked by powerful forces. The question is, “Is this check mate?”...The legislation that the President promised in his SOTU address can’t be a rehash of what was previously tried with Fannie and Freddie. That door is closed, at least until the next election. Therefore, I anticipate that the President will attempt to use the other big D.C. player in the mortgage business, the Federal Housing Authority (FHA). This entity could, in theory, be used to achieve Obama’s objectives. It could guarantee the payment of the new mortgages that would be required. In the process, it would transfer risk (both credit and interest rate) from F/F to FHA. That would make DeMarco happy. While this plan is a possibility, it will never happen. The FHA is already in financial jeopardy (link). It needs a capital injection into its reserve fund for the existing book of business ($1T)...FHA would need a very big slug of additional capital to handle the ReFis that the President wants. (There are approximately 10mm homeowners, all underwater who would be eligible.) There is no way in hell that the FHA could get that much money this year. To do so would require the blessings of Senator Shelby. He has already tipped his hand; he won't back off in 2012. I think we will see some legislation on this from the WH. It will get talked about on TV, but it’s dead on arrival. The President will claim that he tried, and he will blame Republicans for the failed effort. I wonder if the upcoming failed effort is not a "planned failure". One that has been put "out there" purely for the political theater that will come with it.
AND THERE'S MUCH MORE...BUT GIVEN OBAMA'S LOVE OF LEGERDEMAIN, I'M WITH BRUCE.
Tansy_Gold
(17,860 posts)Demeter
(85,373 posts)I'm way behind in the emails, again. That's what happens when I take a day off....
Also, it's a sign that the herd senses danger...the 1%ers are getting restless. You should see what abomination David Brooks put out
http://www.democraticunderground.com/1002245517#post2
Demeter
(85,373 posts)Demeter
(85,373 posts)The Federal Trade Commission intensified its crackdown on the booming debt-collection industry, announcing a $2.5 million settlement with a company for allegedly coercing borrowers into paying debts they no longer legally owed.
The settlement with Asset Acceptance Capital Corp., one of the nation's largest buyers of soured consumer debts, is the second-biggest penalty ever levied by the FTC against a debt collector. Officials said they are investigating other companies for alleged violations of federal law and expect to announce more enforcement actions soon.
"More cases are on the way," said Tony West, an assistant attorney general in the Justice Department...
Ghost Dog
(16,881 posts)Feb. 1 (Bloomberg) -- Asian stocks fell as unexpected growth in Chinese manufacturing stoked speculation the mainland may not ease lending curbs. Weaker U.S. economic data also dimmed the earnings outlook for exporters.
Industrial & Commercial Bank of China Ltd., the world’s biggest lender, slid 1.3 percent in Hong Kong. Li & Fung Ltd. (494), a supplier of toys and clothing to Wal-Mart Stores Inc., fell 1.7 percent. Sumitomo Heavy Industries Ltd. sank 9.6 percent in Tokyo after the machinery maker cut its full-year profit forecast by 28 percent. Shipping stocks gained on speculation rising cargo rates will shore up earnings.
The MSCI Asia Pacific Index (MXAP) slipped 0.3 percent to 122.59 as of 4:40 p.m. in Tokyo, reversing gains of as much as 0.3 percent. About the same number of shares rose and fell in the gauge. In January, the measure posted its biggest monthly advance since September 2010 amid bets China will ease lending curbs, the U.S. economy is improving and Europe is containing its debts crisis...
... Japan’s Nikkei 225 Stock Average added 0.1 percent, while South Korea’s Kospi Index gained 0.2 percent. Australia’s S&P/ASX 200 Index slipped 0.9 percent. India’s BSE Sensitive Index lost 0.6 percent as the nation’s manufacturing growth accelerated, reducing the scope for the central bank to cut interest rates.
China’s Shanghai Composite Index (SHCOMP) sank 1.1 percent, erasing gains of as much as 0.6 percent, on speculation the stronger- than-expected Chinese manufacturing report today reduces the need for further monetary-policy easing. Hong Kong’s Hang Seng Index slipped 0.3 percent.
/... http://www.bloomberg.com/news/2012-02-01/most-asian-stocks-rise-as-greece-optimism-tempers-lower-earnings-forecasts.html
So, markets moved more, these days, by expectations of central bank action or inaction, rather than by indicators of performance of real economies.
Ghost Dog
(16,881 posts)Oil rose in New York after China’s manufacturing index unexpectedly rose, boosting optimism that the world’s second-biggest crude consumer is withstanding Europe’s debt crisis.
Futures rose as much as 0.5 percent after China’s purchasing managers’ index increased to 50.5 from 50.3 in December, exceeding the median estimate in a Bloomberg News survey for a reading below the 50 level that divides expansion from contraction. Oil fell for a third day yesterday after the government said consumer confidence and business activity cooled in the U.S. Data from the American Petroleum Institute indicated oil stockpiles rose to the highest level since November.
Crude for March delivery increased as much as 51 cents to $98.99 in electronic trading on the New York Mercantile Exchange and traded at $98.97 at 4:40 p.m. Singapore time. The contract yesterday declined 0.3 percent to $98.48 a barrel, the lowest since Jan. 20. Prices slid 0.4 percent in January, falling for a second month.
Brent oil for March settlement gained 56 cents to $111.54 a barrel on the London-based ICE Futures Europe exchange. The European benchmark contract’s premium to West Texas Intermediate futures traded at $12.51, compared with a record spread of $27.88 on Oct. 14.
The European Union said last month it will ban Iranian oil imports starting in July and freeze the assets of the country’s central bank as part of sanctions against the Persian Gulf nation’s nuclear program. Iran’s Foreign minister Ali Akbar Salehi said this week that the International Atomic Energy Agency team would be visiting some of the country’s nuclear sites and could extend its stay if it needed to.
/... http://www.bloomberg.com/news/2012-01-31/oil-futures-decline-for-third-day-as-consumer-confidence-equities-drop.html
Tansy_Gold
(17,860 posts)ARE the economies.
Isn't that what we were all taught, back in the day, that made the old USSR such a failure? They relied on massive central planning that was too rigid to allow for human foibles, and they strangled their economy? Am I crazy, or is this what's happening all déjà vu-ly over again?
TG
Demeter
(85,373 posts)I wonder how long it will take the talking heads to get there....maybe we should tweet them?
It's even more of a parallel...the real people are living in the underground economy. The FIRE are living in an artificial, state-constructed pretend economy. And never the twain shall meet, except in court for tax evasion or foreclosure.
The only thing that kept the USSR alive for so long was the underground economy. When the State overwhelmed the underground's coping skills, and the underground starved the State, and the rest of the world stopped enabling, it all came crashing down.
Tansy_Gold
(17,860 posts)Bingo.
I think economists should be barred from ever serving in government.
AnneD
(15,774 posts)Max Keisre gets on the soap box about the central bank (among other things).
I think this push to go cashless, will be on the horizon. It is a feeble attempt to control the black market and get revenue, but it is doomed to failure. Wait til the fundamentalist get wind of that-they will go ape shit crazy.
The more you try to control, the more it slips from your grasp.
Ghost Dog
(16,881 posts)A cashless society surely would of necessity carry with it the Mark of the Beast (in the form of computer records of (almost) every little thing you do).
AnneD
(15,774 posts)I always thought they had a screw loose when they talked about the anti Christ, mark of the beast and certain people not being allowed to buy and sell in the market-----but I am not laughing much anymore.
This is all a naked power grab by a few and an attempt to extract wealth for those they consider no better than cattle.
Ghost Dog
(16,881 posts)(Reuters) - Stocks rose and the euro steadied on Wednesday as investors remained on guard ahead of the release of manufacturing surveys from the Europe's biggest economies after China's powerful factories showed a slight expansion.
The Chinese manufacturing sector grew modestly in January, with an official PMI reading inching up to 50.5 from 50.3 in December, beating the 49.5 forecast and lifting Asian stocks and commodity-linked currencies.
Euro zone Purchasing Manager's Indexes are expected to show the region still on track for a modest recession as its debt problems hit consumer and business confidence, although Germany should stand out, staying on track for small expansion.
Across Europe stock markets started firmer with the pan-European FTSEurofirst 300 .FTEU3 index of top shares up 0.3 percent at 1,040.81 points.
"The probability of the euro zone debt problems turning into a global financial crisis has receded considerably and the risk of global growth grinding to a halt is low, but that doesn't change the main scenario for an economic slowdown generally," Takao Hattori, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo said.
/... http://uk.reuters.com/article/2012/02/01/uk-markets-global-idUKTRE80T08A20120201
Ghost Dog
(16,881 posts)From Dow Jones:
"A rebound in German manufacturing helped to slow the contraction in euro-zone factory activity in January, but continued falls in other countries suggest a two-speed Europe may be emerging.
Markit Economics said its purchasing managers index for the manufacturing sector rose to 48.8 from 46.9 in December. This is still below the break-even 50.0 threshold, meaning activity fell, but is the strongest figure in five months.
"Euro area manufacturing has started 2012 surprisingly well, suggesting the region may avoid a slide back into recession," said Chris Williamson, Chief Economist at Markit.
But the rebound masks stark divergence between countries. While a few countries, like Germany, are showing signs of recovery, others, particularly those that have needed to be bailed out in the currency bloc's debt crisis, continue to face a bleak outlook.
/... http://www.fxstreet.com/news/forex-news/article.aspx?storyid=44d13fc4-763b-4656-92ba-43517bd4c697
Ghost Dog
(16,881 posts)The highest proportion of European companies on record are missing profit estimates even as the region’s stocks post their best start to a year since 1998.
Siemens AG (SIE) and Ericsson AB (ERICB) are among the 59 percent of Stoxx Europe 600 Index companies reporting earnings that fell short of forecasts during the current quarter, according to data compiled by Bloomberg. That’s the worst ratio since Bloomberg started collating estimates in 2006, with 39 percent of companies missing projections in an average quarter.
Bulls say the Stoxx 600 will extend this year’s 4 percent gain as the region’s stocks are still cheap and efforts by the European Central Bank to boost lending will help liquidity. The rally will fade as analysts’ 2011 earnings projections are too positive even after a 9 percent cut, according to money managers at Robeco Gestions SA and Banque Palatine SA...
... Twenty of the 34 companies in the Stoxx 600 that released results from Jan. 9 through yesterday had per-share earnings that trailed behind analyst estimates, data compiled by Bloomberg show. Earnings for members of the gauge probably rose by 12 percent on average in 2011 and may increase a further 7 percent this year, according to more than 12,000 analyst forecasts compiled by Bloomberg.
The Stoxx 600 rallied 4 percent in January, the best start to a year since 1998, Bloomberg data show. The measure advanced 20 percent from its Sept. 22 low through Jan. 26, entering the second bull market in less than a year. The index climbed 1.3 percent to 257.66 at 9:24 a.m. in London today. The surge in stocks is outpacing earnings prospects as Spain’s economy shrinks and borrowing costs in Portugal this week climbed to a euro-era record, according to Matthieu Giuliani, who helps oversee $4 billion at Banque Palatine in Paris.
/... http://www.bloomberg.com/news/2012-02-01/worst-earnings-since-2006-in-europe-fail-to-dent-rally-in-region-s-stocks.html
Demeter
(85,373 posts)I'll have whatever he is drinking. I could use a good fantasy.
Until the hot money is banned at the borders, there will continue to be global financial crises. Until the banksters are jailed or fired and the banks are regulated, there is no safety.
And expecting the Chinese to magically solve all problems is insane. The Chinese have no interest in solving global problems, they have their hands full at home.
Ghost Dog
(16,881 posts)... and I hate to think about what the 24/24TV gaggle must be like.
Ghost Dog
(16,881 posts)... Just two weeks after saying that investors should “remain cautious,” Larry Hatheway, the chief economist at UBS AG (UBSN), raised his recommendations on global shares and high-yield bonds in a Jan. 23 note to customers entitled, “Wrong, but not too late.” Royal Bank of Scotland Group Plc (RBS), and Benoit Anne, the global head of emerging-markets strategy at Societe Generale (GLE) SA, said their estimates for developing nations were proven wrong.
The MSCI All-Country World Index (MXWD) climbed 5.7 percent in January, surprising strategists at Bank of America Corp. (BAC), Goldman Sachs Group Inc. (GS) and Barclays Plc (BARC) who had forecast first-half losses because of Europe’s debt crisis. JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C), which predicted the rally in stocks, say it will continue as the U.S. housing market rebounds and China eases lending restrictions to bolster economic growth.
“In hindsight, everybody was so beared up at the end of last year,” Mary Ann Bartels, the New York-based head of technical and market analysis at Bank of America, who predicted on Dec. 27 that the Standard & Poor’s 500 Index would probably fall about 15 percent in the first half before recovering, said in a Jan. 31 phone interview. “There was nowhere for the market to go but up.”
Investor confidence improved after the European Central Bank announced a three-year lending program for banks, the Federal Reserve said it will keep benchmark interest rates low through at least 2014 and reports showed a stronger U.S. labor market and slower Chinese inflation.
/... http://www.bloomberg.com/news/2012-02-01/global-strategists-abandoning-bearish-views-after-missing-rally.html
Demeter
(85,373 posts)What goes up for no good reason will go down much farther, and probably even faster....in the absence of any rocket propellant (other than Uncle Ben's kickapoo joy juice)
Ghost Dog
(16,881 posts)Tuesday 31 January 2012
Tax office workers across Britain walked out today in opposition to what they described as "creeping privatisation" in the sector.
The 24-hour strike - timed to coincide with the deadline for the filing of self-assessment tax forms - was in response to government plans to trial the use of private firms at two centres, Lillyhall in Cumbria and Bathgate in West Lothian.
An estimated 20,000 employees walked out in opposition to the appointment of two private companies, Sitel and Teleperformance, to run call-handling trials in the two HM Revenue and Customs centres...
... The advertised jobs are paid several thousand pounds less a year than civil servants doing the same work.
The union argues that the department would be better advised to invest funds in its own staff rather than planning to axe an estimated 10,000 jobs.
/... http://www.morningstaronline.co.uk/news/content/view/full/114873
Ghost Dog
(16,881 posts)LONDON - House prices unexpectedly fell for the second month in a row in January, due to the prospect of greater unemployment and buyers' problems finding large enough mortgage deposits, data from lender Nationwide showed on Wednesday.
/... http://uk.reuters.com/article/2012/02/01/uk-house-prices-idUKTRE8100FG20120201
Ghost Dog
(16,881 posts)
Ghost Dog
(16,881 posts)VIENNA (dpa-AFX) - Eurozone inflation remained unchanged in January, raising expectations for another rate cut from the European Central Bank. Inflation held steady as expected at 2.7 percent, preliminary data from Eurostat showed Wednesday. The breakdown of consumer price figures will be released on February 29. Although inflation slowed from a three-year high seen in November, it stays above the central bank's target of 'below, but close to 2 percent' since December 2010...
... Meanwhile, inflation slowed in Spain to 2 percent from 2.4 percent in December...
... Elsewhere today, the latest bank lending survey from the European Central Bank indicated that euro area banks are set to tighten credit standards in the first quarter, albeit at a slower pace than in the final three months of 2011. For the first quarter of 2012, banks expect a sizeable drop in the net demand for housing loans, while the decline in net demand for consumer credit is expected to remain unchanged...
/... http://www.finanznachrichten.de/nachrichten-2012-02/22592964-eurozone-inflation-unchanged-at-2-7-020.htm
So, UK consumer price inflation is running at about twice the Eurozone rate.
Ghost Dog
(16,881 posts)VIENNA (dpa-AFX) - The dollar gave back most of its gains against the euro Wednesday morning, edging near its lowest in a month amid hopes of an end to the European sovereign debt crisis. Investors were pinning their hopes on talks between Greece and private lenders...
... The dollar eased to $1.3136 from yesterday's peak near $1.3020. With the loss, the dollar nudged further from January's 17-month high of $1.2623. The euro held its ground despite news that Eurozone inflation remained unchanged in January, raising expectations for another rate cut from the European Central Bank...
... The buck remained under heavy pressure versus the sterling, struggling to stay near $1.58 -- its lowest since mid-November. And the dollar was hammered for third day against the yen, dropping to a 3-month low of Y76.02.
On the economic front from the U.S., the ADP National Employment report, which sheds light on non-farm private employment, is scheduled to be released at 8:15 am ET. The consensus expectations are for an addition of 172,000 jobs by the sector in January following an addition of 325,000 jobs in December. Additionally, the results of the manufacturing survey of the Institute for Supply Management, which are based on data compiled from purchasing and supply executives nationwide, are due out at 10 am ET. Economists expect the index to show a reading of 54.5 for January compared to 53.9 in December. The Commerce Department's construction spending report to be released at 10 am ET is expected to show a 0.5 percent increase in December...
/... http://www.finanznachrichten.de/nachrichten-2012-02/22593237-dollar-under-pressure-ahead-of-adp-jobs-report-020.htm
Ghost Dog
(16,881 posts)WASHINGTON (dpa-AFX) - U.S. stock futures are rallying on Wednesday, as the focus shifted to some positive global data points. Developments on the eurozone debt crisis have been encouraging after the much feared Portugal bill auction results proved fairly encouraging and hopes concerning a Greek-PSI deal strengthened. Domestic earnings have been mixed. Traders may also focus on the ADP's private sector employment report and a domestic national manufacturing reading. As of 6:30 am ET, the Dow futures are rising 93 points, the S&P 500 futures adding 9.60 points and the Nasdaq 100 futures up 13.50 points...
... Also, Philadelphia Federal Reserve Bank President Charles Plosser is due to speak to the Main Line Chamber of Commerce on the economic outlook, in Philadelphia at 8:30 am ET.
In corporate news, Amazon (AMZN) said its fourth quarter earnings exceeded estimates despite declining from the year-ago period. Net sales fell 35 percent and trailed estimates. The company issued first quarter sales guidance range, which at best will meet estimates...
/... http://www.finanznachrichten.de/nachrichten-2012-02/22592464-wall-street-vibrant-on-global-economic-recovery-hopes-020.htm
Demeter
(85,373 posts)
Roland99
(53,342 posts)We'll see how that pans out after Friday's numbers (and how many public sector jobs were lost, too)
Demeter
(85,373 posts)Matt Taibbi starts off positively exultant when talking about developments in the foreclosure fraud settlement, particularly on the narrow release of liability, but I’m interested in what happens after he gets his head out of the clouds:
Robosigning had a profound and immediate impact on large numbers of actual human beings, and I don’t want people to think I’m dismissing it as unimportant. I probably also shouldn’t celebrate news like this until I see how the actual deal looks, what wording is used to narrow the deal’s purview, how homeowners and other victims will be compensated, what will be done to prevent it in the future, and so on [...]
When I first heard about the foreclosure settlement, I thought it might contain a broad waiver for everything, including the tax evasion issues, the fair lending issues, securitization, and all the other things on that list above. If they did that, that would be TARPx10. My only point about this deal is that it appears to have been effectively negotiated down from a bloodcurdling outrage to whatever it is now, which is probably something far less than that: it may still be a serious underpay, but it’s not the unreal, criminal giveaway it was originally meant to be.
Taibbi has kind of bought the argument that the robo-signing was a smaller part of a bigger fraud in the securitization markets, which is true. That doesn’t mean that a settlement that allows you to go after that poisoned tree by only giving up the fruit is in any way equitable. That’s the point of California Rep. George Miller, a key ally to Nancy Pelosi:
“Whatever settlement they have has to go out to the public for a week, for a period of time, where it can be commented on,” Miller said, “because this represents the largest decisions about people’s homes, their equity, their assets and their worth.”
There is a path to a settlement that would at least be somewhat strong, and it includes a whole lot more elements than a narrow release of liability, as Abigail Field explains. It includes serious enforcement with an independent court-appointed monitor that has actual authority and the ability to impose penalties. It includes real nationwide servicing standards that include an auditing of the servicing software and account records to check for systemic fraud, rather than just a promise not to do the bad stuff ever again. And it includes principal reductions where the monitor, not the banks, makes the decision on who gets relief and at what amount. The banks have to pay the fine here, not pass it on to investors. Furthermore:
Regardless of how the DE’s MERS lawsuit is resolved and liability for its past actions addressed, the settlement should include an agreement to stop using MERS on all loans made after the date of the settlement. We need to limit the damage.
The settlement has to deal with the fact that most mortgages’ documents are FUBAR. ‘Robosigning’ isn’t simply about signing documents in a funny way; it’s about creating documents the banks don’t have because they didn’t do their job right at the outset. Why are they creating the documents? So they can win foreclosure cases. That’s obstruction of justice. When you don’t have the evidence you need, you’re not supposed to just make sh-t up. But the servicers are, systematically. And it’s not like they’re doing things they have the right to do, just late. For a variety of reasons these documents are just fraudulent. They’re creating documents in the name of companies that have long since gone out of business, for example.
Bottom line: You can’t solve “robosigning” simply by slowing the process down long enough for people to review newly-minted documents before submitting them. Similarly, if the database the reviewer is checking the numbers against is wrong, the review doesn’t help either. How to resolve the FUBAR documents situation? I don’t know. All I know is that the topic has to be dealt with head on.
This is of course what regulators probably don’t even want to wrestle with. The broken nature of the land title system in the United States is a can of worms I think these people aren’t legitimately interested in opening.
Demeter
(85,373 posts)President Barack Obama blew a kiss to Apple in last week’s State of the Union speech, praising the entrepreneurial spirit of its founder, the late Steve Jobs, as the cameras panned to his widow in the audience. Obama’s timing couldn’t be weirder. In the last month, Apple has released a damning audit that found almost 100 of its supplier factories force more than half their workers to exceed a 60-hour week. The company announced responsibility for aluminum dust explosions in Chinese supplier factories that killed four workers and injured 77. Hundreds more in China have been injured cleaning iPad screens with a chemical that causes nerve damage. Apple was just subjected to a “This American Life” radio special reporting on its abysmal factory conditions in China. Last weekend a front-page New York Times story asked why the company offshored all of its manufacturing, mostly to China. (The answer is found in what its executives call “flexibility.” Tens of thousands of workers there live in factory dorms on-site, where, the Times reports, they are woken in the middle of the night and forced onto 12-hour shifts when Apple decides a product needs tweaking.)
In the face of all this bad press, the tech darling’s response has been to reveal its supplier factories and to announce a partnership with the Fair Labor Association to do stepped-up factory inspections. The FLA is the partly corporate-funded group that until now only monitored apparel factories, and which Nike helped establish after its own scandals in the ’90s. In sum, Apple is now doing what Nike has been doing for nearly 15 years: the apology-plus-transparency formula, straight out of the manuals offered by “reputation management” consultants. This was certainly enough for most mainstream media and even some activists. Some more dubious observers said the actions came about because of “consumer pressure,” claiming the company acted to quell the displeasure of the legions of iPhone worshippers.
It must be said that Apple looked more serious this week than it did several years ago, when it shrugged off 18 worker suicides at its main supplier, Foxconn, in China. Steve Jobs told the press that the high number of suicides was about average for the Chinese population as a whole. Just last week, Terry Gou, CEO of Foxconn, referred to his workers as “animals” during an appearance at the Taipei City Zoo—not a lot of empathy there, either.
Change the Image, Not the Actual
When anti-sweatshop campaigners in the ’90s relentlessly called Nike out for its miserable, toxic factories around the world, sneaker-buying Americans did have an impact on Nike. U.S. sales fell for four successive years, despite billion-dollar marketing outlays every year. So CEO Phil Knight rented the National Press Club and told reporters his shoes were “synonymous with slave wages, forced overtime, and arbitrary abuse.” He vowed to put things right. Since then, Nike has spent hundreds of millions of dollars on factory “monitoring” and hired on a “corporate social responsibility” staff of over 200. Nike became a charter member of the FLA in 1999, and has a representative on its board...What has it wrought? Very little. Richard Locke, a highly regarded business professor and long-time observer of Nike, has been granted extraordinary access by the shoe giant. “A decade’s-worth of high-profile efforts to change sweatshop conditions in overseas apparel factories hasn’t worked,” Locke concludes... All these new workers’ rights experts work for the corporations they’re monitoring—either directly, as on Nike’s social responsibility staff, or in NGO mode. NGOs sell their monitoring services to the big brands that are seeking cover while their supplier factories continue the same profitable patterns of worker abuse....
AND THE BEAT GOES ON...AND THE BEATINGS CONTINUE
Demeter
(85,373 posts)
http://www.alternet.org/newsandviews/article/769240/china_cheats_trade_laws%3A_will_obama_make_the_country_play_fair/#paragraph3
China cheats – it openly flouts trade laws – and routinely denies it. It restricts access to its markets, forces companies that want to sell in China to transfer technology and manufacture there, and then often steals the technology. It purposefully underprices its currency to keep the down the price of its exports. When it targets an industry as strategic, it employs a range of subsidies, directed procurement, and trade maneuvers to capture market share.
China cheats and everyone knows it. Pressures are building on the administration to start enforcing our trade laws. Republican presidential aspirant Mitt Romney says he’ll cite China as a currency violator on day one of his presidency. In his State of the Union address, President Obama announced he would set up a special unit to enforce trade laws, calling out China by name.
Now a coalition of unions led by the United Steelworkers and the United Auto Workers, along with allied organizations are joining with Senators Sherrod Brown and Debbie Stabenow to call the question.
Today, they announce that they will file a series of enforcement actions – and call for legislation – to challenge Chinese violations in the area of auto parts. There has been a 900% increase in auto parts imports from China over the last decade, to nearly $12 billion a year. Over 400,000 jobs have been lost in this industry in the last decade, according to a study by the Economic Policy Institute that will be released today. Michigan, Ohio and Pennsylvania -- three key swing states in the upcoming presidential election - - have been hit particularly hard...
xchrom
(108,903 posts)
Demeter
(85,373 posts)Without a dramatic rethink, our "free-enterprise" system may never again provide enough decent jobs for those who need them. Capitalism is coming apart at the seams and the middle-class is paying the price. This week’s news alone bombards us with examples of how, absent a dramatic rethink, our "free-enterprise" system may never again provide enough decent jobs for those who need and want them.
1. iSlavery...Apple just announced that it doubled its already enormous profits over the Christmas holidays. Like the Pharaohs of old, it’s always paid to build great things on the backs of slave labor.
2. The Bain of Our Middle-Class Existence...Mitt repeatedly tells us that Bain created tens of thousands of jobs at Staples, Domino’s Pizza, Sealy, Brookstone, Sports Authority, Burger King, Burlington Coat Factory, Dunkin’ Donuts, and Toys 'R' Us. For a moment let’s put aside the fact that Bain also drove a large number of companies into bankruptcy while loading them up with debt and extracting enormous profits along the way. Instead, let’s focus on the type of jobs that Staples, Domino’s et al. produce for the American middle-class. While these jobs are not as slavish as those sought after by Apple in China, most Bain companies pay so little and have so few benefits that it is impossible to support a middle-class existence from the jobs they create...ALL THOSE COMPANIES ARE SHADOWS OF THEIR FORMER SELVES--DEMETER
3. Surprise! Federal Auditors Find Big Pay for Bailed-Out Bankers...You may recall that the Obama administration demanded that executives at the top seven bailed-out firms receive no more than $500,000 a year. Congress complied by passing a law to set up a “special master” to administer the salary cap. Well, this week we discovered that the special master got mastered, according to federal auditors. Apparently, the bailed-out companies teamed up with Treasury Secretary Timothy Geithner and company to pressure the special master to allow salaries 10 times as high for these failed executives. “Forty-nine people received packages worth $5 million or more from 2009-2011,” according to the auditor’s report. (What the auditor failed to mention is that the law only applies to direct bailout money. It does not cover the big Wall Street firms that took trillions in hidden loans from the Federal Reserve to avoid collapse. Those top bankers earn much more than those at the seven bailed-out firms.)...So while the Apple workers in China get up in the middle of the night from their company dorms to assemble phones, and while Staples workers try to live on $8 an hour, we the taxpayers are supporting financial executives who can’t make ends meet on $500,000 a year?
4. Economically Addicted to War...
5. Mitt Slithers Through the “Carried Interest” Loophole...Of course, one of the big news items of the week was Mitt’s tax returns, which revealed that he paid only 13.9 percent in federal taxes instead of the 30-plus percent high-income earners are supposed to pay. Like Warren Buffett, Mr. Romney probably pays a lower tax rate than his secretary at Bain Capital...It’s not just that he has a legion of tax sharpies who know how to hide his money in secret Swiss accounts and in the Grand Cayman Islands. The real culprit is a gigantic tax loophole called “carried interest” that allows private equity moguls and hedge fund honchos to essentially lie about what they do for a living....This loophole is the poster child example of how the super-rich enhance their wealth at the expense of the rest of us. And the rest of us do indeed make up the difference either through increased taxes or decreased services.
6. How the Gringrich/Freddie Tryst Distorts History..This week also treated us with the release of Newt’s $600,000 a year consulting contract with Freddie Mac. Did he get paid for influence-peddling or for his prescient historical insights? Who cares? As sordid as his deal may have been, the real damage comes from the analysis of the financial crash that accompanies the story. We hear again and again by all, including the media, that Fannie Mae and Freddie Mac, the two troubled government housing agencies, caused the financial meltdown. Not true!
How do we put America back to work?
These recent examples demonstrate yet again that "free-enterprise" on its own can not create enough middle-class jobs. Neither Apple, nor Bain-Staples, nor Wall Street, nor deficit reduction will get us there. By the way, neither will small business. We need to recognize that modern financialized capitalism is deeply flawed. Without enormous government support, it cannot function. Without enormous government support, there will be no sizable middle-class. The solution is both simple and difficult for us to accept. We need to use public money to create jobs and decent wages doing the things that need doing!
How do we pay for it? By now that should be conceptually easy: Wall Street should pay for the damage it has done. (A financial transaction tax would be a good first step.) And while we’re at it, get rid of the carried interest loophole so that Romney and the rest of his gang pay the same rates as the rest of us.
*******************************************************************************
Les Leopold is the executive director of the Labor Institute and Public Health Institute in New York, and author of The Looting of America: How Wall Street's Game of Fantasy Finance Destroyed Our Jobs, Pensions, and Prosperity—and What We Can Do About It (Chelsea Green, 2009).
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I HAVE SEVERELY EDITED THIS SCREED...SEE FULL TEXT AT LINK
Demeter
(85,373 posts)Demeter
(85,373 posts)On Sunday, 1 percenters left the World Economic Forum at Davos with bold plans to stay fat and happy while the world falls apart...Billed as “The Great Transformation,” the WEF promised sessions on rethinking capitalism, reducing inequality and solving Europe's financial crisis. Founder Klaus Schwab opened the forum with a wise observation that capitalism needs to be fixed "to serve society." Was it possible that these leaders wanted change? Had they opened their ears to the 99 percent?...Guess it depends on which society and what you mean by fixed. Because in reality, the brochure should have read: "The Great Retrenchment: with sessions on denying capitalism's failures, staying rich despite inequality, and dumping Europe's financial crisis onto the backs of ordinary people."
In the midst of a crippling European debt crisis, some 2,500 business leaders, intellectuals and politicians strolled among the five-star hotels and plush conference rooms of the WEF. There was much talk about how economic turmoil in Europe could spread to the rest of the world. There was much networking. Much giddy tweeting (Inspiration! Youth! Social entrepreneurs!) and much partying among ice sculptures. Outside, Swiss police sprayed tear gas at demonstrators protesting youth unemployment, Occupiers camped in igloos protested the event’s elitism, and a group of Ukranian women decried the sexism by going topless and wielding signs that read “Poor because of you!” Yes, there were some reports of elites feeling a bit “besieged” and security was accordingly beefed up. Strategies to maintain the status quo varied by industry and sometimes country. But when you start reading that bankers felt “cautious optimism” about how leaders were responding to their plight, you know that the 99 percent was never really part of the agenda. That Vikram Pandit, CEO of the global bank Citigroup, who blew up the company and sent the bills to taxpayers, was co-chair of this year’s forum spoke volumes...
You would not be surprised to learn that the foundation that puts on the WEF is funded by its 1,000 member companies, the typical firm being a global enterprise with over $5 billion in turnover. Representatives of small businesses and cooperatives, which constitute much of the global economy, are naturally unwelcome in Davos Man's habitat. You will be even less shocked to know that all of the 30 video messages from Davos co-chairs and partners posted ahead of the meeting featured men, most of them western and white. Columbia University’s Anya Schiffrin commented on the notable lack of female participants, saying, “I understand there are not a lot of women running hedge funds, but in that case change your category, maybe don't only have CEOs.” A bold idea. But a bit too innovative for Davos Man.
...At a time when, according to the Economic Cooperation and Development (OECD), the earnings gap between the rich and poor had reached its highest level in 30 years, non-elites got little airtime here, and when they did, they generally expressed dismay. Greenpeace executive director Kumi Naidoo was on hand to call bullshit on the summit's "transformational" rhetoric, observing that "it's more about system recovery than system redesign.” And the system, as we know by now, is one designed so very carefully for the benefit of the 1 percent. So things like, for example, prosecuting financial fraud, redesigning incentives for corporate predation, and, well, reining in a capitalist system that is sucking the world's real economy dry, are just not on the table....
IT'S A DELICIOUS DISHING ON THE FOLLIES OF THE BLINDED-BY-MONEY
Demeter
(85,373 posts)
Fuddnik
(8,846 posts)Time to head over to physical therapy. I've got 7 more appointments scheduled, that I have to cancel. I just don't have the cash left to pay all the $25 co-pays this month. I set up all my bills to be paid online today, and it wiped out my pension checks. Now there's another $5,000 that has to go out this month on top of all that.
I only hope that I have enough left for a couple, no several bottles of vodka at the end of the day.
Last night, I couldn't bear to turn on the TV, and watch all the repeats of the primary, so I decided to re-read Chomsky's "Failed States". Funny how nothing much (and none for the better) has changed since he wrote it in 2006.
xchrom
(108,903 posts)I'm going now...take it over!
xchrom
(108,903 posts)
Demeter
(85,373 posts)"For some ridiculous reason, to which, however, I've no desire to be disloyal,
Some person in authority, I don't know who, very likely the Astronomer Royal,
Has decided that, although for such a beastly month as February, twenty-eight days as
a rule are plenty,
One year in every four his days shall be reckoned as nine and twenty..."
Pirate King, Pirates of Penzance
xchrom
(108,903 posts)Demeter
(85,373 posts)xchrom
(108,903 posts)how young sonny and cher were there -- i really miss those days sometimes.
Demeter
(85,373 posts)The Kid has already unearthed her copy for me...(a HORRIBLY BAD PUN, AND COMPLETELY UNINTENTIONAL)
Demeter
(85,373 posts)She broke her temporary crown for breakfast, and 3 miles after the dentist, did it again for lunch. So we turned around and DID IT AGAIN!
My entire life lately has been like that....
xchrom
(108,903 posts)i can't believe it.
xchrom
(108,903 posts)&width=600
There was fresh data from the government Tuesday showing that the American dream of owning a home is fading fast.
The share of all U.S. privately-owned houses that stood empty fell in the fourth quarter to its lowest since 2006 as the number of houses occupied by renters rose faster than the pace of new vacancies created by homeowners moved out, according to the Commerce Department. There number of housing units occupied by renters rose by 749,000 in the fourth quarter compared to a year earlier; some 91,000 fewer homes were occupied by owners, the data show.
With the fast pace of foreclosures showing no sign of letting up, the U.S. homeownership rate continues to fall. Just 66.0 percent of U.S. homes were occupied by their owners in the fourth quarter of last year – half-a-percentage-point lower than a year earlier. That’s the lowest level of homeownership since the second quarter 1998.
The steady rise in demand for rentals has tightened the supply of housing, helping to push rents higher. Homebuilders report that the market for multi-family units has been a lone bright spot in the overall housing market. While the pace of new household formations has lagged historical averages, those new households are becoming renters. That trend is likely to continue until would-be home buyers gain more confidence that the housing market has bottomed, according to NAHB Chief Economist David Crowe.
DemReadingDU
(16,000 posts)The price of the house, the mortgage, property taxes, outside maintenance, inside maintenance, insurance, etc. etc.
I think I am getting too old to keep up with a house.
Tansy_Gold
(17,860 posts)not the easiest, but the best, imho. That's part of what made the whole middle class lifestyle of the 50s and 60s and 70s possible. Families were able to build their equity, and then could hope to pass that wealth along to their children. Homes could be used to fund college, to secure a comfortable retirement, and to establish a foundation for future wealth.
The aristos began chipping away at that in earnest as soon as they installed reagan. Oh the evil that was done behind his smarmy smile! Break the unions, and kill the middle class. Raise interest rates and kill the middle class. Defund alternative energy and kill the middle class. Nothing is so terrifying to the aristos as a healthy, wealthy middle class.
Now we have unaffordable college, disappearing manufacturing jobs, and out-of-reach home ownership.
FUCKERS!!!!
Fuddnik
(8,846 posts)They had a segment on CBS Nooz last night that property values around the Fort Myers, Fl area have plummeted 65% since 2006. 1 in 8 homes are already foreclosed.
They showed Lehigh Acres. My dad used to have a couple of lots there in the 80's that my former BIL gave him to settle a debt. They're probably worth less now.
Tansy_Gold
(17,860 posts)and I did point out (somewhere) that TPTB have made it more and more difficult. But under normal conditions, home ownership is still the best route to stable wealth and the establishment of a viable middle class.
I own my home free and clear because my husband and I worked damn hard to make the payments. We refied not for lower payments or to cash out equity but to pay it off in 19 years instead of 30. We never cashed out any equity. When I sold that house after his death, I didn't trade "up" but traded "even."
I've watched too many friends lose everything because they either got greedy with what they had, or they thought renting was cheaper. No maintenance, no taxes! When they realized they were paying for maintenance and taxes through the rent -- and a profit for the landlord on top of it -- it was too late. They'd poured 20, 30, 40 years of rent money down the drain and had nothing to show for it.
One couple, now in their late 60s, just saw their rent go from $1200/mo to $1550, because the landlord died and the heirs wanted to make more money. Oh, they're free to move to a cheaper place, but that means coming up with moving costs as well as deposit on a new place, if they can even find one that's cheaper. As the wife told me a couple months ago, when they got word of the rent increase, they should have taken the "savings" they got from renting all those years and put it into buying.
The mobility factor is one thing; lack of job security and stability are another factor. But at the end of the day, if all you do is rent all your life, you have nothing. If you CAN buy, and you can do so sensibly, home ownership remains IMHO the best way to build wealth. I know the aristos don't like that; they want to keep it all to themselves, and they're doing a damn fine job of it.
Demeter
(85,373 posts)Normal is an abstraction...perhaps familiar would be a better description of what we are looking for. Something familiar so we know how to cope, survive, and maybe overcome or even, (gasp) succeed!
Right now, I'd be happy to ensure survival for loved ones....
Demeter
(85,373 posts)The load is shared on the structural issues, and forced savings (if there is a well-run and funded capital reserve fund) will cover flood, fire, etc. as well as the usual repairs on the outside. If I could stop working so much (or maybe, posting) I could catch up on the inside repairs (as long as the Kid stops her test-to-destruction QC).
Which is why I'm on the condo board, to see that the place is well-run and the structures maintained...and the finances properly managed and allocated....
I'm hoping that 5 years after I "retire" (start collecting Social Security and qualify for Medicare), I can get my house in order. At least it's paid for.
xchrom
(108,903 posts)Wind energy now supplies about 5% of California’s total electricity needs, or enough to power more than 400,000 households.
That’s the word from the California Wind Energy Assn., which said that California put up more new turbines than any state last year, with 921.3 megawatts installed. Most of that activity occurred in the Tehachapi area of Kern County, with some big projects in Solano, Contra Costa and Riverside counties as well.
“The total amount of wind energy installations in 2011 created a banner year for wind generation in California and is helping to drive California closer to reaching its goal of 33% renewable energy,” said Nancy Rader, executive director of the California Wind Energy Assn.
Wind capacity in the Golden State has doubled since 2002. With a total of nearly 4,000 megawatts installed, California now ranks third nationwide, behind Texas and Iowa.
xchrom
(108,903 posts)Euro zone manufacturing activity declined for a sixth straight month in January as a slight upturn in Germany failed to offset a prolonged contraction in the region's smaller economies, a survey showed today.
Euro zone output did increase, for the first time since July, but new order levels continued to decline across the region suggesting it may be some time before the troubled currency union's economy returns to solid growth.
Markit's Eurozone Manufacturing Purchasing Managers' Index (PMI) rose to 48.8 last month from December's 46.9, revised up from a flash reading of 48.7 but recording its sixth month below the 50 mark that divides growth from contraction.
The output sub-index was revised up from an earlier reading of 50.0 to 50.4, from 47.1 in December.
xchrom
(108,903 posts)A group of Independent TDs who want Europe's new fiscal treaty put to a referendum will seek to use a little known constitutional provision to petition the President to do so, it has emerged.
Under Article 27 of the Constitution, a Bill can be referred to a referendum if requested by at least one third of the Dáil, and a majority of the Seanad.
Donegal deputy Thomas Pringle said a mechanism contained in Article 27, although never used before, could allow TDs and Senators to petition President Michael D Higgins about the matter.
Mr Pringle said the group would need to support of one-third of all TDs and half of Senators. He calculated the Dáil membership of Fianna Fáil, Sinn Féin, Independents and ULA amounted to 52 TDs. With 55 deputies required to achieve a third, he conceded the group would require a number of Government TDs to come forward.
In the Seanad, he said Fianna Fáil, Sinn Féin and Independents amounted to 31 members, and he was “hopeful of achieving the requirement there”.
xchrom
(108,903 posts)We have to disentangle autonomy from resistance. And if we want to do that, we have to disentangle desire from energy. The prevailing focus of modern capitalism has been energy: the ability to produce, to compete, to dominate. A sort of energolatria, a cult of energy, has dominated the cultural sense of the West from Faust to the Futurists. The ever growing availability of energy has been its dogma. Now we know that energy isn’t boundless. In the social psyche of the West, energy is fading. I think we should reframe the concept and practice of autonomy from this point of view. The social body is unable to reaffirm its rights against the wild assertiveness of capital because the pursuit of rights can never be dissociated from the exercise of force.
When workers were strong in the 1960s and 1970s, they did not restrict themselves to asking for their rights, to peaceful demonstrations of their will. They acted in solidarity, refusing to work, redistributing wealth, sharing things, services, and spaces. Capitalists, on their side, do not merely ask or demonstrate, they do not simply declare their wish: they enact it. They make things happen; they invest, disinvest, displace; they destroy and they build. Only force makes autonomy possible in the relation between capital and society. But what is force? What is force nowadays?
The identification of desire with energy has produced the identification of force with violence that turned out so badly for the Italian movement in the 1970s and 1980s. We have to distinguish energy and desire. Energy is falling, but desire has to be saved. Similarly, we have to distinguish force from violence. Fighting power with violence is suicidal or useless nowadays. How can we think of activists going against professional organizations of killers in the mold of Blackwater, Haliburton, secret services, mafias?
Only suicide has proved to be efficient in the struggle against power. And actually suicide has become decisive in contemporary history. The dark side of the multitude meets here the loneliness of death. Activist culture should avoid the danger of becoming a culture of resentment. Acknowledging the irreversibility of the catastrophic trends that capitalism has inscribed in the history of society does not mean renouncing it. On the contrary, we have today a new cultural task: to live the inevitable with a relaxed soul. To call forth a big wave of withdrawal, of massive dissociation, of desertion from the scene of the economy, of nonparticipation in the fake show of politics. The crucial focus of social transformation is creative singularity. The existence of singularities is not to be conceived as a personal way to salvation, they may become a contagious force.
Demeter
(85,373 posts)Ghost Dog
(16,881 posts)The Indian government said yesterday it was entering into exclusive talks with the French company Dassault Aviation to provide 126 jets, delivering a devastating blow to the Eurofighter consortium that was hoping to secure the $12bn deal.
Dassault's Rafale and the Eurofighter, produced by a four-nation consortium including Britain's BAE Systems, had been whittled down from a shortlist of six last year and industry observers had been anxiously awaiting the opening of sealed bids that contained the costs of each company's pitch. It appears the French bid came in just a few million dollars cheaper...
... James Hardy of IHS Jane's Defence Weekly said: "It's a big win for the Dassault and the Rafale, its first overseas order, after a couple of big disappointments in Brazil and UAE, and a big loss for Eurofighter. The Typhoon was widely tipped to be the favourite and had major political support from the big beasts of the Eurofighter nations."
He added: "However, it is important to note that this is just the first step. Rafale has been selected as preferred bidder but any student of Indian procurement knows that this means nothing until the contract is physically signed."
/... http://www.independent.co.uk/news/business/news/blow-for-bae-as-india-picks-dassault-jet-6297563.html
... Downing Street is to try and persuade the Indian government to rethink its plans to buy Rafale fighter planes from France, rather than UK-backed Eurofighter Typhoons.
No 10 said it would be contacting Delhi to understand the reasons behind the decision to go with the French option.
There was some suggestion that the British might ask the European commission to examine whether EU state aid rules had been breached, but officials said it was premature to speak in those terms.
At prime minister's questions in the Commons, David Cameron sought to reassure Conservative MPs that the decision to give the French preferred bidder status would not mean job losses...
/... http://www.guardian.co.uk/business/2012/feb/01/cameron-india-eurofighter-typhoon-deal?newsfeed=true
xchrom
(108,903 posts)A broken-backed economy with devastated public finances and a long, hard slog ahead. That's a brief summary of what the Institute for Fiscal Studies was saying in its "green budget", which sketches out the options for the chancellor in this year's budget and beyond.
Before looking at the bad news – of which there is plenty – it's worth mentioning the one or two snippets of good news. George Osborne has exercised such control over his cabinet spending colleagues that they are on course to spend £3bn less this year than the chancellor had allowed for. By 2016-17, borrowing will be £9bn lower than the projections made by the independent Office for Budget Responsibility last November. At the election, due to be held in 2015, Osborne may have a bit more wiggle-room for some vote-winning sweeteners.
The rest of the IFS report, though, is not for the faint-hearted. Concern number one relates to the enormous cost of the recession of 2008-09, which has cost £200bn in output lost for ever. Concern number two is that a second period of retrenchment is now under way, with the co-authors of the IFS report, Oxford Economics, predicting a double-dip recession in early 2012 and growth of just 0.3% for the year as a whole.
An economy that suffered as big a collapse as that in the UK would normally bounce back quickly and strongly. The dependence of the UK on debt-driven growth in the financial and housing sectors has been brutally exposed, as has the impact of high inflation in an era when wages have been depressed.
xchrom
(108,903 posts)Right, that's quite enough time wasted on Mr Goodwin, let's focus today on people at the other end of the social pile whose fate may be greatly affected by today's parliamentary battle over Iain Duncan Smith's welfare bill. Amelia Gentleman describes what sort of individuals they are in a heart-rending article in today's Guardian.
I know you're busy, but spare a few minutes to read at least some of it. Gentleman went to Hull, a very distinctive city on the mouth of the Humber where she interviewed and observed those involved in the government's latest version of the welfare-to-work programmes. It seeks to get the unemployed – especially the hardest-to-reach long-term jobless – back into the labour force where, current theory insists (I broadly agree), most of us are healthier and happier.
By coincidence the Chartered Institute of Personnel and Development (CIPD) today publishes a 60-year survey of British working habits – you'll find it here – to mark the Queen's diamond jubilee.
Though much has improved in 60 years, we don't seem much happier after all, says the CIPD, not least because work-related stress, new technologies and consequent information overload (you're reading an example here, perhaps you should stop!).
CountAllVotes
(20,870 posts)Her husband died at the age of 85 years in 2008. He managed all of the money of course. When he died, she had no idea as to what to do with the finances so she hired a broker to manage things for her. She called me up and told me that she had learned something and that there are not only stocks but there are bonds as well.
Holy crap.
She is about to turn 83 years old herself.
I'd like to find this broker and give him a piece of my mind. I won't do it of course, I'll leave that up to her kids which don't seem to give a damn about her. 
DemReadingDU
(16,000 posts)They have worked hard and made good money. Lots of it. But they are too busy to manage their own portfolios. They have no clue what their mutual funds contain. Unfortunately, none listen to my warnings...I'm just a reader of blogs, thus I'm not a 'professional'. Besides, I am told, if the markets go down, they would miss the gains when the markets recovered.
AnneD
(15,774 posts)is why they are called brokers-because they leave you broker than you were before they met you. 
CountAllVotes
(20,870 posts)I guess she is stuck really. I couldn't believe the memorial she sent out for him. Amongst the words said were something about the 'effin stock market. Unbelievable how it rules such a very shallow world view.
xchrom
(108,903 posts)Banco Santander's earnings last year fell sharply as Spain's leading bank opted to take a big hit on the value of the real estate assets on its books in anticipation of a reform of the banking sector due to be unveiled by the government.
Santander said Tuesday its net attributable profit in 2011 declined 35 percent to 5.351 billion euros as it took a charge of 1.812 billion euros against its exposure to the property sector in Spain. It also wrote off 600 million euros in goodwill on its businesses in Portugal.
As a result of the extraordinary charges, Santander's net income in the last quarter of 2011 slumped to 47 million euros from 2.1 billion a year earlier.
"People want to see these risks (exposure to the property sector) properly provisioned for, and the sooner the better," Bloomberg quoted Daragh Quinn, an analyst at Nomura International in Madrid, as saying.
xchrom
(108,903 posts)(Reuters) - Three years ago, when its banks started to go under, a grim joke was doing the rounds in Dublin, "What's the difference between Ireland and Iceland? One letter and six months."
Now the comparison is back and this time it's a positive.
Ireland's sovereign bonds have been the best performers in Europe over the past six months, with the yield on two-year paper dropping from a high of 24 percent to just over five percent, prompting some investors to ask when Ireland is going to follow Iceland's June 2011 return to global capital markets.
Ireland's success in meeting its targets under an EU-IMF bailout without social or political unrest and its export-focused economy has enabled it to dodge the recent euro zone downgrades by S&P and Fitch and distance itself from fellow bailout recipients Greece and Portugal.
AnneD
(15,774 posts)Greece's financial crisis is being blamed for the rising number of parents abandoning their children.
Athens-based Ark of the World, a non-profit organisation that cares for about 200 children, said a newborn baby was among those abandoned recently by parents who are struggling to make ends meet.
The mother of a two-year-old girl ran away after giving her daughter to volunteers at the centre, it said.
A four-year-old girl was left at Ark of the World with a note: "I will not be coming to pick up Anna today because I cannot afford to look after her. Please take good care of her. Sorry."
The centre was founded in 1998 by Father Antonios Papanikolaou in an attempt to keep children with their mothers instead of being institutionalised.
http://au.news.yahoo.com/thewest/a/-/newshome/12565506/poor-parents-abandon-children-in-greece/
This is just about the saddest thing I have read in a long time. I know many Greek and they have such close knit families....What kind of hell it must be to think that your child is better off without you.
I look for that to become more common. Makes me want to lynch a bank CEO.
Ghost Dog
(16,881 posts)lock the deserving up for a considerable time in preferably non-privatized (and non-segregated) prison.
Oh, and shame them in public too.
AnneD
(15,774 posts)a new American reality show "Your Life Sucks" where people change places for at least 6 weeks.
xchrom
(108,903 posts)(Reuters) - Nervous hedge funds managers are stress-testing their portfolios and searching for ways of protecting themselves against their worst nightmare -- a potential break-up of the euro zone.
With talks on restructuring Greece's debt mountain still deadlocked, and the exit of one of more countries from the euro seen as a small but definite possibility, funds are modelling scenarios ranging from a 50 percent slump in European stocks or a 45 percent fall in the oil price to a 30 percent rise in gold.
Managers are also trying to dig out old computer programmes they once used to model the behaviour of currencies such as the drachma or the deutschmark as they prepare for an event for which -- even after the 2008 collapse of Lehman Brothers -- they effectively have no precedent.
Many, having already trimmed risk, are piling into credit default swaps or deeply out-of-the-money options, hoping they pick a counterparty that can withstand the shock of a break-up.
Ghost Dog
(16,881 posts)California (STOCA1) will seek a loan from Wall Street of as much as $1 billion to pay bills as the most populous U.S. state’s tax collections trail budgeted amounts, according to the treasurer’s office.
Treasurer Bill Lockyer is drawing up plans for a so-called revenue-anticipation note sale to deal with cash-flow needs, said Tom Dresslar, a spokesman.
/... http://www.bloomberg.com/news/2012-02-01/california-will-borrow-up-to-1-billion-to-stave-off-impending-cash-crisis.html
See also: http://www.democraticunderground.com/101440589
Po_d Mainiac
(4,183 posts)Tax collections are falling a tad short of projections, so just float a bond on anticipated revenues. That sounds about right.
But it's all Greek pour moi.
Ghost Dog
(16,881 posts)sunsoaked tax-avoiding PIIGS beachbums, quoi?
Po_d Mainiac
(4,183 posts)besides, the PIIGS issue ain't about bailing out sovereigns in leaking dingys, but a feeble attempt to bailout the banksters that made luxury ocean liner sized loans and stand to get canoes in return.
DemReadingDU
(16,000 posts)2/1/12 AMR will seek to end worker pensions
The Pension Benefit Guaranty Corp, which has responsibility for insuring certain benefits under private defined benefit pension plans, said on Tuesday it believes American Airlines will seek to terminate employee pensions in bankruptcy.
The agency said it filed a $92 million lien against American parent AMR Corp AAMRQ.PK for the balance of unpaid pension plan contributions. It added that the lien was applied to AMR assets outside the United States, mainly in Latin America.
American filed for Chapter 11 protection in late November, citing uncompetitive labor costs. The carrier declined to comment on the PBGC statement.
American's unions, meanwhile, were bracing for meetings with airline managers this week that may provide clarity on the cost savings the carrier hopes to win from labor.
"We believe that tomorrow they will outline the size of the cuts at American," said Jamie Horwitz, spokesman for the Transport Workers Union.
more...
http://uk.reuters.com/article/2012/01/31/us-amr-idUKTRE80U1LP20120131
So the PBGC won't be taking over the AMR pensions, for reduced amounts? Pensions eliminated entirely?
AnneD
(15,774 posts)it seems like contract law to me. Your employment is a contract and that pension was part of the contract, just like your check. And since you take a pension in lieu of a full salary or it is deducted from your paycheck, you are entitled to the terms of your contract.
YMMV
Demeter
(85,373 posts)and if you don't have the legal expertise (or the money to buy said expertise), you are SOL
DemReadingDU
(16,000 posts)2/1/12 PBGC preps for possible AMR pension takeover with liens
The Pension Benefit Guaranty Corp. has filed 76 liens against the assets of American Airlines parent AMR Corp., Joshua Gotbaum, PBGC director, said at a news briefing Tuesday.
Braced for the possibility that the agency will have to assume responsibility for some of the airline’s pension plans as part of Fort Worth, Texas-based AMR’s Chapter 11 bankruptcy reorganization, PBGC officials filed the liens after American made $6.5 million of a $100 million required pension contribution due Jan 15.
At the time, company officials said that paying less than the full amount would allow it to preserve cash needed to reorganize.
The liens, filed Jan. 19-20 in courts in Texas, Delaware and the District of Columbia, seek $91.68 million from assets in the United States, Bermuda, Colombia, Dominican Republic, Mexico, St. Lucia and Venezuela.
Those assets are not part of the Chapter 11 case.
PBGC officials said at a news briefing Tuesday that filing liens is a common legal tool they use when full contributions are not made as scheduled. Mr. Gotbaum said that AMR had sought and gained approval from the U.S. Bankruptcy Court in New York to make the full $100 million contribution.
Mr. Gotbaum said the agency is prepared to target other assets if American misses another $100 million payment that is due April 15.
According to PBGC estimates, taking over all four plans—for pilots, flight attendants, agents and ground crew—would add nearly $9 billion to the agency’s deficit, based on the level of underfunding in the plans. The plans have a combined $8.3 billion in assets and $18.5 billion in liabilities, not all of which would be guaranteed by the PBGC, if the agency takes over the plans.
To recoup its possible loss, “There is a different set of actions,” Mr. Gotbaum said. He declined to discuss the agency’s possible tactics during bankruptcy proceedings, but said: “We want American Airlines to be able to reorganize successfully and succeed as a business. However, we would like it to succeed as a business without killing its pension plans.”
http://www.businessinsurance.com/article/20120131/NEWS03/120139971?tags=|62|307|77|82
