STOCK MARKET WATCH -- Monday, 29 December 2014

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Monday, 29 December 2014[font color=black][/font]

SMW for 24 December 2014

AT THE CLOSING BELL ON 26 December 2014
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Dow Jones 18,053.71 +23.50 (0.13%)
S&P 500 2,088.77 +6.89 (0.33%)
Nasdaq 4,806.86 +33.39 (0.70%)


[font color=black]10 Year 2.25% 0.00 (0.00%)
30 Year 2.82% 0.00 (0.00%) [font color=black]


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[font size=2]Market Conditions During Trading Hours[/font]
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(click on link for latest updates)
http://tools.investing.com/market_quotes.php?
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[font size=2]Euro, Yen, Loonie, Silver and Gold[center]

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[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
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Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
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[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
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The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
Wall Street on Parade
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[font color=black][font size=2]Handy Links - Essential Reading:[/font][/font]
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Matt Taibi: Secret and Lies of the Bailout


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[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
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LegitGov
Open Government
Earmark Database
USA spending.gov
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[font color=black][font size=2]Handy Links - Videos:[/font][/font]
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Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
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[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison
6/4/12 Matthew Kluger, lawyer, sentenced to 12 years in prison, along with co-conspirator stock trader Garrett Bauer (9 years) and co-conspirator Kenneth Robinson (not yet sentenced) for 17 year insider trading scheme.
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."
8/22/12 Doug Whitman, Whitman Capital LLC hedge fund founder, convicted of insider trading following a trial in which he spent more than two days on the stand telling jurors he was innocent
10/26/12 UPDATE: Former Goldman Sachs director Rajat Gupta sentenced to two years in federal prison. He will, of course, appeal. . .
11/20/12 Hedge fund manager Matthew Martoma charged with insider trading at SAC Capital Advisors, and prosecutors are looking at Martoma's boss, Steven Cohen, for possible involvement.
02/14/13 Gilbert Lopez, former chief accounting officer of Stanford Financial Group, and former controller Mark Kuhrt sentenced to 20 yrs in prison for their roles in Allen Sanford's $7.2 billion Ponzi scheme.
03/29/13 Michael Sternberg, portfolio mgr at SAC Capital, arrested in NYC, charged with conspiracy and securities fraud. Pled not guilty and freed on $3m bail.
04/04/13 Matthew Marshall Taylor,fmr Goldman Sachs trader arrested, charged by CFTC w/defrauding his employer on $8BN futures bet "by intentionally concealing the true huge size, as well as the risk and potential profits or losses associated."
04/04/13 Matthew Taylor admits guilt, makes plea bargain. Sentencing set for 26 June; faces up to 20 years in prison but will likely only see 3-4 years. Says, "I am truly sorry."
04/11/13 Ex-KPMG LLP partner Scott London charged by federal prosecutors w/passing inside tips to a friend in exchange for cash, jewelry, and concert tickets; expected to plead guilty in May.
08/01/13 Fabrice Tourré convicted on six counts of security fraud, including "aiding and abetting" his former employer, Goldman Sachs
08/14/13 Javier Martin-Artajo and Julien Grout charged with wire fraud, falsifying records, and conspiracy in connection with JP Morgan's "London Whale" trade.
08/19/13 Phillip A. Falcone, manager of hedge fund Harbinger Capital Partners, agrees to admit to "wrongdoing" in market manipulation. Will banned from securities industry for 5 years and pay $18MM in disgorgement and fines.
09/16/13 Javier Martin-Artajo and Julien Grout officially indicted on charges associated with "London Whale" trade.
02/06/14 Matthew Martoma convicted of insider trading while at hedge fund SAC (Stephen A. Cohen) Capital Advisors. Expected sentence 7-10 years.
03/24/14 Annette Bongiorno, Bernard Madoff's secretary; Daniel Bonventre, director of operations for investments; JoAnn Crupi, an account manager; and Jerome O'Hara and George Perez, both computer programmers convicted of conspiracy to defraud clients, securities fraud, and falsifying the books and records.
05/19/14 Credit Suisse, which has an investment bank branch in NYC, agrees to plead guilty and pay appx. $2.6 billion penalties for helping wealthy Americans hide wealth and avoid taxes.
09/08/14 Matthew Martoma, convicted SAC trader, sentenced to 9 years in prison plus forfeiture of $9.3 million, including home and bank accounts







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

[Demeter]

1. MICHAEL HUDSON: From Marx to Goldman Sachs: The Fictions of Fictitious Capital

http://michael-hudson.com/2010/07/from-marx-to-goldman-sachs-the-fictions-of-fictitious-capital1/

As published in Critique, based on a presentation given at the China Academy of Sciences, School of Marxist Studies in Beijing in November 2009, and at the Left Forum in New York City, March 20, 2010.

Classical economists developed the labor theory of value to isolate economic rent, which they defined as the excess of market price and income over the socially necessary cost of production (value ultimately reducible to the cost of labor). A free market was one free of such “unearned” income – a market in which prices reflected actual necessary costs of production or, in the case of public services and basic infrastructure, would be subsidized in order to make economies more competitive. Most reformers accordingly urged – and expected – land, monopolies and banking privileges to be nationalized, or at least to have their free-lunch income taxed away.

In keeping with his materialist view of history, Marx expected banking to be subordinated to the needs of industrial capitalism. Equity investment – followed by public ownership of the means of production under socialism – seemed likely to replace the interest-extracting “usury capital” inherited from antiquity and feudal times: debts mounting up at compound interest in excess of the means to pay, culminating in crises marked by bank runs and property foreclosures.

But as matters have turned out, the rentier interests mounted a Counter-Enlightenment to undermine the reforms that promised to liberate society from special privilege.

Instead of promoting capital investment in an alliance with industry and government, financial planners have sponsored a travesty of free markets. Realizing that income not taxed is free to be capitalized, bought and sold on credit, and paid out as interest, bankers have formed an alliance between finance, insurance and real estate (FIRE) to free land rent and monopoly rent (as well as debt-leveraged “capital” gains) from taxation.

The result is that today’s economy is burdened with property and financial claims that Marx and other critics deemed “fictitious” – a proliferation of financial overhead in the form of interest and dividends, fees and commissions, exorbitant management salaries, bonuses and stock options, and “capital” gains (mainly debt-leveraged land-price gains). And to cap matters, new financial modes of exploiting labor have been innovated, headed by pension-fund capitalism and privatization of Social Security. As economic planning has passed from government to the financial sector, the alternative to public price regulation and progressive taxation is debt peonage.

In his draft notes on “Interest-Bearing Capital and Commercial Capital in Relation to Industrial Capital” for what became Vol. III of Capital and Part III of Theories of Surplus Value, Marx wrote optimistically about how industrial capitalism would modernize banking and financial systems. Its historical task, he believed, was to rescue society from usurious money lending and asset stripping, replacing the age-old parasitic tendencies of banking by steering credit to finance productive investment...MORE

IF YOUR NEW YEAR'S RESOLUTION INCLUDES SOME EDUCATION...HERE'S YOUR ECONOMICS ELECTIVE!

TAKE IT IN SMALL BITES...THAT'S HOW TO EAT AN ELEPHANT!

[Demeter]

2. Putin: It Is Time to Play Your Ace in the Hole By Ron Holland

http://www.marketoracle.co.uk/Article48785.html

The entire world is watching Putin play poker with the Western politicians lead by Obama and followed by Washington quislings in London, Brussels and Berlin.

America's goal since the end of the Cold War has been to weaken by financial, economic and, if necessary, military means any real competition to its global financial and resource domination through the petrodollar and dollar world reserve currency status. The current trade and economic sanctions against Russia and Iran follow this time-tested action that is never successful on its own, as we know from the 50-plus-year blockade of Cuba. But this strategy can lead to opposition nations retaliating by military means, often their only alternative to end blockades etc., which are an act of war and allow the US and other democracies to bring their ultimate superior military power to bare against the offending sovereign state. This worked for Lincoln against the Confederate States of America, by Woodrow Wilson against the Central Powers before World War One, against the Japanese Empire before World War Two, Iraq, Libya – the list is endless.

Recently the US has created the oil price collapse, working closely with its client state Saudi Arabia, in order to weaken the economic power of both Iran and Russia, the two main nations opposing US hegemony, foreign policy and petrodollar policy. Yes, this will play havoc with the US shale oil industry as well as London's North Sea oil industry but oil profits pale in comparison to the importance of maintaining Western power over Russia and China...China is waiting in the wings as the new world economic power and while it is too big to challenge, US strategy is to take out its top two allies, Iran and Russia, to buy time for Wall Street and Washington. The strategy might be a competitive economic course of action but the risk of military consequences and even a third world war loom on the horizon and no country has ever defeated Russia in a land attack. This is risky brinkmanship just to protect our banking and Wall Street elites and their profits at the expense of the American people, I might add, but the US has done this before.

BIG HISTORY LESSON GOES HERE


So Where Does Russia Go from Here?

First, the US cable pundits are suggesting that Putin might retaliate by invading Ukraine. Why would Russia want Ukraine? Except for substantial agricultural resources that can be purchased on the open market, this is a bankrupt country with a long list of failed governments. The country has become a pawn in the battle between East and West, and its people have already suffered so much. Now Russia might move in the East to protect Russian-speaking areas and could be willing to suffer the additional economic consequences of creating a land bridge to Crimea but the military option appears quite limited and counter-productive at best. No nation will win a shooting war between the US, UK and EU versus Russia and China. The consequences are too horrible to be contemplated but Russia has an ace in the hole that can win the financial and economic battle going on today:

First, Russia should join with China in a new gold, oil and natural resource backed monetary union as an alternative to the failed debt democracy model pushed by Wall Street, the central bank cartel and self-serving politicians in the West. It simply does not work in the long term to finance prosperity and improved standards of living through mountains of debt placed on future generations...Washington has destroyed every tax haven and bit of personal and financial privacy in the world because of its desperate need for revenue. Every financial haven has caved, including Switzerland, because they cannot hope to prevail against the US, UK and EU. The US intends to make Russia a pariah state and cut it off from trade, funds transfer, banking and Western credit markets. It will not relent until Putin is overthrown and Russia is compliant with and a supporter of the New World Order. Next in line following Russia will be China. Thus, a monetary union could provide the needed support for Russia necessary to guarantee the independence and self-determination of China.

Second, Russia should act offensively rather than defensively on the financial front by creating corporate tax-free/low income tax zones and welcoming corporations, successful individuals and entrepreneurs to take up residence and create jobs and prosperity. The Hong Kong model does work to create industry, service industry and free-market prosperity and to win, Russia needs far more than a resource-based economy. (NO NO NO ! NO FOREIGN CORPORATIONS! RUSSIA ALREADY MADE THAT MISTAKE ONCE, AS DID CHINA, AND THEY AREN'T ABOUT TO DO IT AGAIN, SO SOON. RUSSIA WILL CREATE ITS OWN BANKING SYSTEM AND REPLACE THE CORRUPTION OF THE WEST WITH SOMETHING HOME-GROWN AND, WITH ANY LUCK, MORE PEOPLE-ORIENTED... DEMETER)

Russia needs more population and a larger middle class and should offer residency and citizenship opportunities to productive and successful workers, entrepreneurial businesses and corporations etc. with the right of reasonable financial and corporate privacy along with the low tax benefits...Canada, the wonderful country I live and work in today, offers permanent residency benefits and citizenship to hundreds of thousands of foreigners wanting to work and immigrate to Canada together with low corporate tax benefits...Russia can and should do the same, although the market will require bargain prices as Russia does not have the long history of rule of law, security and peace like Canada does. Russia should look at good climate areas like Crimea and other areas around the Black Sea and maybe Kaliningrad in the north directly in the middle of the EU....Vladimir Putin, now is the time to play your ace in the hole. Russia can win the financial and economic war being waged against it but not by playing the same old game of poker where cheating prevails. Show the world that Russia is worthy of 21st century leadership in a peaceful and competitive manner by using the debt, currency and banking weaknesses of the West to defeat an opponent out to chain Russia as it has the rest of the world into surrender and serfdom.

WELL, THERE'S SOME GOOD IDEAS, AND SOME REALLY BAD ONES, MIXED TOGETHER...

[Demeter]

3. Magic Growth Numbers From The Government By Paul Craig Roberts

http://www.informationclearinghouse.info/article40571.htm

Everyone wants good news, so the government makes it up. The latest fiction is that US real GDP grew 4.6% in the second quarter and 5% in the third.

Where did this growth come from?

Not from rising real consumer incomes.

Not from rising consumer credit.

Not from rising real retail sales.

Not from the housing sector.

Not from a trade surplus.

The growth came from a Bureau of Economic Analysis survey of consumer spending on services. The BEA found that spending on Obamacare drove the US real GDP growth to 5% in the third quarter. http://www.zerohedge.com/news/2014-12-23/here-reason-surge-q3-gdp
In America, unlike in other countries, a huge chunk of medical spending goes to insurance company profits, not to health care. Another big chunk goes to paperwork, which has a variety of purposes such as collecting personal information on patients and combating fraud (probably the paperwork costs more than fraud). Another chunk goes for tests and procedures in order to justify further procedures. For example, if a doctor thinks a patient’s diagnosis requires a MRI, he must often first order an x-ray to establish that a cheaper procedure does not suffice. If a cancerous skin growth needs to come off, first a biopsy must be done to establish that it is a cancer so that a needless removal is not performed. And, of course, medical practicians must order unnecessary tests in order to protect themselves from the liability of relying on their medical judgment.

To regard any of these expenses as economic growth is farfetched.

There are sampling and other problems with the survey of personal consumption, and apparently Obamacare spending was all dumped into the third quarter. Why the third quarter? The answer is that the illusion of economic recovery must be kept alive. Real GDP growth of 5% in the third quarter is inconsistent with the sharp fall in key industrial commodity prices. It is not only oil (down 47%) but iron ore prices (down 49%), natural gas (down 30%), copper (down 15%). Pam and Russ Martens show that the fall in the producer price index for industrial commodities in 2014 is sharper than in 2008, the year of the crash. http://wallstreetonparade.com/2014/12/oil-crash-dont-believe-the-happy-clatter/

With 30% of 30-year old Americans and almost 50% of 25-year olds living with parents, with debt-based derivative instruments impacted by falling oil and industrial commodity prices, with the likelihood that the US and EU economic attack on Russia will fail and perhaps produce retaliatory measures that could bring down the European banking system, look for 2015 to be the year that Washington will cease to get away with its economic lies. The financial media and Wall Street economists, by refusing to ask obvious questions, have left the American people unprepared for another drop in their living standards and ability to cope.

Dr. Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. Roberts' latest books are The Failure of Laissez Faire Capitalism and Economic Dissolution of the West and How America Was Lost.

[Demeter]

4. Crude price drop triggers major layoffs in US oil industry

http://www.rt.com/usa/217959-us-oil-industry-prices/

Thousands of recently highly paid workers have been laid off after the oil price plummeted 50 percent in 2014. At least four American oil-producing states are already facing budget problems due to decreasing oil revenues. The price plunge has affected petroleum production in all oil-extracting countries, including the US.

Currently cheap fuel is still believed to be providing an overall boost to the US economy, as consumers can spend less on gasoline and more on shopping and services. But for the American energy sector the future looks less bright. It’s effecting places like Alaska, Louisiana, Oklahoma and Texas, the New York Times reports.

US oil experts recall the 1980s oil price downturn, accompanied by economic disasters around the globe and arguably becoming one of the causes of the fall of the Soviet Union. Some experts are positive and say America’s oil-producing states won’t suffer too much because they “diversified their economies.”

STATE BY STATE ANALYSIS FOLLOWS...

[Demeter]

5. Let’s all screw the 1 percent: The simple move Obama could make to strengthen the rest of us

http://www.salon.com/2014/12/26/lets_all_screw_the_1_percent_the_simple_move_obama_could_make_to_strengthen_the_rest_of_us/?source=newsletter



“The economy” in the abstract is doing relatively well, with strong job growth, a booming stock market, and rising GDP. But the American people aren’t feeling it—and Democrats have paid a serious political price as a result—simply because the concrete, individual experience is quite different. Raising the minimum wage is one way to get at the problem—but for a problem that big, it’s a limited line of attack. There are millions of Americans making well more than the minimum wage, yet still doing much worse than their similarly situated parents did a generation ago.

“So what’s changed since the 1960s and ’70s?” progressive billionare venture capitalist Nick Hanauer asked in Politico back in November. “Overtime pay, in part,” he answered: “Your parents got a lot of it, and you don’t. And it turns out that fair overtime standards are to the middle class what the minimum wage is to low-income workers: not everything, but an indispensable labor protection that is absolutely essential to creating a broad and thriving middle class.”

Although the details are a bit complicated, the bottom line is not: there’s a wage level below which everyone qualifies for mandatory time-and-a-half overtime, even if they’re on a salary, and that level has only been raised once since 1975, with the result that only 11 percent of salaried Americans are covered today, compared to over 65 percent of them in 1975. If you make less than $23,660 a year as a salaried worker, you qualify for mandatory overtime—if not, you’re out of luck. Only those hanging on to the lowest levels of the middle class have those protections anymore. Just adjusting the wage level for inflation since 1975—an act of restoration, not revolution—would be as significant an income increase for millions of middle-class Americans as a $10.10 or even $15 minimum wage is for low-wage workers. It would cover an additional 6.1 million salaried workers (by one account) up to $970 per week, about $50,440 annually—the vast majority of those it was originally designed to protect, but who have slowly lost their protections since the 1970s. Hanauer proposes a slightly greater increase, intended to cover roughly all the workforce that was covered in 1975. That would raise the threshold to $69,000 annually, and would cover an added 10.4 million workers...

WORTH A LOOK

[Demeter]

6. I got a call to jury in Jonestown

I thought I had fallen off the edge of the world into a nest of sea serpents.

If that's DU, what are we doing here?

I'm going to find a bottle and my bed...the shock is too much for the nervous system. Good night, all! Have a good week!

[Fuddnik]

7. Give us a taste of the thread and alert.

I get a summons occasionally, and it's usually over some stupid, petty thing. Usually the alerter is trying to suppress some unwelcome fact. They deserve their very own tombstone for such petty shit.

[Demeter]

21. the thread was about hip-hop and whether some white Australian woman

should try to sound like a southern American black woman when she's rapping.

and the alert was even dumber. Race-baiting, hidden hate talk, and condescension.

[xchrom]

8. Greece's Presidential Vote Just Failed And Markets Are Crashing

http://www.businessinsider.com/greek-stocks-are-tumbling-before-presidential-vote-2014-12

Greece’s parliament just voted on the government’s presidential candidate, and didn’t get the super-majority it needed. Snap elections are now coming on January 25th, and Greece's stocks are going through the floor again.

This was the third and final round of voting by Greek politicians: The government need a super-majority to avoid the sudden elections. That meant it needed 180 of 300 MPs to approve Stavros Dimas, the candidate. The governing coalition has 155 MPs, and it persuaded another 13 to back Dimas in the last round. It needed another 12 today and it didn't get a single extra one.

The Athens Stock Exhcnage is down by more than 8.4% as of 11 a.m. GMT, after falling 11% immediately after the vote. Far-left Syriza seem likely to win the snap election less than a month from now. Since the presidential vote was announced in the first week of December, the Athens Stock Exchange has tumbled by more than a quarter.



Read more: http://www.businessinsider.com/greek-stocks-are-tumbling-before-presidential-vote-2014-12#ixzz3NHoyRztq

[Demeter]

22. Poor Stavros Dimas

How unwanted he must feel...he will have to get a consolation job from his Euro-cronies.

And it probably ought to be located outside Greece, for his ultimate safety.

[bread_and_roses]

33. Will Greece lead the way?

Great goddess - 60% youth unemployment. Time rushes by - was it last year or the year before I was reading about Greek elders unable to afford their medicine, people with no heat ...

Of course, here in the great ol' USofA we take that sort of thing as a given. The poor freeze and starve and die from treatable illness here in Randianland. But it was shocking to read of it in Europe .... though I know EU is not a monolith ... still - we never had anything else and they were LOSING benefits - something that usually sets people off? I wondered at their tolerating it.

http://www.commondreams.org/news/2014/12/29/vowing-end-neoliberal-experiment-greek-left-rises-snap-elections-called

Vowing to End 'Neoliberal Experiment,' Greek Left Rises as Snap Elections Called

"The future has already begun."

...In an op-ed published on Sunday in the leftwing Avgi newspaper, Tsipras explained his party's thinking in clear terms:

SYRIZA’s victory will be the start of a great national effort to save society and restore Greece – a national effort with international repercussions, since our historical responsibility is to pave the way for an alternative policy in Europe, turning a Eurozone country from a neoliberal experiment to a model of social protection and growth. [...]

[xchrom]

9. The 10 Most Important Things In The World Right Now

http://www.businessinsider.com/10-most-important-things-in-the-world-dec-29-2014-12

1. Indonesian officials said on Monday that search and rescue planes had spotted objects in the sea within the area where an AirAsia jet carrying 162 people went missing on Sunday.

2. The Greek Parliament will hold its third and final vote to elect a president on Monday, while failure to do could trigger snap elections.

3. The Croatian presidential election will head for runoff on Jan. 11 after Sunday's vote produced no outright winner.

4. More than 200 people are still trapped on a burning ferry that caught fire on Sunday as the boat was travelling from Greece to its home port in Italy.

5. Gmail has been blocked in China.



Read more: http://www.businessinsider.com/10-most-important-things-in-the-world-dec-29-2014-12#ixzz3NHpXQjlk

[xchrom]

10. Germany's First Minimum Wage Is About To Go Into Effect

http://www.businessinsider.com/afp-german-minimum-wage-rings-in-happy-new-year-for-millions-2014-12

Berlin (AFP) - As the New Year approaches, Berlin bakery worker Jessica Arendt is not just looking forward to the fireworks. In 2015, she says, "I'll be able to afford a few more things".

A national minimum wage comes into effect in Germany on January 1, and that means an additional one euro ($1.30) an hour for the 23-year-old.

Mathias Moebius, a bakery chain owner, isn't quite so happy. He says he will have to put up prices in response.

Chancellor Angela Merkel this year signed off on the country's first national minimum wage, an idea she had long opposed.



Read more: http://www.businessinsider.com/afp-german-minimum-wage-rings-in-happy-new-year-for-millions-2014-12#ixzz3NHpw1cch

[xchrom]

11. 10 Things You Need To Know In Markets Today

http://www.businessinsider.com/european-markets-open-27-dec-2014-2014-12

Greece's Politicians Might Prompt A Snap Election. Greece's parliament will begin voting on the government's presidential candidate at about 11 a.m. GMT. A super-majority of 180 legislators is needed (out of 300), but the government only managed 168 in favour at the last ballot. If the vote fails, Greece will move to a nationwide snap election which could have huge consequences for Europe.

Germany's Central Bank Chief Is Pushing Back Against More Easing. In an interview with a German Sunday newspaper, Bundesbank boss Jens Weidmann expressed irritation at pressure to start a quantitative easing (QE) programme, and said Europe's growth was not as bad as some people believed. The ECB is expected to start a QE programme early this year.

South Korea Is Proposing To Resume Talks With The North. South Korea proposed on Monday to resume stalled talks with North Korea, an overture that comes amid heightened diplomatic tension after Seoul's key ally the United States blamed the North for a cyberattack on Sony Pictures.

A Missing AirAsia Plane Is Thought To Have Crashed Near An Indonesian Island. An AirAsia plane that went missing during a flight to Singapore is thought to have crashed near the Indonesian island of Belitung, an official from Indonesia's National Search and Rescue Agency told local news outlets. AirAsia shares fell about 8% in Malaysia on Monday.

Sony Made $15 Million (£9.63 Million) In Online Sales Of The Interview In Its Opening Weekend. Sony announced Sunday night that "The Interview" was downloaded or rented online more than 2 million times, generating over $15 million in sales. Sony had initially pulled the film from general release after the company was hacked.



Read more: http://www.businessinsider.com/european-markets-open-27-dec-2014-2014-12#ixzz3NHqi1otc

[xchrom]

12. Markets Are Up In Asia

http://www.businessinsider.com/r-asia-follows-wall-street-up-euro-wobbles-before-greek-vote-2014-12

TOKYO (Reuters) - Asian stocks tip-toed higher on Monday, following fresh gains on Wall Street, while the euro wallowed near 28-month lows versus the dollar on nervousness ahead of a vote in the Greek parliament that could result in snap elections.

MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> edged up 0.1 percent.

Tokyo's Nikkei <.N225> climbed 0.4 percent and Australian shares <.AXJO> rose 0.6 percent.

The Dow <.DJI> and S&P 500 <.SPX> both closed at new record highs on Friday after a broad rally.

The euro stood little changed at $1.2173 <eur=>, not far from its lowest since August 2012, at $1.2165, hit the previous week.



Read more: http://www.businessinsider.com/r-asia-follows-wall-street-up-euro-wobbles-before-greek-vote-2014-12#ixzz3NHrCHEXi

[xchrom]

13. Oil Prices Rally As Tensions Heat Up In Libya

http://www.businessinsider.com/r-us-oil-climbs-above-55-a-barrel-on-renewed-libyan-tensions--2014-12

SINGAPORE (Reuters) - U.S. crude rose more than $1 in early Asian trade on Monday, reversing a fall in the previous session as escalating clashes in Libya threatened oil exports and supply disruptions from the OPEC member.

Both U.S. crude and Brent climbed on renewed geopolitical concerns and the possibility of increased demand for oil on new fiscal stimulus packages by China and Japan.

Forces loyal to Libya's recognized government launched air strikes on the western city of Misrata on Sunday in apparent retaliation against a missile attack last week which started a fire at Es Sider, one of the OPEC producer's largest export terminals.

More than 800,000 barrels of crude - at least two days production - was destroyed by the fire which continued to engulf three storage tanks, the National Oil Corporation said on Sunday. Libya's total oil production stands at 385,000 barrels per day, it added.



Read more: http://www.businessinsider.com/r-us-oil-climbs-above-55-a-barrel-on-renewed-libyan-tensions--2014-12#ixzz3NHreIoqo

[xchrom]

14. Illinois Risks Default If It Doesn’t Tackle Its Public Pension Crisis

http://www.businessinsider.com/illinoiss-public-pension-crisis-2014-12

Bruce Rauner, a Republican, liked to talk tough about unions and public-sector pensions when he was campaigning for governor in Illinois.

"The system is full of fraud and self-dealing and abuses, such as folks who have a pay rise in the last years of their career [so their pension is higher] or folks who moved in and out of certain jobs, so they could get a pension," he said in August 2013.

With two or three pensions, some are making as much as half a million dollars in retirement pay, he claimed. This, he thundered, is a rip-off of taxpayers and other workers.

But as soon as Mr Rauner was elected last month, the self-made millionaire toned down the rhetoric. The size and complexity of the public-pension mess suddenly hit him, and, aware that he had to bring together Democrats, unions and creditors, he began to backtrack.



Read more: http://www.businessinsider.com/illinoiss-public-pension-crisis-2014-12#ixzz3NHsAW9fZ

[xchrom]

15. GLOBAL STOCKS UP AS OIL PRICE REBOUNDS

http://hosted.ap.org/dynamic/stories/F/FINANCIAL_MARKETS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-12-29-04-51-11

KEEPING SCORE: France's CAC-40 gained 0.2 percent to 4,304.35, while Germany's DAX declined 0.3 percent to 9,891.62, as trading resumed following a four-day break for Christmas. Wall Street looked set for gains, with futures for the Dow Jones industrial average and Standard & Poor's 500 index both up 0.1 percent. On Friday, the Dow added 0.1 percent, while the S&P rose 0.3 percent.

ASIA'S DAY: Hong Kong's Hang Seng index gained 1.8 percent to 23,761.29 points and the Shanghai Composite Index added 0.3 percent to 3,168.02. India's Sensex rose 0.7 percent to 27,439.68. Sydney, Singapore and Manila also rose. South Korea's Kospi was off 1 percent at 1,927.86.

CHINESE BANKING: China's official Xinhua News Agency reported Sunday that regulators will change accounting rules for bank deposits to free up more money for lending. That could help to boost economic growth that slumped to a five-year low in the latest quarter. The report came after government data on Saturday showed profits for China's biggest industrial companies fell 4.2 percent in November from a year earlier, accelerating from the previous month's 2.1 percent decline. Stocks for China's state-owned banks rose on expectations of higher interest income from bigger lending.

ANALYST'S TAKE: "Asian equities are off to a great start to the week, with investors growing increasingly optimistic about China deploying stimulus. Chinese equities are leading the way, with solid gains for the Hang Seng and Shanghai Composite," strategist Stan Shamu of IG Markets said in a report.

RUBLE TROUBLES: Russia's currency fell 4 percent on Friday, breaking a five-day rally. Russian monetary officials have made stabilizing the currency a priority amid slumping oil revenues and unease about the country's economic outlook. Mizuho Bank warned in a report that this "may not be the end of the troubles" for the Russian economy.

[xchrom]

16. U.S. Bond Sentiment Worst Since Disastrous ’09 as Fed Shifts

http://www.bloomberg.com/news/2014-12-29/u-s-bond-sentiment-is-worst-since-disastrous-09-as-fed-shifts.html

Get ready for a disastrous year for U.S. government bonds. That’s the message forecasters on Wall Street are sending.

With Federal Reserve Chair Janet Yellen poised to raise interest rates in 2015 for the first time in almost a decade, prognosticators are convinced Treasury yields have nowhere to go except up. Their calls for higher yields next year are the most aggressive since 2009, when U.S. debt securities suffered record losses, according to data compiled by Bloomberg.

Getting it right hasn’t been easy. Almost everyone who foresaw a selloff this year as the Fed ended its bond buying was caught off-guard as lackluster U.S. wage growth and turmoil in emerging markets propelled Treasuries to the biggest returns since 2011. Now, even as the bond market’s inflation outlook tumbles, forecasters are sticking to the view that Treasuries are a losing proposition as the economy strengthens.

“Next year should be the break-out year finally,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd., said by phone from New York on Dec. 23. “The market is ignoring the rhetoric that Yellen and the FOMC is getting closer and closer to tightening. The market has it wrong.”

[xchrom]

17. China Tackles First-World Quandary as $800 Billion Lending Freed

http://www.bloomberg.com/news/2014-12-29/china-first-world-quandary-exposed-as-800-billion-lending-freed.html

China’s central bank is joining the balancing act of developed-world counterparts as it extended its toolkit to free up at least $800 billion in funds for lenders, seeking to support growth without inflaming financial risk.

The world’s largest emerging economy will broaden the definition of a deposit in 2015, boosting the lending capacity of Chinese banks that have to cap loans at 75 percent of funds held. The relaxation, reported by the official Xinhua News Agency yesterday, could make an additional 5 trillion yuan ($800 billion) to 5.5 trillion yuan available, according to analysts at Credit Agricole CIB and Guotai Junan Securities Co.

“Beijing is trying to stimulate lending and they are trying not to use strong measures,” said Dariusz Kowalczyk, an economist at Credit Agricole CIB in Hong Kong. “Policy makers across the globe are trying to boost demand by increasing bank lending, especially to businesses, so in this sense China’s efforts to boost lending fit well into the picture.”

Central bankers worldwide are hunting for new ways to stimulate investment as elevated debt levels in developed nations stifle governments’ scope to respond and record-low borrowing costs limit room for monetary maneuvering. As global policy makers grapple with concern that asset bubbles are a by-product of increased liquidity, the People’s Bank of China’s challenge is supporting growth sufficiently to avoid political discontent while discouraging a renewed borrowing binge.

[xchrom]

18. Saudi Arabia Said to Plan Stock Market Opening in April

http://www.bloomberg.com/news/2014-12-28/saudi-arabia-said-to-plan-bourse-opening-to-foreigners-in-april.html

Saudi Arabia is seeking to open its $509 billion stock exchange to foreign investors in April, according to three people briefed on the country’s plans.

The Capital Market Authority informed brokers and fund managers of the timeline in London last month, two of the people said, asking not to be identified as the meeting was private. Saudi Arabia isn’t planning significant changes to draft rules published in August, the people said. The country announced in July that it would open the market in the first half of 2015.

The world’s biggest oil exporter is removing barriers to one of the world’s most-restricted major stock exchanges as it pursues a $130 billion spending plan to boost non-energy industries. Opening the market may prompt MSCI Inc. to include the bourse in its emerging market gauge by 2017, luring as much as $40 billion of foreign cash, Schroders Plc. said in July.

A spokesman for the CMA said yesterday that the regulator continues to expect the market to open to foreign investors in the first half of next year, though no specific date is set.

[xchrom]

19. China to Ease Tax Pressure on Oil Producers After Prices Plummet

http://www.bloomberg.com/news/2014-12-29/china-to-ease-tax-pressure-on-oil-producers-after-prices-plummet.html


China moved to cut oil company tax bills as crude prices headed for the biggest annual decline since 2008, sparking gains by producers led by PetroChina Co.

China will raise the level for the windfall tax on output to $65 a barrel, from $55, starting Jan. 1, according to a Dec. 26 finance ministry statement. Nomura Holdings Inc. expects China to boost the threshold again to $75 in a year.

“It’s an encouraging policy move by the government because the oil price slump is putting a lot of pressure on cash flow,” Gordon Kwan, Nomura’s Hong Kong-based head of regional oil and gas research, said by phone. “China needs to reduce the windfall profit tax to accommodate struggling producers. Otherwise there’s a lack of incentive to invest.”

Raising the tax threshold would increase profits of China’s biggest oil companies by at least 10 percent next year, if other factors are unchanged, according to UOB Kay Hian Ltd.

[xchrom]

20. The 94% Plunge That Shows Abenomics Losing Global Investors

http://www.bloomberg.com/news/2014-12-28/the-94-plunge-that-shows-abenomics-is-losing-global-investors.html

Foreign investors have had just about enough of Abenomics.

After pumping record amounts of cash into Japanese shares last year, they’ve hardly added to holdings in 2014. Inflows are down 94 percent this year to 898 billion yen ($7.5 billion), on pace for the smallest annual amount since the 2008 global financial crisis. The month of April 2013 alone registered almost three times as much foreign investment in the stock market as all of 2014.

These figures provide the clearest look at how global investors have become disillusioned with Prime Minister Shinzo Abe after he pushed through a tax increase in April that sent Japan into recession. Fund managers from Sumitomo Mitsui Trust Bank Ltd. to MV Financial say to lure investors back, Abe needs to move beyond short-term stimulus and start enacting the structural changes he laid out in his initial plan, dubbed Abenomics, to end Japan’s two-decade economic malaise.

“We need to see a framework where growth isn’t dependent on monetary easing,” Ayako Sera, a market strategist at Sumitomo Mitsui Trust, which oversees $325 billion in assets. “If not growth, then at least a way to increase productivity. For now there’s nothing like that, so I imagine it’ll be hard for stocks to keep going higher and for foreigners to take an interest in them.”

[Demeter]

24. Yen Swaps Spur Biggest Global Demand for Japan Bonds Since 2007

INSTEAD OF BUYING SHARES IN JAPANESE COMPANIES, THE PLAY IS CURRENCY SPECULATION...

THAT OUGHT TO PUT JAPAN IN A SWIVET.

http://www.bloomberg.com/news/2014-12-28/yen-swaps-spur-biggest-global-demand-for-japan-bonds-since-2007.html

Foreign investors are buying Japanese government bonds at the fastest pace since the start of the financial crisis as they profit from currency swap trades.

Overseas funds bought a net 8.1 trillion yen ($67 billion) of medium- and long-term JGBs in the first 11 months of this year, the most since they purchased a record 10 trillion yen in 2007. They were net buyers for the fourth-consecutive week up to Dec. 19, even after Moody’s Investors Service lowered the nation’s debt rating at the start of the month.

International investors are joining Japanese insurers and other domestic buyers overlooking warnings about the nation’s credit risk as they profit from swapping foreign currencies into yen and then investing the proceeds in JGBs. Ten-year yields fell past a record set in April 2013 when the Bank of Japan started unprecedented easing to reach an inflation target.

“JGBs look attractive to foreign investors because you can get a premium via basis swaps,” said Shuichi Ohsaki, a rates strategist in Tokyo at Bank of America Merrill Lynch, one of the primary dealers obliged to bid at government auctions. “At a time when long-term yields remain low internationally, JGBs have added support from the BOJ’s quantitative-easing program, so you don’t have to worry about prices collapsing.”

[Demeter]

23. Thanks X! Sounds like the Big Unwind is about to Commence

There will be much wailing and gnashing of teeth in the New Year, I predict.

We will see who is left standing when it's all over, this time next year.

[xchrom]

26. i think we should collectively move to france. nt

[Demeter]

28. Why France? Personal Preference?

I've never been....

[xchrom]

31. it's heaven...and most of your neighbors will be very socialist minded.

the french are marvelously skeptical folks -- very community minded.

and the food? to die.

[kickysnana]

37. Alright I'm in. I know some French & have a distant cousin who owns a champaign grape vineyard.

[Demeter]

25. Yanis Varoufakis: The Euro’s First Inkling – A Piece in Lieu of Best Wishes for 2015

By Yanis Varoufakis, a professor of economics at the University of Athens. Originally published at his website: http://yanisvaroufakis.eu/2014/12/26/6265/

As 2015 is approaching, seemingly pregnant with crucial challenges for Europe, the euro and all those who have to live with it, I could not think of a better seasonal offering for readers of this blog than a suitable extract from my next book. I chose a piece that narrates, and interprets, the story of the first time the euro was proposed in the highest echelons of European decision making. Hope you enjoy it.

With wishes for a 2015 worth remembering fondly.

An Indecent Proposal

Kurt Schmücker was a man not given to strong emotions. But on the morning of March 23rd 1964 he could hardly trust his ears and only barely managed to contain his astonishment.

As Germany’s Minister of the Economy, Herr Schmücker was used to meeting, regularly, with his French counterpart, Valerie Giscard d’ Estaign, President Charles De Gaulle’s finance minister and a man who would, ten years later, become President of France himself. So, when Giscard dropped by his Bonn office, for a two-hour chat, Minister Schmücker was relaxed, anticipating another anodyne meeting, like all previous get-togethers whose real purpose was to put on a show of European unity between the two erstwhile foes shouldering the burden of constructing a European Union at the early stages of its development.(ii)

Schmücker and Giscard normally exchanged polite views on how each saw the economic policies of the other, on how the two countries dealt with movements of money across their borders, on interest rates and trade balances, on their attitudes toward taxing business and, of course, on their joint efforts at cementing a European Union still in its infancy. Occasionally they would also swap tales of woe on their tense relations with their own central bankers, the Bundesbank and the Banque de France. Nothing, in other words, that might have prepared Herr Schmücker for what he was about to hear. But, that morning, once the obligatory niceties had been dispensed with, Giscard came out with a shocking proposal: France and Germany should create a common currency, inviting the other four members of the European Union to join in when and if they were ready.

It took Schmücker a few moments to recover his composure. What on earth was the aristocratic Frenchman saying? Germany and France sharing the same banknotes, the same coins, the same Central Bank? Which one? The Bundesbank? For heavens sake!, he is certain to have cried out inside his own head. Outwards, he put on a face of somber iciness, pretending not to have been taken aback. Indeed, the record shows that he responded as if he had not heard the earth-shattering proposition. Why not be more modest, he countered? Why don’t we just try to stabilize our exchange rates through our central banks and on the basis of (a conservative German’s wet-dream) “strict discipline” and “contractual rules”?(iii)

Giscard was having none of it: “Why choose this system which works only as long as everybody goes along?”, he rIposted energetically, adding that his proposal was coming from the very top – from President Charles De Gaulle himself. Flabbergasted, Schmücker tried to alert France’s Minister of France to the deeper meaning of what De Gaulle was proposing: France was proposing to forfeit its national sovereignty! Was Paris serious about that? Giscard neither confirmed nor denied Schmücker’s obvious point. He bypassed it by urging quick action so that a common Franco-German currency be created forthwith, leaving it open to other European Union members to join in.

And so it was that a common European currency was first tabled, briefly discussed, and spectacularly… ignored. Schmücker knew that this was not an issue he had any authority to get seriously involved with. So he dutifully passed De Gaulle’s proposal on to Ludwig Erhard, his Chancellor.

Upon reading Schmücker’s brief, Dr Erhard smelled a rat. France could not possibly be giving up so light-heartedly its power to set taxes, to spend public funds, to set interest rates, to pursue its beloved “planification”. De Gaulle must have been up to something, again, thought Erhard. After all, the only reason Ludwig Erhard had risen to the highest office in Germany, a few short months earlier, was because of his role in frustrating President De Gaulle’s designs.(iv) This outrageous common currency proposal, thought Erhard, could only be made sense of as a continuation of those same designs.

Unwilling to enter into an official, public confrontation with France, Chancellor Erhard dutifully… “misplaced” Schmücker’s brief and pretended never to have received it. Nevertheless, when in 1966 he was forced out of the Chancellery, amongst the very few papers that Erhard took with him into retirement was that brief – a memento of the euro’s first official inkling.(v)



NOTES

(i) Kurt Schmücker was not atypical of the Christian Democrats that ruled W. Germany uninterruptedly from 1949 until 1969. At the tender age of 18, in 1937, he joined the Nazi party and, three years later, went to war, serving in the Wehrmacht till the bitter end. A year after the war had ended, he joined the Christian Democrats and became the party’s youngest member of Federal Parliament in the 1949 elections. In 1963, after Ludwig Erhard (an accomplished economist who had been Minister of Finance since 1949 and had overseen Germany’s most impressive economic reconstruction, 1949-1963) became Germany’s Chancellor, Schmücker took over the Ministry of Economics. Having only completed a publishing course, Schmücker nursed much anxiety about his capacity to take over Erhard’s role. As it turned out, both men (Erhard and Schmücker) were booted out of government in 1966, as a result of Germany’s first post-war recession which was, arguably, engineered for political purposes by the nation’s Central Bank – the fierce Bundesbank – see below.

(ii) At the time, the European Union was called the European Economic Community (EEC) and comprised six members, the signatories of the Treaty of Rome (signed on March 25th 1957): Germany, France, the Netherlands, Luxemburg, Belgium and Italy. The EEC was renamed European Union in the Treaty of Maastricht, November, 1st, 1993 – at the same time that the rules governing the common currency, the euro, were agreed to. In this book I shall be referring to the EEC as the European Union, for purposes of continuity.

(iii) Their conversation began with Schmücker addressing Giscard’s concerns that free trade within the European Union would create trade imbalances that would destabilize the exchange rate between the franc and the Deutsch mark. He suggested that EU (or EEC as it was then called) members should sign a formal contract and abide by agreed rules of contact regarding government fiscal and monetary policies so that the system could be stable. Giscard had other thoughts: (The dialogue below is quoted in Schoenborn, 2014):

Giscard: This is too little! We have not yet talked about it in the government, but de Gaulle has told me that dangerous developments as we are now experiencing cannot be avoided or overcome without a common currency of the EEC countries. We need a single currency for the EEC! (N.b. emphasis added)

Schmücker: In order to achieve the same effect, the currencies can also be maintained nominally while the monetary policies of the individual Member States are put under strict discipline through contractual rules.

Giscard: Why choose this system, which works only as long as everybody goes along?

Schmücker: I am just looking for a successful method without obliging France to renounce her sovereignty. A single EEC currency would be a supranational matter. So far France has been speaking out against any kind of supranational arrangement.

Giscard: De Gaulle has told me explicitly that he deems a single EEC currency necessary. He takes the view that no other way remains. If one state repeatedly pushes another into inflation, the only ones to benefit are the Socialists.

Schmücker: What do we do, if the other four will not join in? The creation of a monetary union is a decisive political step forward. Once the monetary union is accomplished, further political consequences will automatically ensue. Erhard’s attempts to advance the political union have not produced the desired response from all governments. Hence we can expect that the proposal will be skeptically received. Or do you imagine that France and Germany should forge ahead?

Giscard: An agreement between France and Germany should be considered only if the others do not participate. In this case the agreement must be drafted in such a way that others will have the option, both legally and practically, to join in at any time

(iv) See below for a full account of De Gaulle’s “designs” that Erhard frustrated, and thus became Germany’s Chancellor.

(v) See Schoenborn, 2014.


MUCH MORE AT LINK...FASCINATING TALE OF HISTORY

[Demeter]

27. U.S. Midterm Election Voter Turnout at Pre-Civil War Level

http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=12888

video at link

[Demeter]

29. The Second-Worst Currency in 2014 is Ukraine’s – The Worst Is Bitcoin

https://www.cryptocoinsnews.com/second-worst-currency-2014-ukraines-worst-bitcoin/

The world’s second-worst currency this year is Ukraine’s hryvnia. Being at war with a nuclear-endowed superpower is an expensive business, and Ukraine’s economy is crippled even after an international bailout worth $17 billion.

And the worst is Bitcoin, Bloomberg View reports:

“Bitcoin is second only to gold on the list of topics guaranteed to arouse the wrath of the Internet trolls. Yet relentless promotion can’t hide these facts: The digital currency peaked at a value of $1,130 just over a year ago. Its plunge of more than 56 percent in 2014 makes it the world’s worst performing currency this year, according to Bloomberg, which tracks 175 foreign-exchange values.”

The author of this provocative article, Bloomberg View columnist and member of the Bloomberg View editorial board Mark Gilbert, says:

“Most of Bitcoin’s supporters seem to be hackers whose resources depend upon the Ponzi-scheme nature of the enterprise itself.”

Gilbert is entirely missing the point, but he isn’t alone. Many Bitcoin supporters who should know better make the same mistake – they think that Bitcoin price is what matters most, but it is what matters least.

Bitcoin transactions have been steadily rising in 2014, and the trend continues to point upward. That means people are starting to use Bitcoin to do things, buy more and more goods and services, as opposed to holding Bitcoin for speculation. As CCN observed in September, use drives down price. But use makes Bitcoin important and encourages more and more venture capital and corporate investments in cryptocurrencies. That’s why in 2014 Bitcoin has been a bad investment for speculators, but a very good investment for venture capitalists.

[Demeter]

30. Martin Hutchinson Predicts 2015 ‘Demise’ of Bitcoin

https://www.cryptocoinsnews.com/martin-hutchinson-predicts-2015-demise-bitcoin/

Retired investment banker and former US Treasury adviser to Croatia Martin Hutchinson recently penned a hit piece in which he made clear two things. One, he does not understand how Bitcoin mining works and two, this lack of understanding leads him to believe that Bitcoin will fall flat on its face in 2015. In his article for the Reuters Breakingviews site, he uses outdated metrics as well as a clearly weak understanding of how cryptocurrency works to make this prophecy.

Bitcoin is controlled not by a state but by an underlying algorithm by which participants can “mine” bitcoins through solving mathematical problems. […] As a reward, miners receive more bitcoins, distributed randomly.

No mention here of the finding of blocks and how that effects the payment. Indeed, a mining pool who finds a block receives the full 25 Bitcoins generated and then distributes it to the miners involved, a process that is not random at all. However, Hutchinson makes even more clear that his information is quite outdated in the following passage:

Assuming miners are risk-averse, the system slants toward monopoly. This theoretical tendency is validated by the current bitcoin setup, in which a single mine, GHash.IO, which pools the interests of individual participants, currently controls about 39 percent of mining activity, according to Blockchain.com.

As the below chart illustrates, Ghash.io has not been the dominant miner for some time, and further nobody at present is controlling more than 25%. As of this writing, Discus Fish is up to a mere 21%, which is nothing compared to the well over 40% that Ghash.io was controlling when everyone was up in arms about them earlier this year...

OY VEH! MORE CONFUSION AT LINK

[Demeter]

32. Bill Black: Mortgage Appraisal Fraud is Baaack…Because Bank Execs Profit From It

http://www.nakedcapitalism.com/2014/12/bill-black-mortgage-appraisal-fraud-baack-bank-execs-profit.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Originally published at New Economic Perspectives

The Financial Crisis Inquiry Commission (FCIC) report described one of three epidemics of accounting control fraud that drove the financial crisis in these terms.

“Some real estate appraisers had also been expressing concerns for years. From 2000 to 2007, a coalition of appraisal organizations circulated and ultimately delivered to Washington officials a public petition; signed by 11,000 appraisers and including the name and address of each, it charged that lenders were pressuring appraisers to place artificially high prices on properties. According to the petition, lenders were ‘blacklisting honest appraisers’ and instead assigning business only to appraisers who would hit the desired price targets” [FCIC 2011: 18].

The FCIC Report then documents scale of this epidemic of loan origination fraud.

One 2003 survey found that 55% of the appraisers had felt pressed to inflate the value of homes; by 2006, this had climbed to 90%. The pressure came most frequently from the mortgage brokers, but appraisers reported it from real estate agents, lenders, and in many cases borrowers themselves. Most often, refusal to raise the appraisal meant losing the client. [FCIC 2011: 91].

A clarification is in order. The “client” was rarely the buyer because, for obvious reasons, we do not allow the borrower to select the appraiser. Even moderately-sized lenders have vastly greater power to successfully extort appraisers than does any residential borrower. It may be true that “many” borrowers tried to “pressure” appraisers to increase the appraisal, but the overwhelming source of such pressure was from lenders and their agents and virtually all of the successful pressure came from lenders and their agents.

Then New York State Attorney General Andrew Cuomo’s investigation confirmed that the largest mortgage lenders were leading the extortion of the appraisers to inflate appraised values.

In 2007the New York State attorney general sued First American: relying on internal company documents, the complaint alleged the corporation improperly let Washington Mutual’s loan production staff ‘’hand-pick appraisers who bring in appraisal values high enough to permit WaMu’s loans to close, and improperly permit WaMu to pressure …. appraisers to change appraisal values that are too low to permit loans to close” [FCIC 2011: 92].

These three findings allow us to understand a great deal about the mortgage appraisal fraud epidemic.

• Appraisal fraud was endemic
  
• Appraisal fraud was led by the controlling officers of lenders and their agents
  
• No honest lender would ever coerce, or permit, the inflation of the appraised value because the home’s true value provides a critical protection to the lender
  
• The lenders’ controlling officers were deliberately creating a “Gresham’s” dynamic in which bad ethics drives good ethics out of the appraisal profession
  
• Honest lenders’ controlling officers could easily block such a Gresham’s dynamic by creating desirable financial incentives and internal controls that will block inflated appraisals
  
• Appraisal fraud optimizes accounting control fraud by lenders (and loan purchasers)

BILL BEATING UP THE WSJ AND THE MORTGAGE LENDERS...

[mrdmk]

34. K & R, some important stuff here

[Demeter]

36. You want real news, Tansy's is the place to go, every day the markets are open

It's one of the few oases of reality and importance left on DU3.

[MattSh]

35. America the Delusional - KUNSTLER

Yeah, I gave it a different headline. The original one sucked...

The Trigger | KUNSTLER

The futility of politics in America these days has driven the public into exactly the dream-state of zombie blood-lust depicted in so many popular video fantasies, a nightmare of decay, powerlessness, and degeneracy matching the actual condition of a disintegrating polity that has lost collective consciousness and seeks only to infect the dwindling numbers of the still-sentient. Almost nobody in this country believes we can manage our affairs anymore.

Well, can we? One of the hallmarks of an imploding culture is that people lose a sense of consequence. Things just seem to happen and unhappen, and nobody really cares about chains of decision and event. Anything goes and nothing matters.

One reason this is happening to us is that we allowed reality to be divorced from truth. Karl Rove wasn’t kidding back in the Bush-2 days when he quipped that “we create our own reality.” The part old Karl left out is that there’s a price for doing that. In the short run, it allows you to pretend that you have superpowers and can act in defiance of the way things really are. In the longer run, your view of the world comports so poorly with the facts of the world that things stop working.

The tragedy of Barack Obama is that he continued the basic Karl Rove doctrine only without bragging about it. I don’t know whether Mr. Obama was a hostage, an empty suit, or a fool, but he broadened and deepened the acquiescence to lying about just about everything. Did criminal misconduct run rampant in banking for years? Oh, nevermind. Is the US economy actually contracting instead of recovering? We’ll just make up better numbers. Did US officials act like Nazi war criminals in torturing prisoners? Well, yeah, but so what? Did the State Department and the CIA scuttle the elected Ukrainian government in order to start an unnecessary new conflict with Russia? Maybe so, but who cares? Was the Affordable Care Act a swindle in the service of insurance and pharmaceutical racketeering? Oh, we’ll read the bill after we pass it. Shale oil will make us “energy independent.” (Not.)

Complete story at - http://kunstler.com/clusterfuck-nation/5336/