STOCK MARKET WATCH -- Monday, 6 April 2015

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Monday, 6 April 2015[font color=black][/font]

SMW for 2 April 2015

AT THE CLOSING BELL ON 2 April 2015
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Dow Jones 17,763.24 +65.06 (0.37%)
S&P 500 2,066.96 +7.27 (0.35%)
Nasdaq 4,886.94 +6.71 (0.14%)


[font color=red]10 Year 1.91% +0.04 (2.14%)
30 Year 2.54% +0.05 (2.01%) [font color=black]


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Matt Taibi: Secret and Lies of the Bailout


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[font color=black][font size=2]Handy Links - Videos:[/font][/font]
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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]

[Crewleader]

1. Robert Reich on facebook

The imbalance of wealth and power in our system is compounding. Those with great wealth are rigging the economic game through their lobbing, political contributions, and propaganda machines. (They’re close to repealing the estate tax; close to getting the Trans-Pacific Partnership; Wall Street is rolling back the Dodd-Frank law; hedge-fund managers keep their “carried-interest” tax loophole; Big Oil continues fracking despite its environmental damage).

All this gives them even more wealth, which further empowers them to rig the game, leading to further wealth. (The Koch political machine alone has raised almost $1 billion for the upcoming election.)

Average Americans, meanwhile, are falling further behind. (Wages are still going nowhere; pensions are disappearing; more workers are “independent contractors” with no Social Security, minimum wage, workers’ compensation, 40-hour workweek, or unemployment benefits; college costs are skyrocketing, as is student debt; childcare costs are exploding; state sales taxes are rising even as income taxes on the rich are falling.)

Why isn’t this growing imbalance of wealth and power being talked about? Why isn’t the media focusing on it? Why aren’t presidential aspirants mentioning it?

https://www.facebook.com/RBReich

[Demeter]

2. New Ukrainian Bill Threatens to Intern Russians Citizens Living in Ukraine

NOT JUST GOING AFTER PUTIN ANYMORE--BUT THEN, THEY NEVER WERE

http://sputniknews.com/europe/20150404/1020473399.html


Russian citizens living in Ukraine can be interned in line with the bill on "The legal regime of martial law", submitted by Ukrainian President Petro Poroshenko to his country's parliament on Friday. According to a memorandum to the bill, "measures on the legal regime of martial law include internment (forced settlement) of nationals of a foreign state which threatens to attack or carries out aggression against Ukraine. On January 27, the Ukrainian parliament adopted a bill recognizing Russia as an aggressor country.

In February, the amendments to the bill on martial law were endorsed by the National Security and Defense Council of Ukraine, which stressed the necessity of the new document being in line with current realities.

In late December 2014, President Poroshenko said that a martial law would be introduced if the ceasefire agreement on eastern Ukraine was violated. "No one will doubt even for a minute", the Ukrainian President said at the time.

A set of measures for a peaceful settlement of the conflict on the territory of Ukraine's Donbass region was reached during talks in the Belarusian capital Minsk on February 12. The parties agreed on a ceasefire and the withdrawal of artillery from the frontline of contact, as well as the exchange of prisoners. The ceasefire regime, which has been in force in Donbass since February 15, is generally being observed, although though there are reports of shootings in some areas.

[Demeter]

3. Ukrainian government approves framework for $15 billion debt-swap

http://www.reuters.com/article/2015/04/04/us-ukraine-crisis-debt-idUSKBN0MV0CE20150404

The Ukrainian government approved on Saturday the framework for Ukraine's debt restructuring operation through which it aims to generate $15.3 billion, the Finance Ministry said in a statement. Ukraine is due to start talks on a fast-track debt swap with investors including Franklin Templeton, PIMCO and Blackrock as part of a $40 billion bailout approved with the International Monetary Fund last month. The Finance Ministry reiterated that Kiev wants a deal in place by end-May, before the IMF carries out its June review.

"As per the IMF Program, negotiations with creditors must be finalised by 1st review (in May 2015)," it said.

It gave no new details on what terms Kiev would propose to investors in talks. Talks were expected to start last week, but on Wednesday creditors said Ukraine had yet to send the restructuring proposals to bondholders.

The three targets of the debt operation are to generate $15.3 billion in savings, bring the public and publicly-guaranteed debt-to-GDP ratio under 71 percent by 2020 and keep the budget's gross financing needs at an average of 10 percent of GDP in 2019-2025, the Finance Ministry said.

Ukraine has included all outstanding Eurobonds placed before February 2014 in the debt operation.

[Demeter]

9. Mysterious Deaths in Ukraine By William Blum

https://consortiumnews.com/2015/04/03/mysterious-deaths-in-ukraine/

The mainstream U.S. news media is so in the tank for the post-coup Ukrainian government that anything negative – from neo-Nazi militias to apparent “death squad” operations – is ignored, including a string of mysterious deaths of anti-coup politicians...

Following the murder of Russian opposition leader, and former Deputy Prime Minister, Boris Nemtsov in Moscow on Feb. 27, the West had a field day. Ranging from strong innuendo to outright accusation of a Kremlin-directed political murder, the Western media and politicians did not miss an opportunity to treat Russian President Vladimir Putin as a football practice dummy. The European Parliament adopted a resolution urging an international investigation into Nemtsov’s death and suggested that the Organization for Security and Cooperation in Europe, the European Council, and the United Nations could play a role in the probe. U.S. Senators John McCain and Lindsey Graham introduced a Senate Resolution condemning the Nemtsov murder. The Resolution also called on President Barack Obama and the international community to pursue an independent investigation into the murder and redouble efforts to advance free speech, human rights, and the rule of law in Russia. In addition, it urged Obama to continue to sanction human rights violators in the Russian Federation and to increase U.S. support to human rights activists in Russia.

So it went … all over the West. Meanwhile, in the same time period in Ukraine, outside of the pro-Russian area in the southeast, the following was reported:

–Jan. 29: Former Chairman of the local government of the Kharkov region, Alexey Kolesnik, hanged himself.

–Feb. 24: Stanislav Melnik, a member of the opposition party (Partia Regionov), shot himself.

–Feb. 25: The Mayor of Melitopol, Sergey Valter, hanged himself a few hours before his trial.

–Feb. 26: Alexander Bordiuga, deputy director of the Melitopol police, was found dead in his garage.

–Feb. 26: Alexander Peklushenko, former member of the Ukrainian parliament, and former mayor of Zaporizhi, was found shot to death.

–Feb. 28: Mikhail Chechetov, former member of parliament, member of the opposition party (Partia Regionov), “fell” from the window of his 17th floor apartment in Kiev.

–March 14: The 32-year-old prosecutor in Odessa, Sergey Melnichuk, “fell” to his death from the 9th floor.

The Partia Regionov directly accused the Ukrainian government in the deaths of their party members and appealed to the West to react to these events. “We appeal to the European Union, PACE [Parliamentary Assembly of the Council of Europe], and European and international human rights organizations to immediately react to the situation in Ukraine, and give a legal assessment of the criminal actions of the Ukrainian government, which cynically murders its political opponents.”

We cannot conclude from the above that the Ukrainian government was responsible for all, or even any, of these deaths. But neither can we conclude that the Russian government was responsible for the death of Boris Nemtsov, the American media and politicians notwithstanding...

I WONDER IF THESE VICTIMS WERE INSURED BY JP MORGAN....

http://williamblum.org/

[Demeter]

4. Petrobras’s China Cash Stems Bond Tumble But Comes With a Stigma

http://www.bloomberg.com/news/articles/2015-04-05/petrobras-s-china-cash-stems-bond-tumble-but-comes-with-a-stigma

Brazil’s state-run Petroleo Brasileiro SA may be putting itself in the company of some of Latin America’s most distressed borrowers by turning to China for loans, but its bondholders don’t mind. They’re just thrilled to see the oil producer get its hands on $3.5 billion of cash. The company’s benchmark bonds rallied the most in more than three months after the agreement with China Development Bank Corp. was announced April 1, rebounding after falling to a record low in March.

Petrobras’s success in finding untraditional financing -- emulating moves by the junk-rated governments of Venezuela and Ecuador -- shows the company hasn’t been totally hamstrung by a corruption probe that cost the chief executive officer her job. It’s a rare piece of good news for a producer that has lost more than a third of its market value and seen its bond yields soar since November, when allegations surfaced that executives demanded millions of dollars in bribes for work contracts.

“At least investors can see that even if it has to be this way, Petrobras can still find ways to fund its short-term operations,” said Rafael Elias, a Latin America debt strategist at Credit Agricole SA. “Chinese loans have been flowing into troubled countries like Venezuela when other sources close up.”

While investors don’t want new securities from Petrobras, one of the biggest emerging-market bond issuer over the past four years, seeing other lenders willing to step up is easing their concerns about a potential cash shortfall. Yields on the company’s $2.5 billion of bonds due 2024 fell to 6.93 percent on Thursday, from a peak of 8.23 percent reached March 17.

[Demeter]

5. INDIA 100 foreign funds get tax demands; total bill may hit $10-bn

http://economictimes.indiatimes.com/news/economy/finance/100-foreign-funds-get-tax-demands-total-bill-may-hit-10-bn/articleshow/46812737.cms

In the biggest-ever tax demand slapped on them, nearly 100 foreign funds have been asked to cough up an estimated $5-6 billion for 'untaxed gains' made by them in the Indian markets over the past years.

The number of affected investors can rise substantially as assessments are still in progress and notices could be served in many more cases, taking the overall tax demand from them to well over USD 10 billion, sources said.

Spooked by these "retrospective" notices and assessment orders, the foreign investors have begun lobbying intensely with the policy makers and regulators, while stating that the move goes against the government's stated position of providing a 'non-adversarial and stable tax regime'.

Till March 31, close to 100 FIIs got notices from the Tax Department for a controversial Minimum Alternate Tax (MAT) of 20 per cent, while they are now being followed up with Assessment Orders. The FIIs have, however, decided to challenge the tax demands, stating that MAT cannot be levied on FIIs or FPIs as they do not earn any 'business income' in India and their income is defined as 'capital gains' under the I-T Act. These FIIs, many of whom have now converted themselves into Foreign Portfolio Investors (FPIs), include entities from the US and Europe as also those operating through Singapore, Hong Kong and Mauritius.

MORE

[Demeter]

6. Greece moves to quell default fears, pledges to meet 'all obligations'

http://www.reuters.com/article/2015/04/06/us-eurozone-greece-imf-idUSKBN0MX01D20150406

Greek Finance Minister Yanis Varoufakis said on Sunday that Greece "intends to meet all obligations to all its creditors, ad infinitum," seeking to quell default fears ahead of a big loan payment Athens owes the IMF later this week. Following a meeting with the head of the International Monetary Fund, Varoufakis told reporters the government plans to "reform Greece deeply" and would seek to improve the "efficacy of negotiations" with its creditors.

Greece has not received bailout funds since August last year and has resorted to measures such as borrowing from state entities to tide it over. It offered a new package of reforms last week in the hope of unlocking funds, but has yet to win agreement on the proposals with its EU and IMF lenders.

Most urgently, Athens is on the hook for a roughly 450 million euro ($494 million) loan repayment to the IMF due this Thursday. The interior minister suggested last week the government would prioritize wages and pensions over the IMF payment, although the government later denied that was its stance.

IMF Managing Director Christine Lagarde said in a statement after meeting with Varoufakis that she welcomed his confirmation that the loan payment due would be made on schedule...

MORE

[Demeter]

7. SEC Starts Issuing Wells Notices to Private Equity Firms

http://www.nakedcapitalism.com/2015/04/sec-starts-issuing-wells-notices-private-equity-firms.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Wall Street Journal reported that private equity firm Fenway Partners had received a Wells notice, which means the agency is planning to lodge an enforcement action. Bear in mind that Wells notices do not mean that an enforcement action is inevitable; as the Journal story points out, in about 20% of the cases, the recipient is able to muster enough of a defense so that the SEC does not move forward...Our source was quite disappointed that only one case has yet hit the press; he’s heard of quite a few more firms getting Wells notices. The SEC, quite sensibly, seems to be taking particular interest in zombie funds like Fenway. From the Journal account:

Between its founding and 2006, Fenway raised three buyout funds ranging in size from $500 million to $900 million. Despite some lucrative deals, the funds have been middling performers. None has returned better than 1.5 times investors’ money, according to public pension-fund data, and Fenway has told investors it wouldn’t raise another.

As with Fenway, zombies result when a private equity general partner has had such lackluster performance that it is unable to raise new funds. Recall the typical cycle of private equity: most firms launch a fund 4-5 years after their last offering (megafunds may offer specialized funds, such as sector or geographically focused funds, more often). But the life of most private equity funds is ten to fifteen years. So if a fund manager is effectively in runoff mode, his incentives are to milk his outstanding funds. It’s common for the fund to get rid of everyone save the founders and the bare minimum in the way of support roles so they can keep as much of the management fees for themselves as possible. And since they no longer have to worry about staying in the good graces of the limited partners, they are even more tempted to steal than most general partner are (recall that the SEC’s Andrew Bowden stated last May that more than half the firms they had examined thus far were engaged in serious misconduct).

While this news report does indicate that the SEC is starting to deliver on its repeated public statements that more private equity enforcement actions are in the pipeline, the Fenway case, like the earlier Lincolnshire settlement that we discussed at length, is troublingly consistent with the idea that the agency is primarily pursing smaller targets that won’t mount much in the way of a defense. Fenway, for instance, never raised particularly large funds. A zombie firm has no franchise to protect, and less in the way of ongoing cash flow to contest an SEC civil action, if things were to go that far. Thus for them, settling is a straight up economic calculation of the cost of paying the SEC what it wants versus incurring the legal costs of fighting back and the expected value of what the court would visit on them if they were to lose. And keep in mind that going after zombies does not threaten the vaunted reputation of the industry. These funds were losers performance-wise; the incumbents can take the position that the desperate actions of these losers has nothing to do with them. So this effort allows the SEC to burnish its image without getting major figures in the industry to pressure the SEC for alleged undue zealousness.

In fairness, the Journal story does point to evidence that the agency is also arm-wrestling with industry giant KKR, which was fingered by the Wall Street Journal for dubious billing practices by its captive consulting arm KKR Capstone, and by the New York Times for not sharing other types of fees as investors expected. But so far, KKR is the only major firm were there has been any public evidence of SEC action, when the agency was telling people privately that in private equity, unlike other areas it supervised, it was finding greater levels of misconduct among the larger players). Thus, we see no change from what we’ve expected: a few token actions against the big players, just as we saw one CDO case per major bank when they sold far more in the way of toxic CDOs, and far more concerted efforts against the small fry.

[Demeter]

8. JAPAN: 90% of small firms give pay raises in shunto

http://the-japan-news.com/news/article/0002057967

About 90 percent of labor unions at small and midsize manufacturers have won pay scale increases in this year’s “shunto” spring wage negotiations, an umbrella organization said Friday. Of the 132 labor unions that have received responses from the management side of such companies to their wage increase requests, 118 unions, or 89.4 percent, obtained positive answers for base salary hikes, up from 106 a year earlier, the Japan Council of Metalworkers’ Unions, or JCM, said.

The size of the pay scale increases averaged ¥1,922 per month, up sharply from the previous year’s ¥1,246. ($1=119.3¥)

Companies are fulfilling their social responsibility to a certain extent in contributing to realizing a virtuous economic cycle, said Yasunobu Aihara, president of the JCM, which comprises unions chiefly in the automobile, electronics, machine and steel industries.

But the proportion of labor unions that won pay scale increases declined when negotiation results at smaller businesses were taken into account.

Of the 1,214 unions that had requested higher base salaries, 68.4 percent, or 830 unions, received positive responses, according to the JCM’s overall tally

[Demeter]

10. British Companies Find Oil Off Falklands; Argentina Threatens Prosecution By Andy Tully

http://oilprice.com/Latest-Energy-News/World-News/British-Companies-Find-Oil-Off-Falklands-Argentina-Threatens-Prosecution.html

The UK and Argentina marked the 33rd anniversary of the start of their 10-week Falklands War with British energy companies announcing the discovery of oil and gas off the islands and the Argentine Foreign Ministry immediately countering with a threat of prosecution. The energy discovery at the Zebedee well about 200 miles north of the Falklands was announced by Premier Oil Plc. and Falkland Oil and Gas Ltd., the first strike in a regional drilling campaign that began last summer. The discovery included an oil reservoir 81 feet deep and a gas basin 55 feet deep.

The Zebedee well is part of a larger drilling enterprise by the British companies called Sea Lion, and uncertainty remains about its development for now, according to analysts at the US brokerage Stifel. “A full appreciation of the significance of today’s result may have to wait until the conclusion of the drilling campaign later this year,” they wrote.

Premier Oil owns 36 percent of the Zebedee well, and Falkland Oil and Gas owns 40 percent. A third British-listed company, Rockhopper Exploration, owns the remaining 24 percent.

The Falklands, which Argentina calls the Malvinas, have long been part of a tug-of-war between Buenos Aires and London, which both claim the islands in the South Atlantic off the Argentine coast. They have been under British control since 1841.

Argentine forces invaded them on April 2, 1982, and claimed them in an effort to establish sovereignty under Buenos Aires. Britain responded by sending a naval task force, and on June 14 Argentina surrendered, returning the islands to British control. The two countries eventually restored full diplomatic relations in 1989, but the ownership of the Falklands remains in dispute. Argentina was quick to react to the announcement of the oil and gas strike on April 2. Foreign Ministry officials in Buenos Aires said the British energy companies would face prosecution for what they called illegal operations in Argentine territory. President Cristina Fernandez de Kirchner condemned the British energy exploration as well. “Our land has always been invaded, first by the Spanish, then by the English,” she said during a speech in the Argentine city of Ushuaia.

The reaction from the British companies was, as expected, much more upbeat....For now, though, the Zebedee well will be plugged and left unused until the rig finishes their work at the three additional wells.

[Demeter]

11. 'Taper tantrum’ fear if eurozone QE is ended too early

THEY JUST STARTED QE EURO, AND THEY ARE ALREADY TALKING OF ENDING IT?

http://www.telegraph.co.uk/finance/economics/11516778/Fears-early-end-to-eurozone-QE-could-cause-second-taper-tantrum.html

The European Central Bank’s money-printing programme has only been running for one month, but already investors are expressing concern that it might be wound down too early, causing panic in financial markets. Designed to prop up the ailing euro area economy, the European Central Bank’s (ECB) €60bn (£44bn) a month of bond purchases is expected to be continued until the end of September 2016. Minutes of the central bank’s March policy meeting showed that officials “intended” to continue the scheme until this date.

But traders are worried about being caught out a second time by the ECB, which notoriously raised its interest rates in 2008 and 2011, exacerbating the eurozone debt crises at the time. Some are worried that the central bank could again remove the much-needed stimulus before its job is done.

Dario Perkins, chief European economist at Lombard Street Research, said that the QE scheme had already begun to work through depreciation of the euro and higher corporate earnings. If purchases were to be wound down early, then this “would unravel the corporate earnings story in Europe,” said Mr Perkins.

If the scheme ended sooner than expected, it could have knock-on effects for US Treasuries. “That could make emerging markets vulnerable,” Mr Perkins added. Some experts have cautioned that such a move would risk a “taper tantrum” episode for financial markets, similar to the turmoil prompted by the US Federal Reserve when it indicated that it would scale back its own asset purchases in the summer of 2013...

[Demeter]

13. Don Quijones: “Bad Bank” Mania Spreads in Europe

http://www.nakedcapitalism.com/2015/04/don-quijones-bad-bank-mania-spreads-europe.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

By Don Quijones, Spain & Mexico, editor at Wolf Street. Originally published at Wolf Street

One thing that the world is not in short supply of these days is bad banks. They are everywhere, it seems. But there are bad banks, and there are Bad Banks. This article is about the latter, the officially dubbed “Bad Banks” launched by governments and central banks to conceal the rising tide of triple-F toxic junk (derivatives, securitized debt, non-performing loans…) that threatens to engulf the world’s financial system. As Bad Banks go, few are as bad as Spain’s SAREB, the public-private company responsible for managing assets transferred from the four nationalized financial institutions BFA-Bankia, Catalunya Banc, NGC Banco-Banco Gallego, and Banco de Valencia.

In theory, SAREB was never meant to exist: “There will be no Bad Bank in Spain, and we will establish procedures that will not be burdensome for taxpayers.” Those were the famous words of Spanish PM Mariano Rajoy during the first few months of 2012. The promise was made on numerous occasions, and not just by Rajoy but also by his Minister of Economy (and former Lehman advisor) Luis de Guindos. But in politics, promises are not made to last; they are there to be broken. By December of that same year, Sareb was born and Spanish taxpayers were left holding the tab for the biggest bank bailout in Spanish history.

Fast forward to today. Sareb is hemorrhaging. In 2014 the firm’s total losses were €585 million, more than double the amount registered in 2013, its first full year of operations (€260.53 million). It’s a stark contrast from the rosy picture painted by KPMG, the firm hired by the government to draw up Sareb’s original business plan. According to KPMG, investor returns, based on “conservative estimates,” would be in the order of around 15%! Enough investors needed to be brought on board “to ensure that the participation of the FROB (the government’s Fund for Orderly Bank Restructuring) remained below 50%. That way, Sareb’s debt would not count as official public debt,” one source told Spanish financial news website El Confidencial. “To do that we had to reel them (investors) in with promises of really high returns,” said another....It’s an old plot with a familiar twist. One way or another, the taxpayers will be left holding a bag of worthless assets… until, of course, they can’t. Or unless the Bad Bank in question is an Austrian entity by the name of Hypo Alpe-Adria...Meanwhile, Europe’s Bad Banks continue to proliferate, to make room for the ever-rising tide of toxic financial waste. As I type these last words, a new Bad Bank is sprouting up in Andorra, to help hide BPA’s dodgy assets. And pressure continues to mount on Renzi’s government to create Italy’s first ever Bad Bank, to help conceal the €333 billion of non-performing loans festering on its banks’ books. The New York Times says it’s a “good idea.” Sure, but for whom? Not the taxpayer. That much we know.

[Demeter]

12. THAILAND Government gives seized plots to landless

http://www.bangkokpost.com/news/politics/518727/government-gives-seized-plots-to-landless

The government has started distributing land plots seized from those caught encroaching on national forest reserves as part of a project to help the landless poor. Following the May 22 coup, more than 50,000 land plots have been confiscated from encroachers nationwide under martial law. The government is now allocating the land plots to landless people nationwide, with Section 44 of the interim charter being invoked to bypass normal legal procedures and fast-track the land allocation project. Section 44 has been invoked to replace martial law - which was lifted on Wednesday...

Please credit and share this article with others using this link:http://www.bangkokpost.com/news/politics/518727/government-gives-seized-plots-to-landless. View our policies at http://goo.gl/9HgTd and http://goo.gl/ou6Ip. © Post Publishing PCL. All rights reserved.. ..

[Demeter]

14. The True Myths on the Trans-Pacific Partnership

http://www.cepr.net/index.php/blogs/beat-the-press/the-true-myths-on-the-trans-pacific-partnership

GREAT ANALYSIS, GOOD AMMO FOR DISCUSSIONS--READ-WORTHY!

[Demeter]

15. Flint residents find state water control hard to swallow

THE HITS JUST KEEP ON COMING, IN MICHIGAN...AND I DON'T MEAN MOTOWN

http://america.aljazeera.com/articles/2015/4/3/flint-residents-find-state-water-control-hard-to-swallow.html

First, Ida Nappier’s hair started falling out.

The nearly lifelong resident of Flint started noticing clumps of hair tangled in her comb or stranded on her pillowcase last fall, about six months after the city switched from buying water from Detroit’s system, which draws from Lake Huron, and began sourcing water from the Flint River. Nappier, known to most as Jackie, always had thick hair, which she wore long during her childhood in Jackson, Mississippi, and later shoulder-length and feathered, Farrah Fawcett–style, during her years raising children and grandchildren in Flint. But suddenly she was losing her hair — and she was far from the only one. Across this shrinking Rust Belt city, residents’ hair and eyelashes began falling out. One woman confessed that she cried every time she cleaned the thick strands out of her shower drain.

At Nappier’s home, she and other family members continued to get sick, even though they heeded the series of boil-water advisories the city issued over the summer after E. coli and other bacteria were detected in the water system. Her daughter Glenda Colton returned to Flint from Ohio in the fall and promptly broke out in a rash across her neck and chest. In December and early January, Nappier’s grandchildren started vomiting and having diarrhea, she said, and they complained that their skin was itchy after showering. One day she ran a bath, and the water was the color of tea. The whole family switched to using bottled water for drinking, cooking and sometimes even bathing.

In January she and the rest of the city’s nearly 100,000 residents received a letter explaining that water testing revealed high levels of trihalomethanes, a group of chemicals known as THMs. Byproducts of the chlorination process, THMs have been linked to increased rates of cancer, kidney and liver failure and adverse birth outcomes. It later emerged that the city knew since the previous May that the THM levels were high — in some places, twice the maximum allowed by the Environmental Protection Agency.

A few weeks later, Nappier returned home from the senior center where she volunteers and ate a bowl of beef vegetable soup her daughter had mistakenly prepared with tap water. By the next morning, she felt sick. Then she had to repeatedly leave church services to use the bathroom. A few days later, she was so dehydrated from constant diarrhea that she asked to be taken to the Hurley Medical Center...

[Demeter]

16. Congressional Budget Plans Get 2/3 of Cuts From Programs for People With Low or Moderate Incomes

http://truth-out.org/news/item/30036-congressional-budget-plans-get-two-thirds-of-cuts-from-programs-for-people-with-low-or-moderate-incomes

The budgets adopted on March 19 by the House Budget Committee and the Senate Budget Committee each cut more than $3 trillion over ten years (2016-2025) from programs that serve people of limited means. These deep reductions amount to 69 percent of the cuts to non-defense spending in both the House and Senate plans.

Each budget plan derives more than two-thirds of its non-defense budget cuts from programs for people with low or modest incomes even though these programs constitute less than one-quarter of federal program costs. Moreover, spending on these programs is already scheduled to decline as a share of the economy between now and 2025.[1]

The bipartisan deficit reduction plan that Alan Simpson and Erskine Bowles (co-chairs of the National Commission on Federal Policy) issued in 2010 adhered to the basic principle that deficit reduction should not increase poverty or widen inequality. The new Congressional plans chart a radically different course, imposing their most severe cuts on people on the lower rungs of the economic ladder....

IT'S THE 1% WAY

[Demeter]

17. How Criminals Built Capitalism BY Clive Crook (UNFORTUNATE NAME, THERE)

http://www.bloombergview.com/articles/2015-04-05/how-criminals-built-capitalism

Whenever buyers and sellers get together, opportunities to fleece the other guy arise. The history of markets is, in part, the history of lying, cheating and stealing -- and of the effort down the years to fight commercial crime. In fact, the evolution of the modern economy owes more than you might think to these outlaws. That's the theme of "Forging Capitalism: Rogues, Swindlers, Frauds, and the Rise of Modern Finance" by Ian Klaus. It's a history of financial crimes in the 19th and early 20th centuries that traces a recurring sequence: new markets, new ways to cheat, new ways to transact and secure trust. As Klaus says, criminals helped build modern capitalism.

And what a cast of characters. Thomas Cochrane is my own favorite. (This is partly because he was the model for Jack Aubrey in Patrick O'Brian's "Master and Commander" novels, which I've been reading and rereading for decades. Presumably Klaus isn't a fan: He doesn't note the connection.) Cochrane was an aristocrat and naval hero. At the height of his fame in 1814 he was put on trial for fraud. An associate had spread false rumors of Napoleon's death, driving up the price of British government debt, and allowing Cochrane to avoid heavy losses on his investments. Cochrane complained (with good reason, in fact) that the trial was rigged, but he was found guilty and sent to prison. The story is fascinating in its own right, and the book points to its larger meaning. Cochrane, in a way, was convicted of conduct unbecoming a man of his position. Playing the markets, let alone cheating, was something a man of his status wasn't supposed to do. Trust resided in social standing.

As the turbulent century went on, capitalism moved its frontier outward in every sense: It found new opportunities overseas; financial innovation accelerated; and buyers and sellers were ever more likely to be strangers, operating at a distance through intermediaries. These new kinds of transaction required new ways of securing trust. Social status diminished as a guarantee of good faith. In its place came, first, reputation (based on an established record of honest dealing) then verification (based on public and private records that vouched for the parties' honesty).

Successive scams and scandals pushed this evolution of trust along. Gregor MacGregor and the mythical South American colony of Poyais ("the quintessential fraud of Britain's first modern investment bubble," Klaus calls it); Beaumont Smith and an exchequer bill forging operation of remarkable scope and duration; Walter Watts, insurance clerk, theatrical entrepreneur and fraudster; Harry Marks, journalist, newspaper proprietor and puffer of worthless stocks. On and on, these notorious figures altered the way the public thought about commercial trust, and spurred the changes that enabled the public to keep on trusting nonetheless. The stories are absorbing and the larger theme is important: "Forging Capitalism" is a fine book and I recommend it. But I have a couple of criticisms. The project presumably began as an academic dissertation, and especially at the start, before Klaus starts telling the stories, the academic gravity is crushing.

Trust, to be simple with our definition, is an expectation of behavior built upon norms and cultural habits. It is often dependent upon a shared set of ethics or values. It is also a process orchestrated through communities and institutions. In this sense, it is a cultural event and thus a historical phenomenon.

No doubt, but after a first paragraph like that you aren't expecting a page-turner. Trust me, it gets better. When he applies himself, Klaus can write. Describing the messenger who brought the false news of Napoleon's death, he says:

Removed from the dark of the street, the man could be seen by the light of two candles. He looked, a witness would later testify, "like a stranger of some importance." A German sealskin cap, festooned with gold fringes, covered his head. A gray coat covered his red uniform, upon which hung a star… Neighbors and residents of the inn stirred and peered in as the visitor penned a note.

MORE

....Give the markets' ubiquitous and ingenious criminals their due. They helped build modern capitalism, and they aren't going away. Just ask Bernie Madoff.

[Demeter]

18. With only 25% of the average day trading--PPT is pumping it up again

DJIA +163 at quarter to 3.

[Warpy]

20. Oh, I suppose I'm grateful

It's nice to be richer on paper and thinking I could afford an occasional hunk o bling marketed to the rich, famous and brainless even though I'm still sensible enough not to want any of it.

In the meantime, gas prices have fallen to $2.06/gallon again, even though spot market futures are at the same place they were last week when it was $2.39.

[Demeter]

19. Next Weekend is a Joke-Off!

Brainstorm hit me (in a very convoluted way) while watching John Oliver interview Ed Snowden in Russia....go see it! It's enlightening! Funny in that sad, quintessentially Russian black humor style...although I don't think either man intended it to come out that way....


http://www.democraticunderground.com/1017256889

[DemReadingDU]

21. Thanks for sharing, that was great