STOCK MARKET WATCH -- Tuesday, 28 July 2015

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Tuesday, 28 July 2015[font color=black][/font]

SMW for 27 July 2015

AT THE CLOSING BELL ON 27 July 2015
[center][font color=red]
Dow Jones 17,440.59 -127.94 (-0.73%)
S&P 500 2,067.64 -12.01 (-0.58%)
Nasdaq 5,039.78 -48.85 (-0.96%)


[font color=green]10 Year 2.22% -0.01 (-0.45%)
[font color=red]30 Year 2.93% +0.01 (0.34%) [font color=black]


[center][/font]

[HR width=85%]

[font size=2]Market Conditions During Trading Hours[/font]
[center]
(click on link for latest updates)
Market Updates
[/center]

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

[/center]

[center]

[/center]

[HR width=95%]

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

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

[font color=black][font size=2]Handy Links - Essential Reading:[/font][/font]
[center]
Matt Taibi: Secret and Lies of the Bailout


[/center]

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

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

[div]
[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison
6/4/12 Matthew Kluger, lawyer, sentenced to 12 years in prison, along with co-conspirator stock trader Garrett Bauer (9 years) and co-conspirator Kenneth Robinson (not yet sentenced) for 17 year insider trading scheme.
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."
8/22/12 Doug Whitman, Whitman Capital LLC hedge fund founder, convicted of insider trading following a trial in which he spent more than two days on the stand telling jurors he was innocent
10/26/12 UPDATE: Former Goldman Sachs director Rajat Gupta sentenced to two years in federal prison. He will, of course, appeal. . .
11/20/12 Hedge fund manager Matthew Martoma charged with insider trading at SAC Capital Advisors, and prosecutors are looking at Martoma's boss, Steven Cohen, for possible involvement.
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







[HR width=95%]


[center]

[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. Greece Fire!

Greek PM Tsipras under pressure over covert Syriza drachma plan reports

http://www.reuters.com/article/2015/07/26/us-eurozone-greece-idUSKCN0Q00JN20150726

Some members of Greece's leftist government wanted to raid central bank reserves and hack taxpayer accounts to prepare a return to the drachma, according to reports on Sunday that highlighted the chaos in the ruling Syriza party. It is not clear how seriously the plans, attributed to former Energy Minister Panagiotis Lafazanis and former Finance Minister Yanis Varoufakis, were considered by the government and both ministers were sacked earlier this month. However the reports have been seized on by opposition parties who have demanded an explanation.

The reports came at the end of a week of fevered speculation over what Syriza hardliners had in mind as an alternative to the tough bailout terms that Tsipras reluctantly accepted to keep Greece in the euro. Around a quarter of the party's 149 lawmakers rebelled over the plan to pass sweeping austerity measures in exchange for up to 86 billion euros in fresh loans and Tsipras has struggled to hold the divided party together

In an interview with Sunday's edition of the RealNews daily, Panagiotis Lafazanis, the hardline former energy minister who lost his job after rebelling over the bailout plans, said he had urged the government to tap the reserves of the Bank of Greece in defiance of the European Central Bank. Lafazanis, leader of a hardline faction in the ruling Syriza party that has argued for a return to the drachma, said the move would have allowed pensions and public sector wages to be paid if Greece were forced out of the euro.

"The main reason for that was for the Greek economy and Greek people to survive, which is the utmost duty every government has under the constitution," he said.

However he denied a report in the Financial Times that he wanted Bank of Greece Governor Yannis Stouranaras to be arrested if he had opposed a move to empty the central bank vaults. In comments to the semi-official Athens News Agency, he called the report a mixture of "lies, fantasy, fear-mongering, speculation and old-fashioned anti-communism".

In a separate report in the conservative Kathimerini daily, Varoufakis was quoted as saying that a small team in Syriza had prepared plans to secretly copy online tax codes. It said the "Plan B" was devised to allow the government to introduce a parallel payment system if the banking system was closed down. In remarks the newspaper said were made to an investors' conference on July 16, Varoufakis said passwords used by Greeks to access their online tax accounts were to have been copied secretly and used to issue new PIN numbers for every taxpayer to be used in transactions with the state.

"This would have created a parallel banking system, which would have given us some breathing space, while the banks would have been shut due to the ECB's aggressive policy," Varoufakis was quoted as saying.

Varoufakis, an outspoken academic economist who became deeply unpopular with other European finance ministers during his five months in office, stood down earlier this month to facilitate bailout talks. He has been a strident opponent of the deal ever since. Under the plan, which the report said went back to before Tsipras was elected in January, transactions through the parallel system would have been nominated in euros but could easily change into drachmas overnight, he was quoted as saying.

Varoufakis denied the report. "So, I was going to "hijack" Greek citizens' tax file numbers? Impressed by my defamers' imagination," he wrote on Twitter.

MORE

Yanis Varoufakis defends secret plan for parallel Greek payment system

http://www.theguardian.com/business/live/2015/jul/27/business-live-chinese-stock-market-rout-ftse-greece-live?CMP=ema_565

Greece’s former finance minister, Yanis Varoufakis, has been thrust back in the spotlight as he vigorously defended plans to launch a parallel payment system in the event of the country being ejected from the euro.

Saying it would have been “remiss” of him not to have a “plan B” if negotiations with the country’s creditors had collapsed, the outspoken politician admitted that a small team under his control had devised a parallel payment system. The secret scheme would have eased the way to the return of the nation’s former currency, the drachma.

“Greece’s ministry of finance would have been remiss had it made no attempt to draw up contingency plans,” he said in a statement.

But Varoufakis, who resigned this month to facilitate talks between Athens’ left-led government and its creditors, denied that the group had worked as a rogue element outside government policy or beyond the confines of the law......

Greek Finance Minister Was Creating a Parallel Payment System

https://www.cryptocoinsnews.com/greek-finance-minister-creating-parallel-payment-system/

According to former Greek Finance Minister Yanis Varoufakis, prior to making a deal with European creditors, he was authorized to find an alternative way to keep the country's financial health in good standing. He assembled a team, and together they hacked into his own Ministry and got the taxpayer database along with other sensitive information. They intended to create Euro liquidity for Greece one way or another. Varoufakis admitted as much recently in London, according to the Telegraph. He also told them:

The context of all this is that they want to present me as a rogue finance minister and have me indicted for treason. It is all part of an attempt to annul the first five months of this government and put it in the dustbin of history. […] It totally distorts my purpose for wanting parallel liquidity. I have always been completely against dismantling the euro because we never know what dark forces that might unleash in Europe.

Varoufakis believes the current bailout plan for Greece will ultimately be a failure. If, in the meantime, Greeks who don't want to lose their money to the banks decide to switch to Bitcoin, the digital currency could see a boost in usage and thus value. The Greek government narrowly avoided a full-blown default on debts recently, and things look bleak to many as regards their future.


FOR MORE DETAIL, SEE ALSO: http://www.informationclearinghouse.info/article42487.htm

[Demeter]

2. Greece, the Sacrificial Lamb By JOSEPH E. STIGLITZ (OR MAYBE YANIS?)

http://www.nytimes.com/2015/07/26/opinion/greece-the-sacrificial-lamb.html

AS the Greek crisis proceeds to its next stage, Germany, Greece and the triumvirate of the International Monetary Fund, the European Central Bank and the European Commission (now better known as the troika) have all faced serious criticism. While there is plenty of blame to share, we shouldn’t lose sight of what is really going on. I’ve been watching this Greek tragedy closely for five years, engaged with those on all sides. Having spent the last week in Athens talking to ordinary citizens, young and old, as well as current and past officials, I’ve come to the view that this is about far more than just Greece and the euro.

Some of the basic laws demanded by the troika deal with taxes and expenditures and the balance between the two, and some deal with the rules and regulations affecting specific markets. What is striking about the new program (called “the third memorandum”) is that on both scores it makes no sense either for Greece or for its creditors. As I read the details, I had a sense of déjà vu. As chief economist of the World Bank in the late 1990s, I saw firsthand in East Asia the devastating effects of the programs imposed on the countries that had turned to the I.M.F. for help. This resulted not just from austerity but also from so-called structural reforms, where too often the I.M.F. was duped into imposing demands that favored one special interest relative to others. There were hundreds of conditions, some little, some big, many irrelevant, some good, some outright wrong, and most missing the big changes that were really required.

Back in 1998 in Indonesia, I saw how the I.M.F. ruined that country’s banking system. I recall the picture of Michel Camdessus, the managing director of the I.M.F. at the time, standing over President Suharto as Indonesia surrendered its economic sovereignty. At a meeting in Kuala Lumpur in December 1997, I warned that there would be bloodshed in the streets within six months; the riots broke out five months later in Jakarta and elsewhere in Indonesia. Both before and after the crisis in East Asia, and those in Africa and in Latin America (most recently, in Argentina), these programs failed, turning downturns into recessions, recessions into depressions. I had thought that the lesson from these failures had been well learned, so it came as a surprise that Europe, beginning a half-decade ago, would impose this same stiff and ineffective program on one of its own. Whether or not the program is well implemented, it will lead to unsustainable levels of debt, just as a similar approach did in Argentina: The macro-policies demanded by the troika will lead to a deeper Greek depression. That’s why the I.M.F.’s current managing director, Christine Lagarde, said that there needs to be what is euphemistically called “debt restructuring” — that is, in one way or another, a write-off of a significant portion of the debt. The troika program is thus incoherent: The Germans say there is to be no debt write-off and that the I.M.F. must be part of the program. But the I.M.F. cannot participate in a program in which debt levels are unsustainable, and Greece’s debts are unsustainable.

Austerity is largely to blame for Greece’s current depression — a decline of gross domestic product of 25 percent since 2008, an unemployment rate of 25 percent and a youth unemployment rate twice that. But this new program ratchets the pressure up still further: a target of 3.5 percent primary budget surplus by 2018 (up from around 1 percent this year). Now, if the targets are not met, as they almost surely won’t be because of the design of the program itself, additional doses of austerity become automatic. It’s a built-in destabilizer. The high unemployment rate will drive down wages, but the troika does not seem satisfied by the pace of the lowering of Greeks’ standard of living. The third memorandum also demands the “modernization” of collective bargaining, which means weakening unions by replacing industry-level bargaining. None of this makes sense even from the perspective of the creditors. It’s like a 19th-century debtors’ prison. Just as imprisoned debtors could not make the income to repay, the deepening depression in Greece will make it less and less able to repay.

Structural reforms are needed, just as they were in Indonesia, but too many that are being demanded have little to do with attacking the real problems Greece faces. The rationale behind many of the key structural reforms has not been explained well, either to the Greek public or to economists trying to understand them. In the absence of such an explanation, there is a widespread belief here in Greece that special interests, in and out of the country, are using the troika to get what they could not have obtained by more democratic processes Consider the case of milk. Greeks enjoy their fresh milk, produced locally and delivered quickly. But Dutch and other European milk producers would like to increase sales by having their milk, transported over long distances and far less fresh, appear to be just as fresh as the local product. In 2014 the troika forced Greece to drop the label “fresh” on its truly fresh milk and extend allowable shelf life. Now it is demanding the removal of the five-day shelf-life rule for pasteurized milk altogether. Under these conditions, large-scale producers believe they can trounce Greece’s small-scale producers...In theory, Greek consumers would benefit from the lower prices, even if they suffered from lower quality. In practice, the new retail market is far from competitive, and early indications are that the lower prices were largely not passed on to consumers. My own research has long focused on the importance of information and how firms often try to take advantage of the lack of information. This is just another instance.

One underlying problem in Greece, in both its economy and its politics, is the role of a group of wealthy people who control key sectors, including banks and the media, collectively referred to as the Greek oligarchs. They are the ones who resisted the changes that George Papandreou, the former prime minister, tried to introduce to increase transparency and to force greater compliance with a more progressive tax structure. The important reforms that would curb the Greek oligarchs are largely left off the agenda — not a surprise since the troika has at times in the past seemed to have been on their side. As it became clear early on in the crisis that the Greek banks would have to be recapitalized, it made sense to demand voting shares for the Greek government. This was necessary to ensure that politically influenced lending, including to the oligarchic media, be stopped. When such connected lending resumed — even to media companies that on strictly commercial terms should not have gotten loans — the troika turned a blind eye. It has also been quiescent as proposals were put forward to roll back the important initiatives of the Papandreou government on transparency and e-government, which dramatically lowered drug prices and put a damper on nepotism.

Normally, the I.M.F. warns of the dangers of high taxation. Yet in Greece, the troika has insisted on high effective tax rates even at very low income levels. All recent Greek governments have recognized the importance of increasing tax revenues, but mistaken tax policy can help destroy an economy. In an economy where the financial system is not functioning well, where small- and medium-size enterprises can’t get access to credit, the troika is demanding that Greek firms, including mom and pop stores, pay all of their taxes ahead of time, at the beginning of the year, before they have earned it, before they even know what their income is going to be. The requirement is intended to reduce tax evasion, but in the circumstances in which Greece finds itself, it destroys small business and increases resentment of both the government and the troika. This requirement seems at odds, too, with another of the demands with which Greece has been confronted: that it eliminate its cross-border withholding tax, which is the withholding tax on money sent from Greece to foreign investors. Such withholding taxes are a feature of good tax systems in countries like Canada and are a critical part of tax collection. Evidently, it is less important to ensure that foreigners pay their taxes than that Greeks do.

There are many other strange features of the troika bailout packages, in part because each member of the troika has its favorite medicine. As doctors warn, there can be dangerous interactions. The battle, however, is not just about Greece. It’s not even just about the money, although special interests in the rest of Europe and some within Greece itself have taken advantage of the troika to push their own interests at the expense of ordinary Greek citizens and the country’s overall economy. This is something I saw repeatedly firsthand when I was at the World Bank, most noticeably in Indonesia. When a country is down, there is all manner of mischief that can be done.

But these policy debates are really about ideology and power. We all know that. And we understand that this is not just an academic debate between the left and the right. Some on the right focus on the political battle: the harsh conditions imposed on the left-wing Syriza government should be a warning to any in Europe about what might happen to them should they push back. Some focus on the economic battle: the opportunity to impose on Greece an economic framework that could not have been adopted any other way. I believe strongly that the policies being imposed will not work, that they will result in depression without end, unacceptable levels of unemployment and ever growing inequality. But I also believe strongly in democratic processes — that the way to achieve whatever framework one thinks is good for the economy is through persuasion, not compulsion. The force of ideas is so much against what is being inflicted on and demanded of Greece. Austerity is contractionary; inclusive capitalism — the antithesis of what the troika is creating — is the only way to create shared and sustainable prosperity.

For now, the Greek government has capitulated. Perhaps, as the lost half decade becomes the lost decade, as the politics get uglier, as the evidence mounts that these policies have failed, the troika will come to its senses. Greece needs debt restructuring, better structural reforms and more reasonable primary budget surplus targets. More likely than not, though, the troika will do what it has done for the last five years: Blame the victim.

Joseph E. Stiglitz is a Nobel laureate in economics, a professor at Columbia and the author, most recently, of “The Great Divide: Unequal Societies and What We Can Do About Them.”

[Demeter]

3. How the Euro Turned Into a Trap NYT EDITORIAL

http://www.nytimes.com/2015/07/26/opinion/sunday/how-the-euro-turned-into-a-trap.html

When they introduced the euro in 1999, European leaders said the common currency would be irreversible and would lead to greater economic and political integration among their countries. That pledge of permanence, long doubted by euro-skeptics, seems ever less credible. While the eurozone may have temporarily avoided a Greek exit, it is hard to see how a deal that requires more spending cuts, higher taxes and only vague promises of debt relief can restore the crippled economy enough to keep Greece in the currency union. On Thursday, the Greek Parliament passed a second set of reforms required by the country’s creditors. Other changes, like higher taxes on farmers, are expected later in the year.

The combative finance minister of Germany, Wolfgang Schäuble, has further undermined confidence in the euro’s cohesion by saying that Greece would be better off leaving the common currency for a five-year “timeout.” As a practical matter, an exit from the currency union would almost certainly be permanent, since readmission involves a grueling process. The eurozone requires new members to keep inflation below 2 percent and to have a maximum fiscal deficit of 3 percent of gross domestic product and a public debt that is no more than 60 percent of G.D.P. The plight of the Greeks has made countries that do not use the euro, like Poland and Hungary, far less eager to join the currency union, which has come to mean a loss of sovereignty and a commitment to austerity, regardless of economic reality.

Of course, the euro was never entirely about economics. European leaders believed the single currency was a big step toward creating an irrevocable alliance among countries on the continent. But many experts warned that it could make its members less stable unless it was followed by a tighter political and budgetary union. Since that did not happen, the currency union was left fully vulnerable to economic crises and to the will of Europe’s more powerful economies...All those fears have played out in Greece, even as the threat of exits from the euro hangs over other weakened countries, like Italy, Portugal and Spain. Senior leaders in Germany, Finland and Slovakia who have publicly suggested a Greek exit seem to think it would scare weaker economies into accepting more austerity. That may not be necessary; some radical parties in those countries are already openly talking about leaving the euro.

The question now is what is the cost of leaving? Can a modern economy withstand the immediate damage of an abrupt currency change if the benefits of devaluation and regaining full control over fiscal and monetary policies could be limited and could take years to realize? For example, returning to the drachma, which would trade at a deep discount to the euro, could help the Greek economy by making its island resorts, olive oil and feta cheese cheaper for tourists and foreign buyers. The country would also be able to control its own monetary policy, by pumping more money into the economy to stimulate lending rather than relying on the European Central Bank, which until recently has done too little. But leaving the euro would mean few foreign institutions and investors would be willing to lend to the government, possibly for many years after exit. That could make it harder for the Greek government to buy essential imports like medicines, oil and gas. The financial system would most likely collapse under the strain of bank runs. Many Greeks fear that a return to the drachma could also lead to runaway inflation if the country’s central bank prints too many drachmas to prop up the economy. And that doesn’t even account for logistical challenges like redenominating contracts and printing new paper currency.

As bad as an exit could be on the debtors, the creditor countries like Germany could also be damaged. They would lose most of the money they lent to the troubled nations in the last few years. The government of Greece owes more than 300 billion euros ($326 billion), most of it to other European governments, the International Monetary Fund and the E.C.B. It is also possible that a Greek exit could strengthen the euro, which would hurt exporters in other eurozone countries by making their goods more expensive on the world market. Given all the immediate losers in the Grexit scenario, the creditors would be foolish to make it inevitable — as the latest bailout terms appear to do. What they should be doing is changing the economic policies that have turned the currency union into a debilitating trap that countries cannot escape without suffering even more pain.

[Demeter]

4. Why Greece Should Leave the Eurozone By HANS-WERNER SINN

http://www.nytimes.com/2015/07/25/opinion/why-greece-should-leave-the-eurozone.html

THERE are not many issues on which I agree with my colleagues Paul Krugman and Joseph E. Stiglitz and the former Greek finance minister Yanis Varoufakis. But one of them is the view that an exit from the eurozone would be advisable for Greece.

Unfortunately for Greece and for Europe, we may now have to live with a third bailout program, in which Greece will receive a rescue package worth 86 billion euros (about $94 billion) in return for additional austerity measures. The new agreement will most likely drag Greece through three more years of a long-lasting, costly experiment that has so far failed miserably.

As of June, the eurozone countries, the European Central Bank and the International Monetary Fund had provided the Greek government and banking system with 344 billion euros ($375 billion) worth of public credit — nearly double Greece’s annual economic output, or about 31,000 euros ($33,000) for each Greek citizen. One-third of the public credit that has flowed to Greece since 2008 has been used to bail out private creditors; one-third went to finance the Greek current account deficit (the excess of imports and net interest payments to foreigners over exports and transfer payments from abroad); and one-third vaporized by financing the capital flight of Greeks.

The public credit has delayed a Greek bankruptcy, but it has failed to revitalize the Greek economy. To compete, Greece needs a strong devaluation — a relative decline of its price level. Trying to lower prices and wages in absolute terms (for example, by slashing wages) would be very difficult, as it would bankrupt many debtors and tenants. It would arguably be better to inflate prices in the rest of the eurozone, as the European Central Bank is trying to do through quantitative easing: purchasing large quantities of bonds to drive down the value of the euro. If the rest of the eurozone posts inflation rates of slightly less than 2 percent, as the E.C.B. hopes, Greece would be competitive after a decade or so, provided that its price level stays put. However, even such a mild form of an “internal devaluation” would be very arduous, as it would require precisely the kind of fiscal restraint that the Greeks rejected in the referendum.

What about the solution favored by leftists: more money for Greece? No doubt, enormous government spending would bring about a Keynesian stimulus and generate some modest internal growth. However, apart from the fact that this money would have to come from other countries’ taxpayers, this would be counterproductive, as it would prevent the necessary devaluation of an overpriced economy and keep wages and prices above the competitive level...Greece’s devaluation started five years after Ireland’s, and by now has reached 9 percent. Analysis by Goldman Sachs researchers suggests that product prices would have to decline by another 13 to 22 percentage points for Greece to be competitive. (Wages in neighboring Turkey, Bulgaria and Romania, the latter two being European Union members, are only one-third to one-fifth Greece’s level.)

The better alternative is a Grexit accompanied by debt relief, humanitarian aid for the purchase of essential imports and an option for eventual return to the euro. Greece could reintroduce the drachma as the only legal tender. All existing prices, wages, contracts and balance sheets, including internal and external debt, could be converted one-to-one into drachmas, which would immediately decline in value. The devaluation would induce Greeks to buy domestic rather than imported products. Tourism would get a boost, and capital flight would be reversed. Rich Greeks would return with their money, buy real estate and renovate it, fueling a construction boom. As the trade deficit gradually turned into a surplus, creditors would get some of their money back. Greece would have the option to return to the eurozone, at a new exchange rate, after carrying out institutional reforms — such as public recording of land purchases, functioning tax collection, accurate statistical reporting — and meeting the normal conditions for eurozone membership. It could take five or 10 years.

It is true that Grexit would make it clear that membership in the eurozone is not irrevocable and could expose member countries to speculative attacks. But this is not very likely, as the markets’ calm reaction to Greece’s capital controls and the “no” vote in the referendum showed. More important, it would lead other countries to adopt more prudent financing and steer clear of the debt trap that caused the bubble in the first place. Until Europe is turned into a federal state — as it should become, at some point — it will not have a currency like the dollar. Until then, what is needed is a “breathing” currency union, with orderly entry and exit options, coupled with an insolvency rule for member states. This would be a better compromise between the goals of avoiding speculative attacks and excessive debt accumulation than the current promise of eternal membership.

Hans-Werner Sinn is a professor of economics and public finance at the University of Munich.

[MattSh]

5. Varoufakis reveals cloak and dagger 'Plan B' for Greece, awaits treason charges - Telegraph

A secret cell at the Greek finance ministry hacked into government computers and drew up elaborate plans for a system of parallel payments that could be switched from euros to the drachma at the "flick of a button".

The revelations have caused a political storm in Greece and confirm just how close the country came to drastic measures before premier Alexis Tsipras gave in to demands from Europe's creditor powers, acknowledging that his own cabinet would not support such a dangerous confrontation.

Yanis Varoufakis, the former finance minister, told a group of investors in London that a five-man team under his control had been working for months on a contingency plan to create euro liquidity if the European Central Bank cut off emergency funding to the Greek financial system, as it in fact did after talks broke down and Syriza called a referendum.

The transcripts were leaked to the Greek newspaper Kathimerini. The telephone call took place a week after he stepped down as finance minister.

"The prime minister, before we won the election in January, had given me the green light to come up with a Plan B. And I assembled a very able team, a small team as it had to be because that had to be kept completely under wraps for obvious reasons," he said.

Mr Varoufakis recruited a technology specialist from Columbia University to help handle the logistics. Faced with a wall of obstacles, the expert broke into the software systems of the tax office - then under the control of the EU-IMF 'Troika' - in order to obtain the reserve accounts and file numbers of every taxpayer. "We decided to hack into my ministry’s own software programme," he said.


Complete story at - http://www.telegraph.co.uk/finance/economics/11764018/Varoufakis-reveals-cloak-and-dagger-Plan-B-for-Greece-awaits-treason-charges.html

[MattSh]

6. Ukraine Spirals Into The Abyss: Pensioner Suicides and Talk of Default | Observer

Natalie Jaresko has the face of a sad magician whose voodoo spells stopped working long time ago’. The Ukraine”s Minister for Finance, Ms. Jaresko nowadays is a common figure on Ukrainian TV. Before becoming the Minister for Finance of Ukraine, this dual Ukrainian-American citizen worked for the US State Department. In the 1990s, she was the first Chief of the Economic Section of the US Embassy in Ukraine, then made her millions as the CEO of a number of investment companies working in Ukraine.

.....

According to the State Statistics Committee, the average monthly salary in Ukraine is around $140 (for simplicity, wages and costs will be in US dollars at the street vendors’ rate of 25 hryvnias per dollar).

The most vulnerable are retirees with their monthly pension of $43. The desperate situation of these people is often used by the political parties to organize “performances” in their support. New UKROP party, for example, financed by the oligarch Ihor Kolomoisky, recently organized in the town of Chernigov the rally in its support. To mobilize the senior citizens, free food was promised—one package of flour, one package of noodles and two cans of fish per person.

While pushing forward for handouts, the big crowd of desperate retirees burst into a fist-fight.

.....

Just two years ago, under the previous “corrupt regime,” the average salary in Ukraine was $500 a month, average social security check—$200 a month when the prices for goods were less than half what they are today. The sarcastic new Governor of Odessa region, Mikheil Saakashvili, remarked that Ukrainians would have to toil hard for the next 20 years if they want to get back the living standards they enjoyed under the “corrupt regime.”

National currency fell into the abyss from 7-8 hrivnias per dollar to an official 22-23 hryvnias per dollar. The only reason it doesn’t fall even deeper for now is Ukrainian Government’s liabilities for unpaid meager wages reached the unprecedented sum of $72 million, the unpaid wages in private companies cannot be definitely calculated but the number must be humongous.

Some Ukrainians, of course, do not care about the money. Flamboyant new Governor of Odessa Region Mr. Saakashvili openly declares that his lavish lifestyle and the ones of his team (in which some are his fellow-Georgians and there is even a young daughter of the former reformist Russian Prime Minister) doesn’t cost Ukraine’s budget a hryvnia—all is paid for by American taxpayers. Minister for Finance of Ukraine, Natalie Jaresko, the one who often goes on TV, says that she sends her kids to the private International School in Kiev on the money she made before in private sector as a head of Horizon Capital Investment Company. (Out of respect to her less fortunate co-citizens one might advise her to stop wearing half-pound weights of gold on her wrists, neck, fingers and ears while on television.)

Complete story at - http://observer.com/2015/07/ukraine-spirals-into-the-abyss-pensioner-suicides-and-open-talk-of-default/

[MattSh]

7. I wonder what devious deeds Kerry and gang are up to at State...

Spelling I guess is not their strong point...

Soclial Media Management Services
Solicitation Number: SGE50015R0105
Agency: Department of State
Office: Office of Acquisitions
Location: Regional Procurement Support Office Frankfurt, Germany

Solicitation Number:
SGE50015R0105
Notice Type:
Modification/Amendment
Synopsis:
Added: Jul 20, 2015 5:11 am Modified: Jul 22, 2015 4:59 am - Track Changes

Please disregard the "pre-solicitation notice corrected" which was posted by mistake.

Thank you

Russian language social media management services

The United States Government, through the Office of International Engagement, Bureau of Public Affairs (PA/IME), requires social media management services for its Russian-language social media platforms, including Twitter, Facebook, YouTube and others, as determined. Online and social media engagement is needed on a daily basis -- including evenings, holidays, and weekends -- as directed by PA/IME and its overseas offices. Contractor shall provide expert services in the field of social media management, execution, original content creation, editing, and coordination.

Contracting Office Address:
American Consulate General Frankfurt
Giessenerstrasse 30, 60435
Frankfurt am Main, Non-U.S.
Germany

Primary Point of Contact.:
Biljana Divac-Krnic
[e-mail]
Phone: [phone]
Fax: [phone]

Secondary Point of Contact:
Colum Mullan,
Contract Specialist
[e-mail]
Phone: [phone]

Complete story at - https://www.fbo.gov/index?id=f0d854f07133c47c9ae9de86ba6c1654

[Demeter]

8. Saw the film "Mr. Holmes" Sunday and loved it

Very British, beautifully filmed, very Holmesian. I did fear that Ian McKellen would drop dead during it...he was a convincing 93 years old...

and frankly, I don't know how much more of Greece I can stand. It's like the endless trainwreck during the Fugitive film with Harrison Ford...

[Demeter]

9. It's a Blue Moon Tonight

so now you have no excuses!

[Demeter]

10. Is this The Donald?

We're into the second week of real hotter than Hades July weather...and I'm losing it! It was supposed to be a mild summer....and so it was, until recently.

[Demeter]

11. The I.R.S. Gives Up on ‘Dark Money’

http://www.nytimes.com/2015/07/26/opinion/sunday/the-irs-gives-up-on-dark-money.html

The federal government has all but surrendered to the powerful, rich donors whose anonymous contributions threaten to undermine the 2016 elections. The commissioner of the Internal Revenue Service, John Koskinen, signaled as much on Thursday when he told a House committee that there would be no change in the tax code in 2016 to end its growing abuse by political operatives using nonprofit “social welfare” institutions to disguise the identities of affluent campaign contributors.

“I don’t want people thinking we are trying to get these regs done so we can influence the election,” Mr. Koskinen declared later to reporters. The statement was remarkable for blessing further procrastination at the I.R.S., whose clear obligation is to enforce existing law in a way that would end the current flood of “dark money” financing politics. The commissioner said the earliest that tighter rules could take effect would be 2017. The I.R.S. has been increasingly timorous on this issue ever since House Republicans opened partisan hearings into complaints that I.R.S. officials have been biased against conservative political groups that claim tax exemptions as nonprofit social welfare groups.

The fact is, the I.R.S. should be dedicated to enforcing the law against phony social welfare claims by all political schemers, from the right or the left. This abuse of the tax law mushroomed after the Supreme Court’s reckless Citizens United decision in 2010 that ended limits on campaign spending by corporations and unions. Since 2006, when only $5.2 million was spent by exempt organizations that do not disclose donors, spending increased 60-fold, to more than $300 million in the 2012 presidential cycle, according to the Center for Responsive Politics. An even bigger infusion is expected in 2016 from big-money donors shielded by the social welfare fiction.

Earlier this year, Mr. Koskinen declared that nonprofit social welfare groups could spend up to 49 percent of revenues on political activity and still keep their tax exemption. This ill-advised statement did not encourage optimism about a tightening of the code. It also contradicts existing law, upheld in court decisions, that these groups must be “operated exclusively to promote social welfare.” Current regulations allow for some political activity provided it is not a group’s “primary” mission, but the notion that a group can use the social welfare shield to devote 49 percent of its revenues to electioneering is outrageous.

It is a gross insult to taxpayers to make them underwrite the brazen evasions of campaign operatives bundling dark money. The abuse is compounded by the latest I.R.S. retreat from its responsibility.

[MattSh]

17. Been a weird summer here...

Normally we get to spend a good deal of time at her family's summer place. But because of a child finishing school and starting university, we've had to spend a lot more time in the city this summer. But the hot weather comes around when we're in the city, and the cooler weather when we're outside the city. But up until two days ago, it's been dry. Not California Dry or even Canada Dry, but the last thing Ukraine needs is agriculture to fall into the abyss.

[Demeter]

12. Lawyer emails threaten $6B settlement

http://www.cnbc.com/2015/07/27/lawyer-emails-threaten-6b-settlement-report.html?__source=yahoo|finance|headline|headline|story&par=yahoo&doc=102867847



A friendship between two opposing lawyers could shake up a $6 billion class-action settlement involving Visa and MasterCard.

Lawyers representing about 100 merchants are slated to tell the card operators that they want to scrap the deal reached in 2012 because of inappropriate communication between lawyers, The Wall Street Journal reported Monday, citing sources. The initial claims challenged rules and fees used by Visa and MasterCard, and the settlement permitted merchants to charge more to customers who pay with cards.

The agreement came into question during an investigation into alleged theft by Keila Ravelo, who represented MasterCard during the proceedings for law firm Willkie Farr & Gallagher. The Journal wrote that New Jersey authorities investigated Ravelo after charging her with conspiracy to commit wire fraud shortly after she resigned from the firm.

Emails and documents sent between Ravelo and Gary Friedman, who represented merchants in the case, were then discovered, the report says. Ravelo and Friedman worked together at another firm earlier in their careers. Merchants plan to say that Ravelo and Friedman exchanged confidential information and documents, leading to inadequate representation, according to the report. Friedman represented American Express in another pending $79 million settlement, which could be threatened, as well, sources told the paper.

A MasterCard spokesman told CNBC "we believe recent events will not have any impact on the settlement and the outcome of the case will stand."

Ravelo's lawyer Steve Sadow said, "We are not in a position to comment at this time."

AmEx declined to comment. Visa and MasterCard did not immediately respond to CNBC's requests to comment. Friedman's firm and Ravelo's former firm also did not answer CNBC's requests.

[Demeter]

13. BP warns on oil price after announcing $6.3B loss

http://www.cnbc.com/2015/07/28/bp-swings-to-2q-loss-of-63-billion-as-oil-price-falls-bite.html?__source=yahoo|finance|headline|headline|story&par=yahoo&doc=102868545



BP, one of the world's biggest oil companies, announced a second-quarter replacement cost loss of $6.3 billion Tuesday, and warned that low oil prices are here to stay.

Bob Dudley, chief executive of the oil major, said in a statement that the "external environment remains challenging."
Chris Ratcliffe | Bloomberg | Getty Images

BP, one of the world's biggest oil companies, announced a second-quarter replacement cost loss of $6.3 billion Tuesday, and warned that low oil prices are here to stay. Bob Dudley, chief executive of the oil major, said in a statement that the "external environment remains challenging...In the past few weeks oil prices have fallen back in response to continued oversupply and market weakness and the recent agreements regarding Iran. I am confident that positioning BP for a period of weaker prices is the right course to take, and will serve the company well for the future," he added.

The replacement cost measure takes into account changes in the price of oil and is used across the industry to report earnings.

It includes a near-$10 billion extra charge related to the environmental costs of the Gulf of Mexico oil spill, which brought the total pre-tax charge for the disaster to $54.6 billion.

MORE

[Demeter]

14. ECB Sets Sights on Reviving Economy With Greece on Back Seat

ECONOMY? WHAT ECONOMY?

http://www.bloomberg.com/news/articles/2015-07-26/draghi-sets-sights-on-reviving-economy-with-greece-on-back-seat

Mario Draghi can take a break from being a full-time Greek crisis firefighter and get back to the job of fostering economic recovery across the euro area.

Although the 19-nation currency bloc has avoided losing a member and the market upheaval that might have entailed, reports this week will probably show the economy is hardly firing on all cylinders. Three years after Draghi promised to do “whatever it takes” to keep the union together, the European Central Bank has its work cut out to speed up the pace of growth and inflation.

A weaker euro and the ECB’s quantitative-easing program are helping the economy find its feet, with the second quarter forecast to show a ninth quarter of expansion. Consumer-price growth remains too low, however, and unemployment, particularly in southern European states, is stubbornly high.

“The Greek issue moves from page 1 to 2 or 3 in the minds of traders and economists,” said Holger Sandte, chief European analyst at Nordea in Copenhagen. “Now attention turns to more classic macro style things.”

MORE SMUG, SELF-SATISFIED BS AT LINK

[Demeter]

15. IMF paints dim picture for Europe, suggests more money printing may be needed

http://www.reuters.com/article/2015/07/27/us-eurozone-economy-idUSKCN0Q11JP20150727

The International Monetary Fund warned on Monday that the euro zone's prospects were modest and that more money printing than planned may be needed. Contrasting the IMF's relative gloom, however, German think tank Ifo reported improving confidence the 19-country bloc's largest economy. The IMF, saying medium-term growth would be subdued, urged the European Central Bank to keep its money presses rolling, perhaps beyond the target late next year.

"The important thing is that the ECB intends to stay the course until September 2016 and that, we think, will be necessary," said Mahmood Pradhan, deputy director of the IMF's European department, referring to quantitative easing (QE).

Letting the 1 trillion euro ($1.1 trillion) plus scheme to buy chiefly government bonds run longer could be better still, he suggested. "It may need to go beyond that," he said.

Worries about the global economy, prompted by a slowdown in China where shares slid more than 8 percent on Monday, are weighing on many countries in Europe...

[Demeter]

16. Once more, into the jungle...keep cool, everyone!

[Hotler]

18. I see they are feeding upon each other in Jonestown.

[Fuddnik]

19. Oh yeah, the usual swarm.

The Hillbillies are restless.

I try to avoid it, but just can't help myself sometimes.