STOCK MARKET WATCH -- Tuesday, 8 September 2015

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Tuesday, 8 September 2015[font color=black][/font]

SMW for 4 September 2015

AT THE CLOSING BELL ON 4 September 2015
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Dow Jones 16,102.38
S&P 500 1,921.22
Nasdaq 4,683.92 -49.58 (-1.05%)

[font color=green]10 Year 2.13% -0.01 (-0.47%)
30 Year 2.89% -0.02 (-0.69%) [font color=black]


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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
08/03/15 Former City (London) trader Tom Hayes found guilty of rigging global Libor interest rates. Each fo eight counts carries up to 10 yr. sentence.
08/21/15 Charles Antonucci Sr, former pres. Park Ave. Bank sentenced to 2.5 years in prison for bribery, fraud, embezzlement, and attempt to steal $11MM in TARP bailout funds, as well as $37.5MM fraud on OK insurance company. To pay $54MM in restitution and give up additional $11MM.







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

[Demeter]

1. ObamaCare to Crapify Health Insurance at 26% of Employers with “Cadillac Tax”

http://www.nakedcapitalism.com/2015/09/obamacare-to-crapify-health-insurance-at-26-of-employers-with-cadillac-tax.html



I haven’t written about much about ObamaCare’s “Cadillac Tax” mostly because it seemed (as we shall see) such an obvious union-busting measure that there wouldn’t be much of interest to say. However, a recent Kaiser briefing on how many employers will be affected by it has generated a lot of coverage, and, as it turns out, the Cadillac tax — not that anybody could have predicted this — turns out to be insanely complex, based on a crazypants neo-liberal economic assumption, and will screw over a lot more working people than originally thought. (There’s actually some pressure on the Hill for reform or repeal, and not just by the usual suspects, but I won’t cover the politics of it here).

So, what is the “Cadillac Tax”? It’s an excise tax; a tax you have to pay when you purchase a particular type of good.(1) Excise taxes are often “sin taxes,” as on liquor or cigarettes, since drunkenness and cancer sticks can be seen as the sort of public harms that governments should use their taxing power to discourage, and I suppose, to a neo-liberal economist, an “overly generous” insurance plan is indeed a sort of sin. From the Vox explainer:

The Cadillac tax — which doesn’t go into effect until 2018 — places a 40 percent tax on health benefits above a certain threshold, encouraging employers to offer less expensive insurance or, if they don’t, pay a big fine.

How complex is the "Cadillac tax"? Despite Vox’s explainer, insanely. (HCPT, “High-Cost Plan Tax,” is the official acronym for the Cadillac plan tax structure.) From the Kaiser briefing:

To avoid the perception that this was a new tax on employees, the HCPT was structured as a tax on the service providers of the health benefit plans providing benefits an employee: insurers in the case of insured health benefit plans; employers in the case of HSAs and Archer MSAs; and the person that administers the benefits, such as third party administrators, in the case of other health benefits. While it is generally expected that insurers and service providers will pass the cost of the tax back to the employer, doing so may not always be straightforward. Because there can be numerous service providers with respect to an employee, the excess amount must be allocated across providers. In some cases, it may not be possible to know whether or not the benefits provided to an employee will exceed the threshold amount until after the end of a year (for example, in the case of an experience-rated health insurance plan), which means that service providers may need to bill the employer retroactively for the cost of the tax they must pay.

In other words, the "Cadillac tax" is an obvious horror show, and that probably accounts for employer reaction. Forbes:

Universally, when queried, purchasers say they will take whatever steps are needed to avoid paying this 40% tax.

How many employers will be hit by the Cadillac tax? (Oddly, or not, I haven’t been able to find a study that shows how many workers will be hit.) The complexity makes that hard to determine, but 26% in 2018 — tomorrow, in corporate terms — is what the conventional wisdom seems to be, according to the Washington Post. Kaiser describes the process:

Our estimates suggest that a meaningful percentage of employers would need to make changes in their health benefits to avoid the HCPT in 2018, and that this percentage grows significantly over time unless employers are able to keep heath plan cost increases at low levels. In fact, 19 percent of employers already in 2015 have a plan that would exceed the HCPT threshold when FSA Flexible Spending Accounts offers are considered; these firms would need to reduce their current plan costs over the next several years to avoid the tax. We estimate that by 2028, 42% of employers would have plans where costs would exceed the threshold for some or all employees. To the extent that health plan premiums continue to grow faster than inflation – a likely scenario – the share of employers affected by the HCPT will grow and eventually reach 100 percent. To avoid the tax, an employer would have to keep plan costs below the threshold and contain growth in costs over time to no more than inflation.

(Towers Watson (a professional services firm) estimates 82% by 2023; that is, more and faster.) Note that the Cadillac tax approaches 100% of employers because it’s calculated not on the basis of the insurance plans’ cost, but on the cost of living (!); the cynical might imagine that designing a tax that ultimately applies to all employers is a complex and obfuscated scheme to get employers to stop offering any health insurance at all.

Why does the Cadillac Tax even exist? Let’s look at the legislative history. From Health Affairs:

When the excise tax was passed by Congress in 2010, the policy rationale was two-fold:

First, the tax was designed to slow the rising cost of health care and put pressure on employers to restructure employee health plans by increasing cost sharing on the part of employees. This would encourage employees to consume less health care, resulting in lower medical spending in the long-term.

Second, the tax was intended to raise significant revenue to pay for other key components of the ACA, including subsidies to help low- and middle-income families afford coverage through the health insurance marketplaces. Before the President signed the ACA in March 2010, the Joint Committee on Taxation (JCT) and Congressional Budget Office (CBO) scored the tax’s revenue impact and estimated that it would raise $30 billion in additional federal revenue in its first two years (2018 and 2019).

So, two rationales: First, to put pressure on employers to slow costs; second, to raise revenues. Both, in fact, depend on how employers will react to the tax, as we shall see. (Those of use present at ObamaCare’s creation will recall how important CBO scoring was, politically, and you can see that the Cadillac Tax would have been one of the many moving parts that went into making ObamaCare “revenue neutral”).(2)

What is the crazypants neo-liberal assumption behind the Cadillac Tax? Let’s consider how the revenue from the Cadillac Tax is to be raised, from a contemporaneous SAGE study:

These revenue estimates from CBO actually combine both direct and indirect revenues. The direct revenue is simply the 40% excise tax collected from private health insurers. The indirect revenue is the increase in federal income and payroll taxes that will result from the relatively higher wages accompanying a switch to plans with lower actuarial values and the outright dropping of coverage expected to occur in response to the net price increase. … In their analyses, the CBO and JCT [Joint Committee on Taxation] assume that workers ultimately pay for their health insurance benefits through lower wages because total compensation (i.e., the sum of wages and benefits) should remain unchanged in competitive labor markets. (If this wage/ benefit trade-off does not actually happen in a one-to-one manner, then the estimates of indirect revenue raised by income and payroll taxes will be overstated.)

Let’s parse that “indirect revenue” from “the increase in federal income and payroll taxes.” Why is that going to happen? Vox explains:

(According to Bradley Herring, a health economist at Johns Hopkins University There’s a vast body of economics research (Oh, OK) that shows workers bear the cost of more expensive health plans with lower wages. These papers suggest there’s a lump sum amount that companies spend compensating workers. It goes into either wages or benefits — so when benefits get more expensive, wages go down.

“If you think this through, once the Cadillac tax is imposed, employers will do things to increase the deductible or change the drug formulary to try and lower costs,” Herring says. “They’ll offset that by raising the wages of workers.”

You got that right. When employers cut benefits, they raise wages. And that’s why the income and payroll taxes are going to rise, so CBO can make its numbers. Is that craziest, most not-real-world, pencil-necked neo-liberal economist idea you’ve ever heard? And the Cadillac tax is based on that assumption! Vox once more:

“I mentioned this when I was presenting at the American Bar Association,” says (Herring). “And if you want to know how to get a room full of lawyers to laugh, have an economist tell them that the Cadillac tax could raise their wages.”

And not only lawyers are laughing. From the International Association of Fire Fighters:

The CBO assumes employers will simply give raises with the money saved; history and common sense tell us a different story. The Cadillac tax won’t lower costs; it will shift them to workers. That’s why it should be repealed.

And from another “strange bedfellow” fighting the Cadillac Tax, in Business Insurance:

In a letter sent to federal lawmakers, the Alliance to Fight the 40 organization says there is little, if any, evidence to support a key assumption behind the tax: that it will raise billions of dollars in new federal revenue as employers cut benefits to avoid the tax and instead boost employees’ wages.

“It is economic theory, not hard evidence, supporting the claims that employers will make up lowered health benefits with higher wages,” the letter said.

It seems far more likely that employers will simply crapify the plans and leave wages where they are. I mean, that’s how — at the very best — how the game has been played for the last forty years, right? How will your health insurance plan be crapified? What happens when the Cadillac Tax means your plan is “too generous” or “too robust” or “too expensive”? Before answering that, we should point out that the whole “generous” framing is distorted; “power concedes nothing without a demand” is as true for the provision of health insurance by employers as it is for anything else. These plans were negotiated:

For years, many workers, including firefighters, have negotiated to secure quality health care in lieu of raises. For many Americans, the exclusion from this tax is one of the only real tax breaks they enjoy.

In other words, the “too generous” trope assumes that unions negotiate luxuries, and not necessities, for their members. How much sense does that make? And that’s before we get to the union-busting aspect, which, for the Obama administration, is a feature, not a bug. Los Angeles Times:

Unions have spent decades negotiating better health benefits for their members as alternatives to wage increases, only to find their hard-won benefits tipping over the Cadillac thresholds.

And if the unions can’t deliver wages, and now they can’t deliver benefits — or prevent existing benefits from being taken away — what exactly do they deliver? So who is to determine what is “generous”? Workers, or pencil-necked neo-liberal economists? Who never mention whether CEO health insurance -- or top 20% health insurance, for that matter -- is "too generous"? That said, let's turn to the crapification. From the Kaiser briefing:

The potential of facing an HCPT assessment as soon as 2018 is encouraging employers to assess their current health benefits and consider cost reductions to avoid triggering the tax. Some employers announced that they made changes in 2014 in anticipation of the HCPT, and more are likely to do so as the implementation date gets closer. By making modifications now, employers can phase-in changes to avoid a bigger disruption later on. Some of the things that employers can do to reduce costs under the tax include:

Increasing deductibles and other cost sharing;
Eliminating covered services;
Capping or eliminating tax-preferred savings accounts like Flexible Spending Accounts (FSAs), Health Savings Accounts (HSAs), or Health Reimbursement Arrangements (HRAs);
Eliminating higher-cost health insurance options;
Using less expensive (often narrower) provider networks; or
Offering benefits through a private exchange (which can use all of these tools to cap the value of plan choices to stay under the thresholds).

For the most part these changes will result in employees paying for a greater share of their health care out-of-pocket.

Mission accomplished! In short form, from Our Future:

As early as 2013, employers indicated that they were preparing for the Cadillac Tax by simply cutting benefits – which is exactly the response most common-sense observers would expect.

On top of the general crapification, there are two knock-on effects. First, the effects are unequal; and second, more and more plans will be affected. On the unequal (hence unfair) implementation:

There also are no adjustments for geography, so plans in regions with high health costs – such as the Bay Area – more likely will be hit “simply because of where they’re located,” says Laurel Lucia, an ACA expert at UC Berkeley’s Center for Labor Research and Education.

Wow, ObamaCare random with respect to jurisdiction, age, income, or personal circumstances? Who knew? Business Insurance:

While Congress’ original intent behind imposing an excise tax [assuming good faith –lambert] was to target only “overly rich plans,” the Alliance to Fight the 40 letter notes that the tax “will hit modest health plans that are expensive simply because they are offered in high-cost areas; or because they cover large numbers of people whose health costs are typically higher than average — women, older and disabled workers and families experiencing catastrophic health events,” the letter said.

Finally, the Cadillac tax will increasingly hit all plans, not just “overly generous” ones. Remember how the tax is figured on the cost of living, not the cost of the insurance? Here’s how that works out in detail. Forbes:

Beginning in 2018, the portion of any annual health insurance premium that exceeds $10,200 for individual coverage and $27,500 for family coverage will be taxed at 40%. For example, for a family plan with an annual premium of $30,000 the employer would be required to pay a 40% tax on the amount above $27,500 ($2,500) or $1,000. Although after 2018, the thresholds will be adjusted annually for the Consumer Price Index (CPI), the number of new individuals who find themselves having to pay this large surtax will grow rapidly, since the MCPI (Medical Consumer Price Index) is projected to increase faster than the overall CPI. This was not anticipated by policy makers, and as a result the assumptions that few plans would hit the threshold or that this excise tax would impact only the wealthiest Americans is looking equally inaccurate.

And so, at least for most of us poor shlubs, we’ve walked all round the barn to end up exactly where we started. Forbes again:

Already, 80% of people with a $5,000 deductible pay essentially all of their healthcare expenses out of pocket in any given year. And if deductibles grow even greater in the future, the barriers to care will rise for an increasing number of Americans who won’t be able to pay the high out-of-pocket expenses required. And when they develop major medical problems for which care is essential, they will face the difficult choice of paying for the needed care and having to default on their mortgages and other financial obligations, or not obtaining the medical treatments required.

Conclusion

So, a race to the bottom that starts out affecting “overly generous” health insurance, and ends up affecting more and more of the rest of us. Typical. I doubt this can be fixed by Congress this year or next, since the Democrats will not be able to admit that Obama has ever made a mistake in any aspect of his sorry administration, and Republicans have no choice but to throw red meat to their base by trying to repeal it all together. Pass the popcorn.

Notes

(1) Of course, health insurance is a product that ObamaCare mandates you purchase, so taxing it seems a little meta (even if employer-based insurance doesn’t come under the mandate).

(2) Note that the whole “revenue neutral” requirement ruled out single payer tout court, no doubt by design. Single payer is not revenue neutral for the government; it nets out positive for society precisely by using government’s purchasing power for public purpose.

http://www.cigna.com/aboutcigna/informed-on-reform/cadillac-tax

[Demeter]

2. EMU crisis has let 'evil genie' of euro exit out of the bottle, says policymaker

http://www.telegraph.co.uk/finance/economics/11828176/EMU-crisis-has-let-evil-genie-of-euro-exit-out-of-the-bottle-says-policymaker.html


Benoit Coeuré says single currency project can no longer force "integration through crisis" after turmoil in Greece... Europe needs to put the "evil genie" of a eurozone exit back in its bottle to retain popular support for monetary union, according to one of the euro's top policymakers.

Benoit Coeuré, executive board member of the European Central Bank, said the eurozone could not risk another Greek-style crisis, where seven months of protracted negotiations led Germany's finance minister to propose Athens voluntarily and temporarily exit the euro.

"The exit of a member country would inevitably lead economic actors to wonder who would be next, with all the potential destabilising effects that such speculation could entail," said Mr Coeuré.

"The genie will not be put back in its bottle once and for all until it is clear that such a risk will not rear its head again."

He added the euro's policymakers could no longer force "integration by crisis” - a mantra that has dictated the single currency project since its inception, but has never gained the support of its citizenry.

"Since 2010, the integration of the euro area has progressed under the pressure of the crisis, with agreements often reached at the last minute.

"We all have in mind Jean Monnet’s remark that 'Europe will be forged in crises, and will be the sum of the solutions adopted for those crises'. But some of these solutions, improvised in a hurry, are not always long lasting."

MORE

JUST FACE REALITY, CAN THE EURO AND ACT LIKE ADULTS FOR CRYING OUT LOUD

[Demeter]

3. Four charts that show why the euro isn't working for Germany or Greece

http://www.telegraph.co.uk/finance/economics/11767891/Four-charts-that-show-why-the-euro-isnt-working-for-Germany-or-Greece.html

The IMF has released its latest healthcheck on the state of the eurozone economy - it makes for grim reading...

1. Rebalancing is going nowhere

The IMF notes that "rebalancing has failed to take place among creditor countries with the large current surpluses of Germany and the Netherlands continuing to grow and moving farther away from levels implied by medium-term fundamentals". Germany is running a record modern-era current account surplus, and has been in violation of the eurozone's "excessive imbalances" rules for the last few years, without punishment. The IMF again redoubled its calls for larger economies to pull their weight and reduce global imbalances in its External Sector Report published today. In essence, the Fund is calling on the likes of Germany and creditor bloc nations, who have "fiscal space and low public debt" to support investment and boost consumption in the bloc.



The consequences of failing to reduce these imbalances are severe. The IMF's David Lipton says: "inaction on excess imbalances would mean a lost opportunity, settling for a mediocre global outcome in terms of growth and stability."

On the flip side, weaker southern debtor states such as Greece have born the brunt of the drive to end the eurozone's dysfunction. Much of this has occurred through a process of "internal devaluation" bringing down the costs of goods and labour in order to boost their competitiveness.

The chart below shows how developments in labour costs have progressed over the last decade or so. It's notable just how severe a devaluation Greece has been forced to undergo. But German unit labour costs have not responded in kind making the country hyper-competitive in relation to its peers.



2. Long-term unemployment is dangerously high

Joblessness has steadily been coming down and currently stands at around 11pc in the eurozone. But long-term and youth unemployment are at near historic highs. The number of people in work is also far below its pre-crisis peak. Long-term unemployment leads to a particualrly dangerous phenomena which economists have dubbed "hysteresis". This relates to a loss of skills by those who have been out of the labour force for a year or longer. In Britain, governor of the Bank of England Mark Carney has warned policymakers should be engaged in a "race against hysteresis". Chronic unemployment problems are most acute in southern Europe. Seven out of the ten EU regions with highest share of long-term unemployment are in Greece, while youth unemployment plagues half the population in Spain.



3. Output is still lagging behind the advanced world

Some monetary unions do work. The chart below compares nominal GDP per person in the US and the eurozone.



The IMF expects eurozone growth to reach 1.5pc in 2015, and 1.7pc next year but over the medium term, potential growth will average around 1pc. They note that in an adverse case of low investment for all euro area countries and increased risk premia for high debt countries, "output could be nearly 2pc lower by 2020".

TO SEE THE GRAPHS, GO TO THE LINK

[Demeter]

4. How the IMF Has Helped to Crush Greece MICHAEL HUDSON

http://www.alternet.org/world/how-imf-has-helped-crush-greece?akid=13453.227380.qvXLCD&rd=1&src=newsletter1042001&t=19

The Eurozone has become another economic dead zone.

This autumn may see anti-austerity coalitions gain power in Portugal, Spain and Italy, while Marine le Pen’s National Front in France presses for outright withdrawal from the eurozone. These countries face a common problem: how to resist the economic devastation that the European Central Bank (ECB), European Council and International Monetary Fund (IMF) “troika” has inflicted on Greece and is now intending to do the same to southern Europe.

To resist the depression and debt deflation that the troika seeks to deepen, one needs to bear in mind the dynamics that make the IMF un-reformable. Its destructive role in Greece provides an object lesson for how southern Europe must shun its horde of ideologues, as Third World countries learned to avoid it by May 2013, the year that Turkey capped the world’s extrication from IMF “advice.” Already in 2008, Turkey’s prime minister Recep Tayyip Erdogan announced: “We cannot darken our future by bowing to the wishes of the IMF.”[1] Greek voters have now said the same thing.

To soften resistance to the IMF’s austerity demands, a public relations drive is being mounted to rehabilitate the myth that the Fund can act as an honest broker mediating between anti-labor finance ministers and the PIIGS – Portugal, Italy, Ireland, Greece and Spain. On Friday, August 28, three Reuters reporters published a long “think piece” trying to show that the IMF is changing and that its head, Christine Lagarde, has seen the light and seeks to promote real debt relief.[2]

The timing of this report seems significant. The IMF got “back in business” in 2010 when its head, Dominique Strauss-Kahn, overrode its staff and many Board members in order to join the troika and shift the country’s bad debt from French and German bankers onto the Greek people. That is the story I tell in Killing the Host, which CounterPunch published in an e-version last week. (The hard-print and Kindle versions are now available on Amazon.)

MORE

[mother earth]

10. If Europe wishes to be smart & save the Eurozone they'll pay attention to the economists

who've penned a letter to the UN offering up the ONLY solution there really is. Germany isn't the winner if no one else is in the EU, they all have to share in economic prosperity & there's really only one way to do that at this point.

[Demeter]

5. Greece: Has New Government Already Sold-Out Before New Elections on 20 September? By Peter Koenig

http://www.informationclearinghouse.info/article42788.htm


The Delphi Initiative of Greece issued yesterday the following statement under the title Tsipras – Kammenos Surrender Greece:

The Greek Left is a political force, the supporters of which gave heroic struggles in the past to defend democracy and national independence of Greece, thousands and thousands of them dying, sent into prison and exile or tortured.

It is the first time in Greek history that a political force and a politician, who refer in the Left and especially in the ‘radical’ Left, cosign the surrender of people sovereignty and national independence of Greece.

According to the revelations in today’s Greek newspaper ‘Agora’ (5.09.2015), “the new government of Greece will be under the strict supervision of Brussels” and the Dutch Commissar Maarten Verwey as leading the new Task Force “will actually write all the proposed legislation for all the sectors plans, from the income tax and the job market to the healthcare policy and the system of social care”. Verwey’s team will cooperate closely with Troika, will be able to assign reports to the IMF and will talk straight with the Prime Minister, as Juncker wants. The agreement that Tsipras and Kammenos signed and the parody of the national delegation validated, forces the “Greek Government” to claim the assistance of the work group until the end of September.

At almost the same time, on 2 September 2015, Ms. Zoi Konstantopoulou, the President of the recently dissolved Greek Parliament, addressed the Fourth World Conference of Speakers of Parliament at the UN General Assembly Hall in New York. Ms. Zoi markedly referred this occasion also to the 70th Anniversary of the UN and the 70th Anniversary of the end of WWII.

Her extraordinary speech is self-explanatory

.

This clearly indicates that the Greek Government, the Greek parties are fully aware of their rights, of the absolute and total illegality – even criminality of what is going on – and has been going on for the last 5 years.

So, why is Greece continuing on this path?

In the face of what is known in the Greek Parliament, in the Greek Government – the abject illegality of the Greek debt through coercion and blackmail, the unconstitutionality of the Greek Parliament to vote against the 62% will of the people – the overwhelming NO to austerity on 5 July 2015 – in the face of this, the Tsipras – Kammenos Surrender begs the question: Why does Greece accept this dehumanizing and humiliating Brussels – troika dictate? – There must be a reason behind it.

Is it fear?

ANSWER? AT LINK

[Demeter]

6. RICHARD WOLFF: CAPITALISM HITS THE FAN (2009?) BUT STILL RELEVANT

[Demeter]

7. The New Colonialism: Greece and Ukraine By Jack Rasmus

http://www.telesurtv.net/english/opinion/The-New-Colonialism-Greece-and-Ukraine-20150829-0012.html

A new form of colonialism is emerging in Europe. Not colonialism imposed by military conquest and occupation, as in the 19th century. Not even the more efficient form of economic colonialism pioneered by the U.S. in the post-1945 period, where the costs of direct administration and military occupation were replaced with compliant local elites allowed to share in the wealth extracted in exchange for being allowed to rule on behalf of the colonizers.

In the 21st century, it is “colonialism by means of financial asset transfer.” It is colony wealth extraction by colonizing country managers, assigned to directly administer the processes in the colony by which financial assets are to be transferred. This new form of colonialism by direct management plus financial wealth transfer is now emerging in Greece and Ukraine.

Behind the appearance of the recent Greek debt deal is the reality of European bankers and their institutions — the European Commission, European Central Bank, IMF, and European Stability Mechanism (ESM) — who will soon assume direct management of the operation of the economy, according to the Memorandum of Understanding, MoU, signed August 14, 2015, by Greece and the Troika. The MoU spells out direct management in various ways. In the case of Ukraine, it is even more direct. U.S. and European shadow bankers were installed by U.S.-Europe last December 2014 as Ukraine’s finance and economic ministers. They have been directly managing Ukraine’s economy on a day-to-day basis ever since.

The new colonialism as financial asset transfer takes several practical forms: as wealth transfer in the form of interest payments on ever rising debt, in firesales of government assets sold directly to the colonizer’s investors and bankers, and in the de facto takeover the colony’s banking system and bank assets in order to transfer wealth to shareholders of the colonizing country’s private bankers and investors.

The Case of Greece


The Case of Ukraine

DETAILS AT LINK---AND IT'S NOT PRETTY! BUT IT IS THE NEW PARADIGM

[Demeter]

8. You Deserve a Raise Today. Interest Rates Don’t. By NYT EDITORIAL BOARD

http://www.nytimes.com/2015/09/07/opinion/you-deserve-a-raise-today-interest-rates-dont.html?_r=0

For most Americans, paychecks determine living standards. Unfortunately, wages in America have long stagnated or declined for most working people, including college graduates. The disappointing employment report for August — in which wage growth showed no sign of accelerating — only drove home that reality. Worse, flat or falling pay is self-reinforcing because it dampens demand and, by extension, economic growth. In the current recovery, median wages have fallen by 3 percent, after adjusting for inflation, while annual economic growth has peaked at around 2.5 percent. At that pace, growth isn’t able to fully repair the damage from the recession that preceded the recovery. The result is a continuation of the pre-recession dynamic where income flows to the top of the economic ladder, while languishing for everyone else.

Policy makers should be focused on strategies to raise wages, but the opposite appears to be happening. Just as Congress enfeebled the economy by switching too soon from stimulus spending to budget cuts, Federal Reserve officials have all but vowed to begin raising interest rates this year. That move reflects a belief that the economy is returning to “normal,” but it would be premature, because today’s norm is an economy that is incapable of generating and sustaining broad prosperity.

In a healthy economy with upward mobility and a thriving middle class, hourly compensation (wages plus benefits) rises in line with labor productivity. But for the vast majority of workers, pay increases have lagged behind productivity in recent decades. Since the early 1970s, median pay has risen by only 8.7 percent, after adjusting for inflation, while productivity has grown by 72 percent. Since 2000, the gap has become even bigger, with pay up only 1.8 percent, despite productivity growth of 22 percent.

Why has worker pay withered? The answer, in large part, is that rising productivity has increasingly boosted corporate profits, executive compensation and shareholder returns rather than worker pay. Chief executives, for example, now make about 300 times more than typical workers, compared with 30 times more in 1980, according to the Economic Policy Institute. Other research shows far greater discrepancies at some companies...

...it would be a setback for the Fed to act as if the economy is already near full employment. It’s not. The proof is in the paycheck.

[Demeter]

9. The long weekend is over, and US futures are up a hair

FROM 11 HOURS AGO...CURRENT FUTURES SHOW DJIA +265 TO +295 POINTS

http://www.cnbc.com/pre-markets/

http://www.businessinsider.com/us-futures-sept-7-2015-2015-9

US stock market futures began trading at 6:00 p.m. ET, and they're up a little. Dow futures are up 77 points, S&P 500 futures are up 11 points, and Nasdaq futures are up 22 points. This only makes up for a fraction of what the markets lost on Friday.

If you've been completely unplugged, you didn't miss too much. And if you're on vacation for the rest of the week, there isn't a whole lot on the economic calendar...The US stock and bond markets were closed Monday for the Labor Day holiday. European and Asian markets were open and the mostly closed modestly higher. China's Shanghai Composite closed down 2.5% and Hong Kong's Hang Seng closed down 1.2%.

The big headline from the long weekend came from the People's Bank of China which revealed the pace at which it was burning through its cash hoard. China's currency reserves fell by a record $93.9 billion in August to $3.557 trillion as the country struggles to prop up its weak currency. The People's Bank of China is selling dollars and buying yuan, which has been suffering since China devalued it against the dollar.

"The fear is that today’s data will reinforce the market view that the only way for the yuan to go is down, and further accelerate capital outflows," Bloomberg's Tom Orlik said.

[Demeter]

11. DJIA up 350 points--por quoi?

Is the PPT actually going to push this back up to 18K?

Haven't they ever heard of Sisyphus?