STOCK MARKET WATCH -- Wednesday, 18 November 2015

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Wednesday, 18 November 2015[font color=black][/font]

SMW for 17 November 2015

AT THE CLOSING BELL ON 17 November 2015
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Dow Jones 17,489.50 +6.49 (0.04%)
[font color=red]S&P 500 2,050.44 -2.75 (-0.13%)
[font color=green]Nasdaq 4,986.02 +1.40 (0.03%)


[font color=green]10 Year 2.27% -0.04 (-1.73%)
30 Year 3.06% -0.04 (-1.29%) [font color=black]


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


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[font color=black][font size=2]Handy Links - Videos:[/font][/font]
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Charlie Rose talks with Roubini
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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.
09/21/15 Volkswagen CEO Martin Winterkorn apologizes for VW cheating on air quality standards with emission testing avoidance device. Stock drops 20%, fines may total $18B.
09/22/15 Stewart Parnell, CEO Peanut Corp. of America, sentenced to 28 years in prison for selling salmonella-tainted peanut butter that killed nine.





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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. Greece reaches deal with lenders over reforms unlocking stalled aid

AND NOBODY CARES ANYMORE

http://www.reuters.com/article/2015/11/17/us-eurozone-greece-mortgages-idUSKCN0T52QU20151117


Greece reached an agreement with its lenders on financial reforms early on Tuesday, removing a major obstacle holding up fresh bailout loans for the cash-starved country. Athens signed up to a new aid program worth up to 86 billion euros ($92 billion) earlier this summer, but payment of part of an initial tranche had been held up over disagreement on regulations on home foreclosures and handling tax arrears owed to the state. After weeks of talks between the government and representatives from the European Union and International Monetary Fund, a deal was reached overnight over a first set of demanded reforms, Finance Minister Euclid Tsakalotos said.

"It was a difficult negotiation," Tsakalotos said. "Over the summer the pressure to reach a deal came from the specter of Grexit, this time it was the need to recapitalize banks," he said.

"The agreement covers all 48 demanded reforms and some extra milestones on financial issues."

Tsakalotos said the agreement meant Greece's parliament could ratify the reforms into law on Thursday, and that deputy euro zone finance ministers, known as the Euro Working Group, could endorse the deal on Friday.


That would allow the disbursement of 2 billion euros ($2.15 billion) in cash for the state to pay its own arrears and another 10 billion euros to help fill a 14.4 billion euro capital hole at the four main banks. The head of the euro zone finance ministers, Jeroen Dijsselbloem, said Greece's European creditors stood ready "to support the disbursement" once parliament approves the reforms.

"This is a good day," the EU's Economics Commissioner, Pierre Moscovici, told a news conference in Brussels.

Prime Minister Alexis Tsipras' leftist government is keen to complete the first review under the new bailout package, Greece's third since 2010, so it can start talks with lenders on debt relief. Tsipras is hoping to begin the debt negotiations before year-end...MORE


IT MUST BE TOUGH TO LOSE THE WORLD'S ATTENTION LIKE THAT, IN THE BLINK OF AN EYE

[Demeter]

2. Brazil Real Leads World Losses on Speculation Levy to Be Ousted

http://www.bloomberg.com/news/articles/2015-11-13/brazil-real-declines-as-china-lending-stokes-commodity-fears

Brazil’s real led world losses after a newspaper said that President Dilma Rousseff has been persuaded to replace Finance Minister Joaquim Levy. A government official denied the report.

...The wire service of Valor Economico newspaper reported that Rousseff has not yet decided on a replacement for Levy, and there is no set date for his exit. Later, a government official with knowledge of the discussions said the president doesn’t plan to remove Levy and hasn’t been persuaded to appoint former central bank chief Henrique Meirelles to the top economic job.

Brazil’s real advanced earlier this week amid speculation that Meirelles could replace Levy, ...MORE

[Fuddnik]

3. I think I'm gonna be disappearing for a while.

Can't take much more of this Hill-billy shit.

I've tried to be good, and kept my keyboard subdued, but I' getting to the point where I gotta let loose on the cult.

[Demeter]

4. Don't get tombstoned

I think the tide is turning on DU, as it is in general...the SHTF moment has come, and the raised curtain has revealed that the Wizard is a fraud...

What agitates me is: what are the site owners doing, ignoring it all? Do they want their income to go bye-bye? Is the alternate site doing so well that they can ignore this one? No, frankly, I don't give a damn. It's more idle curiosity than anything else.

Before it was the GOP grassroots going insane and ripping the Tea Party from the corporate cynics who sought to use it to enthrone Romney. Now, it's the Bernistas; and the corporations, union leadership, and DLC/Third Way are going to feel the Bern unto the 3rd degree.

It will be a very different world. At least, I hope so.

[Hotler]

17. Jones Town is insane these days. They feed on each other. Sometimes I have....

to go underground away from DU and the world as a whole just to catch a breath and regain some sort of balance. Yet I still have no and see no future especially at my work. Please take care and remember we are here for you if you need to vent.

[DemReadingDU]

19. I never visit there

Last edited Wed Nov 18, 2015, 02:53 PM - Edit history (1)

Why add more stress to my already stressful life

[DemReadingDU]

20. Oh no

It's sane here, though more economical than political.

BTW, how is your wife's son doing?

[Fuddnik]

23. Better now, but he was worse than we thought.

They finally moved him out of ICU yesterday. He was supposed to go into long term care, but they decided that he no longer needed that, and he's going into rigorous rehab instead.

I talked to one of my Dads doctors during a visit yesterday, and she said he must have had a major stroke, to lose his gag reflex, and inability to swallow. We didn't think it was that bad. But, I wasn't there to ask questions either.

[Demeter]

25. wow. Concentrating on him--the rest of the world can go hang

Sounds like he's getting top care, at least.

[Demeter]

5. Fear Spreads as China's Finance Firms Face Arrests VERY INTERESTING!

http://www.bloomberg.com/news/articles/2015-11-17/fear-spreads-in-china-finance-amid-unprecedented-arrests-probes

The high-drama highway arrest of a prominent hedge fund manager. Seizures of computers and phones at Chinese mutual funds. The investigations of the president of Citic Securities Co. and at least six other employees. Now, add the probe of China’s former gatekeeper of the IPO process himself...The arrests or investigations targeting the finance industry in the aftermath of China’s summer market crash have intensified in recent weeks, creating a climate of fear among China’s finance firms and chilling their investment strategies. At least 16 people have been arrested, are being investigated or have been taken away from their job duties to assist authorities, according to statements and announcements compiled by Bloomberg News.

The authorities’ goal is to root out practices such as insider trading as part of China’s anti-corruption campaign, and a desire by "some in the political leadership to find scapegoats to blame" for the market crash, according to Barry Naughton, a professor of Chinese economy at the University of California in San Diego. “Together these are creating uncertainty and anxiety that can only undermine the effort to make these markets work better,” he said by e-mail.

New Products

Chinese authorities have long encouraged funds and brokerages to create new investment products to keep the finance industry along a development path. Now that’s been halted by regulators’ raids, arrests by police and anti-corruption investigations of even regulators themselves by the Communist Party’s disciplinary committee. JPMorgan Chase & Co. and Credit Suisse Group AG have scaled back products that allowed foreign investors to bet on stock declines. At least one Chinese research firm has withdrawn information it used to provide to the market, calling it "too sensitive."

The government’s response to the market crash was intervention: state-directed purchases of shares, a ban on initial public offerings and restrictions on previously allowed practices, such as short selling and trading in stock-index futures. Next, high-ranking industry figures came under scrutiny as officials investigated trading strategies, decried “malicious short sellers” and vowed to “purify” the market. Policy makers say “now we’re innovating, so you can all come in -- using high-frequency trading, hedging, whatever -- to play in our markets,” Gao Xiqing, a former vice chairman of the China Securities Regulatory Commission, told a forum in Beijing on Nov. 6. “A few days later, you say no, the rules we made are not right, there are problems with your trading, and we’re putting you in jail for a while first.”

‘Hardly Predictable’

“That makes our markets hardly predictable -- such rules won’t bring stability,” said Gao, who later led China’s sovereign wealth fund and now teaches at Beijing-based Tsinghua University.

The products scaled back by Credit Suisse and JPMorgan are called synthetic shorts, which enabled clients to indirectly wager against Chinese stocks through Hong Kong’s stock exchange link with Shanghai, according to a memo to investors seen in September and people with knowledge of the matter. A scarcity of stocks that could be used for synthetic shorting led to limited usage of the product, said one of the people. The banks scaled back the offerings, which were legal, after Chinese authorities restricted short-selling and trading in index futures. Spokeswomen at both firms declined to comment at the time and again when contacted this week.

Stopped Trading About a third of China’s futures-focused hedge funds had to stop trading as regulators restricted practices such as short-selling. Howbuy Investment Management Co. in September said it stopped providing data on premature fund liquidations because the information was too sensitive. The Shanghai-based fund research firm had previously said almost 1,300 hedge funds closed this year amid the stock rout.

In the latest probe announced last week, Yao Gang, a vice chairman at the CSRC, is under investigation for “alleged serious disciplinary violations,” the Communist Party’s Central Commission for Discipline Inspection said. Known as China’s "King of IPOs," he supervised China’s initial public offerings until earlier this year, when he changed to approve bonds and futures, according to Caixin magazine. He joins two other CSRC officials being investigated, one of whom, Zhang Yujun, was formerly the general manager of the Shanghai and Shenzhen stock exchanges.

Unannounced Inspections The securities regulator carried out unannounced inspections of several Chinese investment firms including Harvest Fund Management earlier this month, taking away hard drives and mobile phones, according to people familiar with the seizures. Police in Shanghai also confiscated computers and froze $1 billion of shares in listed companies connected to Xu Xiang, the manager of Zexi Investment known as “hedge fund brother No. 1,” who was arrested Nov. 1 on a highway between Shanghai and Ningbo. Among Xu’s fellow money managers who performed well this year, anxiety has been palpable following his arrest, according to hedge fund manager Lu Weidong, chairman of Xinhong Investment based in China’s southern city of Dongguan. Lu’s Fuguo No. 1 fund was the best-performer among the 236 Chinese multi-strategy hedge funds from June to August, according to Shenzhen Rongzhi Investment Consultant Co., which tracks the data. It isn’t uncommon for Chinese money managers to trade on unpublished information, according to Lu. Everybody that ever traded on such tips would “restrain themselves a bit” going forward, Lu said by phone. “People are worried,” he said. While Zexi Investment’s Xu kept such a low profile that few knew what he looked like until a photo of him in handcuffs when he was arrested as part of a probe of alleged insider trading went viral on the Internet, he has long attracted attention for his funds’ exceptional performance, which had been “an outlier from a statistical point of view,” according to Yan Hong, Shanghai-based director of China Hedge Fund Research Center.

Amid tumult in China’s stock market, five funds managed by Xu yielded an “astonishing” 249 percent on average this year through September, according to Shenzhen Rongzhi data. The Shanghai Composite Index fell 5.6 percent in the same period, after a 41 percent market plunge since June 12 wiped out earlier gains. His returns prompted speculation about the methods and strategies he used, according to analysts including Hao Hong, chief China strategist at Bocom International Holdings Co. in Hong Kong.

MORE--WHAT A MESS!

[Demeter]

6. Debt Market Distortions Go Global as Nothing Makes Sense Anymore

STRAIGHT FROM THE HORSE'S MOUTH

http://www.bloomberg.com/news/articles/2015-11-15/debt-market-distortions-go-global-as-nothing-makes-sense-anymore

Something very strange is happening in the world of fixed income.

Across developed markets, the conventional relationship between government debt -- long considered the risk-free benchmark -- and other assets has been turned upside-down.

Nowhere is that more evident than in the U.S., where lending to the government should be far safer than speculating on the direction of interest rates with Wall Street banks. But these days, it’s just the opposite as a growing number of Treasuries yield more than interest-rate swaps. The same phenomenon has emerged in the U.K., while the “swap spread” as it’s known among bond-market types, has shrunk to the smallest on record in Australia.

Part of it simply has to do with the fact that investors are pushing up yields on Treasuries -- which guide rates for just about everything -- as the Federal Reserve prepares to raise borrowing costs for the first time in a decade. But in many ways, it reflects the unintended consequences of post-crisis rules designed to make the financial system stronger. Those changes have made it cheaper and safer to use derivatives to hedge risk, and more onerous and expensive for bond dealers to make markets in the safest securities.

“These kinds of dislocations can be expected to grow over time,” said Aaron Kohli, a fixed-income strategist at Bank of Montreal, one of 22 primary dealers that trade directly with the Fed. “The market structure and regulatory structure has evolved in a period with very low volatility. Once you take that away, it’s not clear what the secondary implications of that will be.”

Illogical Relationship

It’s hard to overstate how illogical it is when swap spreads are inverted. That’s because it suggests that governments are less creditworthy than the very financial institutions they bailed out during the credit crisis just seven years ago. And as the Fed prepares to end its near-zero rate policy, those distortions are coming to the fore.

MORE, AND VIDEO WORTH A LOOK-SEE

[Demeter]

7. A Trade Deal for Working Families By Barack Obama POSTED IN BLOOMBERG NEWS

I'M NOT GOING TO QUOTE FROM THIS POTUS POS, BUT IF YOU ARE CURIOUS (AND HAVE A STRONG STOMACH) IT'S AT:

http://www.bloombergview.com/articles/2015-11-10/a-trade-deal-for-working-families


I NEVER SAW A WORSE CASE OF SPECIAL PLEADING...HE STILL OUTDOES HILLARY, WHICH MAKES HER LOOK WORSE...

[Demeter]

8. Here's what the Internet hates about the TPP trade deal

http://www.dailydot.com/politics/what-is-tpp-internet-intellectual-property/?tw=dd

After years of warning that the secretive Trans-Pacific Partnership would be devastating for Internet freedom, intellectual property experts have finally gotten to look at the final draft of the proposed treaty. And they say it’s as bad as they feared.

Spanning 30 chapters over thousands of pages, the TPP is enormous. It took its 12 member nations—the U.S., Mexico, Canada, as well as Oceania and countries in South America and Asia—five years to negotiate it. Different civil groups have all kinds of criticisms of the TPP’s provisions, ranging from labor to the environment, though the main theme is that it emphasizes business over civil interests. That shouldn’t be surprising, given that it’s a trade deal, and that corporate lobbyists were given access to the negotiation process that was denied to the press and civil groups. Some of activists' most vocal criticism targets the TPP's intellectual property chapter, which critics say could have sweeping effects on Internet freedoms. Given that the IP chapter alone is more than 28,000-words long, analysts are still making their way through it, which means there will surely be more to add to this list as they dig deeper. Here are the areas of concern experts have singled out so far.

Investor-state dispute settlement

While it isn’t part of the IP chapter, the TPP comes with its own legal system, called the investor-state dispute settlement, which shows why it’s such a big deal if each member country adopts the new measures. In theory, the ISDS is a kind of court to help resolve trade disputes. But the consumer-advocacy group Public Citizen warns that it actually “would not meet standards of transparency, consistency, or due process common to TPP countries’ domestic legal systems or provide fair, independent, or balanced venues.” When would such disputes arise? Internet-rights group the Electronic Frontier Foundation notes that in 2011, Australia, in addressing the fact that cigarettes were among the leading causes of preventable death in the country, passed the Plain Packaging Act, which denied cigarette manufacturers from branding packs of cigarettes. U.S.-based cigarette manufacturer Philip Morris sued, unsuccessfully, over that law, citing a different trade agreement. The TPP’s legal system, the EFF argues, “can be characterized as a tool for private industry to directly undermine democracy and any public interest rule.”

The Office of the United States Trade Representative, which argued the U.S.’s stance for the TPP, previously told the Daily Dot that it wouldn’t agree to anything that contradicts U.S. law—in particular, when it comes to intellectual property, the oft-criticized 1998 Digital Millennium Copyright Act (DMCA). But a close reading, the EFF found, revealed that while the IP chapter seemed to strike a balance between regular Internet users and copyright holders, “all of the provisions that recognize the rights of the public are non-binding, whereas almost everything that benefits rights-holders is binding.”

Extended copyright terms

The TPP finds that copyright on works can last 70 years before they’re released into the public domain. Different countries have different standards on a copyright’s expiration date. Canada, say, or Malaysia—both TPP nations—currently have 50-year terms. That means that it’s currently perfectly legal there to share a movie or book or album from 1945-1965. But once Canada adopts the TPP, a person there can be accused of, and sued for, copyright infringement for sharing content of that age—and expect to face the ISDS instead of a real court. As Canadian copyright expert Michael Geist has noted, this also means that Canada will have to adopt the U.S. copyright “takedown” system, which legally compels websites to take down content if someone claims they hold the copyright to it.

ISP liability

A central way that the DMCA deals with piracy revolves around the concept of “safe harbor.” In essence, a website isn’t responsible if a user posts copyrighted content—otherwise, how would Facebook, or Tumblr, or any major site survive the onslaught of lawsuits?—provided that site is quick to take down that content when a copyright owner sends a DMCA notice. Technically, though, a copyright owner can sue a user’s Internet provider if they think that user is a repeat pirate and insist that the ISP block that user from getting online. In practice, this rarely happens, though there is one prominent copyright enforcement service, RightsCorp, that’s made kicking users offline part of its business model.

Since the TPP follows the DMCA’s lead on safe harbor, that means that copyright holders in one TPP nation can sue those in another over alleged piracy. It can be quite easy to be falsely accused of piracy, and in the past, major copyright holders have had no problems with suing regular users for hundreds of millions of dollars over claims of copyright infringement. And remember, these claims can go to the ISDS.

DRM

Digital rights management, or DRM, is a broad term, but it boils down to the basic sense of “locks” on electronics. Remember how iTunes used to let you “rent” songs, rather than buy them, meaning you couldn’t send them to friends or play them on non-Apple devices? The concept extends to hardware, like how you’re not supposed to use Keurig coffeemakers or John Deere tractors for anything other their intended purposes. The general argument against DRM is pretty clear: Customers feel like they should be able to do whatever they want with items they pay for, and that includes hacking them to see how they work or repurposing them for something else. The DMCA criminalizes DRM circumvention, which is harsher than a number of other TPP countries’ existing laws. But the intellectual property chapter would enforce the DMCA’s provision in every country, criminalizing anyone who “circumvents without authority any effective technological measure that controls access to a protected work, performance, or phonogram.”

Cybersecurity

Another provision of the TPP, designed to protect the interests of software developers prevents nations from demanding source code. In theory, this would help prevent piracy and protect the rights of those developers. But it also means that if the source code is secret, there are far fewer eyes searching for potential flaws—a key part of good cybersecurity—increasing the likelihood that the digital products we use can be hacked and our data exploited.

Stewart Baker, a lawyer who specializes in national security and technology issues, wrote in an op-ed in the Washington Post that the U.S. was extremely shortsighted here. “I doubt US security agencies are comfortable letting Vietnam write apps that end up on the phones of their employees without the ability to inspect the source,” he wrote. “In short, this is a tough policy call that is likely to look quite different in five years than it does today.”

None of this is entrenched quite yet, though. While it looks likely, each member nation has to ratify the TPP before joining in. For the U.S., that means passing Congress, and Senate Democrats have vowed to fight it.

[Fuddnik]

24. Two paragraphs are all I could swallow.

And I can't hold that down.

[Demeter]

9. The rain that was supposed to be here and gone is still stuck in Chicago

which gives the lawn crews another day to get the job done (but they have more than one day's work left, so there's a good chance Saturday's snow will cover the leaves, instead).

We live in interesting times.

[Demeter]

10. Portugal on collision course with EU as centre-Right government falls after 11 days

11 DAYS AND FREEDOM! THERE'S SOMETHING TO BE SAID FOR THE PARLIAMENTARY SYSTEM

http://www.telegraph.co.uk/news/worldnews/europe/portugal/11986416/Portugal-on-collision-course-with-EU-as-centre-Right-government-falls-after-11-days.html

Leftist anti-austerity forces wait in the wings after bringing down shortest government in Portugal's history... Portugal's centre-right government has collapsed after 11 days after Left-wing forces bought down prime minister Pedro Passos Coelho, putting the country on a collision course with the EU.

In a vote of no confidence held on LAST WEEK Tuesday, the country's parliament voted by 123 to votes to 107 to bring down the minority government and force Mr Passos Coelho's resignation. The collapse was widely expected after the country's three main left opposition forces - the moderate Socialists, Communists and radical Left Bloc - agreed a historic coalition in a bid to form an alternative government...Portugal's Leftist anti-austerity forces have vowed to reverse key economic policies of the previous government, setting Lisbon up for a battle with the EU only a year after it exited a €78bn bail-out programme.

...Left-wing alliance is likely to reverse cuts to the minimum wage and derail attempts at privatisation, but has toned down its anti-eurozone rhetoric.

The country's immediate future now hinges on the decision of president Anibal Cavaco Silva, who had promised to bar anti-EU forces from offices less than a month ago. Mr Cavaco Silva could be forced into a dramatic U-turn or put in place a caretaker government until new elections are held in April 2016 at the latest. Should the president relent, a new Left-wing government could be put in place by the end of the week. WELL, THAT DIDN'T HAPPEN

"A Left-wing government would shift policy from fiscal austerity to modest loosening, while a caretaker government would probably be unable to pass any key legislation, including the crucial 2016 budget," said Antonio Montilla, analyst at Citi.

The compliant conservative government of the last four years has been held up as an example by the likes of Germany. But following the government's ousting, one of the Berlin's most senior centre-right MEPs, Manfred Weber, said the any left wing government would "act against will of voters & winner of elections". UH, NO, THAT'S EXACTLY THE OPPOSITE, REALLY.

[Demeter]

11. The LASD bought a five million dollar helicopter with seized assets last year

https://www.muckrock.com/news/archives/2014/aug/05/pulitzer-project-asset-forfeiture/

...In most jurisdictions, when police conduct a lawful search of a person or their property, officers can seize any money or other physical property they believe to be involved in criminal activity. Usually this involves drugs or guns, but it can extend to assets such as cars, yachts, and houses.

The burden of proof usually lies on the owner, who must demonstrate that their money or goods are not crime-related in order to avoid forfeiture.

If the property is forfeited, its value is split between the law enforcement and prosecutorial agencies involved in the seizure and a general fund for either the state or federal government.

Asset forfeiture is therefore a valuable cash cow for money-hungry law enforcement agencies.

The Los Angeles County Sheriff's Department, for example, ended the 2013 Fiscal Year with over $12 million in its Equitable Sharing Fund after spending over $11.5 million from that account, including nearly $5 million on a new helicopter. And that balance only includes the profits from assets the LASD seized with the help of federal law enforcement agencies...

THIS LEVEL OF CORRUPTION HAS GOT TO BE EXPUNGED

[Demeter]

12. Everything You Need to Know About the Exxon Climate Change Probe

http://www.bloomberg.com/news/articles/2015-11-10/everything-you-need-to-know-about-the-exxon-climate-change-probe

For years, energy companies have couched the possible effects of climate change-related regulations in public reports to investors as "uncertain," "difficult," or "not possible" to reasonably predict. Now a probe by New York Attorney General Eric Schneiderman is raising questions as to whether the companies knew more than they were letting on.

Exxon Mobil received a subpoena last week by the state official seeking documents from as far back as the 1970s in a probe that aims to determine whether oil giant lied to investors and consumers, or withheld information about the effects of climate change. On Sunday, meanwhile, Schneiderman reached a settlement with the largest U.S. coal miner, Peabody Energy, in which the company agreed to include more detailed disclosures in reports to investors about the potential costs of climate-related regulations.

Exxon has denied implications that it lied to investors or the public. Peabody neither admitted nor denied the official’s findings.

While environmental advocates have cheered Schneiderman’s effort to take energy firms to task over a global crisis, some legal scholars question whether he is the right man for the job. "You wonder why this is the sort of thing that a New York attorney general should be doing," said James Fanto, a professor at Brooklyn Law School. "It seems like it’s just completely politically motivated."

Still, the state’s powerful Martin Act, a broad anti-fraud statute, could prove the best tool to expose anything companies could be hiding. "The Martin Act is a perfectly appropriate vehicle for addressing issues of investor disclosure," said Tom Sanzillo, director of finance for the Cleveland-based Institute for Energy Economics and Financial Analysis and a former first deputy comptroller for New York State....

IF LYING IS THE GAME, THEN ALL ADVERTISING WOULD HAVE TO BE BANNED, INCLUDING EBAY AND ANGIES AND CRAIGS LISTS....

[Demeter]

13. The euro was pointless Matthew C Klein

I'D SAY THE EUROZONE COMPACT WAS DECEPTIVE AND DANGEROUS TO PEOPLE, BUT THERE WAS A POINT TO THE EURO...PEOPLE WERE TIRED OF BEING RIPPED OFF BY CURRENCY EXCHANGES, AND HELD UP AT BORDERS.

THE EUROZONE WAS SOLD AS A CONVENIENCE TO PEOPLE, BUT DESIGNED AS A MEANS OF HURTING PEOPLE VIA CENTRAL BANKS, CORPORATIONS, AND OTHER POLITICAL CONSTRUCTS.

http://ftalphaville.ft.com/2015/11/11/2144531/the-euro-was-pointless/

It’s easy to forget now, but the single currency wasn’t created purely as a political project. Many economists in the 1980s and 1990s thought monetary union would encourage cross-border investment and trade by eliminating the risk premiums associated with the supposedly destabilising devaluations of the past. The net effect would be converging living standards, dampened business cycles, slower inflation, and faster productivity growth for everyone — the benign Germanisation of Europe. This was a laudable goal, but unfortunately it’s not how things worked out. The policy mistakes that exacerbated the eurozone crisis, while deeply destructive, can’t be blamed. A stimulating conference recently hosted by the Centre for European Reform made it clear to us the euro had already failed to meet the expectations of its architects before the crisis. Sharing currencies was unnecessary for economic convergence, if not actively harmful.

The monetary unions that weren’t

Before getting to the specifics of Europe’s situation, consider the most natural currency union never to exist: Australia and New Zealand. The two commonwealth countries have remarkably similar economies, a shared culture, a common language, and even the same banking oligopoly. About a fifth of New Zealand’s exports are bound for Australia and, until very recently, around the same proportion of its imports came from Australia. About 12 per cent of New Zealand’s exports to Australia are used as components in Australia’s exports, while about 20 per cent of New Zealand’s imports from Australia are used as inputs into New Zealand’s exports to the rest of the world. A little more than half of New Zealand’s outbound direct investment goes to Australia and about half of New Zealand’s inbound direct investment comes from Australia. The stock of Australian FDI in New Zealand is equivalent to about 26 per cent of New Zealand’s GDP...New Zealand’s population is less than a fifth the size of Australia’s, and a large bulk of the changes in the number of people living and working in Middle Earth can be attributed to New Zealanders moving back and forth from Oz, based on the relative health of the two countries’ job markets. (The two governments agreed on free movement of labour among citizens back in the 1970s. After many years in which more Kiwis moved west than the other direction, the commodity bust has finally pushed net migration in the opposite direction.) Truly, if there were any reason for any rich countries to enter into monetary union, there would be a case for New Zealand to join the Australian dollar zone. Yet despite having a lot more in common than, say, Portugal and the Netherlands, Australia and New Zealand have been perfectly content to have separate currencies and independent monetary policies. Moreover, the exchange rate has been quite flexible over the past 45 years...We could stop there, but there are a few other country pairs worth exploring.

Norway and Sweden are neighbors with basically the same language, similar cultures, and roughly comparable levels of economic development. (Yes, oil obviously affects Norway differently than it affects Sweden, but we never said these countries were identical, just similar.) Presumably if two countries could work out a shared currency, besides Australia and New Zealand, it would be these two eminently reasonable Nordic countries. Sweden exports more to Norway than to any other country in the world and, until the oil price crash, it imported more from Norway than from every other country besides Germany — which is remarkable given the far greater variety of products produced in Germany. Norway imports more from Sweden than from anywhere else, including Germany, and exports more to Sweden than to every other country in the world besides a few large oil-hungry European neighbors. Sweden is the largest source of foreign direct investment in Norway by a large margin, and the actual linkage may be even bigger than official data suggest given the outsize importance of Luxembourg and the Cayman Islands. Yet, just like Australia and New Zealand, the Swedes and Norwegians have done just fine floating their currencies against each other and pursuing independent monetary policies according to domestic conditions...With the notable exception of Sweden’s financial crisis in the early 1990s, the two countries have had almost identical inflation rates going back to the 1950s. (The recent divergence in inflation is less meaningful than it first appears because Sweden’s price index is distorted by floating-rate mortgage payments.) Clearly the volatility in their exchange rate hasn’t been a serious impediment to real economic integration. We could make similar comparisons between Norway and Germany and between Sweden and Germany, given their tight integration with the dominant economy of the euro area, but we want to end this section with our favourite pair of highly integrated economies: Canada and the US.

America is Canada’s biggest trading partner by an overwhelming margin — 77 per cent of Canada’s exports went to its southern neighbor in 2014, while 55 of its imports came from there. Canada is also America’s biggest trading partner and biggest export destination. This shouldn’t be surprising given cultural similarities, language, and the ease of moving from one place to the other. Canadian banks operate south of the border, while the high-end manufacturing industry, especially for motor vehicles, is tightly integrated along the Great Lakes region. (This is why the Canadian government contributed to the bailouts of General Motors and Chrysler.) About half of the foreign direct investment in Canada comes from the United States, while 42 per cent of Canada’s outbound FDI is held in the US. The true economic exposure to the US is probably higher, since roughly 17 per cent of Canada’s outbound FDI is invested in Barbados, the Cayman Islands, and Luxembourg. Similarly, a little more than 8 per cent of foreign direct investment in Canada comes from Bermuda, the Caymans, and Luxembourg. Around 11 per cent of the foreign direct investment in the US comes from Canada — more than any foreign country besides the UK, after adjusting for tax-minimisation strategies that imply significant foreign investment from Belgium, Luxembourg, the Netherlands, the British Virgin Islands, etc...Canada and the US have long had comparable inflation rates and tightly-linked business cycles, yet Canada, which is roughly one-tenth the size of America, has also been happy to have an independent monetary policy and floating exchange rate...

All of these examples should have been known to the founders of the euro by the 1990s, yet they moved ahead regardless. The biggest convergence in Europe had nothing to do with the single currency...In retrospect, it’s clear the euro simply shifted risk from exchange rate fluctuations to defaults (for foreign creditors) and nominal income (for domestic workers and businesses). This wasn’t sufficiently obvious at the time, however, or we wouldn’t have seen such massive growth in cross-border banking and portfolio flows within the currency bloc before 2008. Contrary to what the euro’s founders believed, it now appears the absence of monetary union is what’s needed to channel capital flows most productively across borders. That’s the real tragedy of the single currency: it was pointless from the start.

THERE'S A LOT MORE...BUT YOU CAN SEE HOW THE SALES PITCH HAD LITTLE TO DO WITH THE ACTUAL PRODUCT'S PERFORMANCE

[Demeter]

14. The real reason Wall Street loves the Trans-Pacific Partnership

http://www.vox.com/2015/11/11/9706360/tpp-financial-services



Due primarily to Elizabeth Warren's joint role as a leading critic of the Trans-Pacific Partnership and a critic from the left of the Obama administration's approach to bank regulation, it's natural that the financial services chapter of TPP has been at the center of much discussion...TPP critics have repeatedly raised the specter of a trade deal broadly undermining American financial regulation. The Obama administration responded to this concern by including a number of pieces of treaty language — including a backstop to the much-debated investor-state dispute settlement (ISDS) process — but it's left critics entirely unmollified. The issue essentially amounts to a complete breakdown of political trust, with critics basically rejecting the idea that any sort of safeguard is adequate.

Many progressives, including Warren, have been waging a years-long effort to shrink, break up, or otherwise destroy America's largest financial services companies. The team negotiating the TPP, by contrast, is trying to secure access to lucrative foreign markets for American financial services companies. From the point of view of the Obama administration, the financial services chapter offers a significant upside in the form of more high-value exports and a very limited downside due to the protections for domestic financial regulation. To the administration's critics, bolstering financial services exports isn't an upside at all — so there's really no level of downside risk that's worth bearing.

Everyone agrees the TPP is good for American banks

The core thing the Trans-Pacific Partnership does is try to ensure that US-based financial services companies — many of which are big, globally competitive, and diversified in terms of the kinds of services they can offer — will be able to compete for market share in TPP partner countries. The agreement to openness is, of course, mutual, but in practice nobody expects much to change in terms of foreign banks operating in the United States. On the one hand, the US financial sector is already very open — New York City is the global hub of finance, after all — and lots of foreign-owned financial firms are already active in the United States. On the other hand, there are numerous small carve-outs for the United States listed in an annex, guaranteeing that existing elements of US financial regulation will be exempt from TPP's broad claims. All of this is a big win for the American financial services sector.

As the Obama administration puts it, "Rules for trade and investment in the financial services sector in the TPP will ensure that American businesses and workers can serve all these varied markets, promoting economic growth and job development in the United States and throughout the Asia-Pacific region." US-based banks are going to make money selling financial services in Asia, and some of that money will flow into the pockets of people who work in the financial services sector in the United States. That's why the US Coalition for TPP includes the American Insurance Association, Citigroup, Goldman Sachs, and Morgan Stanley...From the White House's viewpoint, this is a good thing. TPP will support high-value exports in a sector where things like cheap Chinese labor are unlikely to carry the day. But if your passion in life is trying to tear down the firms that sit at the commanding heights of the American banking system, it's not such a good thing at all.

MORE

[Demeter]

15. Very hard to find economic news

Even Bloomberg is full of Paris and debates and so forth.

Not that there's anything wrong with such coverage, but I have the sneaking suspicion that while the public's attention is diverted, so is its wealth, prosperity, and future.

VERY interesting weather pattern today...go look! http://www.wunderground.com/US/Region/US/2xFronts.html

I'm having another impossible day. Maybe Thursday I can get up to speed. Happy Hump day, everyone!

[Demeter]

16. When Can the Government Freeze Your Assets?

http://www.slate.com/articles/news_and_politics/supreme_court_dispatches/2015/11/supreme_court_luis_case_when_can_the_government_freeze_your_assets.html

Sila Luis wants a good lawyer. Charged with defrauding Medicare for millions of dollars through kickbacks and overbilling, Luis faces a three-week criminal trial—and, if convicted, heavy fines and a lengthy prison sentence. To secure counsel, Luis hopes to draw from an account entirely unrelated to her alleged fraud. But the federal government refuses to give her access to a single cent, freezing all of her assets, including those untainted by her purported fraud. You can still get a lawyer to represent you, the government tells her—you just have to find one who’ll do it for free.

Nobody is eager to stand up for a rich woman who allegedly swindled taxpayers for millions then demands the right to hire a fancy lawyer. But Luis seeks support from that longtime defender of unpopular plaintiffs, the Constitution of the United States. Scan through the Sixth Amendment, and you’ll find that “in all criminal prosecutions, the accused shall enjoy the right … to have the assistance of counsel for his defense.” The Supreme Court has long held that this provision includes the right of a defendant “to secure counsel of his own choice.” Luis argues that, by denying her access to legitimate, untainted funds, the government is unconstitutionally denying her the right to choose her preferred attorney.
Advertisement

On Tuesday morning, Luis took her case to the Supreme Court to see if she could find five justices who agree with her theory. It’ll be a close call. After a lively hour of arguments, it’s not at all clear which way the court is leaning. This is one of those cases that transcends ideological (or, for cynics, partisan) divisions: a good old-fashioned stumper where what seems right and what the Constitution demands may very well be at complete odds.

Howard Srebnick, a lawyer from Florida, where Luis’s alleged crimes occurred, kicks off arguments with a defense of Luis, and his glorious mullet instantly stands out in a courtroom filled with neatly trimmed locks and balding pates. Srebnick wants the court to draw a simple line between tainted and untainted funds. Tainted funds, the court held in 1989, can be constitutionally frozen even when doing so bars the defendant from retaining her preferred attorney. (“A defendant has no Sixth Amendment right to spend another person’s money for services rendered by an attorney,” the court huffed.) But untainted funds, Srebnick argues, cannot be entirely frozen: The Sixth Amendment requires that a defendant be permitted to draw from untainted assets to pay an attorney of her choice.

This distinction holds for approximate 45 seconds, at which point Justice Elena Kagan thrusts the court into an ontological debate about money. Kagan describes two bank robbers: one who uses stolen money to pay an attorney, and one who uses stolen money to pay his rent—then uses the money he saved on rent to pay an attorney.

“Why,” Kagan asks, “should the two cases be treated any differently for Sixth Amendment purposes?”


WHY INDEED? MAYBE SHE ISN'T GUILTY? COULD THAT BE AN ACCEPTABLE REASON?

[DemReadingDU]

21. Whenever it wants to

[Demeter]

26. Another reason to buy physical gold

[DemReadingDU]

18. U.S. Targets RBS, J.P. Morgan Executives in Criminal Probes

11/18/15 U.S. Targets RBS, J.P. Morgan Executives in Criminal Probes
Investigations center on mortgage securities sold before the financial crisis; no decisions yet on whether to bring charges

Federal prosecutors are actively pursuing criminal cases against executives from Royal Bank of Scotland Group PLC and J.P. Morgan Chase & Co. for allegedly selling flawed mortgage securities, people familiar with the probes said, as the clock ticks down for bringing cases from the 2008 financial crisis.

Officials are working to establish that the bankers ignored warnings from associates that they were packaging too many shaky mortgages into investment offerings and are weighing whether they can prove that constituted fraud, the people said.

At RBS, prosecutors are scrutinizing a $2.2 billion deal that repackaged home mortgages into bonds in 2007, the people said. In a 2013 civil settlement with RBS, the Securities and Exchange Commission described the lead banker on that deal, whom it didn’t name, as trying to push it through over concerns of the diligence department.

At J.P. Morgan, prosecutors are focusing on two people who worked on a different residential-mortgage deal, the people said.

J.P. Morgan noted the existence of a criminal probe in a Nov. 2 quarterly securities filing. A spokesman declined to comment beyond that document.

RBS, which neither admitted nor denied the SEC’s findings in its settlement with the agency, declined to comment for this article. In a July securities filing, the bank said the civil and criminal divisions of the Justice Department were investigating the bank’s mortgage securitizations.

more...
http://www.wsj.com/articles/u-s-targets-rbs-j-p-morgan-executives-in-criminal-probes-1447786655

[mahatmakanejeeves]

22. Housing starts fall to lowest level since the spring after storms, flooding

Economy & Politics
Economic Report

Housing starts fall to lowest level since the spring after storms, flooding

By Jeffry Bartash
[e-mail]
Published: Nov 18, 2015 9:11 a.m. ET

WASHINGTON (MarketWatch) — Home builders scaled back in October, but the slower pace of construction was mainly in the South where storms and flooding disrupted work.

So-called housing starts fell 11% last month to an annual rate of 1.06 million, the Commerce Department said Wednesday. That’s the lowest level since March.

Housing starts in September were also revised down slightly to a seasonally adjusted 1.19 million rate.

Yet a rebound in permits to build new homes suggests the slowdown in October is likely to be temporary. Permits rose 4.1% last month to a 1.15 million annual rate.