STOCK MARKET WATCH -- Friday, 4 December 2015

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Friday, 4 December 2015[font color=black][/font]

SMW for 3 December 2015

AT THE CLOSING BELL ON 3 December 2015
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Dow Jones 17,477.67 -252.01 (-1.42%)
S&P 500 2,049.62 -29.89 (-1.44%)
Nasdaq 5,037.53 -85.70 (-1.67%)


[font color=red]10 Year 2.32% +0.09 (4.04%)
30 Year 3.05% +0.10 (3.39%) [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]

[Proserpina]

1. We all will wait a long time for that

Mom has got the mechanicals in her house all replaced, and now she's working on mine, which are equally old and failing rapidly.

And the struts in her car need to be replaced. It's just one damn thing after another. At least it hasn't snowed since 2 weeks ago...

[Proserpina]

2. Ukrainian refugees in Russia: Did Moscow fumble a valuable resource?

http://www.csmonitor.com/World/Europe/2015/1201/Ukrainian-refugees-in-Russia-Did-Moscow-fumble-a-valuable-resource

Russians have warmly welcomed more than a million pro-Moscow Ukrainian refugees in the past 18 months. But the state bureaucracy hasn't followed suit...Over the past 18 months, Russia has taken in more than 1 million Ukrainian refugees like the Pyatkov family who have fled the destructive civil war between a West-oriented government in Kiev and Russian-backed rebels. The deluge is comparable to the wave of Syrians and others pouring into Europe – but it’s happened with very little publicity and even fewer apparent social strains.

A key reason for that is that most of the Ukrainians who’ve been streaming into Russia are Orthodox, Slavic Russian-speakers who tend toward a pro-Kremlin political viewpoint and who are welcomed, in theory at least, by President Vladimir Putin’s government.

But the Pyatkov family is still among the lucky few who’ve managed to obtain proper documents to live and work here. Others remain trapped in a corrupt, glacial immigration process that seems designed to keep migrants from central Asia in low wage jobs but without permanent status. While ordinary Russians have welcomed them warmly, many Ukrainian refugees say, they find it impossible to find legal work for which they are qualified...With peace possibly breaking out now in Ukraine, there are tentative signs of a reverse exodus, and experts say the window of opportunity to properly welcome and integrate this wave of ideal newcomers may be rapidly closing.

“It may have been what our authorities always said they wanted, but the sudden influx of over a million people was a huge headache for them, and they were in no way prepared for it,” says Dmitry Oreshkin, head of the Mercator Group, a Moscow-based think tank. “They’re not ready for it now, especially since Russia is in the midst of an economic crisis, so it seems that they are trying to discourage Ukrainian immigrants in practice, pressure them to go home, regardless of what official policy proclaims.”

According to Russia's Federal Migration Service (FMS), 2.6 million Ukrainians live in Russia, more than half of them long-term “guest workers,” but about a million more who’ve arrived in the past 18 months fleeing next-door Ukraine...

[antigop]

4. Why Do Former Goldman Sachs Bankers Keep Landing Top Slots at the Federal Reserve?

http://www.thenation.com/article/why-do-former-goldman-sachs-bankers-keep-landing-top-slots-at-the-federal-reserve/

During the last year, three vacancies opened up to head regional Federal Reserve banks. They all went to Goldman Sachs alumni.

It’s hardly a secret that the halls of government are filled with graduates of Goldman Sachs, the controversial Wall Street investment bank. But the revolving door between Washington and Goldman has been spinning a little faster of late, depositing three of the bank’s alumni into top slots at the Federal Reserve in recent months. This should concern anyone with a commitment to democracy, transparency, and a government free of corporate influence—and it should prompt swift action from Federal Reserve Chair Janet Yellen, who has the power to stop dubious appointments and can exercise her authority to reform how Fed leaders are selected.

During the last year, three vacancies have opened up to head regional Federal Reserve banks around the country. One by one, all three of the spots have gone to former insiders from Goldman Sachs. First, Goldman Sachs trustee Patrick Harker essentially picked himself to lead the Philadelphia Fed, stepping down as chair of the Philadelphia Fed Board of Directors to allow for his own selection. In August, former Goldman Sachs Vice Chair Robert Kaplan was chosen to head the Dallas Fed despite sitting on the board of directors for the headhunting firm tasked with finding a new Dallas Fed president.

Now, just this month, the Minneapolis Fed tapped Neel Kashkari, who began his banking career covering information technology software at Goldman Sachs, as its 13th president and CEO. A protégé of former Goldman chief Hank Paulson, Kashkari can hardly be counted on to side with workers over banks. As the administrator of the federal government’s bank bailout program, the Troubled Asset Relief Program, Kashkari resisted calls for more accountability and better oversight of the way financial institutions spent billions in taxpayer money. And while running as the Republican candidate for governor of California last year, Kashkari lambasted labor unions and promoted austerity.

Once Kashkari takes his seat on January 1, 2016, one-third of the 12 Federal Reserve Banks will be led by someone with strong ties to Goldman Sachs. In addition to Kashkari and his two fellow (and they are all fellow) recent appointees, the New York Fed’s president, William Dudley, is also a Goldman Sachs alumnus. He served as the bank’s chief economist for ten years as well as partner and managing director.

[Proserpina]

22. (see post #14)

[Proserpina]

5. U.S. officials seek business help to sell Pacific trade pact

Do they really think ordinary people think what business wants is important?

http://www.reuters.com/article/2015/12/03/us-trade-tpp-idUSKBN0TM2YC20151203?feedType=RSS&feedName=businessNews

U.S. officials and lawmakers urged business leaders on Thursday to get behind a Pacific trade pact as they vowed an all-out effort next year to get the deal through the U.S. Congress.

Negotiators from 12 countries sealed the Trans-Pacific Partnership trade pact, a key plank of U.S. President Barack Obama's outreach to Asia, in October, but it has so far won a mixed reception in Congress. Senior White House officials told a gathering of top CEOs who advise Obama on trade that they planned an all-out push next year for the TPP, mirroring a campaign for key trade legislation this year. That took six weeks to clear Congress and passed the House of Representatives on a 218-208 vote.

"Trade votes are always hard, this is going to be a tough battle," U.S. Trade Representative Michael Froman told a meeting of the President's Export Council, adding that lawmakers needed to see the concrete benefits for workers and firms at home. "We look forward to working with you in that regard."

Although the deal has won backing from some industry groups and companies including Metlife (MET.N) and Cargill [CARG.UL], major business groups, including the U.S. Chamber of Commerce and the National Association of Manufacturers, have yet to declare a final verdict on the TPP. Pharmaceutical firms are unhappy with monopoly periods for some drugs, carmaker Ford (F.N) laments a lack of sanctions for currency manipulation and financial services firms are unhappy that they are excluded from a ban on countries forcing firms to store data locally.

Republican lawmaker Dave Reichert said an exemption allowing TPP members to shield anti-smoking measures from lawsuits by foreign investors would lose around 15 Republican votes, and trade advocates would have to woo new supporters. "Your input, your visitations with a variety of members of Congress on both sides of the aisle will be absolutely critical," he said...

[Proserpina]

6. VW ready to sell assets should loan repayment falter

http://www.reuters.com/article/2015/12/03/us-volkswagen-emissions-idUSKBN0TM1BA20151203?feedType=RSS&feedName=businessNews

Volkswagen (VOWG_p.DE) has told banks supplying a 20 billion euro ($21.1 billion) credit line that it would sell assets if it finds no other way of repaying the one-year loan, two people familiar with the matter said.

Europe's largest carmaker is under pressure to strengthen its finances as it is expected to have to pay out tens of billions of euros to cover fines, lawsuits and vehicle refits after it admitted to cheating U.S. diesel emissions tests and falsifying carbon dioxide emissions.

The biggest corporate scandal in the German company's 78-year history has forced out its long-time CEO, wiped billions of euros off its market value and hammered its bonds, making it much more expensive for the company to borrow through its traditionally-preferred route of the debt market.

VW secured the 20 billion euro bridging loan from 13 banks this week and is planning to refinance it by issuing bonds over the next couple of months, the sources said.

Under the terms, VW assured the lenders it would sell or list assets worth up to significantly more than 20 billion euros if it fails to find other sources of money, the people said...

[Proserpina]

7. J.P. Morgan: Hamilton is awesome, if ‘the damn fool who shot him’ founded the bank

http://www.marketwatch.com/story/jp-morgan-hamilton-is-awesome-and-so-is-the-guy-who-shot-him-2015-12-03?siteid=YAHOOB

J.P. Morgan Chase & Co. sent out its annual reading list for the holidays on Thursday, and for the first time it included a music album. And not just any album, but the original hip-hop soundtrack to “Hamilton: An American Musical”...“Hamilton,” which chronicles the story of founding father Alexander Hamilton, has been the talk of the town since arriving on Broadway in August — President Barack Obama has seen the show at least twice — but J.P. Morgan’s reason for including the cast album in its 2015 holiday reads is, if nothing else, odd.

“The history of J.P. Morgan Chase will forever be tied to Alexander Hamilton, who lost his famous duel in 1804 to Aaron Burr, founder of The Bank of The Manhattan Company,” the bank said in a news release. And by “lost his famous duel,” they, of course, mean that Burr was the guy who shot him. But not before tricking Hamilton into an endorsement that helped Burr establish The Manhattan Company, which is J.P. Morgan’s earliest predecessor.

New York City’s water supply in the 1700’s was, as one can only imagine, putrescent, often thought to be the cause of frequent yellow fever epidemics. So Burr gathered some prominent New Yorkers — including Hamilton, who had resigned his post as Secretary of the Treasury in 1795 — to propose creating a private firm to supply clean water to residents of New York City.

However, the charter obtained from the New York State Legislature included a loophole that allowed The Manhattan Company to use any excess capital to engage in banking activity. At the time there were two banks in New York: The New York branch of the First Bank of the United States and the Bank of New York, which was dominated by Hamilton’s Federalist party. The Manhattan company raised $2 million, used $100,000 for the water supply system, and used the rest to start The Bank of The Manhattan Company, which then battled Hamilton and his banking buddies...

[Proserpina]

8. 1776, it's not

Dreadful!

[MattSh]

9. WEE Theme: Time to get out your crystal balls everybody!

New predictions for next year, 2016. Will there be a choice worth voting for? Will the economy go belly up? Or the empire? Will new technology save the day or are we all basically screwed? Is it time for another big one (war, that is)?

Old predictions, from last year, last decade, or last century. What's come true, what has not? Might some of this still come true?

There's so many so-called professionals that do this every year, and do it poorly. Show that wee have a better handle on this prognostication stuff than the so-called pros do.

See you this WEEkend!

[Proserpina]

10. Pimco, others sue Citigroup over billions in mortgage debt losses By Jonathan Stempel

http://finance.yahoo.com/news/pimco-others-sue-citigroup-over-202412863.html


Pacific Investment Management Co and other investors have sued Citigroup Inc over the bank's alleged failure to properly monitor toxic securities backed by more than $13.8 billion of mortgage loans, resulting in $2.3 billion of losses. According to a complaint filed Tuesday night in a New York state court in Manhattan, Citigroup breached its duties as trustee for the 25 private-label trusts dating from 2004 to 2007 by ignoring "pervasive and systemic deficiencies" in how the underlying loans were underwritten or being serviced. The investors said Citigroup looked askance at the loans' "abysmal performance" out of fear it might "jeopardize its close business relationships" with loan servicers including Wells Fargo & Co and JPMorgan Chase & Co, or prompt them to retaliate over its own problem loans. Some loans backing the 25 trusts came from issuers including the now-defunct American Home Mortgage and Washington Mutual. The lawsuit seeks class-action status and unspecified damages.

Citigroup spokeswoman Danielle Romero-Apsilos declined to comment. TIAA-CREF, and affiliates of Prudential Financial Inc and Aegon NV's Transamerica are among the other plaintiffs.

Pimco, a unit of German's Allianz SE, has filed lawsuits against other banks raising similar allegations over other mortgage trusts. A Pimco spokesman declined to comment.

Bond issuers appoint trustees to ensure that payments are funneled to investors, and handle back-office work after securities are sold. Trustees have in recent years become a target for investors who lost money on badly underwritten mortgages, and believe the trustees shirked their duties to force lenders and bond issuers to buy those loans back...

[Proserpina]

11. Wall St. Faces Mounting Criticism From Regulators

http://www.nytimes.com/2015/11/26/business/dealbook/wall-st-faces-mounting-criticism-from-regulators.html?_r=0

Despite the fallout from the 2008 financial crisis, Wall Street still has a tendency to dismiss as frivolous some of the ethical issues it faces daily.

But at a Nov. 5 symposium on ethics at the Federal Reserve Bank of New York — the second on the topic two years — regulators suggested that Wall Street executives who continue to ignore the various cultural flaws at their firms do so at their own peril.

It seems that this time really is different: If Wall Street doesn’t take steps to prevent some of the behavior that has led to $230 billion in fines against American and European banks in the last six years, principal regulators appear quite determined to do it for them, promising to break up the big investment banks if they need to. And that will not be an outcome that will appeal to anyone running a powerful Wall Street firm.

William C. Dudley, the former Goldman Sachs partner who has been president of the New York Fed since January 2009, organized the event as a follow-up to his October 2014 closed-door session on the same subject....more

but don't hold your breath

[Proserpina]

12. U.S. working to keep up with surging weapons demand: Pentagon

http://www.reuters.com/article/2015/11/25/us-usa-arms-idUSKBN0TE0B920151125

The U.S. government is working hard to ensure quicker processing of U.S. foreign arms sales, which surged 36 percent to $46.6 billion in fiscal 2015 and look set to remain strong in coming years, a top Pentagon official said.

"Projections are still strong," Vice Admiral Joe Rixey, who heads the Pentagon's Defense Security Cooperation Agency (DSCA), told Reuters in an interview late on Monday.

He said the agency was trying to sort out the impact of a much stronger-than-expected fourth quarter as it finalized its forecast for arms sales in fiscal 2016, which began Oct. 1.

The fight against Islamic State militants and other armed conflicts around the globe were fueling demand for U.S. missile defense equipment, helicopters and munitions, Rixey said, a shift from 10 years ago when the focus was on fighter jets...

[MattSh]

13. Just another example of the gun sickness infecting the whole damn USA.

Hey, sell arms to everybody, and hope the all kill each other. If they don't, we'll stir up old animosities, then they'll be happy to. The USA will sit back and collect the money to enrich the 1%. Then maybe that money will extend the American Century a couple more years.

[Proserpina]

14. Mom says Hi!

[DemReadingDU]

20. ha!

tell mom Hello!

[Proserpina]

15. The real reason for the Obamacare repeal

http://www.politico.com/story/2015/12/obamacare-repeal-real-reason-216409

Republicans on Capitol Hill are sending their long-sought Obamacare repeal on a kamikaze mission to the president’s desk. The GOP has big reasons to move ahead with a doomed mission: to force the president to veto the bill, to fulfill a promise to its base and to lay the groundwork to truly repeal Obamacare under a Republican president in 2017.It’s not just optics. Republicans are carefully constructing a legislative strategy, based on Senate rules and precedents, to make it easier to unravel the health law in 2017 if a Republican wins the White House.

The Senate on Thursday approved legislation, 52-47, to repeal the most significant parts of the Affordable Care Act under special budget rules, called reconciliation. Democrats couldn't filibuster reconciliation under the rules, and it only needed 51 votes to pass.

While President Barack Obama has already promised to veto the bill, its contents could provide a road map showing which pieces of the Affordable Care Act could be repealed under a Republican administration.

Under the special rules of reconciliation, the Senate’s parliamentarian has to determine whether each provision complies with the Senate’s rules. Those rulings are based in part on precedent. So once the parliamentarian determines that this legislation complies, it makes it hard to argue that a similar repeal bid doesn’t in January 2017 -- when a new president might sign it into law.

Read more: http://www.politico.com/story/2015/12/obamacare-repeal-real-reason-216409#ixzz3tM76SP1D


I suspect President Sanders can also use it, to clean up the mess after he gets Universal Single Payer Healthcare (Medicare for All) on the books.

[Proserpina]

16. ECB did not see need to increase monthly QE spend because of other moves

http://www.reuters.com/article/ecb-policy-spend-idUSL8N13S3ND20151203

The European Central Bank did not add to its monthly asset purchase programme because extending the scheme and reinvesting proceeds were deemed sufficient, ECB President Mario Draghi said on Thursday.

He added that other moves were open later if needed and described the decision to reinvest principal repayments on bonds it has already bought to maintain liquidity as "very significant".

"Our asset purchase programme is flexible. It can always be adjusted. We decided the extension of our horizon and especially the re-investment of principal would be sufficient," he said.

Financial markets were surprised that the ECB did not to more actions on Thursday, such as increasing the monthly spend.

Draghi Braves QE Hype With Boost That Leaves ECB Room to Do More

The European Central Bank unveiled a package of measures to tackle too-low inflation, from a cut in the floor for interest rates to an expansion of its bond-buying program by at least 360 billion euros ($390 billion). Investors were unimpressed.

The Frankfurt-based ECB will extend quantitative easing by six months until at least March 2017 at the current rate of 60 billion euros a month, and broaden the assets purchased to include local and regional debt, ECB President Mario Draghi said on Thursday. The Governing Council earlier reduced its deposit rate by 10 basis points to minus 0.3 percent.

The fresh stimulus coincides with a shift in global monetary policy, with the ECB adding stimulus as the U.S. Federal Reserve prepares to start its process of normalization. Even so, financial markets reacted with skepticism, sending the euro up as much as 2.6 percent and equities and government bonds down in a sign that Draghi’s measures fell short of expectations.

“The expectations were too high, and this was the minimum he could do,” said Marco Valli, chief euro-area economist at UniCredit SpA in Milan. “I think this was a mix of Draghi being held back by the conservatives, but also him wanting to keep some powder dry in case more is needed.”

more

[Proserpina]

17. S&P downgrades holding companies of eight U.S. banks

http://www.reuters.com/article/us-s-p-banks-idINKBN0TM27C20151203

Standard & Poor's cut its nonoperating holding company (NOHC) ratings on eight U.S. "global systemically important banks" by one notch, citing uncertainty about the U.S. government's willingness to provide support to the banking system if it came under stress.

The ratings apply to the holding companies of Bank of America Corp (BAC.N), Citigroup Inc (C.N), Morgan Stanley (MS.N), Wells Fargo & Co (WFC.N), Bank of New York Mellon Corp (BK.N), State Street Corp (STT.N), JPMorgan Chase & Co (JPM.N) and Goldman Sachs Group Inc (GS.N).

The credit ratings on the banks' operating units are not affected by the downgrade...

[Proserpina]

18. U.S. SEC charges 3 Chicago traders with spoofing

http://www.reuters.com/article/usa-sec-spoofing-idUSL1N13S1X420151203#038vSssQGWGoWc8T.97

U.S. securities regulators charged three Chicago-based options traders with civil fraud on Thursday over allegations they engaged in manipulative electronic trading known as spoofing, faking orders for a security to deceive the market. The Securities and Exchange Commission said twin brothers Behruz and Shahryar Afshar, and Richard F. Kenny IV, circumvented exchange rules and engaged in additional misconduct that allowed them to pay lower fees and reap other benefits.

The SEC initiated proceedings to permanently stop the traders from continuing the alleged conduct. A hearing will be set to determine possible other sanctions for the traders, the SEC said in a statement. Lawyers for the Afshar brothers and Kenny did not immediately return calls requesting comment...The banned trading practice is a growing focus among regulators and criminal authorities. Last month, a Chicago jury convicted high-frequency trader Michael Coscia of commodities fraud and "spoofing" in the U.S. government's first criminal prosecution involving spoofing.

In Thursday's SEC civil case, the three traders' "alleged scheme deceived the options exchanges, disadvantaged other market participants, and undermined the fair operation of the U.S. securities markets," said the agency's enforcement head, Andrew Ceresney, in a statement.

The SEC described the Afshar brothers as sophisticated options traders and Kenny as a former broker. The agency said they conducted their spoofing on the Philadelphia Stock Exchange, owned by Nasdaq Inc. The traders, in addition to spoofing, misidentified their options orders as being so-called "customer" orders instead of "professional" orders so that they could benefit from $2 million in lower fees and rebates to which they were not entitled, the SEC said.

[Proserpina]

19. Appeal court asks for new medical report on jailed Libor trader

http://www.reuters.com/article/us-libor-hayes-appeal-idUSKBN0TL1LC20151202

London's Court of Appeal has asked lawyers for Tom Hayes, jailed in August for conspiracy to manipulate Libor benchmark interest rates, to provide an up-to-date medical report on the former yen derivatives trader by next Wednesday. Lord Chief Justice John Thomas, the head of the judiciary in England and Wales, made the request after Hayes's leading counsel Neil Hawes closed his arguments in a two-day appeal hearing against Hayes's conviction and 14-year jail sentence - one of the longest handed down for white collar crime.

Hayes, a former UBS and Citigroup trader, was found guilty of eight charges of conspiracy to defraud for rigging Libor, the London interbank offered rate, which underpins around $450 trillion of financial contracts and consumer loans worldwide. The 36-year-old former Tokyo-based trader was diagnosed with Asperger's syndrome and Attention Deficit Hyperactivity Disorder (ADHD) shortly before his trial. Hayes has been moved from London's 19th Century Wandsworth prison - the largest in Britain - to Lowdham Grange in central England, the court heard.

Hawes has argued that Jeremy Cooke, the judge who presided over Hayes's trial, made legal errors in the way he handled the case and that the sentence was wrong in principle and excessive. Hayes was sentenced consecutively for the conspiracies of which he was found guilty at UBS and at Citigroup between 2006 and 2010. Had the market rigging charges been considered as one offense, he would have faced a maximum 10-year sentence. Hawes said there were no sufficiently distinguishing features between Hayes's conduct at UBS and Citigroup to warrant separate and consecutive sentences - and that the judge did not need to use the sentence as a deterrent to the banking industry. Regulatory changes and new laws governing Libor processes had already achieved that, he said. He also argued the sentence did not reflect the fact the prosecution did not identify any counterparty loss, that counterparties were market professionals, that Hayes held no managerial position and that others were doing the same.

Sentencing Hayes on Aug. 3, Cooke said there was "no doubt" the sums involved in the conspiracies ran into millions of dollars and that the conduct in the case "must be marked out as dishonest and wrong and a message sent to the world of banking accordingly".

[Proserpina]

21. House-Senate negotiators agree on U.S. highway bill, revive Ex-Im Bank

http://www.reuters.com/article/hold-usa-congress-transportation-idUSL1N13Q2YY20151202

U.S. Senate and House of Representatives negotiators reached agreement on Tuesday on a $305 billion, five-year transportation bill that would fund roads, bridges and mass transit, while also reviving the embattled Export-Import Bank. The legislation, which has bipartisan support, is expected to reach the floor of each chamber by Friday, when a short-term funding measure runs out. If approved and signed into law by President Barack Obama, it would be the first U.S. highway measure in a decade to last longer than two years.

The legislation would renew the EXIM Bank's charter through Sept. 30, 2019, after it expired on June 30 in the face of conservative opposition. The measure to revive the bank, which helps Boeing Co and other companies with foreign competitors, has wide support in Congress. The agreement would reduce EXIM's total lending limit by $5 billion to $135 billion and provide a number of reforms aimed at improving transparency and governance.

To pay for various transportation projects, the bill calls for a one-time transfer of $19 billion from the Federal Reserve's surplus funds. It would also cap the Fed from holding in excess of $10 billion in surplus funds in the future, with anything above that cap transferred to the general fund of the Treasury. The legislation would eat away at the profits of big national banks by reducing the current 6 percent dividend they get from the Fed by an amount tied to yields on 10-year Treasuries. Currently, the 10-year rate is around 2 percent. Smaller banks with less than $10 billion in assets would be exempt and still be eligible to receive a 6 percent dividend. Other funding sources include an increase in customs fees and cost-saving measure to require the Internal Revenue Service to use private tax collection agencies.

The transportation bill falls short of the six-year, $480 billion package the Obama administration proposed earlier this year as a step toward reversing the deterioration of U.S. infrastructure and accommodating economic and population growth.

Negotiators from the House and Senate released a 1,302-page conference report that also includes provisions to support rail transportation and auto industry whistleblowers. It would also raise penalties for automakers that violate vehicle safety rules and meet Obama industry spending targets for defect investigations and other vehicle safety measures, should regulators meet prescribed reforms.

[Proserpina]

26. Banks to Have Fed Dividends Clipped to Pay to Fill Potholes; JPMorgan, BoA the Biggest Losers

http://www.nakedcapitalism.com/2015/12/banks-have-fed-dividends-clipped-to-pay-to-fill-potholes.html


Posted on December 2, 2015 by Yves Smith

Yesterday, the general public scored a small but important victory over the Fed and the banking-industrial complex. To help fund the highway trust, which repairs highways and bridges, Congress released a compromise to the highway funding bill that whacks a long-standing subsidy to banks. This measure has high odds of passing...Part of the funding will come from a cut the dividend the Fed pays to member banks on their non-voting preferred stock holdings. It will drop from 6% to the 10 Treasury bond yield at the time of the dividend payment, which currently is 2.3%, with a cap at 6% for banks with more than $10 billion in assets. This was a compromise from the original proposal, to cut the dividend to 1.5% for banks with over $1 billion in assets.

The banks that will see the biggest decline in income in 2016 as a result of this change will be JP Morgan and Bank of America, at roughly $200 million each. Media reports suggest that this change will produce $8 to $9 billion in revenue, but the experts to whom I’ve spoken estimate the take at $12 to $15 billion over the next ten years.

While this is not the most earthshaking change, it is nevertheless important for several reason. First, it is a sign of the decline in reputation and power of the Fed as well as of the banking lobby. This provision was included in the highway funding bill, which was where it was first proposed in its current form (the idea had initially surfaced as an idea in the Progressive Caucus’s budget proposal). It had been removed from the House version of the bill but was reinserted in the reconciliation talks.

Notice that the measure went forward despite the shameful but predictable opposition of Janet Yellen, who blathered about “unintended consequences”. The more likely path for this to have gone on was for the Fed to have won this round, but for the idea to have gone on the list of earmarks and to have eventually been passed, since legislators who don’t understand how MMT works are always in need of ways to fund their spending bills.

Second, the passage of this provision implicitly recognizes that subsides to banks are unnecessary and don’t deserve to be preserved.

More from Dave Dayen at the Intercept, who first wrote about this bank handout in 2014:

Fed membership offers many perks, from access to processing payments to cheap borrowing. But the dividend could be the sweetest gift, because banks cannot ever lose money on the stock; they’re even paid out if their regional Fed bank disbands.

Despite the total lack of risk, member banks have received the 6 percent dividend payout every year since 1913.

So for example, JPMorgan Chase, which has held stock since then, has made back their investment six times over without risking any loss. And if the bank stock was in place before 1942, that dividend payment is tax-free.

Originally – that is, 100 years ago — the Fed offered the dividend to entice banks into the new Federal Reserve system. But nationally chartered banks are today required by law to become members, and all banks must abide by the standards of membership. So the dividend is just a vestigial sweetener that never went away, pumping billions of dollars in public money to the banks for no discernible reason.

For once, sanity reigns. Who’ve have thunk it?

[Proserpina]

23. Yellen says no set plan for pace of rate hikes

http://www.reuters.com/article/usa-fed-yellen-rates-idINKBN0TL2FI20151202

Federal Reserve Chair Janet Yellen said there is no set plan for how steadily to raise U.S. interest rates once the initial hike is approved.

The Fed is expected to approve its first rate hike in a decade at a meeting in two weeks, and focus has begun turning to how quickly or slowly the central bank may enact subsequent rate increases. Fed officials in general have said the pace of hikes will be "gradual."

"The first step does not mean we have embarked on some predetermined path," Yellen said. "There is no such plan. It will depend entirely on how incoming data influence our assessment of the outlook."

[Proserpina]

24. Cyber Monday clocks record sales as mobile sales surge

http://www.usatoday.com/story/money/2015/12/01/cyber-monday-sales-results/76602534/

Quick thumbs tapping across mobile keyboards helped make Cyber Monday the largest U.S. online sales day ever.

The latest data show significantly more people are comfortable not only browsing, but buying products on their smartphones, fundamentally changing the way retailers clock sales during the busiest shopping period of the year.

Mobile traffic accounted for nearly half of all online traffic and 27.6% of all online sales Monday, which is up more than 25% from last year, according to IBM Watson Trend, which tracks millions of transactions on retail websites. Online sales increased 17.8% Monday compared to the same day in 2014, IBM says. Consumers made bigger-ticket purchases on desktop, though, with an average order value of $128 vs. about $102 on smartphones.

Another report shows Cyber Monday sales topped $3 billion, up 16% from last year, according to Adobe data, which is based on 200 million visits to 4,500 retail sites...

more

[Proserpina]

25. Initial Jobless Claims in U.S. Rose to 269,000 Last Week

http://www.bloomberg.com/news/articles/2015-12-03/initial-jobless-claims-in-u-s-rose-to-269-000-last-week

Applications for unemployment benefits in the U.S. rose last week, maintaining a see-saw pattern around four-decade lows that shows persistent strength in the labor market. Jobless claims climbed by 9,000 to 269,000 in the period ended Nov. 28, matching the median estimate in a Bloomberg survey, a Labor Department report showed Thursday. Filings are hovering just above the 255,000 level reached in July, the lowest since the 1970s.

Companies are reluctant to dismiss workers as the labor market tightens, a development Federal Reserve policy makers are monitoring as they consider raising their benchmark interest rate. A greater sense of job security may help Americans feel more comfortable spending during the holidays, which would provide a much-needed boost to growth.

“Claims are low and people’s expectations of the labor market are improving,” Joe Carson, director of global economic research at AllianceBernstein LP in New York, said before the report. “Everything says that labor markets are tightening.”

Estimates of 41 economists in the Bloomberg survey ranged from 255,000 to 278,000. While there was nothing unusual in the data, claims for Louisiana were estimated because the state was switching to a new system for handling applications, according to the Labor Department. The four-week average of claims, a less-volatile measure than the weekly figure, dropped to 269,250 from 271,000 the week before.

Continuing Claims

The number of people continuing to receive jobless benefits rose by 6,000 to 2.16 million in the week ended Nov. 21. In that same period, the unemployment rate among people eligible for benefits held at 1.6 percent, where it’s been since mid-September, the report showed. Jobless claims have been bouncing around historically low levels that economists say are consistent with robust job growth. The employment report, scheduled for release Friday, may show that companies added 200,000 workers in November after a gain of 271,000 the prior month.

Fed policy makers will use jobs data to help them decide whether they should raise their benchmark interest rate for the first time since 2006. Though inflation remains subdued, Fed officials have noted stronger labor markets as a reason to begin reining in their accommodative stance on monetary policy.