STOCK MARKET WATCH -- Friday, 11 December 2015

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Friday, 11 December 2015[font color=black][/font]

SMW for 10 December 2015

AT THE CLOSING BELL ON 10 December 2015
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Dow Jones 17,574.75 +82.45 (0.47%)
S&P 500 2,052.23 +4.61 (0.23%)
Nasdaq 5,045.17 +22.31 (0.44%)


[font color=red]10 Year 2.23% +0.02 (0.90%)
30 Year 2.97% +0.01 (0.34%) [font color=black]


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Matt Taibi: Secret and Lies of the Bailout


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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. He's not the only one

There's a line out the door.

[Fuddnik]

2. Need some real help on this one.

http://www.democraticunderground.com/10027440044

[Proserpina]

3. Michael Hudson: The IMF Changes Its Rules….for Ukraine

http://www.nakedcapitalism.com/2015/12/michael-hudson-the-imf-changes-its-rules-for-ukraine.html

Yves here. Needless to say, the IMF broke its rules like crazy to fund the war lend to the government in Ukraine. For starters, it’s against IMF rules to lend to a country at war. IMF loans are also supposed to be sustainable. As Hudson reminds readers, it was clear from the outset that the Ukraine loans could never be paid back in full. But the IMF staff engaged in some creative writing to pretend otherwise.

So it should be no surprise that the rule-bending for Ukraine continues.

By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is KILLING THE HOST: How Financial Parasites and Debt Bondage Destroy the Global Economy

On December 8, the IMF’s Chief Spokesman Gerry Rice sent a note saying:

The IMF’s Executive Board met today and agreed to change the current policy on non-toleration of arrears to official creditors. We will provide details on the scope and rationale for this policy change in the next day or so.

Since 1947 when it really started operations, the World Bank has acted as a branch of the U.S. Defense Departmnt, from its first major chairman John J. McCloy through Robert McNamara to Robert Zoellick and neocon Paul Wolfowitz. From the outset, it has promoted U.S. exports – especially farm exports – by steering Third World countries to produce plantation crops rather than feeding their own populations. (They are to import U.S. grain.) But it has felt obliged to wrap its U.S. export promotion and support for the dollar area in an ostensibly internationalist rhetoric, as if what’s good for the United States is good for the world.

The IMF has now been drawn into the U.S. Cold War orbit. On Tuesday it made a radical decision to dismantle the condition that had integrated the global financial system for the past half century. In the past, it has been able to take the lead in organizing bailout packages for governments by getting other creditor nations – headed by the United States, Germany and Japan – to participate. The creditor leverage that the IMF has used is that if a nation is in financial arrears to any government, it cannot qualify for an IMF loan – and hence, for packages involving other governments. This has been the system by which the dollarized global financial system has worked for half a century. The beneficiaries have been creditors in US dollars.

But on Tuesday, the IMF joined the New Cold War. It has been lending money to Ukraine despite the Fund’s rules blocking it from lending to countries with no visible chance of paying (the “No More Argentinas” rule from 2001). With IMF head Christine Lagarde made the last IMF loan to Ukraine in the spring, she expressed the hope that there would be peace. But President Porochenko immediately announced that he would use the proceeds to step up his nation’s civil war with the Russian-speaking population in the East – the Donbass. That is the region where most IMF exports have been made – mainly to Russia. This market is now lost for the foreseeable future. It may be a long break, because the country is run by the U.S.-backed junta put in place after the right-wing coup of winter 2014. Ukraine has refused to pay not only private-sector bondholders, but the Russian Government as well.

This should have blocked Ukraine from receiving further IMF aid. Refusal to pay for Ukrainian military belligerence in its New Cold War against Russia would have been a major step forcing peace, and also forcing a clean-up of the country’s endemic corruption. Instead, the IMF is backing Ukrainian policy, its kleptocracy and its Right Sector leading the attacks that recently cut off Crimea’s electricity. The only condition on which the IMF insists is continued austerity. Ukraine’s currency, the hryvnia, has fallen by a third this year, pensions have been slashed (largely as a result of being inflated away), while corruption continues unabated. Despite this the IMF announced its intention to extend new loans to finance Ukraine’s dependency and payoffs to the oligarchs who are in control of its parliament and justice departments to block any real cleanup of corruption.

For over half a year there was a semi-public discussion with U.S. Treasury advisors and Cold Warriors about how to stiff Russia on the $3 billion owed by Ukraine to Russia’s Sovereign Wealth Fund. There was some talk of declaring this an “odious debt,” but it was decided that this ploy might backfire against U.S. supported dictatorships. In the end, the IMF simply lent Ukraine the money. By doing so, it announced its new policy: “We only enforce debts owed in US dollars to US allies.” This means that what was simmering as a Cold War against Russia has now turned into a full-blown division of the world into the Dollar Bloc (with its satellite Euro and other pro-U.S. currencies) and the BRICS or other countries not in the U.S. financial and military orbit.

[Proserpina]

4. Income inequality happens by design. We can't fix it by tweaking capitalism Steven W Thrasher

http://www.theguardian.com/commentisfree/2015/dec/05/income-inequality-policy-capitalism?utm_source=esp&utm_medium=Email&utm_campaign=GU+Today+USA+-+Version+A&utm_term=141847&subid=9068680&CMP=ema_565a


The economic hoarding by those at the top has been termed “income inequality”, but that’s neither a strong nor accurate enough phrasing. I have never heard poor people complain about “income inequality”; poor people complain about being screwed out of housing , or about working more hours for less pay or about having to choose between medicine and food. “Inequality” sounds like something that happens by accident and can be remedied by fiddling around the edges. It is not as if the rich are a little more equal and the poor a little less equal, and if we shift a bit we’ll all come out in the middle. What we’ve been calling “income inequality” might be better understood as a war waged by US political and economic policy on the poor.

A new report from the Institute for Policy Studies issued this week analyzed the Forbes list of the 400 richest Americans and found that “the wealthiest 100 households now own about as much wealth as the entire African American population in the United States”. That means that 100 families – most of whom are white – have as much wealth as the 41,000,000 black folks walking around the country (and the million or so locked up) combined. Similarly, the report also stated that “the wealthiest 186 members of the Forbes 400 own as much wealth as the entire Latino population” of the nation. Here again, the breakdown in actual humans is broke down: 186 overwhelmingly white folks have more money than that an astounding 55,000,000 Latino people.

The disparities in wealth that we term “income inequality” are no accident, and they can’t be fixed by fiddling at the edges of our current economic system. These disparities happened by design, and the system structurally disadvantages those at the bottom. The poorest Americans have no realistic hope of achieving anything that approaches income equality; even their very chances for access to the most basic tools of life are almost nil. President Lyndon Johnson’s so-called War on Poverty didn’t angle to take anything from the rich so that the poor could see equality. It was designed to keep some of the poor just alive enough that they wouldn’t rebel, and designed to let other poor people perish as an object lesson to the rest of us to keep scampering.

• Income inequality is better termed structural racism. White people earn more money with less education than black people and consistently have half the unemployment of black people. And, as new research has shown, “family wealth” predicts outcomes for 10 to 15 generations. Those with extreme wealth owe it to events going back “300 to 450” years ago, according to research published by the New Republic – an era when it wasn’t unusual for white Americans to benefit from an economy dependent upon widespread, unpaid black labor in the form of slavery.
  
  
• Income inequality is better viewed as structural sexism. Women earn 78 cents on the dollar overall compared to white men, but black women only earn 64 cents and Latinas 56. Women are also routinely discriminated against economically for bearing children.
  
  
• Income equality is better viewed as structural child abuse. In the United States, one in five children needs government help to eat. As Aisha Sultan recently wrote in the Education Writers Association, if a 30-child classroom looked like the nation at large, seven of the children would be living in poverty, six would be victims of abuse and one would be homeless. These kids aren’t just unequal; they are never offered the opportunity to achieve equality.
  
  
• Income inequality is better viewed as economic genocide, which shortens the lives of the poor. As the New York Times bluntly put it last year, “where income is higher, life spans are longer”. For one of the most jarring examples of how this plays out, look no further than the Ferguson Report, which shows how just in St Louis County, the average life expectancy ranges from 91 in the whitest neighborhood to 56 in the poorest, blackest neighborhood.

Too often, the answer by those who have hoarded everything is they will choose to “give back” in a manner of their choosing – just look at Mark Zuckerberg and his much-derided plan to “give away” 99% of his Facebook stock. He is unlikely to help change inequality or poverty any more than “giving away” of $100m helped children in Newark schools. Allowing any of the 100 richest Americans to choose how they fix “income inequality” will not make the country more equal or even guarantee more access to life. You can’t take down the master’s house with the master’s tools, even when you’re the master; but more to the point, who would tear down his own house to distribute the bricks among so very many others?

[Proserpina]

5. Five Scandals That Show Why We Need Structural Reform in the Banking Industry

http://www.truth-out.org/news/item/33884-five-scandals-that-show-why-we-need-structural-reform-in-the-banking-industry

Multibillion-dollar scandals have continued to occur at big banks across the world, throwing the integrity of the banking system into question. The current state of banking ethics, the enormous size of banks and the banks' inability to detect real-time fraud all contribute to the ongoing failures in preventing serious banking crimes. In addition to this, the big banks have complicated organizational structures with thousands of subsidiaries operating across multiple markets. Bank acquisitions and cross-ownerships across the globe can make it difficult to unwind trades and transactions in the case of a bank's failure during a crisis.

Since the 2008 financial crisis, violations at the world's leading banks have resulted in huge costs and tarnished the reputation of the entire financial system, leaving the public skeptical about the industry. According to a CCP Research Foundation analysis, over 200 billion pounds (nearly $300 billion) was paid out by banks in penalties and settlements during the period of 2010 to 2014. In 2015, banking crimes in the industry remain an ongoing and unaddressed issue.

The president of New York Fed, William Dudley, in 2013, acknowledged that "the deep-seated cultural and ethical failures at many large financial institutions" had been a result of the growing size and complexity of banking structures, as well as a result of bad incentives. Democratic presidential candidate Sen. Bernie Sanders (I-Vermont) and Sen. Elizabeth Warren (D-Massachusetts) have called for breaking up the big banks by reinstating the Glass-Steagall Act of 1933, the Depression-era law originally passed in response to the 1929 stock market crash, which was later repealed in 1999 under the Clinton administration.

The 21st-century Glass-Steagall Act, introduced by Senators John McCain (R-Arizona), Warren, Maria Cantwell (D-Washington) and Angus King (I-Maine), would significantly reduce the size of the banks by separating traditional banks (secured by the Federal Deposit Insurance Corporation) from investment banks that are involved in high-risk trading and speculative activities. Such reforms would help enable the efficient supervision of banks and make the foundation of the financial system more secure and stable.

A closer look at the following five banking scandals underscores why a structural reform of the banking system is urgently needed:

1. The Libor Scandal

2. The Money Laundering Scandal

3. Foreign Exchange Rigging

4. Mis-sold Payment Protection Insurance (UK)

5. Frauds Related to the 2008 Financial Crisis (US)

[Proserpina]

6. Heads I win, Tails you Lose - Why our Financial System Collapsed - And How Not Much Has Changed

http://www.huffingtonpost.com/leland-faust/heads-i-win-tails-you-los_2_b_8772906.html?ncid=txtlnkusaolp00000592&ref=yfp

In March 2009 I wrote an article offering my thoughts on what caused the market crashes in 2008 and the Great Recession. Here we are almost seven years later, and almost nothing has changed. Take a look at what I said and you'll see why.

U.S. financial institutions were for many years the product of the best and the worst aspects of our economic system. They were rightfully the envy of the world and ambassadors of capitalism around the globe. When functioning at their best, these institutions were responsible for unmatched real wealth creation for their clients, their shareholders and their employees. Unfortunately, the worst of our current system was also on display in the manner in which these institutions managed their own businesses as off balance sheet liabilities, excess borrowing, and taking extremely large and risky positions became all too common. Then came the rise of irresponsible executive pay in the form of outsized bonuses with no regard to performance and the explosion of irresponsible issuance of company stock and stock options.

This has all led to where we are today. The very existence of many of our major financial institutions is in question and the radical restructuring of our economy is becoming a real possibility. Citicorp was once considered the vanguard of U.S. capitalism. Bank of America was the entrepreneurial success story of the western expansion and conservative banking. General Electric Credit was the AAA rated underwriter of the world's biggest companies. All of these and many others are now only shadows of what they once were because of the self-interested "heads I win, tails you lose" approach they all followed.

The captains of Wall Street were allowed to put themselves in a position to make huge personal gains with essentially no personal risk. They were able to pass the risk to others - namely the shareholders of enterprises whose interests they were supposed to advance. Our free enterprise system only functions well when risk is rewarded and failure is penalized. Over the last few decades, there has been an increasing disconnect between the interests of shareholders and employees in large financial enterprises. How did this happen? As public corporations became larger and larger, the employees of the financial firms stopped representing their shareholders and found more and more ways to profit themselves. All too often this was done at the expense of the very shareholders they were supposed to protect. These "masters of the universe" first convinced themselves and then somehow others that they were entitled to huge compensation when they were successful in taking huge risks with other people's money. If risky bets paid off, there was gargantuan compensation for the employees. If those risks did not pay off, the losses would belong to the shareholders. Amazingly, large compensation continued to be paid to the employees even when the bets failed. This was often justified by the "fear" that these employees would move to competing firms.

If people truly risked their own capital, then those who made profits in one year but suffered losses later would have the prior years' gains offset by losses. This has not been the case for Wall Street's employees where bonuses in one year never have to be recouped. In fact, bonuses remained at high levels even in years of under performance. What was the penalty for poor performance? If losses ever became too large so that bonuses were curtailed, then the employees would simply move to similar firms and start again at continued high compensation...

more

[Proserpina]

7. 4 reasons crude-oil prices are in a nasty death spiral—again

http://www.marketwatch.com/story/4-reasons-crude-oil-prices-are-in-a-nasty-death-spiralagain-2015-12-10?siteid=YAHOOB

Crude-oil futures have been facing severe headwinds since last year, when prices for the U.S. and global benchmarks shed more than half their value from the highs seen in June 2014. Now, crude oil faces another stunning unraveling.

The commodity has already lost a third of its value in 2015, staging what seems like a relentless drop toward multiyear lows.

On Friday, West Texas Intermediate crude took another step lower threatening to dip below $36 an ounce after the International Energy Agency contributed to the pessimism in the market by saying that it believed the oil-supply glut would continue to keep prices low. WTI was trading down 48 cents, or 1.3%, at 36.29 a barrel after settling at $36.76 a barrel Thursday. Brent crude, meanwhile, hit a seven-year low Friday, drifting 61 cents, or 1.6%, lower at $39.50 a barrel. The European benchmark finished at $39.73 a barrel Thursday.

But contrary to popular belief, the Organization of the Petroleum Exporting Countries isn’t the only reason for oil’s most recent downturn.

“The likelihood of rising OPEC production going forward” is certainly a concern, said Matthew Smith, a commodity analyst at ClipperData.

But strength in the U.S. dollar, resilient U.S. production and a continuing global supply glut are also among the key reasons why oil prices continue to fall, he said.

more

[Proserpina]

8. U.S. stock futures losses intensify as oil heads toward $36

http://www.marketwatch.com/story/us-stock-futures-slip-oil-prices-retail-sales-in-focus-2015-12-11?siteid=YAHOOB

Wall Street eyed its fourth downbeat session of the week Friday, as oil prices continued to slump and investors prepared for next week’s Federal Reserve meeting and a likely increase in benchmark U.S. interest rates.

Front of mind early in the day was the much ballyhooed corporate tie-up between DuPont and Dow Chemical Co.—a megamerger that has been rumored about since last week and announced Friday.

Reports on retail sales and consumer sentiment out later on Friday are likely to be weighed on how they will affect the Fed decision, although economist argued it would take a bombshell to alter expectations.

“By all accounts it’s going to take quite an upset here if opinion is to shift over the likelihood of the Fed going through with that widely-expected rate hike next week. There’s certainly little to suggest we’ll see any near-term shift in sentiment for equities,” said Tony Cross, market analyst at Trustnet Direct, in a note...

more

[Proserpina]

9. European stocks on course for second straight weekly slump

http://www.marketwatch.com/story/european-stocks-on-course-for-second-straight-weekly-slump-2015-12-11?siteid=YAHOOB

European stocks sank Friday, with a further drive down in oil shares contributing to what will likely be a weekly loss for the regional benchmark.

The Stoxx Europe 600 SXXP dropped 1.4% to 358.26, on course for a fourth straight day of losses. No sector traded higher.

The pan-European index was facing a 3.3% pullback for the week, which would mark a second consecutive weekly loss.

“Equities markets were in the red on what is likely to be a risk-off Friday ahead of Sunday’s Chinese macro data and the impending U.S. Fed rate decision next week,” said Mike van Dulken, head of research at Accendo Markets, in a note.

Oil slump: A large chunk of this week’s downbeat performance stemmed from the energy sector. Oil and gas shares were the worst performing on Friday, putting the Stoxx 600 Oil and Gas index SXEP, -2.07% on track for a nearly 4% slump for the week. ...more

[Proserpina]

10. New Report Tallies Some Of The Cost Of The “Walmart Model” Economy

http://www.nationofchange.org/2015/12/09/new-report-tallies-some-of-the-cost-of-the-walmart-model-economy/

See if this business model sounds familiar:

• Close American factories and offshore production to a low-wage country with few environmental regulations. (Note: moving a factory out of the country “increases trade” and they say that’s a good thing.)
  
• Replace American-made goods with cheap stuff made overseas.
  
• Allow U.S. workers to end up with low wages – or no wages at all.
  
• Pay workers so little that they need public assistance to get by.
  
• Let executives and shareholders pocket the wage and cost-of-protecting-environment differential.
  
• Dodge taxes using schemes that shift profits to offshore tax-haven subsidiaries.
  
• Use your status as a giant, multinational corporation to drive smaller competitors under.
  
• Watch as your shareholders who benefit from this model use their wealth to influence government to keep wages low, keep the offshoring going, keep the tax-dodge loopholes open, and keep the workers from unionizing.

Some call this the “Walmart Model.” One result of this model is that the six “Walmart heirs” are so wealthy from inherited stock that they have more wealth than 42 percent of all Americans combined. That figure is from 2012. It may be worse now.

The billionaires created by stripping the rest of our wages (and taxes needed to fund our government) use the wealth gained from this model to influence our government and keep the game going. For example, the Walton heirs helped fund a drive to repeal inheritance taxes. The Walmart heirs were one of 18 families that funded a 10-year campaign to get rid of inheritance taxes. In 2006 Congress did just that. Public Citizen documented how these families used front groups to push the “death tax” AstroTurf campaign to convince Americans that average people (“They’re taking family farms!”) were affected by this tax, when only one-fourth of one percent of Americans were affected at all. This campaign gave politicians “cover” to vote for the repeal. (Congress has since restored some of the estate tax.)

A Measure Of The Cost

How much does this Walmart-model economy cost? A new study measured job losses from Walmart’s offshoring at 400,000. The New York Times reports on the study, in “Walmart’s Imports From China Displaced 400,000 Jobs, a Study Says”:

Imports from China by Walmart, the nation’s largest retailer and biggest importer, eliminated or displaced over 400,000 jobs in the United States between 2001 and 2013 …

The jobs, mostly in manufacturing, represent about 13 percent of the 3.2 million jobs displaced over those same years that the study attributes to the United States’ goods trade deficit with China. Walmart’s Chinese imports amounted to at least $49 billion in 2013, according to the study, which was based on trade and labor data. Over all, the United States’ trade deficit with China hit $324 billion that year.

The study is “A Conservative Estimate of ‘The Wal-Mart Effect’,” by Robert Scott of the Economic Policy Institute (EPI). Key findings from the report include:

• The Walmart-based trade deficit with China alone eliminated or displaced over 400,000 U.S. jobs between 2001 and 2013.
  
• Walmart is responsible for a $36.7 billion increase in the U.S. trade deficit with China between 2001 and 2013—15.3 percent of the total growth in the U.S.-China trade deficit.
  
• Chinese imports entering through Walmart totaled at least $49.1 billion in 2013, up from $11.4 billion in 2001.
  
• The manufacturing sector has been hardest hit by the growth of Walmart’s imports. Walmart’s increased trade deficit with China between 2001 and 2013 eliminated 314,500 manufacturing jobs.
  
• On average, each of the 4,835 Walmart stores in the United States was responsible for the loss of about 86 U.S. jobs due to the growth of Walmart’s trade deficit with China between 2001 and 2013.

The study: http://www.epi.org/publication/the-wal-mart-effect/

In the long history of false promises made by trade negotiators, the claim that China’s entry into the World Trade Organization (WTO) in 2001 would reduce the U.S. trade deficit with China and create good U.S. jobs stands out. The total U.S. goods trade deficit with China reached $324.2 billion in 2013. Between 2001 and 2013, this growing deficit eliminated or displaced 3.2 million U.S. jobs (Kimball and Scott 2014). As the world’s largest retailer, U.S.-based Wal-Mart is a key conduit of Chinese imports into the American market.

********

China has achieved its rapidly growing trade surpluses by manipulating its currency: it invests hundreds of billions of dollars per year in U.S. Treasury bills, other government securities, and private foreign assets to bid up the value of the dollar and other currencies and thereby lower the cost of its exports to the United States and other countries. China has also repressed the labor rights of its workers and suppressed their wages, making its products artificially cheap and further subsidizing its exports. Wal-Mart has aided China’s abuse of labor rights and its violations of internationally recognized norms of fair trade by providing a vast and ever-expanding conduit for the distribution of artificially cheap and subsidized Chinese exports to the United States.

*******

The U.S. relationship with China needs fundamental change: addressing the exchange rate policies and labor standards issues in the Chinese economy should be important national priorities. Wal-Mart’s huge reliance on Chinese imports illustrates that many powerful economic actors in the United States benefit from China’s unfair trading system. Wal-Mart’s gain, however, is not the country’s gain, as Wal-Mart’s imports have contributed to the ever-growing trade deficit that imperils future economic growth.

That 400,000 job-loss number doesn’t measure the jobs lost at smaller, local Walmart competitors driven out of business. It doesn’t measure the cost of public assistance for low-wage employees. It doesn’t measure the way communities are hit by the job losses and resulting low wages. It doesn’t measure the lost jobs due to deferred infrastructure maintenance that result from tax dodging – and budget cuts forced on us by politicians funded by billionaires.

The “Walmart model” has become the model of our economy. The billionaires that model creates use their wealth to bribe – I mean, “influence” — our government to keep things the way they are. It is time to take back our government from the billionaires, fix trade, fix taxes and fix wages.

shamelessly stolen from eridani

[antigop]

11. Warren Buffett Goes to Bat for Hillary Clinton on Wall Street

http://blogs.wsj.com/washwire/2015/12/10/warren-buffett-goes-to-bat-for-hillary-clinton-on-wall-street/

Democratic presidential candidate Hillary Clinton has been talking tough on Wall Street, but that’s yet to stop finance industry bigwigs from opening up their checkbooks for her.

On Wednesday night, Blackstone Group LP President and COO Hamilton “Tony” James held a fundraiser at his Manhattan home for Mrs. Clinton. Mrs. Clinton wasn’t in attendance, but there was another draw: Warren Buffett.

Mr. Buffett isn’t the biggest fan of Wall Street, but he is a big supporter of Mrs. Clinton. The billionaire investor met with a group of 12 Wall Street executives, including bankers and private-equity partners, according to people familiar with the matter. The price of entry was $33,400, with the proceeds of around $400,000 going to the Hillary Victory Fund, which is split between the Clinton campaign and the Democratic National Committee.

Among those in attendance were Blair Effron, the co-founder of boutique advisory firm Centerview Partners; Byron Wien, a vice chairman at Blackstone; Dick Cashin, the founder of One Equity Partners; Cliff Robbins, CEO of Blue Harbour Group; Wesley Edens, the co-founder of Fortress Investment Group; and Dermot Dunphy, a retired executive and former CEO of Sealed Air, according to people familiar with the matter.

[Fuddnik]

12. Buffett and Blackstone pretty much own Tampa Bay now.

Over the last year or so, Blackstone has bought over $1 billion in foreclosed single family homes in the area, converting them to rentals. And everywhere you look at a commercial real estate bldg or a vacant lot, it has a Berkshire-Hathaway sign on it.

I sure hope these guys are throwing away their money. Or Berning it!

[Proserpina]

13. Okay, I am going to try to do a Weekend theme on my own...but you all have to help

It's very hard to find any economic news what with all the war and politics and police brutality....

So look around in your favorite sources and post for Demeter's sake, if not mine!

The theme is seasonal, and ecumenical, so have at it.

[golfguru]

14. It is IMPOSSIBLE to grow economy by 1% for ever

A modest 1% growth compounded for the 3,000 years of Ancient Egypt’s population would have multiplied its economic output by nine trillion times!

That is clear proof why growing economy every year for ever is impossible. We live in a finite world. Sharp recessions are built into our finite world. ZIRP & QE's simply postpone recessions, and make them more painful when they inevitably must appear.