STOCK MARKET WATCH, Thursday, November 17, 2011

[Pale Blue Dot]

Source: du

STOCK MARKET WATCH, Thursday, November 17, 2011

AT THE CLOSING BELL ON November 16, 2011

Dow 11,905.59 -190.57 (-1.60%)
Nasdaq 2,639.61 -46.59 (-1.77%)
S&P 500 1,236.91 -20.90 (-1.69%)
10-Yr Bond... 1.98 -0.03 (-1.35%)
30-Year Bond 3.00 -0.04 (-1.25%)

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Market Conditions During Trading Hours

Euro, Yen, Loonie, Silver and Gold

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Bush Administration Officials Convicted = 2
Names: David Safavian, James Fondren
Dishonorable Mention: former House majority leader, Tom DeLay

Bush Administration Officials Charged = 1
Name(s): Richard Lopez Razo

Financial Sector Officials Convicted since 1/20/09 = 12

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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.

Read more: du

[Pale Blue Dot]

1. Today's Reports

Nov 17 08:30 Initial Claims 11/12 400K 398K 390K
Nov 17 08:30 Continuing Claims 11/05 3650K 3648K 3615K
Nov 17 08:30 Housing Starts Oct 575K 604K 658K
Nov 17 08:30 Building Permits Oct 600K 603K 594K
Nov 17 10:00 Philadelphia Fed Nov 5.0 7.5 8.7

Read more: http://www.briefing.com/investor/calendars/economic/2011/11/14-18/#ixzz1dxmyVgnt

[Roland99]

49. Sept. starts revised 630,000 vs 658,000 prev est

[tclambert]

82. Don't do that! I thought you meant initial claims.

And I'm going, "What the . . .? That's horrible!" 388K for initial claims should mean decreasing unemployment. 630K would be big increase.

As for housing starts, they say construction for single family homes has gone up 2 months in a row for the first time in several years.

[Roland99]

86. didn't meant to frighten ya!

:)

[Roland99]

50. U.S. Oct. housing starts down 0.3% to 628,000 (higher than 605,000 expected...up 16.5% year-on-year)

[Roland99]

51. Weekly U.S. jobless claims fall 5,000 to 388,000 (lowest since April)

[Roland99]

52. Four-week claims average falls 4,000 to 396,750

[Roland99]

63. Philly Fed survey shows slowing growth in November (3.6 from 8.7. 10.0 expected!)

http://www.marketwatch.com/story/philly-fed-survey-shows-slowing-growth-in-november-2011-11-17?link=MW_home_latest_news

[Pale Blue Dot]

2. Oil above $103 after 37 percent rally in 6 weeks

SINGAPORE – Oil prices rose above $103 a barrel Thursday in Asia, extending a 37 percent rally during the last six weeks.

Benchmark crude for December delivery was up 67 cents at $103.26 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $3.22 to settle at $102.59 in New York on Wednesday.

Brent crude for January delivery slumped 28 cents to $111.60 a barrel on the ICE Futures Exchange in London.

Oil has soared from $75 on Oct. 4 amid signs the U.S. economy is growing slowly — rather than slipping into a recession as some analysts feared during the summer.

http://old.news.yahoo.com/s/ap/oil_prices

[Demeter]

23. Shell pulls out of Kurdistan oil talks

Effort to protect lucrative investments in southern Iraq after Baghdad officials threaten to cancel existing contract with ExxonMobil

Read more >>
http://link.ft.com/r/6NPSBB/SP6TJT/1O51V/XHGXGV/XHVA0K/LE/t?a1=2011&a2=11&a3=17

[legin]

68. I've been watching the Nymex-Brent gap

At it's largest it was $27.
Since Gaddafi's death it has been dropping like a stone. It is now $8.6.

I have been here in the past complaining that that I could only account for a $15 gap, but it appears that the entire gap was due to Gaddafi.
I also got caught some time back when the oil price dropped from $140 to $40.
With the oil market it doesn't pay to underestimate the squids ability to exaggerate things.

[Ghost Dog]

80. Sharp Observation!

Thanks.

[Pale Blue Dot]

3. U.S. Stock Futures Are Little Changed

U.S. stock futures were little changed as investors awaited a report that may show manufacturing in the Philadelphia area increased, while Spain’s borrowing costs soared at an auction of the country’s bonds.

Applied Materials Inc. (AMAT) fell 2.5 percent in after-market trading in New York after forecasting first-quarter profit that fell short of analysts’ estimates. Johnson & Johnson slipped 0.7 percent in German trading.

Futures on the Standard & Poor’s 500 Index expiring in December rose 0.1 percent to 1,231.9 at 10:44 a.m. in London. Dow Jones Industrial Average futures expiring the same month added 18 points, or 0.2 percent, to 11,863.

The S&P 500 dropped 1.7 percent yesterday as Fitch Ratings said further contagion from the euro area’s debt crisis posed a risk to American banks. The S&P 500 turned negative for the month of November after gaining the most since 1991 in October.

http://www.bloomberg.com/news/2011-11-17/u-s-stock-index-futures-are-little-changed-applied-materials-j-j-drop.html

[Roland99]

5. futures pointing lower

S&P 500 1,227.00 -4.00 -0.32%
DOW 11,822 -23.00 -0.19%
NASDAQ 2,307 -7.25 -0.31%

[Roland99]

4. Morning

1st rec to start the day

[Roland99]

6. Europe: Spain bond yields surge after expensive auction

http://www.marketwatch.com/story/spain-bond-yields-surge-after-expensive-auction-2011-11-17?dist=beforebell

The Spanish Treasury on Thursday sold €3.562 billion ($4.79 billion) of benchmark 10-year paper at a maximum yield of 7.088%, which was the highest yield paid since the euro's inception. The bond represents a new series, therefore yields cannot be directly compared to results of a prior-10-year auction, the Treasury said. On Oct. 20, the Treasury paid a maximum yield of 5.5% on April 2021 bonds, according to Dow Jones Newswires. Spanish 10-year government bond yields ES:10YR_ESP +0.57% rose to 6.61%. Yields on 10-year Italian government bonds IT:10YR_ITA +0.54% were above 7%. The market is also awaiting results on a French government bond auction

[boomerbust]

7. Heath Shuler (D) North Carolina

Pathetic excuse for a Democrat.

[Fuddnik]

8. He was a pathetic excuse for a Quarterback too.

Unfortunately, "D"s like him are becoming the norm, anymore, as Mall Street spreads it's goodies out to both The repukes, and the repuke wing of the Democratic Party. Looking for the reasons for poor turnout? Schuler embodies it.

[xchrom]

9. holla in the morning!

:donut:

[xchrom]

10. europe: Report paints dire picture of Greek finances

http://hosted.ap.org/dynamic/stories/E/EU_EUROPE_FINANCIAL_CRISIS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-11-17-08-09-06

BRUSSELS (AP) -- Greece is losing out on about euro60 billion ($81 billion) in uncollected taxes, with half of that caught up in lengthy legal disputes that prevent the debt-ridden country from getting its hands on desperately needed funding, a European Union task force said Thursday.

The task force was set up earlier this year when it became obvious that Greece needed a lot of support to implement reforms promised in return for a massive international bailout and get its economy growing again.

The group's first report, presented by task force head Horst Reichenbach, paints a dire picture of Greece's efforts to raise money to repay its debts. But it also spells out specific areas where other EU states and international institutions can help the Greek administration work more efficiently and effectively.

The report, which the EU said showed "cautious optimism" for Greece despite some of its negative findings, comes amid a further intensification of the eurozone's wider debt crisis, which was kicked of by Greece's troubles two years ago.

[xchrom]

11. France raises $9.4 billion at bond auction

http://hosted.ap.org/dynamic/stories/E/EU_FRANCE_FINANCIAL_CRISIS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-11-17-07-23-54

PARIS (AP) -- France raised euro6.98 billion ($9.41 billion) at an auction of two and five year bonds amid strong demand but it was forced to pay higher interest rates than in the previous auction last month.

The French treasury said Thursday the rate on its two-year bonds maturing on Sept. 25, 2013, rose to 1.85 percent, up from 1.31 percent at the last comparable auction in October.

The interest rate on five-year bonds maturing in July, 2016, rose to 2.82 percent, up from 2.31 percent at the last auction.

On the secondary market, yields on France's 10-year bonds stood at 3.78 percent, as their spread over similar German bonds widened to nearly two percentage points amid investor flight to safer investments.

[xchrom]

13. Italy's new PM aims for economic growth

http://hosted.ap.org/dynamic/stories/E/EU_ITALY_FINANCIAL_CRISIS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-11-17-08-10-03

ROME (AP) -- Italy's new premier, Mario Monti, vowed Thursday to spur economic growth while also trying to be fair in imposing reforms urgently needed to save his country - and the euro - from financial disaster.

He said his new government's policies would fight tax evasion, lower costs for companies so they can hire more and help women and young people find jobs.

"The end of the euro would cause the disintegration of the united market," the economist and former European Union competition commissioner told the Senate ahead of a confidence vote on his one-day-old government. "The future of the euro also depends on what Italy will do in the next week."

Monti, laying out his priorities, said he will concentrate on reining in Italy's spending with "rigor," spur growth and work for "fairness" in applying reforms.

[xchrom]

16. France Clashes With Germany Over ECB’s Rescue Role

http://www.bloomberg.com/news/2011-11-17/merkel-rejects-french-calls-to-deploy-ecb-as-crisis-backstop-on-euro-debt.html

German Chancellor Angela Merkel rejected French calls to deploy the European Central Bank as a crisis backstop, defying global leaders and investors calling for more urgent action to halt the turmoil.

As the crisis sent borrowing costs in core economies outside Germany to euro-era records, Merkel listed using the ECB as lender of last resort alongside joint euro-area bonds and a “snappy debt cut” as proposals that won’t work.

“I’m convinced that none of these approaches, if applied right now, would bring about a solution of this crisis,” Merkel said in a speech in Berlin today. “If politicians believe the ECB can solve the problem of the euro’s weakness, then they’re trying to convince themselves of something that won’t happen.”

Merkel’s comments underscore German reluctance to assume more liability for taming the debt crisis even as it moves on to France, the euro region’s second-largest economy, and threatens to trigger a global recession. Merkel said that “political action” to tighten budget rules is needed to solve the turmoil.

[xchrom]

17. Pound Strengthens Versus Dollar After Retail Sales Surge, Beating Estimate

http://www.bloomberg.com/news/2011-11-17/pound-strengthens-versus-dollar-after-retail-sales-surge-beating-estimate.html

The pound strengthened against the dollar, snapping a three-day decline, after U.K. retail sales unexpectedly rose in October.

Sterling appreciated against all but one of 16 major peers tracked by Bloomberg. Spain’s borrowing costs surged at an auction of 10-year debt. U.K. retail sales including fuel increased 0.6 percent from September, the most since June, compared with a median estimate of a 0.2 percent decline in a Bloomberg survey of economists.

The pound was 0.3 percent stronger at $1.5773 at 12:58 p.m. London time. It was little changed at 85.55 pence per euro and 0.2 percent higher at 121.42 yen.

The 10-year gilt yield was three basis points higher at 2.19 percent, after earlier sliding to 2.111 percent. The rate yesterday dropped to a record 2.107 percent.

[xchrom]

22. Spain's borrowing costs hit 14-year high

http://www.bbc.co.uk/news/business-15771776

Spain's borrowing costs have risen at its latest bond auction, as Spaniards prepare to vote for a new government to tackle its financial crisis.

On money borrowed today, payable in 10 years, Spain has to pay an interest rate of 6.975%, the highest since 1997.

A high rate or yield indicates investors may not have confidence in a government to fully repay its debts.

The figure is perilously close to 7% - the level at which other eurozone countries have had to seek bailouts.

[xchrom]

27. International Monetary Fund Europe director resigns

http://www.bbc.co.uk/news/business-15767076

The head for Europe at International Monetary Fund (IMF) has resigned at a crucial time in the efforts to tackle the continent's debt crisis.

Antonio Borges said that personal reasons were behind his decision to stand down immediately.

He had been director of the IMF's European Department for one year.

Earlier in the year, Mr Borges was forced to retract comments in which he suggested the Fund might help Italy and Spain by buying up their debts.

[Demeter]

55. and now that That is exactly what they are doing, He Quits? Or is forced out?

This smells worse than Limburger.

[xchrom]

62. i found that very curious my self.

people quitting at his level right now -- it says something.

[xchrom]

32. Permanent underclass is emerging in UK, businesses warn

http://www.guardian.co.uk/education/2011/nov/17/permanent-underclass-emerging-businesses-warn

Britain risks creating an underclass of people who are permanently excluded from the prospect of employment, a report published on Thursday warns.

The survey of 1,000 UK employees and 500 employers, conducted between July and September, shows that 73% of businesses and 84% of workers believe there is a permanent underclass emerging, for whom a poor education and background leaves them largely unemployable.

The survey, conducted by human resources services provider Adecco Group, will further concern the government as unemployment among the under-25s tops 1m for the first time and fears grow that apprenticeship schemes are failing to help young people into work.

Business secretary Vince Cable announced a series of measures on Wednesday to encourage small businesses to take on apprentices aged under 25. These included a cash payment of up to £1,500 for each young apprentice hired and a relaxing of red tape for firms employing fewer than 50 people.

[xchrom]

48. Spain pays 7 percent to finance her ten year debt bonds

http://www.typicallyspanish.com/news/publish/article_32717.shtml

Spain is being labelled as in the ‘rescue zone’ today after the treasury had to pay more interest in a launch of ten year bonds. It came as the Risk Premium went above 500 points for the first time.

The treasury placed 3.563 billion € in the ten year bonds, but paid 30% more than at the last auction, at 7.088% interest, a level considered as unsustainable in the medium term, and not seen since 1997. Demand was firm at 5.5 billion, but the 7% is seen as a psychological barrier in the markets. Last October similar bonds were sold at 5.453%.

The drama for the Spanish treasury is not over yet. It has to return to the markets five times more before the end of the year.
After the auction the Risk Premium, the difference paid between German ten year bonds, rose as high as 500 here in Spain.

Meanwhile in Italy it has reached 540 points and even France has seen its Risk Premium rise to 202 basic points.

Read more: http://www.typicallyspanish.com/news/publish/article_32717.shtml#ixzz1dyMRP1oq

[Roland99]

56. Fitch statements on Italy >>>>

FITCH SAYS ITALY RATING MAY BE CUT IF IT LOSES MARKET ACCESS
FITCH SAYS ITALY RATING COULD BE CUT TO LOW INVESTMENT GRADE
FITCH SAYS ITALY IS PROBABLY ALREADY IN RECESSION
FITCH SAYS MONTI GOVERNMENT MAY REMAIN IN POWER TO APRIL 2013

[Roland99]

61. Photos And Video As Thousands Of Italians Protest Monti's "Banker" Government

http://www.zerohedge.com/news/technocratic-revulsion-begins-photos-and-video-thousands-italians-protest-montis-banker-governm

[Demeter]

12. Morning, all. No Snow Today--Sunny, but COLD!

At least, not yet.

[xchrom]

14. it's gloomy here -- apparently there were tornadoes

in the SE -- it was supposed to rain -- meh, not so much.
& we need rain.

[kickysnana]

59. Snow here this weekend. Perhaps there in 24 hours?

Bitter wind. I had to adjust the thermostat twice this morning.

[Roland99]

64. still hitting the 80s today. light rain about to move in for a few min.

[Demeter]

15. Clashes at Italy protest against "bankers' government"

http://news.yahoo.com/milan-students-protest-against-bankers-government-111131833.html

Thousands of Italians took to the streets in several cities on Thursday to protest against what they called a "bankers' government" led by economist Mario Monti, and there were clashes with police. Students in Italy's financial capital Milan threw firecrackers at police trying to prevent them approaching the Bocconi university, which is chaired by Monti and has become a symbol for the new executive of technocrats he has formed to tackle Italy's debt crisis. Police responded by charging the students with batons. One journalist was injured by a firecracker, police sources said. The students also threw eggs and fake dollar banknotes at the building of the Italian banking association. "We don't want the banks to rule" and "Monti's government is not the solution," the students chanted.

Monti's government, sworn in on Wednesday, set out the measures it intends to take in the upper house of parliament on Thursday before seeking a confidence vote at 1930 GMT. Monti said that Italy faced a serious emergency which could help decide the future of the European Union. He said the three pillars of the government's policy would be budgetary rigor, economic growth and social fairness...A collapse of market confidence has pushed Italy to the brink of financial disaster and driven up its borrowing costs to unsustainable levels.

UNIVERSITIES TARGETED

There were also protests in Turin, Rome, Palermo and Bari, with demonstrators targeting universities where some of Monti's ministers used to teach, bank branches and tax offices. In Turin, clashes broke out between police and thousands of demonstrators including anarchists trying to approach the local headquarters of the Bank of Italy. Police said several people had been injured, including a policeman. Some of the protesters chanted: "Smell of austerity" and "Monti will all make us beggars."

...................................................................

Monti's cabinet is made up of a mix of academic specialists and experienced administrators and includes Corrado Passera, the chief executive of Italy's biggest retail bank, Intesa Sanpaolo, as industry minister. The fact that none of the new cabinet has been elected is likely to make it harder to win popular support for new taxes, job cuts or pension reforms that could hit ordinary Italians hard.

[Demeter]

29. Technocrat cabinet takes helm in Rome

Mario Monti took charge of the eurozone’s third-biggest economy to the applause of Europe’s leaders and scepticism of investors

Read more >>
http://link.ft.com/r/EB8122/XH26RR/9MEOW/JE989F/KQP1JR/HK/t?a1=2011&a2=11&a3=17

[Demeter]

30. Hopes rest on Italy’s team of outsiders

The 17 sombre and unelected technocrats in Italy’s new administration are riding on a wave of popular support

Read more >>
http://link.ft.com/r/EB8122/XH26RR/9MEOW/JE989F/5VWKZ4/HK/t?a1=2011&a2=11&a3=17

THEY ARE RIDING A WAVE OF SOMETHING...BUT IT DOESN'T LOOK LIKE POPULAR SUPPORT

[xchrom]

18. U.S. Banks Face Contagion Risk From European Debt

http://www.bloomberg.com/news/2011-11-16/banks-in-u-s-facing-serious-risk-on-contagion-from-europe-fitch-says.html

U.S. banks face a “serious risk” that their creditworthiness will deteriorate if Europe’s debt crisis deepens and spreads beyond the five most-troubled nations, Fitch Ratings said.

“Unless the euro zone debt crisis is resolved in a timely and orderly manner, the broad credit outlook for the U.S. banking industry could worsen,” the New York-based rating company said yesterday in a statement. Even as U.S. banks have “manageable” exposure to stressed European markets, “further contagion poses a serious risk,” Fitch said, without explaining what it meant by contagion.

The “exposures” of U.S. lenders to major European banks and the stressed nations of Greece, Ireland, Italy, Portugal and Spain, known as the GIIPS, are smaller than those to some of the continent’s larger countries, Fitch said.

[xchrom]

19. asia: BOJ board maintains ultralow interest rate

http://www.japantimes.co.jp/text/nb20111117a2.html

The Bank of Japan Policy Board said Wednesday it will maintain its virtually zero interest rate policy while putting off additional monetary easing to cope with the impact of Europe's debt crisis and the yen's sharp rise.

Despite agreeing by a unanimous vote to leave its key short-term interest rate at zero to 0.1 percent, the central bank acknowledged that the fallout from fragile economies overseas is clearly being felt on domestic soil.

"Japan's economic activity has continued picking up, but at a more moderate pace mainly due to effects of a slowdown in overseas economies," the BOJ said in a statement following the two-day meeting of its board members.

While noting that exports and production have recovered from the March 11 disaster and private consumption has remained firm, the central bank said much uncertainty lies ahead for the economy.

[xchrom]

44. Asian stocks lower on borrowing fears in Europe

http://timesofindia.indiatimes.com/business/international-business/Asian-stocks-lower-on-borrowing-fears-in-Europe/articleshow/10764295.cms

HONG KONG: Asian stocks were mostly lower on Thursday after a credit ratings agency warning that US banks could be hit hard if Europe's debt crisis spreads beyond financially troubled countries like Greece.

Oil prices fell below $102 per barrel, while the dollar rose against the yen and the euro.

Japan's Nikkei 225 index lost 0.3 percent to 8,436.49 while Hong Kong's Hang Seng dropped 1.2 percent to 18,725.32. South Korea's Kospi was marginally higher at 1,858.26.

Mainland China's benchmark Shanghai Composite Index lost 0.2 percent at 2,459.52. Benchmarks in Singapore and Taiwan also fell, while Australia's S&P ASX 200 edged up 0.2 percent to 4,255.10.

[Demeter]

20. Retail Sales Reports Give Me Gas

http://www.zerohedge.com/contributed/retail-sales-reports-give-me-gas

It just doesn't get any more bullish than Tuesday's retail sales report. Or so you would think if you only read the mainstream media reports. "More spending at online stores such as Amazon and electronics and applicance stores boosted retail sales by 0.5% in October, following a strong 1.1% surge in September," shouted Marketwatch. "Retail sales rose more than projected in October as American shoppers gave the economy a boost at the start of the fourth quarter, "enthused Bloomberg. The Wall Street Journal was a little less effusive: "U.S. retail sales rose in October as Americans spent their dollars at electronics stores and on the Internet."...The stories noted that the data beat economists' expectations. Since economists' tend to beat, miss, or get the number right on a seemingly random basis, I don't know why anyone still cares. Someone should put together the data on how often they get it right, and then ask the question, "Tell me again why we are paying these people." I haven't heard of any university economics departments or Wall Street brokerages, nor certainly any financial infomercial media organizations, lining up to do that research and write that report. The last thing they're interested in is in exposing the shills who butter their bread. As for why I don't do it, that's a project for another day.

The real story on this month's retail sales number isn't quite as bright as the captive media reports suggest. As always, they report just the seasonally adjusted, made up number. I like to start with the actual, not manufactured "impressionistic" number reported in the media. The government reports it, but mainstream "reporters" don't bother with it. Actual sales were up 1.1% from September and 6.7% versus last October. Will someone please explain to me how an actual year to year gain of 6.7% translates to a seasonally adjusted year to year gain of 7.2%. They should be the same. The comparison is of two periods at the exact same point in the year. The impact of seasonal smoothing should be zero. Somehow, the application of seasonal fictionalization causes the annual rate of change to grow too. How cool is that! October is normally stronger than September, so the fact that it had a gain is unremarkable. The question is one of magnitude. In order to gauge whether this October was really a good month, we need to compare it to years past. Last year's October gain was 2.9%. October 2009 was even better with a gain of 4.4%. October 2008, when the US economy and financial markets were going into a tailspin saw a drop of 0.2%. October 2007, just at the threshold of recession, had a gain of 4.2%.

By that standard, it's hard to understand what all the pundits are so excited about. It's even more underwhelming when we dig a little deeper. For example, I like to consider the impact of inflation and the effect of gasoline sales, which tend to act like a tax and suppress the sales of other goods when gas prices rises, or like a tax cut, stimulating sales of other goods when gas prices fall. The price volatility of gasoline results in distortion of total retail sales. Gas sales currently comprise about 12% of total retail sales. When gas prices rise 20-30% in a year, that adds a couple of percent on to nominal total sales. Rising gas prices cause the value of gasoline sales to rise which flows through to total retail sales, even though no more gas is being sold, and the rise in gas prices tends to suppress other retail sales. To get a truer picture of underlying consumer spending, I like to look at retail sales adjusted for inflation and excluding gasoline sales. Once gasoline sales are backed out, the net sales result is adjusted by the change in CPI, suddenly that 6.7% year over year gain gets a whole lot smaller, dropping to 1.75%. That's down sharply from a year to year gain of 3.2% in September and 3.5% in August. Not only are October sales ho-hum at best, they represent deceleration in growth from the two previous months.



Real Retail Sales Ex Gasoline Chart-

This chart shows clearly just how weak the real growth of retail sales have been. While the nominal number has blown past the October levels at the retail sales peak in 2007, the inflation adjusted numbers ex gasoline sales remain 5% below the peak levels. The nominal numbers make it look like the economy is making progress, when the reality is that for the past year its progress has been marginal. At the same time, the US population has grown by an estimated 3% since October 2007, according to the Census Bureau. Also over that period foreigners taking advantage of the cheaper US dollar came flooding into the US on shopping excursions. Even with growing population and increasing retail tourism real sales ex gasoline are down by 5% in 4 year. That certainly is nothing to get excited about, especially considering the weakening of the growth rate throughout 2011. The bulls want you to see the glass as half full and rising. Not only is it half empty, but it appears to be draining at an accelerating rate. What does this mean for investors? There's been a leading relationship between the annual growth rate of real retail sales ex gas and the direction of stock prices. Although that rate hasn't turned negative, as it has slowed this year, stock prices have tended to follow, as they have in the past decade. If the trend doesn't reverse soon, the growth rate will drop into negative territory and stock prices would probably fall. The growth rate of this series would need to recover and stabilize somewhere north of 3% for it to be a solidly bullish indication for stock prices. A lot is riding on this Christmas shopping season. A fall in gas prices might give retail sales and stock prices the boost that's needed to keep the bulls in business. A rise in gas prices could be the kiss of death. The recent persistence of the uptrend in crude oil prices over the past 2 months is not a good omen.

[DemReadingDU]

21. it's all spin

anything to make people think economy is recovering

edit:
and my own paper is predicting that Christmas sales are going to be the best in 5 years. It's as if they are pushing people to spend, spend, and spend more. Don't they realize people don't have money to spend.
:wtf:


11/15/11 Ohio holiday sales to be highest in five years, report says
http://www.daytondailynews.com/news/dayton-news/ohio-holiday-sales-to-be-highest-in-five-years-report-says-1284881.html

[AnneD]

67. The Titanic slowly sinks.....

and the band plays on. :nopity:

What WS forgets is that some of the worlds wealthiest folks dies when it sunk...Vanderbuilt, B. Guggenheim, J.J. Astor, Isador and Ida Straus. The crooks have taken money from the middle class investors, and as MG Global is shown, these crooks will soon be cannibalizing other members of the 1%

[Demeter]

24. US airlines fight Air-India financing

A lobby group has sued to stop the US Export-Import Bank from providing credit guarantees to back the sale of Boeing aircraft

Read more >>
http://link.ft.com/r/6NPSBB/SP6TJT/1O51V/XHGXGV/62XD5D/LE/t?a1=2011&a2=11&a3=17

[Demeter]

25. GE signs Mongolian wind power deal

General Electric will help build Mongolia’s first wind energy park in a $100m deal with Newcom, a Mongolian private investment company

Read more >>
http://link.ft.com/r/6NPSBB/SP6TJT/1O51V/XHGXGV/QNB8HL/LE/t?a1=2011&a2=11&a3=17

[Demeter]

26. Morgan Stanley settles SEC advisory fee claim

Fine of $3.3m for payments to third party in its Malaysia Fund as US watchdog increases its focus on charges to retail customers

Read more >>
http://link.ft.com/r/6NPSBB/SP6TJT/1O51V/XHGXGV/GDRN9E/LE/t?a1=2011&a2=11&a3=17

[Demeter]

28. UniCredit seeks better ECB funding access for Italy’s banks

Chief executive Federico Ghizzoni makes request to central bank as eurozone crisis puts further strains on money markets

Read more >>
http://link.ft.com/r/6NPSBB/SP6TJT/1O51V/XHGXGV/167521/LE/t?a1=2011&a2=11&a3=17

[Demeter]

31. ECB under strain as political masters bicker

The central bank fears weakening incentives for governments to implement reforms

Read more >>
http://link.ft.com/r/EB8122/XH26RR/9MEOW/JE989F/C4QSKW/HK/t?a1=2011&a2=11&a3=17

[Demeter]

33. Call for triple A ‘power core’ in eurozone FASCISM RISING IN FINLAND

They should have greater say in economic affairs, says Finland’s Europe minister Alex Stubb

Read more >>
http://link.ft.com/r/EB8122/XH26RR/9MEOW/JE989F/ORTB3N/HK/t?a1=2011&a2=11&a3=17

[Demeter]

34. US body sees renminbi as threat to dollar

The Chinese currency could pose a challenge to the international dominance of the greenback within a decade, says a commission set up by Congress

Read more >>
http://link.ft.com/r/EB8122/XH26RR/9MEOW/JE989F/GDRNEK/HK/t?a1=2011&a2=11&a3=17

NO COMMENT...IT WOULD TAKE SEVERAL BOOKS

[Po_d Mainiac]

70. The Bernank and his

mountain of ink cartridges, are making a strong case against fiat.
YMMV

[Demeter]

35. Sarkozy to tackle French labour costs

Nicolas Sarkozy announced a review of the funding of France’s social welfare system, saying the heavy labour costs it imposed hurt the economy and the country’s ability to compete

Read more >>
http://link.ft.com/r/NA70KK/WTVBMR/4VXHZ/4C2DCA/R3GTGH/JY/t?a1=2011&a2=11&a3=16

[xchrom]

36. Dell expects disk drive shortage to hurt revenue

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2011/11/15/financial/f163543S73.DTL

Dell is likely to be hampered for a couple quarters by an industry-wide shortage of computer storage drives resulting from the recent flooding in Thailand, the computer maker said Tuesday.

Dell predicted full-year revenue near the low end of the guidance it issued in August, which called for revenue growth of 1 percent to 5 percent over 2010 and was in turn a reduction from a previous forecast.

Dell Inc. cited the uncertain economy, as well as the disk drive shortage. The Thai flood waters, which started spreading in August, are now receding, but they closed many of Thailand's tech-related factories, including a bevy that produce a critical component of personal computers: hard disk drives.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2011/11/15/financial/f163543S73.DTL#ixzz1dyEp8D5B

[Demeter]

37. Ermotti to present UBS plan to investors

Strategy to shrink Swiss bank’s balance sheet by half in wake of appointment of Sergio Ermotti as permanent chief

Read more >>
http://link.ft.com/r/LVA6WW/R38PZE/NRHD3/R3U0C1/IINJJD/82/t?a1=2011&a2=11&a3=16

[Demeter]

38. Citigroup to cut at least 900 jobs

The positions will be eliminated in the bank’s securities and banking division, with up to 3,000 jobs potentially on the line

Read more >>
http://link.ft.com/r/LVA6WW/R38PZE/NRHD3/R3U0C1/U1OGB3/82/t?a1=2011&a2=11&a3=16

[Demeter]

39. Central banks’ gold buying at 40-year high

Central banks made their largest purchases of gold in decades in the third quarter, as a sharp drop in prices in September accelerated the shift to bullion as a means of diversification.

The scale of the buying, at 148.4 tonnes on a net basis, will come as a surprise to many traders as it is a long way beyond the purchases that had previously been disclosed.

Read more >>
http://link.ft.com/r/IOCBMM/16MADF/3CWTA/975N5G/KQPHHA/50/t?a1=2011&a2=11&a3=17


I'D SAY THE GLOVES AND THE MASKS ARE NOW OFF--THE TIME HAS COME TO CHOOSE SIDES, AND THE GINGRICHES AND THE OBAMAS AND THE BANKSTERS HAVE SHOWN THEIR TRUE FACES AND TRUE GENDAS AT LAST.

IT WON'T BE LONG NOW. BE READY FOR ANYTHING.

[Demeter]

40. Obama declares Asia a ‘top priority’

President Barack Obama said on Thursday the Asia-Pacific region was now “a top priority” and pledged an expanded military presence that would not be affected by planned budget cuts.

Speaking to the Australian parliament in Canberra, Mr Obama said he hoped to improve co-operation with China, but stressed that the US was “here to stay” as a Pacific power despite China’s dramatic economic and military advances.

Read more >>
http://link.ft.com/r/8P1R88/5VX79M/T10SH/JE989E/WTC2H4/E4/t?a1=2011&a2=11&a3=17

SO NOW WE ARE GOING TO INVADE CHINA? HE'S A MADMAN.

[Demeter]

41. Yukon Huang: The real risks to China’s financial system

The recent assessment of China’s financial stability by the International Monetary Fund highlights increasing vulnerabilities stemming from the government’s role in the lending process, and an inflexible interest rate policy.

Those who regard weaknesses in the banking sector as a likely trigger for a financial collapse have railed against China’s negative real interest rates and the speculative activity this has spawned.

They see the heavy reliance on credit expansion to stimulate the economy during the global financial crises as eventually leading to a surge in non-performing loans. All this is viewed as part of a strategy of financial repression that postpones the day when China’s big four state banks can operate as real commercial banks.

Read more >>
http://link.ft.com/r/IOCBMM/PFBL7R/XBAN6/R3U0CW/167XWL/CM/t?a1=2011&a2=11&a3=17

[Demeter]

42. Richard Lambert: Its camp is gone, but the Occupy movement will grow

The Occupy Wall Street movement is a symptom of a growing public disquiet about the workings of market capitalism. As such, Monday night’s decision to close down the camp in New York City is unlikely to check the protests: if anything, the reverse may be true.

Public support for free markets is based on two broad arguments. The first is that they deliver more efficient outcomes than the alternatives. The second is that over time they create increased prosperity for society at large. Both these assumptions have taken a severe jolt in the past few years.

Read more >>
http://link.ft.com/r/8P1R88/XH2H5N/SUO9T/ZG65BY/U1OBD1/LE/t?a1=2011&a2=11&a3=15

[Demeter]

69. Homeland Security Coordinated 18-City Police Crackdown on Occupy Protest

http://www.washingtonsblog.com/2011/11/homeland-security-coordinated-18-city-police-crackdown-on-occupy-protest.html

NO SURPRISE THERE---THAT'S WHAT IT WAS CREATED TO DO

[Demeter]

71. Police State: #OWS, Other Crackdowns Part of National, Coordinated Effort; Bloomberg Defies Court Or

Police State: #OWS, Other Crackdowns Part of National, Coordinated Effort; Bloomberg Defies Court Order to Let Protestors Back into Zuccotti Park

http://www.nakedcapitalism.com/2011/11/police-state-ows-other-crackdowns-part-of-national-coordinated-effort-bloomberg-defies-court-order-to-let-protestors-back-into-zuccotti-park.html

The crackdowns on the Occupations around the US are as ugly as they seem.

The area around Zuccotti Park was subject last night to a 9/11 level lockdown over peaceful, lawful protests by a small number of people. No credible case has been made by the officialdom that the protestors had violated any laws. Martial law level restrictions were in place. Subways were shut down.Local residents were not allowed to leave their buildings. People were allowed into the area only if they showed ID with an address in the ‘hood. Media access was limited to those with official press credentials, which is almost certainly a small minority of those who wanted to cover the crackdown (the Times’ Media Decoder blog says that journalists are describing the tactics, as we did, as a media blackout). Moreover, reading the various news stories, it appears they were kept well away from the actual confrontation (for instance, the reported tear gassing of the Occupiers in what had been the kitchen, as well as separate accounts of the use of pepper spray and batons). News helicopters were forced to land. As of 10 AM, reader Wentworth reported that police helicopters were out in force buzzing lower Manhattan...the 18 police action was a national, coordinated effort. This is a more serious development that one might imagine. Reader Richard Kline has pointed out that one of the de facto protections of American freedoms is that policing is local, accountable to elected officials at a level of government where voters matter. National coordination vitiates the notion that policing is responsive to and accountable to the governed.

National coordination vitiates the notion that policing is responsive to and accountable to the governed. Even though the blog the Stranger gives a tidbit from the Seattle mayor, who did not participate in the crackdown, that the effort was coordinated through the US Conference of Mayors, it is not hard to imagine that there was more that a little bit of, erm, help from the Feds. Gregg points out that New York city police chief Ray Kelly has a tight relationship with the CIA and the FBI. Homeland Security has also trying to increase its influence over police forces in major cities. It is not hard to imagine it playing a role in this effort as well. And this of course makes a farce of the sympathetic noises from Teleprompter (hat tip reader Bob Falfa for the coinage)...

[Demeter]

73. Occupiers Occupied: The Hijacking of the First Amendment By Robert Reich

http://www.informationclearinghouse.info/article29732.htm

A funny thing happened to the First Amendment on its way to the public forum. According to the Supreme Court, money is now speech and corporations are now people. But when real people without money assemble to express their dissatisfaction with the political consequences of this, they’re treated as public nuisances and evicted.

First things first. The Supreme Court’s rulings that money is speech and corporations are people have now opened the floodgates to unlimited (and often secret) political contributions from millionaires and billionaires. Consider the Koch brothers (worth $25 billion each), who are bankrolling the Tea Party and already running millions of dollars worth of ads against Democrats. Such millionaires and billionaires aren’t contributing their money out of sheer love of country. They have a more self-interested motive. Their political spending is analogous to their other investments. Mostly they want low tax rates and friendly regulations. Wall Street is punishing Democrats for enacting the Dodd-Frank financial reform legislation (weak as it is) by shifting its money to Republicans. The Koch brothers’ petrochemical empire has financed, among many other things, candidates who will vote against environmental protection. This tsunami of big money into politics is the real public nuisance. It’s making it almost impossible for the voices of average Americans to be heard because most of us don’t have the dough to break through. By granting First Amendment rights to money and corporations, the First Amendment rights of the rest of us are being trampled on.

This is where the Occupiers come in. If there’s a core message to the Occupier movement it’s that the increasing concentration of income and wealth poses a grave danger to our democracy. Yet when Occupiers seek to make their voices heard — in one of the few ways average people can still be heard — they’re told their First Amendment rights are limited. The New York State Court of Appeals along with many mayors and other officials say Occupiers can picket — but they can’t encamp. Yet it’s the encampments themselves that have drawn media attention (along with the police efforts to remove them). A bunch of people carrying pickets isn’t news. When it comes to making views known, picketing is no competition for big money .

Yet if Occupiers now shift tactics from passive resistance to violence, it would spell the end of the movement. The vast American middle class that now empathizes with the Occupiers would promptly desert them. But there’s another alternative. If Occupiers are expelled from specific geographic locations the Occupier movement can shift to broad-based organizing around the simple idea at the core of the movement: It’s time to occupy our democracy.

**************************************************************************

Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written thirteen books, including The Work of Nations, Locked in the Cabinet, Supercapitalism, and his most recent book, Aftershock. His "Marketplace" commentaries can be found on publicradio.com and iTunes. He is also Common Cause's board chairman. - www.robertreich.org/

[tclambert]

84. The mistake there is to call it a "free market." Those virtues come from a "competitive market"

which actually requires strong government regulation to prevent the harmful anti-competitive effects of monopolies, cartels, and "Too Big To Fails." The corporate monopolists love to promote this confusion because they actually HATE competition. They don't want to have to answer to the desires of customers. They want the power to dictate to the marketplace, giving the power to the CEOs.

BTW, I couldn't read the article. It said I needed to sign in. And I wanted to find out if I'm related to this guy. Pretty sure we're both descended from a guy named Noah, but he could be another cousin I can shun.

[Demeter]

85. Try these links

http://ftalphaville.ft.com/blog/2011/11/16/748801/pick-pinks/

and here is a commentary on his article:

http://www.thedeal.com/thedealeconomy/on-the-zeitgeist-patrol-with-ows.php

[xchrom]

43. south asia: Sensex tumbles 314 points to 6-week low

http://timesofindia.indiatimes.com/business/india-business/Sensex-tumbles-314-points-to-6-week-low/articleshow/10768566.cms

MUMBAI: The Bombay Stock Exchange benchmark today touched 6-week low as it fell 314 points on selling in blue-chips, triggered by Reliance Industries, amid a string of dampeners like below-expected corporate earnings and weak trend in global markets.

The Sensex, which had lost 793 points in the last five sessions, dropped further by 314.16 points to 16,461.71, reaching a level last seen on October 7.

The most-heaviest on the Sensex - Reliance Industries tumbled by 4.51 per cent as funds reduced their holding amid a reduction in fuel prices.

A weak trend in the Asian region and lower opening in Europe on concerns over the persisting euro-zone debt crisis worsened the sentiment.

[xchrom]

46. Nifty may test levels of 4700; Rupee depreciation, corporate earnings weigh

http://economictimes.indiatimes.com/markets/analysis/nifty-may-test-levels-of-4700-rupee-depreciation-corporate-earnings-weigh/articleshow/10768919.cms

NEW DELHI: The BSE Sensex slipped over 360 points in trade on Thursday to post its lowest close in six weeks as concerns on the mounting European debt crisis continued to dampen investor sentiment.

The broader 50-share NSE index closed 1.9 per cent down to 4,934.75.

The 30-share BSE index closed 1.87% lower at 16,461.71 points led by losses in Reliance Industries (down 4.5%), ITC (down 2.3%) and HDFC (down 1.7%).

World stocks too dipped to a one-week low and the euro held near a five-week trough while safe-haven German bonds rose, as concerns grew over spillover damage to US banks from the euro zone sovereign debt crisis.

[xchrom]

47. India gold futures steady, physical buying absent

http://economictimes.indiatimes.com/markets/commodities/india-gold-futures-steady-physical-buying-absent/articleshow/10769485.cms

MUMBAI: India gold futures were steady following overseas leads, but price falls of about 1 percent from Tuesday's peak were not enough to attract physical buyers, who sought to stock in the middle of the wedding season, dealers said.

* The most-active gold for December delivery on the Multi Commodity Exchange (MCX) was 0.20 percent lower at 28,937 rupees per 10 grams. The contract has fallen about 1 percent from the contract high of 29,212 struck on Tuesday.

* A weaker rupee kept the downside in prices limited. The rupee plays an important role in determining the landed cost of the yellow metal, which is quoted in dollars.

* Overseas gold traded steady after 1 percent drop in the previous session, as markets remain jittery over the euro zone debt crisis while the bloc's political wrangling continues.

[DemReadingDU]

45. Legg Mason’s Miller to Exit Main Fund

11/17/11 Legg Mason’s Miller to Exit Main Fund

Bill Miller, the Legg Mason Inc. (LM) manager known for beating the Standard & Poor’s 500 Index for a record 15 years through 2005, will step down from his main fund after trailing the index for four of the past five years.

Miller, 61, will be succeeded by Sam Peters as manager of Legg Mason Capital Management Value Trust (LMVTX) on April 30, the Baltimore-based firm said today in an e-mailed statement. Miller will remain chairman of the Legg Mason Capital Management unit while Peters will assume the role of chief investment officer.

Miller, known for picking stocks he deems cheap based on financial yardsticks such as earnings, became mired in the worst slump of his career as he wagered heavily on financial stocks during the 2008 credit crisis. Value Trust lost 55 percent that year as the S&P 500 dropped 37 percent, including dividends, prompting a wave of withdrawals. The fund’s assets have plunged from a peak of $21 billion in 2007 to $2.8 billion as of Nov. 15, according to data compiled by Bloomberg.

more...
http://www.bloomberg.com/news/2011-11-17/legg-mason-s-bill-miller-to-exit-main-fund-after-falling-behind-its-peers.html

[Demeter]

54. When you join forces with the banksters--try to ride their coat tails

you are on the short road to hell and ruination. Washington, DC take note.

[ret5hd]

53. OWS has delayed opening of NYSE

ooops! looks like the reports i heard were wrong.

Nevermind.

[Demeter]

57. 'A Responsibility To Represent The People:' Occupy Protest In Full Swing

http://www.npr.org/blogs/thetwo-way/2011/11/17/142450786/a-responsibility-to-represent-the-people-occupy-protest-in-full-swing?ft=1&f=1001

Protesters are trying to surround the intersections that lead to the New York Stock Exchange. At the intersection of Pine and Nassau, the protesters are close enough to get a glimpse of the ornate facade of the Exchange. That's why a few hundred protesters have stopped there, with rows and rows of police lining the streets, trying to keep a walking path open and trying to keep protesters from breaching the barricades and making it to the steps of the Exchange...One man in a dark suit and tie said, "This is disgusting and horrible and I'm a busy person trying to get to work."

...Government is more concerned about the interests of the rich corporations as opposed to the interests of the people who elected them.

To make that point, Pete Tridish, 41, dressed as cookie monster and held a sign that said "One percent of the monsters eat 99 percent of the cookies."

"It's a great metaphor," he said. "There are no checks and balances." Wall Street has been deregulated and has been "allowed to do what they want."

[Demeter]

58. Because of Decentralization

the Market will open...just not at full strength. Some portions will not get on line at opening, some banksters' servants will be tardy, etc...

[Demeter]

60. Got to dash--keep warm and safe, all!

[Roland99]

65. Three Israeli banks warn; analysts not worried

http://www.marketwatch.com/story/three-israeli-banks-warn-analysts-not-worried-2011-11-17?link=MW_home_latest_news

[Hotler]

66. k&r n/t

[Demeter]

72. Hard times forcing desperate measures

http://www.theage.com.au/world/hard-times-forcing-desperate-measures-20111115-1nh3o.html

THE central Minnesota town of Foley tried having its own police department and contracting with the county sheriff's department for law enforcement. Now, in an effort to save money, the town with a population of 2600 is making a controversial move: it plans to employ a private security company to patrol its streets. Nationwide, other cities have supplemented traditional police with contracted officers, said John Firman, director of research for the International Association of Chiefs of Police. But as cities across the US struggle with the economic downturn, more will look at innovative ways of providing public safety, Mr Firman said.

''For the first time in our history … police are no longer immune from budget cuts,'' he said. After cuts in state aid and uncertainty about future funding, Foley City Council started looking at options to save money on policing. The town decided to contract with General Security Services Corporation to provide 24-hour coverage starting in January for about $US16,000 ($15,592) a month.

Budget cuts have also forced a county school board in Colorado to sell advertising space on student report cards to help make ends meet. Jefferson County Public Schools expects to make $US90,000 over three years from Collegeinvest, a college savings plan, for the five-centimetre ads on report cards issued by its 91 primary schools. The school board last year slashed its spending by $US40 million after reduced state and federal government support. ''We're obviously looking for revenue generators and taking them where we can find them,'' board spokeswoman Melissa Reeves said. The Jefferson County school board already sells advertising space on buses to a bank. Ms Reeves said it anticipates making a further $US70 million in spending cuts in coming years, as the US struggles to put hard times behind it.

[Demeter]

74. Is the US Getting Domestic Indefinite Military Detention for Thanksgiving? By Adam Serwer

http://motherjones.com/mojo/2011/11/america-getting-domestic-indefinite-military-detention-thanksgiving

A bipartisan group of senators is poised to force through dramatic changes to how the US government handles suspected terrorists—over the objections of the White House and Senate Democratic leadership.

Legislative language that emerged from the Senate Armed Services Committee on Tuesday afternoon would mandate the automatic, indefinite military detention of noncitizens apprehended in the United States who are suspected members of Al Qaeda or associated groups. The wording, which is part of a must-pass bill to fund the military, also appears to allow the indefinite military detention of citizens and legal permanent residents. The bill would also extend restrictions on transfers of detainees from Guantánamo Bay, though only for one year.

Obama administration officials fear that the mandatory detention provisions could force the FBI to interrupt ongoing investigations in order to hand suspected terrorists over to the military. They also worry that the new rules could interfere with the prosecution of suspected terrorists in federal courts. At a homeland security and counterterrorism conference in September, White House counterterrorism adviser John Brennan warned that "this approach would impose unprecedented restrictions on the ability of experienced professionals to combat terrorism." Senate Majority Leader Harry Reid (D-Nev.) held up the defense funding bill in mid-October on the basis of the those objections. The latest changes to the bill appear to address some of the administration's concerns by claiming that designating an individual a terrorist "does not require the interruption of ongoing surveillance or intelligence gathering activities." But civil liberties advocates are disappointed.

"The problems with these provisions have not been fixed—they've been made worse," says Chris Anders, legislative counsel with the American Civil Liberties Union. "There is absolutely no reason for Congress to now pass legislation that would put in indefinite military detention American citizens and other suspects apprehended far from any battlefield, even within the United States itself. "

[AnneD]

77. This is how...

Gulags grow. FEMA camps are real. I can just see OWS protesters being transported to these facilities. Re education will not be far behind.

[Demeter]

75. Credit Storm Batters Europe So, how bad will the EU credit crunch get? By Mike Whitney

http://www.informationclearinghouse.info/article29739.htm

Credit conditions in the eurozone continue to deteriorate while yields on French, Spanish, Belgian and Italian bonds move higher. Italy’s 10-year yield increased 19 basis points to 6.89 percent on Tuesday, just a stone’s throw from the “unsustainable” 7 percent. French debt is also under increasing pressure. The spread between France’s 10-year debt and German bund hit a new high on Tuesday, widening by 174 basis points. If yields continue to rise, European Central Bank (ECB) chief Mario Draghi will be forced to either expand his bond buying program (Securities Markets Programme) or watch while defaulting sovereigns domino through the south taking most of the EU banking system along with them. Germany will not permit the ECB to act as lender of last resort. As the Bundesbank’s president Jens Weidmann explained in an interview last week, unsterilized bond purchases (monetization) would violate Article 123 of the EU treaty.

“I cannot see how you can ensure the stability of a monetary union by violating its legal provisions.” Weidman said. “I think the prohibition of monetary financing is very important in ensuring the credibility and independence of the central bank, which allow us to deliver on our primary objective of price stability. This is a very fundamental issue. If we now overstep that mandate, we call into question our own independence.”

So, for now, the ECB’s hands are tied, but as bond prices continue to fall and credit markets freeze, German opposition will weaken and the ECB will asked to intervene.

Samsung Securities is now warning of a run on Italian banks. Here’s an excerpt from their report:

“A more immediate issue confronting investors is whether we are likely to soon witness a significant run on Italian-based banks. If the answer is yes, then this without question will be the end of the road for the eurozone and will confront the ECB and Germany with an inescapable choice of either providing unlimited support for all eurozone commitments (including deposits) or allowing the disintegration of the euro….

In the case of most countries that are starting to suffer from deposit outflow, the banks have to increasingly rely on higher interest rates to lure depositors. Is this starting to happen in Italy? The answer is yes, particularly in the case of corporate accounts….

One of the key leading indicators of a bank run is the bank’s increasing reliance on ECB’s refinancing facilities. Over the past three-to-four months, we have seen increasing reliance by Italian banks on eurosystem refinancing. Whereas in 2008 and 2009, Italian banks were average users of ECB facilities, accounting for only 3-4% of the total vs Italy’s share of 13.7% of the eurozone’s banking assets. However, since July, the share of ECB’s refinancing attributable to Italian banks rose to a historically high level of 18.8% (end-October)

….markets remain frozen…Banking refinancing markets remain largely closed. Whether one looks at OIS spreads (90bps on the euro), ECB deposits or CDS spreads between the eurozone’s senior and subordinated debt (235bps) remain at extremely elevated levels, indicating extreme reluctance of banks to lend to each other for longer than overnight or preference for depositing funds with the ECB rather than lending.” (“Samsung Securities, Prepare for the Italian bank runs”, Pragmatic Capitalism)

Samsung’s conclusions are no different than those of other analysts who’ve followed developments in the credit markets closely. Banks are depositing record amounts of money at the ECB rather than lending it out, funding is getting more difficult as US money markets reduce their lending to EU banks, credit gauges are steadily rising, and new capital requirements are forcing banks to dump risk-weighted assets on an already-saturated market. These are all signs of a deepening crisis. Here’s a clip from the Wall Street Journal:

“Worries over the fate of European nations are gumming up the intricate gears of the financial system….The rising cost of borrowing demonstrates the lack of faith investors hold in European leaders to resolve the region’s debt crisis. It also suggests that the region’s banks remain under stress, despite officials’ efforts to restore confidence. Taken as a whole, the markets show that private money is flowing only in fits and starts to select few European financial recipients.

“The funding market is not working properly,” said Giuseppe Maraffino, a European money-market strategist at Barclays Capital…

The latest sign came on Monday, when the European Central Bank reported that money going into its low-interest-rate overnight-deposit facility has been surging, effectively pulling money out of the banking system. Last week, euro-zone banks’ overnight deposits with the ECB hit €288.43 billion ($397.8 billion), the highest level since the debt crisis first erupted last year. (“Financing Markets Tighten Spigots”, Wall Street Journal)

So, how bad will the EU credit crunch get? That’s a question the Financial Times blog tries to answer on Monday in a post titled “It’s a capital ratio of two halves”. Here’s a clip from the article:

“In another sign of how bad this is looking, Commerzbank, Germany’s leading lender to central and eastern Europe, is ceasing all loan origination outside of its home country and Poland…….But assuming any adjustments to the rules will come too little to late, we could be in for €1,500bn to €2,500bn of deleveraging according to a note published by Morgan Stanley on Sunday.” (“It’s a capital ratio of two halves”, FT. Alphaville)

Well, now, if the banks are going to unload a hefty $3 trillion in assets, (in an effort to meet the new 9% capital requirements) then they’re not going to be doing a lot of lending now are they? And, if there’s no credit expansion (new loans) then there’s no growth, right? In that case, people would be well advised to pick a cozy spot outside the unemployment office now before the lines form.

Reuters blogger Felix Salmon has an excellent post (Monday) that explains the implications of the credit storm raging across the eurozone. Here’s an excerpt:

“Europe is in the middle of a textbook liquidity crisis. Banks are not lending to each other — and the ECB isn’t stepping in to solve the problem. This is a serious structural issue with the way that the European monetary system was constructed: the ECB is tasked only with guarding inflation, and not with ensuring the health of the banking system. Individual national central banks are meant to do that. But they can’t print money — only the ECB can. So when there’s a liquidity crisis, no one’s able to step in and solve it…..

There is no reasonable amount of capital that can cure a liquidity shortage. The reason why people are refusing to lend to the banks is not primarily because they fear an underlying solvency problem (although some people do), but because they fear an obvious and immediate liquidity problem. It is rational not to lend to an institution that you believe to be illiquid.

The real problem here is simply that banks are hoarding their cash and not lending to each other. Look at the way that bank debt issuance has fallen off a cliff…

And the way the banking sector works, banks have to be constantly lending to each other: in nearly every country in Europe, the amount of bank debt coming due every day is higher than the total amount of bank capital in the system. The overnight interbank market is the bloodstream of the European financial system, and the flow of blood is coming to a halt.” (” Europe’s liquidity crisis”, Felix Salmon, Reuters)

So, soaring yields on sovereign bonds are only a small part of a bigger and more complicated story. The real problem is in the credit markets, where plunging asset values and funding woes are paving the way for another full-blown financial meltdown.

************************************************************

Mike Whitney lives in Washington state. He is a contributor to Hopeless: Barack Obama and the Politics of Illusion, forthcoming from AK Press. He can be reached at [e-mail]

[Demeter]

76. Eurozone Regime Change Big Finance Moves In by MIKE WHITNEY

http://www.counterpunch.org/2011/11/14/big-finance-moves-in/

Greek Prime Minister Georgios Papandreou and Italian Prime Minister Silvio Berlusconi have both been forced from office and replaced by representatives of big finance. Mario Monti, who will replace Berlusconi, was formerly the European Chairman of the Trilateral Commission and a member of the Bilderberg Group. He is also listed on Goldman Sachs board of international advisers...Lucas Papademos, who will replace Papandreou, was formerly the Vice President of the European Central Bank (ECB), and served as Senior Economist at the Federal Reserve Bank of Boston in 1980. He’s also been a member of the Trilateral Commission since 1998...It’s also worth noting that the ECB’s new president, Mario Draghi, is a trustee at the Brookings Institution, a Fellow of the Institute of Politics at the John F. Kennedy School of Government at Harvard, a former member of the Board of Directors of the Bank for International Settlements, and a former Managing Director at Goldman Sachs.

Global banking is an incestuous business where pedigree is everything. One’s personal history indicates one's commitment to the system and whether one can be trusted to implement the policies that directly benefit finance capital. This new group of so-called “technocrats” will use their power to impose harsh austerity measures aimed at crushing the unions, dismantling the pension system, and privatizing public assets. Their belt-tightening policies will intensify the slump, shrink government revenues, increase unemployment and foment social unrest. As more of the eurozone’s leaders are replaced by bank hirelings, opposition to further eurozone integration will appear in the form of nationalist groups demanding a withdrawal from the 17-member monetary union. Peaceful protests will turn in pitched battles with police and state security forces as working people fight to have their voices heard. These confrontations will grow more commonplace as the economy deteriorates and desperation increases. Here’s an excerpt from an article in the World Socialist Web Site titled “Greece and the Dictatorship of Finance”:

“The situation is reminiscent of Germany in the 1930s. Then, German Chancellor Heinrich Brüning, a centrist politician, sought to impose the impact of the international financial and economic crisis on the population with drastic austerity measures. He ruled through emergency measures, relied on the powers of the president and the parliamentary support of social democracy, and suppressed opposition to his austerity policies with brutal police operations. Brüning paved the way for the rise of the Nazis and their subsequent takeover of power.

The development in Greece is heading in the same direction. This follows inexorably from the logic of the “government of national unity.” Declaring its austerity program to be an expression of supreme national interests, the government will denounce all resistance as treason to be forcibly suppressed.” (“Greece and the Dictatorship of Finance”, World Socialist Web Site)

Papademos and Monti have already pledged that they’ll faithfully execute the terms of their agreements with the Troika (The European Union, the International Monetary Fund and the ECB) even though austerity measures have failed wherever they’ve been implemented. Greece’s deficits have ballooned in the two years since Papandreou agreed to follow the EU’s hairshirt policies putting the country on the fasttrack to default. Unemployment has soared to a record 18.4 percent in August, up 2 percent in a matter of months. Even so, EU leaders remain stubbornly committed to the policies of economic strangulation. In other words: “The beatings will continue until morale improves”...In Italy, it’s more-of-the-same; contractionary policies that are only deepening the slump and adding to the misery. The austerity regime has no pro-growth component at all; there’s not a whiff of Keynesian stimulus to be found anywhere. Italy is expected to shrink its way back to health, a notion that flies in the face of basic economic theory and boggles the mind. Here’s an excerpt from the New York Times that outlines Italy’s cost-cutting program:

“The legislation includes selling $21 billion of state assets and increasing the retirement age to 67 from 65 by 2026. It also sets the stage for a liberalization of closed professions and labor laws, a gradual reduction in government ownership of local services and tax breaks for companies that hire young workers.” (New York Times)

The near-Depression on the EU periphery has led to a slowdown in the core countries and the prospect of another recession. Last week, the IMF released a report for the G-20 conference in Cannes stating:

“Recovery remains in low gear in major advanced economies with elevated risk of falling back into recession. Policy paralysis and incoherence have contributed to exacerbating uncertainty, a loss of confidence, and heightened financial market stress—all of which are inimical to demand rebalancing and global growth prospects.

Thus, understanding large imbalances within and across countries has taken on renewed importance. Policy makers need to move with a greater sense of urgency on reaching an agreement on policies that will reduce imbalances and lay the foundation for restoring the global economy to health.”

While the IMF is correct in pointing to the bulging account imbalances that are at the root of the present crisis (and not “profligate spending or “lazy Greeks” as many believe), their agents, who have been sent to Rome and Athens to monitor progress, are only adding to the seething resentment directed at the IMF, the ECB and Germany. Also–as a practical matter–slashing public spending in the middle of a downturn is a prescription for disaster as British PM David Cameron recently discovered...So austerity has been a bust. Contractionary policies lead to retrenchment and recession, not fiscal expansion and recovery.(as many conservatives claim) In every case, austerity has added to deflationary pressures, increased turmoil in the credit markets, and shrunk GDP. Still, EU leaders refuse to adjust their policies so they jibe with the data. In fact, the ECB now uses its bond purchasing program as a form of blackmail to ensure that their orders are strictly followed. Case in point: The ECB intervened in the bond market on Friday (sending the yield on the Italian 10-year plunging) after suspending bond purchases for two full days during which yields skyrocketed above 7 percent.(“unsustainable” levels) The ECB’s absence from the market created an atmosphere of crisis which ultimately forced Berlusconi to resign and paved the way for the passing of the new austerity bill in the Italian parliament.

Regardless of how one may feel about Berlusconi, this type political meddling is unacceptable. It just shows that the ECB is prepared to use its power to impose its own political vision of Europe on the member states and to force policymakers to comply with its dictates. The incident brings to mind a quote by Meyer Rothschild:

“Give me the right to issue and control a nation’s money and I care not who governs the country.”

Leaders across Europe are just now beginning to grasp the ominous meaning of Rothschild’s words. By surrendering control of their currencies (and their ability to act as lender of last resort), they have inadvertently given up their sovereignty. Mario Draghi, a man who has never been elected to public office, is now arguably the most powerful man in Europe. So far, he appears to be less interested in “price stability” or “transmission of monetary policy” than he is with subverting the democratic process and conducting all-out class warfare. So, where is Europe headed? Professors Markus Brückner and Hans Peter Grüner have explored the relationship between economic crises and political extremism, and presented their findings in an article titled “The OECD’s growth prospects and political extremism.” Here’s an excerpt:

“Higher per capita GDP growth is significantly negatively linked to the support for extreme political positions. While estimates vary between specifications, we find that roughly a one percentage point decline in growth translates into a one percentage point higher vote share of right-wing or nationalist parties….

Our results therefore make clear that countries should not expect right-wing parties to get majorities unless growth declines quite as much as in the 1920s. Nevertheless, even with a less significant fall in economic growth rates, a rise in support for extreme parties is likely to change political outcomes – for example through their impact on incumbent parties’ political platforms….

Our results lend support to Benjamin Friedman’s view that economic growth determines the direction in which a democracy develops. This also implies that solving Europe’s growth problem may have important consequences that lie outside the purely economic sphere.” (“The OECD’s growth prospects and political extremism”, VOX EU)

If Professors Brückner and Grüner are right, then we can expect to see a steady rise in right wing groups sprouting up in countries across the south. Their popularity, in large part, will depend on their ability to rekindle nationalism and to pin the ongoing depression on the troika’s policies. If they succeed, then their ranks will swell and their demands –of an immediate withdrawal from the 17-member monetary union and a restoration of national sovereignty–will lead to a splintering or, perhaps, breakup of the eurozone.

[Demeter]

78. The suspense is killing me!

Waiting for the economic apocalypse....wondering which bankster will pull down the curtain and turn off the juice.

Wondering why the speculation in oil continues...don't they ever get margin calls?

Wondering which nation will go up in flames and burn out the parasites, or perhaps just the ordinary people.

Wondering whether Indonesia will offer refuge to the soon to be formerly first family, or if the CIA prepared some safe house for such an eventuality, and whether any Marine or mercenary will stand by to guard.

Who needs Hollywood? So long, Harry Potter.

[Demeter]

79. In other news, It's snowing

spitting flakes of moderate size in a heavy wind.

[RUMMYisFROSTED]

81. 12,000, I hardly knew ye.

[Demeter]

83. "My kingdom for some context"!

You can't handle the context. Neither can I.