Is it Tuesday already? my how time flies.

The weatherman is predicting it will hit 100F on Thursday, up from 98F earlier. I sure hope he's wrong. I don't think I can learn to shoot in two days....

Airlines, trucking companies and other big energy consumers are betting on further oil price falls, with many reluctant to lock in at current levels amid fears prices could plunge if the global economy weakens further

Read more >>
http://link.ft.com/r/LVA6WW/2O3JI0/MJTKN/7ASVCA/ZGNDF9/OS/t?a1=2012&a2=6&a3=25


MEANWHILE, THE ISRAELI LEADERS ARE JUMPING UP AND DOWN IN A TANTRUM--NOT EVEN RUSSIA WILL BEAT UP THE IRANIANS FOR THEM. GET A CLUE, NETANYAHU!

The European Union would gain far-reaching powers to rewrite national budgets for eurozone countries that breach debt and deficit rules under proposals likely to be discussed at a summit this week, according to a draft report seen by the Financial Times

Read more >>
http://link.ft.com/r/KC2844/5V1NYT/87I64/B5N7ZM/QNYAK1/QR/t?a1=2012&a2=6&a3=25

THIS IS CRAZY--NOT EVEN WASHINGTON TRIES TO DICTATE STATE BUDGETS.

http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/131201.pdf

TOWARDS A GENUINE ECONOMIC AND MONETARY UNION
Report by President of the European Council
Herman Van Rompuy

It is my pleasure to hereby transmit to you the report which I prepared in close cooperation
with the Presidents of the Commission, the Eurogroup and the European Central Bank.

This report sets out a vision for the future of the Economic and Monetary Union and how it
can best contribute to growth, jobs and stability. The report proposes to move, over the
next decade, towards a stronger EMU architecture, based on integrated frameworks for the
financial sector, for budgetary matters and for economic policy. All these elements should
be buttressed by strengthened democratic legitimacy and accountability.

This report is not meant to be a final blueprint: it identifies the building blocks and
suggests a working method. I do however expect to reach a common understanding
amongst us on the way forward for the EMU at our meeting at the end of the week. The
current situation requires careful consideration of future work that will be necessary over
the medium to long term...

/... http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/131201.pdf


Leaders draft federal plan to save the eurozone

European leaders have drafted a radical plan to turn the 17 countries of the eurozone into a full-fledged political federation within a decade in an attempt to placate the financial markets by demonstrating a political will to save the single currency in the medium-term.

The incendiary proposals for a banking, fiscal, and economic unions resulting in a "political union" are to be debated at an EU summit on Thursday and Friday. Following two bad-tempered meetings of European leaders in Mexico and Rome over the past week, the Brussels summit looks likely to see major clashes over the future of Europe as well as the immediate crisis surrounding sovereign debt, bad banks, and the euro's survival...

... The seven-page document, obtained by the Guardian, has been drafted by the "gang of four" — a quartet of European presidents: Herman Van Rompuy of the European Council, Mario Draghi of the European Central Bank, José Manuel Barroso of the European commission, and Jean-Claude Juncker of the 17-country Eurogroup.

It calls for a quick start on establishing a new European banking union, says that the ECB could be given supervisory authority over EU banks quickly, and proposes common resolution funds (for winding up bad banks, funded by a banking levy to spare EU taxpayers) as well as a common deposit guarantee scheme for Europe's savers.

/... http://www.guardian.co.uk/business/2012/jun/26/european-leaders-plan-save-eurozone

must be something in the water...

Herman Van Rompuy, president of the European Council, has published a significantly scaled-back version of the highly-anticipated plan for the future of the eurozone to be debated at a summit this week.

Read more >>
http://link.ft.com/r/0QSDPP/QNKXJ8/DXJ2Y/VLMUK6/U19X4K/QR/t?a1=2012&a2=6&a3=26

http://www.alternet.org/newsandviews/article/991171/pelosi_urges_obama_to_declare_the_debt_ceiling_time_bomb_unconstitutional/#paragraph2

...At a meeting with reporters late last week, House Minority Leader Nancy Pelosi (D-CA) embraced a plan to make sure this kind of hostage taking can never happen again — declaring the debt ceiling unconstitutional:



Pelosi’s constitutional solution to the debt ceiling time bomb is not a new suggestion. Several senators proposed President Obama invoke the Fourteenth Amendment and disarm this time bomb during the GOP-led crisis last year — although Obama himself often showed rhetorical reluctance to turn to the Fourteenth Amendment.

If the American people choose to elect Obama to a second term, however, their decision may become utterly meaningless unless the White House executes some plan to take the debt ceiling off the table for good. Senate Minority Leader Mitch McConnell (R-KY) has already warned that he will use the debt ceiling to take America hostage again in 2013, once against forcing a choice between a sudden economic collapse or a slow bleed due to austerity.

In other words, McConnell’s plan is to ensure that, no matter who wins the 2012 election, Republicans will get to set our nation’s policy. If America is to remain a democracy, eliminating the debt ceiling time bomb needs to be a top priority.

But the next few months will tell. He will either have to step back into reality or go down with the Conservative ship he stepped on when he took office.

IS TIRED OF TRYING TO REASON WITH PAUL KRUGMAN!!!!






(but the poster IS funny!)

...He's sick?

He's 64 and at death's door for years, it seems.

http://www.reuters.com/article/2012/06/25/us-greece-idUSBRE85M0AW20120625

Greece's new finance minister resigned because of ill health on Monday, throwing the government's drive to soften the terms of an international bailout into confusion days before a European summit.

Vassilis Rapanos, 64, chairman of the National Bank of Greece, was rushed to hospital on Friday, before he could be sworn in, complaining of abdominal pain, nausea and dizziness. Greek media said he had a history of ill-health.

The office of Prime Minister Antonis Samaras, who himself only took office last Wednesday following a June 17 election, said Rapanos had sent a letter of resignation because of his health problems and it had been accepted...Only hours before Rapanos's resignation, a hospital bulletin said he would be discharged on Tuesday. He had undergone a gastroscopy and colonoscopy, an official at the Hygeia Hospital told Reuters on condition of anonymity. The tests "showed everything is completely normal", it said. According to a source from one of the three parties in the new coalition government, Rapanos had been under heavy pressure from his family to turn down the stressful job because of his health problems...

http://www.bloomberg.com/news/2012-06-12/eu-says-9-members-could-pass-financial-transaction-tax-sz-says.html

The European Commission thinks that a financial transaction tax could be passed in nine states of the European Union this year if that number of governments agrees to it by July, Sueddeutsche Zeitung reported.

Nine states are the minimum for a common initiative in a smaller group in case not all 27 members agree on an issue, the newspaper said in a preview of an article for tomorrow’s edition, citing unidentified people close to EU commissioner Algirdas Semeta.

http://online.wsj.com/article/SB10001424052702303665904577452521454725242.html

CHATTANOOGA, Tenn.—Germany's transplant-factories, like the sprawling Volkswagen AG VOW.XE -2.42% complex here, aren't just cranking out cars, machinery and chemicals. They're also bringing a German training system that could help narrow America's skilled labor gap.

Volkswagen, whose auto factory will graduate its first class of U.S. apprentices next year, is one of dozens of companies introducing training that combine German-style apprenticeships and vocational schooling.

These worker training programs are winning U.S. adherents as manufacturers grapple with a paradox: Though unemployment remains stuck above 8%, companies can't find enough machinists, robotics specialists and other highly skilled workers to maintain their factory floors. An estimated 600,000 skilled, middle-class manufacturing jobs remain unfilled nationwide, even as millions of Americans search for work.

"We've learned it is better to build our own workforce instead of just relying on the market," said Hans-Herbert Jagla, Volkswagen's human resources chief at its one-year-old Chattanooga plant. The German car maker has launched a three-year apprenticeship program to ensure it has skilled workers to maintain and troubleshoot the car maker's high-tech robotics and assembly line systems.

MORE

http://online.wsj.com/article/BT-CO-20120613-703953.html

There is currently "enormous uncertainty" about Greece's political direction, and the contagion risks would be significant if the country chooses to leave the euro zone, a senior official at Fitch Ratings said Wednesday, JUNE 13. If Greece were to exit the euro, Fitch is quite likely to downgrade its ratings for most of the euro-zone peripheral countries, Fitch Managing Director for Sovereigns Ed Parker said at a conference. Political risks are on the rise in Europe, said Mr. Parker, adding that a prolonged recession in the region might give rise to "reform fatigue."

A new round of Longer Term Refinancing Operation loans to banks from the European Central Bank seems inevitable if Greece leaves the euro, and is likely even if the country keeps the common currency, Fitch Managing Director for Financial Institutions James Longsdon said at the conference. The ECB's earlier LTRO rounds have eased, but not eliminated, funding concerns in Europe, he added.

In the Nordic region, the banks have generally benefited from solid capitalization, but some of them still face some potential problems, said Jens Hallen, Fitch director for financial institutions. Some of the issues facing Nordic banks include slow economic growth in Denmark, Swedish lenders' reliance on potentially unstable international investors for funding, and the possibility of a future housing bubble in Norway, he added. If the financial turmoil in the euro zone should intensify, for instance through a Greek exit, Nordic banks are likely to see little direct impact as their exposures to the region's periphery are limited, Mr. Hallen told Dow Jones Newswires in an interview at the conference. However, the banks could suffer indirect effects in the longer term, for example if Nordic companies' exports to the euro zone get hit, he said.

Swedish banks will need to manage their liquidity tightly in order to limit the risks of their foreign funding reliance, said Mr. Hallen. They have limited scope for replacing the market funding with deposits as Swedes tend to save relatively little in bank accounts, he noted. There is a "medium" risk that the Swedish banks' foreign funding dries up if the European financial crisis gets worse, said Mr. Hallen. However, an intensifying euro-zone crisis could also have the opposite effect as it could potentially lead international investors to move funds from the continent to Swedish banks, he added.

http://www.bloomberg.com/news/2012-06-14/dimon-says-overconfidence-fueled-loss-he-can-t-defend.html


JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon said overconfidence in trusted managers allowed traders to accumulate more than $2 billion in losses through a strategy that “violated common sense.”

Risk-monitoring systems and executives at the largest U.S. bank failed to adequately police threats concentrated in a derivatives portfolio at a London unit of the chief investment office, he said. The division wasn’t subjected to the same scrutiny as other businesses, and managers there deviated from control procedures, even after triggers on risk limits were breached, Dimon told the Senate Banking Committee yesterday.

“The first error we made was that the CIO unit had done so well for so long that I think it was a little bit of complacency about what was taking place,” Dimon, 56, said. The CIO made “several billion dollars” in the three or four years preceding the loss on a book of credit derivatives designed to profit if the U.S. economy weakened and corporations were under duress. “It changed into something I cannot publicly defend,” he said.

Under pressure from lawmakers after disclosing the loss on May 10, JPMorgan may test pay provisions to reclaim bonuses and stock compensation from executives. The loss has renewed debate in Washington for tighter trading curbs and raised questions about whether anyone can manage a financial empire as vast as JPMorgan, which has more than $2.3 trillion in assets, larger than the annual gross domestic product of Brazil or the U.K...While Dimon wouldn’t update the size of the loss on the derivatives book, which he had previously said could widen by $1 billion or more, he forecast the bank would be “solidly profitable” when it reports second-quarter results on July 13.
MORE

http://money.cnn.com/2012/06/22/real_estate/mortgage-debt/index.htm

Reducing the amount struggling homeowners owe on their mortgages is proving to be a more effective way to prevent foreclosures than other methods, such as reducing interest rates or postponing payments, a new report finds. In a report presented this week, Amherst Securities Group said that when principal reductions brought mortgages near the home's market value, borrowers were substantially less likely to fall behind on payments again and lose their homes. Only 12% of borrowers who received principal reductions re-defaulted in 2011, Amherst found. That's compared with 23% of borrowers who received mortgage modifications with interest rate reductions (but no principal reduction) and 30% who received forbearance, which postpones their debt repayment.

"Modifications with principal forgiveness are apt to be most effective, as the borrower no longer owes the money -- so he is no longer hopelessly underwater," said Laurie Goodman, Amherst's housing market analyst and one of the authors of the report.

The success these principal reductions have had in turning delinquent borrowers back into paying clients has led many lenders to step up debt forgiveness on the loans in their own portfolios. So far this year, principal reductions have accounted for 40% of the modifications done by the banks, up dramatically from 25% in 2011 and 11% in 2010, according to Amherst. The mortgage servicers cannot forgive debt on loans that are owned or backed by one of the two government-controlled mortgage giants, Fannie Mae (FNMA) and Freddie Mac (FRE), however, and they are limited in what they can forgive on loans owned by investors. That means, of the vast majority of loans -- 6 million since April 2009, according to the Treasury Department -- only a fraction have received debt forgiveness. That may be changing, though.

The Federal Housing Finance Agency, which controls the majority of outstanding mortgages through its oversight of Fannie and Freddie, has thus far prohibited the mortgage giants from including debt forgiveness as part of their mortgage modifications. Last month, however, Fannie and Freddie announced they would participate in two programs in California and Nevada that will use part of a $7.6 billion Hardest Hit Fund to pay down loans the companies own or back. However, the move will not cost Fannie and Freddie anything and is a far cry from the principal reduction that private mortgage servicers are extending to borrowers.

"My guess is that eventually, Fannie and Freddie will go down that path, but there's still a lot of reticence there," said Mark Zandi, the chief economist for Moody's Analytics. "People have problems with principal reduction. They think it's unfair."

WHICH PEOPLE MIGHT THESE BE?

Even if Fannie and Freddie remain on the sidelines, Amherst said it expects to see a continued increase in principal reductions. ..MORE

Media group hires more than 100 professionals for global industry service to provide much of what was once the preserve of Wall Street analysts

Read more >>
http://link.ft.com/r/5F39HH/97BLCY/Z87P0/97RAP8/SPEMLZ/SN/t?a1=2012&a2=6&a3=26

WILL THE RATE OF LYING GO UP, OR DOWN?

http://www.nationofchange.org/romney-and-rise-superpredator-corporate-class-1340633447

Remember the "superpredators"? They were the supposedly super-violent youngsters of dark complexion that conservatives kept screaming about in the 1990s. We were told they were about to unleash an unprecedented wave of vicious crime any day now. Those superpredators don't exist, and never did. But the myth of the "superpredator" offers us a new (and, admittedly, partially ironic) lens through which to view today's corporate executives, a class of people which is apparently remorseless about the harm it causes in the pursuit of self-enrichment. Let's be clear: No group of human beings is uniquely predisposed toward evil. But society and government are supposed to discourage people from from acting on their worst impulses, and when it comes to the corporate class they - and we - have failed. Now the rise of the Corporate Superpredator Class could culminate in the election of one of its own to the highest office in the land.


Fear of Children

The myth of the juvenile "superpredator" was promoted by conservatives in the 1990s and 2000s. As Fairness and Accuracy in Media reported in 1998, politicized professors and mainstream commentators were terrifying the public with stories about the "remorseless brutality" we can expect to see from the "teenaged time bomb" that TIME Magazine's scare piece described as follows: "They are just four, five and six years old now, but already they are making criminologists nervous." But those superpredator children never existed. In fact, juvenile crime rates have declined "significantly" since the early 1990s, according to FBI statistics. But the fear engendered by superpredator scare tactics has distracted millions of Americans from their economic plight, and the forces behind it. Maybe that's why ALEC and other corporate-sponsored organizations have funded the "Stand Your Ground" laws that led to the death of Trayvon Martin and a number of other young people. If stoking fear of our minority children was a tactic to divert attention from the behavior of corporate leaders, it's been remarkably successful. Stories that "superpredators" were preying on the survivors of Hurricane Katrina helped distract the public temporarily from the real horror taking place there - the horror of government neglect.

The "superpredator" described in now-discredited sociological works was a person who was inherently amoral and criminal because he lived in a social milieu which lacked both a moral framework and a means of restraining and punishing bad behavior. Which gets us to Mitt Romney and today's top corporate executives. A highly wealthy American is now running for the highest office in the land with a nomination bought and paid for by his ultra-wealthy backers. The corporate class finally has the chance to elect one of its own, rather than depending on the compliance of someone else in that office. Am I saying that the country's top executives, some of whom I have known and worked with, are the real-life equivalent of those mythical, ultra-violent young people described in the "superpredator" scare stories? No. Many of them are good, decent people who are doing the best job they can. But there is a new culture of corporate leadership, one that's been growing over the last thirty to forty years. This new culture is less moral and more selfish then the leadership culture that preceded it, and it is almost sociopathically indifferent to the effects of its own behavior on other people.

Spotting a Superpredator

The now-discredited theory laid out the characteristics of those mythical teen superpredators. DeIulio said each generation of predator would be "three times as dangerous" as the generation that preceded it. They would, said DeIulio, be amoral, "radically impulsive," and "brutally remorseless. " Consider the evidence regarding corporate America: No current bank CEO has expressed remorse for the global impact of their misbehavior: tens of trillions of dollars in lost wealth, hundreds of millions of un- or under-employed people worldwide (and roughly 24 million of them here in the US), millions of foreclosures, nearly one home in three underwater, and a steep rise of families (including children) living in poverty. Many of these bank CEOs are second- and third-generation bankers. But then, as John DiIulio wrote, "kids of whatever race, creed, or color are most likely to become criminally depraved when they are morally deprived" in their upbringing. The near-sociopathic disregard for others isn't limited to Wall Street, either. When I flew from New York to Los Angeles on Saturday I stood in a crowd of people for over an hour waiting to pass through security. The temperature was high, there was no water, no place to sit, nobody coming through to check on the well-being of the people in line (some of whom were elderly, disabled, or carrying small children). This radical disregard for customer well-being on behalf of an entire industry would have been considered unthinkable a couple of decades ago......The corporate-superpredator mentality isn't limited to customers, either, or even to innocent bystanders. Shareholders, once considered the true owners of a publicly traded company, are now considered just another class of human being to be bilked, swindled, and misled. That viewpoint has been encouraged by the SEC, through the collusion of the Justice Department, which has often allowed investor fraud to be settled with no criminal charges for the wrongdoers and a big settlement that's paid by ... the swindled shareholders themselves.


John Iulio: &quot T)he super-predators are radically self-regarding. They regret getting caught."

The only banker who has publicly expressed real remorse at what the industry has done is former Citigroup chair John Reed, in his thoughtful interview with Bill Moyers. But Reed's a member of the earlier, non-predatory breed of corporate executive who believed in the executive's traditional mission: to deliver a service or product well, to build a company that will last for the long haul, and to treat everyone fairly in the process. That's the ethic that typically motivated executives across political boundaries. Even industrialists like Howard Hughes and Henry Ford, both of whom became virulently right-wing (Ford also became publicly anti-Semitic), were genuine engineering and business innovators. That distinguishes them from the executives in today's bloated financial sector, or predatory executives in non-innovative businesses...

Superpredators Are Made, Not Born...There's a moral to this story, and it's a simple one: If you reward predatory behavior, you will create more predators....Stopping the Superpredators: It's Everybody's Job

THERE'S A LOT I EDITED OUT (DOES NOT CONTRIBUTE MUCH TO THE ARGUMENT, BUT YOU CAN READ IT AT LINK)

http://www.reuters.com/article/2012/06/25/us-chesapeake-land-deals-idUSBRE85O0EI20120625

Under the direction of CEO Aubrey McClendon, Chesapeake Energy Corp. plotted with its top competitor to suppress land prices in one of America's most promising oil and gas plays, a Reuters investigation has found. In emails between Chesapeake and Encana Corp, Canada's largest natural gas company, the rivals repeatedly discussed how to avoid bidding against each other in a public land auction in Michigan two years ago and in at least nine prospective deals with private land owners here. In one email, dated June 16, 2010, McClendon told a Chesapeake deputy that it was time "to smoke a peace pipe" with Encana "if we are bidding each other up." The Chesapeake vice president responded that he had contacted Encana "to discuss how they want to handle the entities we are both working to avoid us bidding each other up in the interim." McClendon replied: "Thanks."

That exchange - and at least a dozen other emails reviewed by Reuters - could provide evidence that the two companies violated federal and state laws by seeking to keep land prices down, antitrust lawyers said.

"The famous phrase is a ‘smoking gun.' That's a smoking H-bomb," said Harry First, a former antitrust lawyer for the Department of Justice. "When the talk is explicitly about getting together to avoid bidding each other up, it's a red flag for collusion, bid-rigging, market allocation."

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

Private industry cartels are forbidden in the United States, where price-fixing between competitors is illegal under the Sherman Antitrust Act. Violations carry stiff penalties. Companies can be fined up to $100 million and individuals up to $1 million for each offense. Jail sentences - which are rare - can be as long as 10 years, and collusion among competitors can lead to prosecution or fines for mail and wire fraud. Victims of bid-rigging can also seek triple the amount of damages...Chesapeake and Encana say they discussed forming a joint venture in Michigan but opted against it. Typically, such partnerships can defray the steep costs of shale development, which include amassing thousands of acres of land and drilling dozens of wells. In response to detailed questions from Reuters, Encana said it was undertaking an internal investigation, saying it "is committed to conducting its business in an ethical and legal way." It acknowledged that its U.S. branch "discussed, but did not go forward with, a joint venture with Chesapeake Energy," but added that it "cannot specifically address the questions posed at this time." Chesapeake spokesman Jim Gipson also said there had been discussions with Encana about "forming an ‘area of mutual interest' joint venture" in Michigan. But he said "no such agreement was reached between the parties…. Nor did Encana and Chesapeake make any joint bids." Antitrust lawyers said the fact that the companies discussed a formal joint venture wouldn't dispel legal concerns. "Nothing in the documents suggests any benefit to the joint venture other than making the price fall," said Darren Bush, a former attorney in the Antitrust Division of the Department of Justice and a law professor at the University of Houston. "If it has no other purpose, then it's just a shell and doesn't change the liability for illegal conduct."

MASIVE AMOUNTS OF SPECIFIC DETAIL FOLLOW...

What do the executives care? The shareholders will pay the fines, and they'll keep their salaries, perks, and bonuses.

And it doesn't matter if they went forward on the venture. They conspired to commit a crime. And conspiracy itself is a crime.

Throw their asses in jail, where they belong.

http://www.nytimes.com/2012/06/26/opinion/nocera-suspense-is-over-in-madoff-case.html

On Monday morning, as the Supreme Court was issuing its big ruling on the Arizona immigration law — and prolonging the suspense on its Affordable Care Act decision — it also quietly decided to end the suspense for the victims of the Bernard Madoff Ponzi scheme. Without comment, the court declined to hear a case about which Madoff victims should be compensated and which should not...Practically from the moment that Irving Picard became the Madoff trustee, he took the position that his job was to get money back for the “net losers” — that is, those who put more into the Madoff fraud than they took out. He planned to do so, in part, by “clawing back” money from the net winners, who took out more than they put in.
Not surprisingly, lawyers for the net winners sued. But, in the lower courts, Picard’s argument held sway, and the Supreme Court saw no reason to wade into the matter...Still, in all the fighting between net winners and net losers, what tends to get overlooked is that the big boys — the “deep pockets” who could actually afford to compensate the Madoff victims — are being allowed to walk away from the fraud.

Early on, the trustee made an enormous effort to investigate the roles of HSBC, JPMorgan Chase and other financial institutions that were in one way or another linked to the Madoff fraud. (JPMorgan was Madoff’s banker, for instance.) It found various HSBC due diligence reports, to cite one example, that clearly showed bank executives declining to look too deeply into Madoff — even though internally they had acknowledged that his returns were too good to be true. At one point, the trustee had up to $100 billion worth of lawsuits, most of them against some of the biggest financial firms in the world. But those cases are starting to be tossed out of court. Though the trustee is appealing, the odds of him gaining a reversal — and thus being able to claw back from Madoff’s enablers — are not high.

The crux of the problem is a longstanding legal doctrine called in pari delicto. What it essentially means is that “thieves can’t sue thieves,” says Peter Henning, a law professor at Wayne State University who writes about white-collar crime for DealBook in The Times. That’s all well and good, I suppose, except that in the view of the law, Irving Picard is a thief. Even though he is trying to get money back for victims, the fact that he is representing the Madoff estate in bankruptcy court means that, in the eyes of the law, he is standing in the shoes of a very bad man. So when he alleges that the big banks played a role in the fraud, he has no legal standing to do so, the courts have ruled. A thief can’t sue a thief. Nor is Madoff the only time in pari dilecto has been trotted out in recent years. According to Frederick Feldkamp, a retired lawyer who has dug into its implications, it has become a common tactic to shield lawyers, accountants, banks and other enablers of fraud that winds up in bankruptcy court. “It’s being used everywhere,” he told me. Bankruptcy trustees can’t overcome the hurdle it poses, and thus are stuck with clawing back money from victims.

If Picard can’t sue the big banks for wrongdoing in the Madoff case, then who can? You might think the answer would be the Madoff victims themselves. When Colleen McMahon, a federal judge, threw out Picard’s lawsuit against JPMorgan last year, she suggested that, indeed, only the victims had the standing to sue. Sure enough, a group of Madoff victims decided to file a class-action lawsuit against the bank. Guess what. It’s probably not going anywhere either — thanks to a law, passed in the mid-1990s, that drastically limits the ability to sue companies for securities fraud. You can’t blame the judges for making these rulings. They are doing what the law plainly tells them to do. But it does make you wonder who the law is supposed to serve: huge institutions that can hide behind legal niceties, or victims of fraud.

Between the weather, the Kid, and the rest of life, I feel like I got on the Up-Chucker ride at the carnival...and I can't get off.

Plus the Board Meeting--Part 2--the Maddening Crowd-- opens tonight...

Some weeks just seem to have it in for us.

Let us know how the board meeting goes.

http://www.bloomberg.com/news/2012-06-24/brics-biggest-currency-depreciation-since-1998-to-worsen.html

The largest emerging markets, whose economies grew more than four-fold in the past decade, are making losers out of everyone from central bankers to Procter & Gamble Co. (PG) as their currencies post the biggest declines since at least 1998. For the first time in 13 years, the real, ruble and rupee are weakening the most among developing-nation currencies, while the yuan has depreciated more than in any other period since its 1994 devaluation...Investors are fleeing the four biggest emerging markets, known as the BRICs, after Brazil’s consumer default rate rose to the highest level since 2009, prices for Russian oil exports fell to an 18-month low, India’s budget deficit widened and Chinese home prices slumped. Investors are bracing for more losses as economic growth slows...

Currencies from Brazil, Russia and India will probably decline at least 15 percent further by year-end, said Jen, the former head of global currency research at Morgan Stanley. Russia’s ruble lost 12 percent this quarter through today, the biggest drop among the 31 most-actively traded currencies tracked by Bloomberg. The 11 percent depreciation in the real and rupee was almost twice the retreat in the euro. China’s yuan, which was kept unchanged during the global financial crisis in 2008 and 2009, fell 1 percent since March after the government widened the amount the currency is allowed to fluctuate each day.

The ruble sank 2.4 percent last week, while the rupee fell 2.9 percent to a record low against the dollar and the real dropped 0.8 percent. India’s currency rebounded 0.3 percent today as the government said it increased the amount of rupee-denominated debt overseas investors can own, one of several measures unveiled to support the currency. The yuan fell as much as 0.3 percent to 6.3827 per dollar, the weakest level since Nov. 29, before closing little changed. The ruble lost 0.3 percent.

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

The countries are still strong enough to account for 80 percent of growth at New York-based Goldman Sachs, the fifth- biggest U.S. bank by assets, Chief Executive Officer Lloyd Blankfein said at the St. Petersburg International Economic Forum in Russia’s second-largest city on June 21....Weaker currencies are hurting U.S. companies that rely on developing-nation revenue to offset slower growth in the U.S., Europe and Japan...Citigroup Inc. (C), which has been expanding in Latin America and Asia under Chief Executive Officer Vikram Pandit, may take a $3 billion to $5 billion “hit” this quarter related to foreign exchange losses, Charles Peabody, a New York-based analyst at Portales Partners LLC, said in an interview with Bloomberg Television on June 20. The losses may reduce Citigroup’s book value, or assets minus liabilities, he said.


MUCH MORE DETAIL AT LINK

http://www.guardian.co.uk/business/economics-blog/2012/jun/21/capitalism-red-tooth-claw-keynes

***SNIP

At the same time, "technological unemployment" has risen. Since the 1980s, we have never regained the full employment levels of the 1950s and 1960s. If most people still work a 40-hour week, a substantial and growing minority have had unwanted leisure thrust upon them in the form of unemployment, under-employment and forced withdrawal from the labour market. And, as we recover from the current recession, most experts expect this group to grow even larger.

What this means is that we have largely failed to convert growing technological unemployment into increased voluntary leisure. The main reason for this is that the lion's share of the productivity gains achieved over the last 30 years has been seized by the well-off.

Particularly in the United States and Britain since the 1980s, we have witnessed a return to the capitalism "red in tooth and claw" depicted by Karl Marx. The rich and very rich have become very much richer, while everyone else's incomes have stagnated. So most people are not, in fact, four or five times better off than they were in 1930. It is not surprising that they are working longer than Keynes thought they would.

But there is something else. Modern capitalism inflames, through every sense and pore, the hunger for consumption. Satisfying that hunger has become the great palliative of modern society, our counterfeit reward for working irrational hours. Advertisers proclaim a single message: your soul is to be discovered in your shopping.

http://www.nytimes.com/reuters/2012/06/25/business/25reuters-banks-home.html?_r=1&hp

The European banking shock and its aftermath have sent finance and investment running for home, a process that could hurt world growth, globalization and developing economies for years to come.

"There has been massive deleveraging with some home bias, not just in our region but in general. We see a clear and present danger," said Piroska Nagy, director for country strategy at the European Bank for Reconstruction and Development, which monitors private sector financing across the former communist countries of central and eastern Europe.

DANGER OF WHAT? ONE MAY ASK...OF THE END OF OUTSIDERS MEDDLING TO HURT A VICTIMIZED NATION AND ITS PEOPLE?

Policymakers explained the surge in globalization and world growth through the 1990s and 2000s and the parallel rise in accounting imbalances between major economies partly by banks and investors lifting their sights beyond their home countries. Most famously, former Federal Reserve chief Alan Greenspan regularly trumpeted the steep decline in home country investing to defend bloated U.S. current account deficits that had chilled many economists in the years leading up to the credit crisis. This decline in home bias was catalyzed by the erosion of cross-border capital controls worldwide but also by events like the collapse of the Berlin Wall in eastern Europe, the launch of the euro across western Europe and the advance of the internet. For at least some of these reasons, European banks were in the vanguard of cross border finance -- most obviously within the new single currency area but also in the emerging economies of central and eastern Europe as well as Asia and Latin America.

Last year European banks had 10 times the amount of loans outstanding in emerging markets than U.S. banks and lend as much to developing countries as they do to the United States. But, reeling from years of property, credit and sovereign debt slumps, a deepening euro crisis and stiff new international rules on bank balance sheets designed to prevent future taxpayer rescues, European banks are rapidly retrenching. Global lending by banks fell by a whopping $799 billion in the fourth quarter of last year, or 2.5 percent, the biggest fall since the drop seen after the collapse of U.S. investment bank Lehman Brothers three years ago, Bank for International Settlements data showed earlier this month. The drop was led by deleveraging euro zone banks, who cut loans by $584 billion, or 4.7 percent and the lion's share of the pullback was from French, German and Spanish banks who all cut lending by about 5 percent. The process intensified within the euro zone itself in the first quarter of this year and European Central Bank data shows euro zone banks' cross-border holdings of the bloc's government and corporate bonds fell to their lowest in a decade. The IMF forecast in April that European banks could further shrink collective balance sheets by as much $2.6 trillion by the end of 2013 - almost 7 percent of total assets - and about a quarter of this could come by a reduction of lending on top of the sale of securities and overseas assets.

The question for many economists is whether this retreat in global finance is merely a temporary ebb that knocks the froth off the worst credit excess, a peculiarity related to the existential euro crisis or a longer-term decline in international finance that could stall globalization. Philip Lane, a professor at Trinity College Dublin who specializes in globalization, said the initial post credit crisis debate was like distinguishing between "good cholesterol and bad cholesterol", separating productive cross-border flows from more dangerous sorts of lending to offshore bank vehicles and conduits that supercharged and destabilized the credit boom. But he said it was now important the authorities addressed the return to more domestic financing, and initiatives such as a European banking union could be critical to that.

"The incredible boom in cross-border finance in 2002-07 period was just not sustainable and we had that sudden stop in 2008-09. But in the reconstruction of these flows, international institutions need to support them or a return to more national financing is possible," Lane said.

...BIS Economic Advisor Steve Cecchetti told the central bank forum's annual meeting at the weekend that financial globalization was only great up to a point.

"For most people, the term globalization means cross-border trade in real goods and services -something that we would all agree has brought the greatest benefits to a large number of people."

"But this real side of globalization relies on financial intermediaries to fund the trading of all this stuff across borders. And the recent crisis showed how problems both on and off the intermediaries' balance sheets can have very large, very real and very bad implications. Many of us have started to ask if finance has a dark side."

I AM NO FAN OF GLOBALIZATION AS A STRATEGY OR A GOAL..AND ANYTHING THAT STOPS THE WATER SLOSHING IN THE BATHTUB...THE RUSHING ABOUT OF HOT MONEY THAT DESTABILIZES A NATION'S FINANCES AND WRECKS ITS CURRENCY...IS JUST FINE WITH ME. IF THERE ARE PROFITS TO BE MADE IN FINANCING A NATION, THEY SHOULD STAY WITHIN THE NATION TO BE RECYCLED INTO MORE DEVELOPMENT AND TAXES TO SUPPORT THE COMMON WELFARE OF ITS PEOPLE. NATIONS ARE NOT MINES FROM WHICH PROFITS ARE TO BE EXTRACTED.

http://www.guardian.co.uk/business/2012/jun/26/uk-economic-outlook-worse-eurozone-bank-england

The outlook for Britain's economy has worsened over the past few weeks due to turmoil in the eurozone and signs of deterioration in emerging markets, the Bank of England said on Tuesday.

The world was not half-way through a deep crisis and the eurozone turmoil was creating enormous uncertainty, leaving Britain at risk of a downward spiral if businesses postponed investment, governor Mervyn King told a parliamentary committee.

Britain's economy slipped into its second recession since the start of the financial crisis around the turn of the year and fears of a longer slump have been rising as companies hold back investment and exports suffer from the eurozone crisis.

The government and the central bank announced two schemes on 14 June to get credit flowing through the economy, as a huge budget deficit limits chancellor George Osborne's room to raise spending to boost growth.

http://www.nakedcapitalism.com/2012/06/michael-olenick-irrational-exuberance-housing-edition.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

A DETAILED PLAN TO GET OUT OF THE MORASS...AND FAR TOO COMPLICATED TO SUMMARIZE

http://elpais.com/elpais/2012/06/22/inenglish/1340379870_571315.html

In a first sign that the era of austerity as the sole prescription for the euro zone’s ills is coming to an end, the leaders of Spain, Italy, France and Germany gathered in Rome on Friday to announce that one percent of EU gross domestic product (GDP), or around 130 billion euros, will be earmarked for a stimulus package.

“The goal is to relaunch growth and create jobs,” Italian prime Minister Mario Monti said. Spain’s prime minister, Mariano Rajoy, underscored the common will for “more Europe, for a banking, economic, fiscal and political union” given that the euro is an “irreversible” project.

Market pressure on Spain and Italy’s sovereign debt has eased up in recent days due to expectations that European leaders will adopt stabilizing measures at a crucial summit next week. But analysts warn that if a credible deal is not produced, the risk premiums of both Mediterranean countries will quickly shoot up again beyond sustainable levels.

The agenda for Friday’s meeting included talks on how to advance towards a fiscal and banking union, and it may also have defined remaining questions regarding the EU rescue package for Spain’s banking sector.

Rajoy said he felt “enormously happy” on leaving the meeting in a former Medici palace after hearing, in French President François Hollande’s words, that EU leaders would “use all the mechanisms necessary to guarantee the euro zone’s stability.” However, Chancellor Angela Merkel underlined German opposition to Spanish banks receiving loans directly from the EU rescue mechanism. “There has to be a guarantor and the guarantor is the Spanish state [which can] tell its banks what they must change,” she said.



*** so i guess what remains to be seen is what kind of stimulus and who gets the money?

Just like everything else.

If they wanted to stop that, they would nationalize all the banks. THEN they could talk about a fiscal union, because the nations' politicians would be in charge of the finance (for once), and be able to make it stick...and any stimulus would go to demand, preferably through transfer payments to the people.

But that would be socialism! (And not neoliberal globalism).

http://www.spiegel.de/international/europe/german-finance-minister-rejects-obama-criticism-of-crisis-management-a-840749.html

German Finance Minister Wolfgang Schäuble rebuffed recent criticism of Germany's handling of the euro crisis from Barack Obama, telling the US president to get his own house in order before giving advice.

"Herr Obama should above all deal with the reduction of the American deficit. That is higher than that in the euro zone," he told German public broadcaster ZDF on Sunday night. It is easy to give advice to others, he added,
Obama, worried about the impact of the debt crisis on the global economy and financial markets -- and on his own prospects for re-election --has been urging Europe to step up its efforts to tackle the problem.

In the interview, Schäuble also reiterated his opposition to euro bonds, saying countries must remain individually liable for their public debt as long as they were taking sovereign decisions on how the money was being spent.

the Repugs in control of the House, it's not that easy to do

I'm going out in the garden, now. to draw strength from the earth like Antaeus for tonight...or at least, some peace of mind.

"You must certainly have a vast estate," said Candide to the Turk.

"I have no more than twenty acres of ground," he replied, "the whole of which I cultivate myself with the help of my children; and our labor keeps off from us three great evils-idleness, vice, and want."

Candide, as he was returning home, made profound reflections on the Turk's discourse.

"This good old man," said he to Pangloss and Martin, "appears to me to have chosen for himself a lot much preferable to that of the six Kings with whom we had the honor to sup."

"Human grandeur," said Pangloss, "is very dangerous, if we believe the testimonies of almost all philosophers; for we find Eglon, King of Moab, was assassinated by Aod; Absalom was hanged by the hair of his head, and run through with three darts; King Nadab, son of Jeroboam, was slain by Baaza; King Ela by Zimri; Okosias by Jehu; Athaliah by Jehoiada; the Kings Jehooiakim, Jeconiah, and Zedekiah, were led into captivity: I need not tell you what was the fate of Croesus, Astyages, Darius, Dionysius of Syracuse, Pyrrhus, Perseus, Hannibal, Jugurtha, Ariovistus, Caesar, Pompey, Nero, Otho, Vitellius, Domitian, Richard II of England, Edward II, Henry VI, Richard Ill, Mary Stuart, Charles I, the three Henrys of France, and the Emperor Henry IV."

"Neither need you tell me," said Candide, "that we must take care of our garden."

"You are in the right," said Pangloss; "for when man was put into the garden of Eden, it was with an intent to dress it; and this proves that man was not born to be idle."

"Work then without disputing," said Martin; "it is the only way to render life supportable."

The little society, one and all, entered into this laudable design and set themselves to exert their different talents. The little piece of ground yielded them a plentiful crop.

http://www.spiegel.de/international/europe/debt-crisis-threatens-the-european-way-of-life-a-840643.html

It's unclear what Meles Zenawi used to think about Europe. The prime minister of Ethiopia heads an authoritarian regime that controls one of the poorest countries on Earth, located in East Africa, a region where ethnic conflicts are usually waged with Kalashnikovs. To a man like Zenawi, rich, peaceful Europe must seem like an island of the blessed -- or rather, must have seemed.

Zenawi's view of the old continent probably changed on Monday of last week. The Ethiopian leader, attending a dinner hosted by the exclusive G-20 club of the most important industrialized and developing countries in Los Cabos, Mexico, was astonished by what he heard.
The doors of the dining room had hardly been closed before the European representatives began giving their counterparts from other continents an eye-opening demonstration of how powerless and divided they are. The humiliation began with a simple question from the host, Mexican President Felipe Calderon. He wanted to know what the Europeans intended to do to get the high interest rates that the Spanish government currently has to pay on its bonds under control.

It was an important issue, replied Italian Prime Minister Mario Monti, whose country is also having great difficulty funding its debt at sustainable interest rates in the market. He proposed that the euro bailout fund buy bonds on the secondary market.

Rally time!
The decline is improving!

the leaks in the two bedrooms (and almost a third?) are from very small cracks in the stucco that I never really noticed and the builder's remediation firm is saying only a 50/50 chance the builder will cover this.

Well, the problems *first* started less than a year into but I thought it was from my daughter leaving a window open.

Been on the builder the last three months to come check on it. Plus, been on them for nearly a year to replace a window in one of the rooms (and if they'd replaced that in a decent timeframe, probably would have noticed the cracks long ago and been able to patch/fix them before any leaks).


*sigh*

http://www.irishtimes.com/newspaper/breaking/2012/0626/breaking34.html

Spain's borrowing costs jumped and demand fell at a bill sale a day after Moody's Investors Service downgraded 28 Spanish banks.

The Treasury sold €3.08 billion of bills, beating a maximum target of €3 billion. Three-month bills fetched an average yield of 2.362 per cent, compared with 0.846 per cent at the last auction on May 22, and six-month bills an average rate of 3.237 per cent, compared with 1.737 per cent.

Spain's 10-year borrowing costs rose for a second day, edging toward 7 per cent, after Moody's yesterday cut at least 12 banks' ratings to junk, saying the government's weakening credit profile undermined its ability to backstop lenders.

The downgrades came as Spain negotiates the terms of a €100 billion loan requested for its banks on June 9.

http://www.bloomberg.com/news/2012-06-26/hollande-reality-makes-french-debt-less-attractive-euro-credit.html

During his first two weeks in office, President Francois Hollande saw French borrowing costs go in one direction, and that was down. Not anymore.
The yield on the French benchmark 10-year bond advanced to 2.60 percent at 9:25 a.m. in Paris, up from a euro-era low of 2.071 percent on June 1. It was as high as 2.902 percent on May 15, when Hollande took office. The rate is at risk of rising further with French banks vulnerable to the region’s debt-ridden nations as economic growth stalls.

Investors already demand more than 6 percent to buy 10-year Spanish securities and almost as much for similar Italian debt. While Hollande has sought to reassure investors in France’s 1.35 trillion-euro ($1.7 trillion) sovereign debt market by repeatedly pledging to cut France’s budget deficit, the financial turmoil to the south makes his task more difficult.
“France has been out of the spotlight, but once the sheer misery of Spain and Italy is figured in, the next target will be France,” said Bill Blain, a Newedge Group Ltd. strategist in London. “I’m seeing a very small number of international institutional players buying French debt. People are very nervous.”

The Nigerian state and oil companies are losing a billion dollars or more a month to oil theft by criminal networks whose activities have expanded rapidly under the government of President Goodluck Jonathan

Read more >>
http://link.ft.com/r/P75VYY/C466DG/A5Q0X/MS6QEV/XHRYIK/36/t?a1=2012&a2=6&a3=26

http://www.nationofchange.org/robin-hood-tax-economic-justice-1340724178

By Leo Gerard

Robin Hood popped up all across America last week. A bunch of green-suited Merry Men protested in front of Wall Street bank branches in 15 cities.

Another felt-hatted group demonstrated in Washington D.C. during J.P. Morgan Chase CEO Jamie Dimon's testimony about why his bank shouldn’t submit to regulation even after flushing $2 billion down the toilet. The biggest band of Robin Hoods appeared on dollar bills -- a pointy hat drawn on George's head and the words “Robin Hood tax” written below.

The American Robin Hoods are seeking economic justice. They want Congress to resurrect the financial transactions tax. This is the Robin Hood tax, a tiny levy on the sale of stuff like stocks, bonds, derivatives, futures and credit default swaps. It packs two benefits in one tax. It would give the government cash to offset the cost of the Wall Street-caused recession. And it would suppress the high-risk, high-speed trading that caused the crash. Britain, home of Robin Hood, already charges a form of it. Ten European Union countries plan to institute it. America needs it.

&feature=player_embedded

It’s not new. The United States collected the tax for half of the 20th Century. During the Great Depression, Congress doubled it to help pay for recovery. It’s not novel.Twenty-nine countries charge it now, including Brazil, India, South Korea, Hong Kong, Singapore and Switzerland. It’s the opposite of a God-forsaken-market-killer. While it was levied in the United States from 1914 to 1966, the nation enjoyed the world’s greatest economic expansion. And it’s a great idea. Lawmakers and pundits are screaming and crying about “the financial cliff” the country faces in December when tax rates will automatically rise and massive budget cuts automatically begin. The Robin Hood tax would help solve that problem....

tax them till their eyes bleed.

http://www.nationofchange.org/euro-big-success-no-kidding-1340723160

The idea that the euro has "failed" is dangerously naive. The euro is doing exactly what its progenitor – and the wealthy 1%-ers who adopted it – predicted and planned for it to do. That progenitor is former University of Chicago economist Robert Mundell. The architect of "supply-side economics" is now a professor at Columbia University, but I knew him through his connection to my Chicago professor, Milton Friedman, back before Mundell's research on currencies and exchange rates had produced the blueprint for European monetary union and a common European currency. Mundell, then, was more concerned with his bathroom arrangements. Professor Mundell, who has both a Nobel Prize and an ancient villa in Tuscany, told me, incensed: “They won't even let me have a toilet. They've got rules that tell me I can't have a toilet in this room! Can you imagine?” As it happens, I can't. But I don't have an Italian villa, so I can't imagine the frustrations of bylaws governing commode placement. But Mundell, a can-do Canadian-American, intended to do something about it: come up with a weapon that would blow away government rules and labor regulations. (He really hated the union plumbers who charged a bundle to move his throne.) “It's very hard to fire workers in Europe,” he complained. His answer: the euro.

The euro would really do its work when crises hit, Mundell explained. Removing a government's control over currency would prevent nasty little elected officials from using Keynesian monetary and fiscal juice to pull a nation out of recession. “It puts monetary policy out of the reach of politicians,” he said. “And without fiscal policy, the only way nations can keep jobs is by the competitive reduction of rules on business.” He cited labor laws, environmental regulations and, of course, taxes. All would be flushed away by the euro. Democracy would not be allowed to interfere with the marketplace – or the plumbing.

As another Nobelist, Paul Krugman, notes, the creation of the eurozone violated the basic economic rule known as "optimum currency area". This was a rule devised by Bob Mundell. That doesn't bother Mundell. For him, the euro wasn't about turning Europe into a powerful, unified economic unit. It was about Reagan and Thatcher.“Ronald Reagan would not have been elected president without Mundell's influence,” once wrote Jude Wanniski in the Wall Street Journal. The supply-side economics pioneered by Mundell became the theoretical template for Reaganomics – or as George Bush the Elder called it, “voodoo economics”: the magical belief in free-market nostrums that also inspired the policies of Mrs. Thatcher. Mundell explained to me that, in fact, the euro is of a piece with Reaganomics: “Monetary discipline forces fiscal discipline on the politicians as well.”

And when crises arise, economically disarmed nations have little to do but wipe away government regulations wholesale, privatize state industries en masse, slash taxes and send the European welfare state down the drain. Thus, we see that (unelected) Prime Minister Mario Monti is demanding labor law “reform” in Italy to make it easier for employers like Mundell to fire those Tuscan plumbers. Mario Draghi, the (unelected) head of the European Central Bank, is calling for “structural reforms” – a euphemism for worker-crushing schemes. They cite the nebulous theory that this "internal devaluation" of each nation will make them all more competitive. Monti and Draghi cannot credibly explain how, if every country in the Continent cheapens its workforce, any can gain a competitive advantage. 
But they don't have to explain their policies; they just have to let the markets go to work on each nation's bonds. Hence, currency union is class war by other means. The crisis in Europe and the flames of Greece have produced the warming glow of what the supply-siders' philosopher-king Joseph Schumpeter called “creative destruction”. Schumpeter acolyte and free-market apologist Thomas Friedman flew to Athens to visit the “impromptu shrine” of the burnt-out bank where three people died after it was fire-bombed by anarchist protesters, and used the occasion to deliver a homily on globalization and Greek "irresponsibility". The flames, the mass unemployment, the fire-sale of national assets, would bring about what Friedman called a “regeneration” of Greece and, ultimately, the entire eurozone. So that Mundell and those others with villas can put their toilets wherever they damn well want to.

Far from failing, the euro, which was Mundell's baby, has succeeded probably beyond its progenitor's wildest dreams.

http://www.aljazeera.com/business/2012/06/2012625222751299391.html

Credit rating agency Moody's has hit 28 Spanish banks with new credit downgrades, as Madrid formally requested a rescue loan of up to 100bn euros ($125bn) for its struggling banking sector.

The credit rating agency said on Monday the banks face rising losses from commercial real estate loans and that Madrid's own lowered credit grade also contributed to the rating cuts.

Spain's lower creditworthiness "not only affects the government's ability to support the banks, but also weighs on banks' stand-alone credit profiles," Moody's said.

The downgrades, which ran from one to four notches, came on the same day Spain formally requested the emergency funds from the eurozone to strengthen its banks, hit by a crash in the country's real estate sector...

6/26/12 Egan Jones Downgrades Germany From AA- To A+

more from Egan-Jones...

6/26/2012: Federal Republic Of Germany: EJR lowered AA- to A+ (Neg.) (S&P: AAA) (3413Z GR)
Synopsis: German chancellor Angela Merkel continues to create tension with EU member states by resisting calls for EU bonds (shared liabs.), money printing calls and for her pushing for fiscal controls and the seniority of bailout funding. Germay is likely to be outvoted by other ECB members and therefore will have greater prospective exposure. Watch for the EFSF and the ESM morphing into banks (thereby depressing eventual recoveries) and a rise in the number of euros. The fallout from a likely Greek exit needs to be monitored. We are cutting to " A+ "

http://www.zerohedge.com/news/egan-jones-downgrades-germany-aa

http://www.ibtimes.com/articles/356178/20120625/euro-crisis-inflation-unemployment-graphic.htm



By Eleazar David Meléndez

A graphic published by Der Spiegel, Germany's top newsweekly, is making the rounds among global financial blogs and Facebook walls, succinctly putting into numbers the horrific economic carnage a collapse of the common currency union would entail. The image, based on calculations commissioned by the magazine and Dutch financial giant ING, suggests, as the article accompanying it states, that if the euro collapses "a monetary disaster would spread across the entire economy like a tidal wave." According to Der Spiegel, ING believes the first two years after the collapse of the euro zone would spur a contraction of one-eighth of the total economic activity in the union, making "the recession that followed the bankruptcy of investment bank Lehman Brothers seem like a minor industrial accident by comparison." The economies of Europe would remain depressed for over five years.

According to the newsmagazine, internal projections at the German Finance Ministry were even more dire. "The officials were so horrified by their conclusions that they kept all of their analyses under lock and key," the publication states, citing an unidentified Finance Ministry official. Indeed, the graphic shows how, ironically, the richer, healthier economies of Europe might be the ones that suffer the most from a collapse of the euro zone.

Unemployment would rise 2 to 3 percentage points in countries like Portugal, Spain and Greece, of course, but Germany, Finland and France would see unemployment soar more than 4 percentage points. That's because a devaluation of the currency in southern European countries would kill a huge amount of the exports of consumer goods from northern Europe, destroying industrial bases in Stuttgart, Helsinki and Reims.



http://www.spiegel.de/international/europe/fears-grow-of-consequences-of-potential-euro-collapse-a-840634.html

SEE SPIEGEL ARTICLE FOR MORE

I SUPPOSE CONGRESS HAS BEEN OUT-CRAZIED BY THE EUROPEANS, AND DECIDED TO HOLD OFF ON THEIR OWN SELF-IMMOLATION UNTIL THE ASHES COOL ABROAD. I AM PRESUPPOSING THAT CONGRESS PAYS ANY ATTENTION TO EVENTS IN THE LARGER WORLD AND DOESN'T JUST SUCK ITS THUMB IN THE CONFINES OF THE BELTWAY...

http://www.bloomberg.com/news/2012-06-25/congress-said-to-delay-automatic-budget-cuts-until-march.html

Republican and Democratic congressional leaders are weighing whether to delay automatic federal spending cuts until March 2013, according to a House aide and industry officials who were briefed on the discussions.

The $1.2 trillion in automatic spending cuts over a decade, half of which would affect the Defense Department, are scheduled to begin in January 2013. At the same time, lawmakers must decide what to do about income tax cuts and other tax breaks scheduled to expire at the end of the year...

OR MAYBE IT'S JUST THIR WAY OF SAYING...OKAY, YOU CAN HAVE YOUR DAB OF BUTTER, AS LONG AS WE GET TO KEEP OUR

http://www.google.com/imgres?q=image+war&start=33&num=10&hl=en&client=firefox-a&hs=ABb&rls=org.mozilla:en-US fficial&biw=1024&bih=647&tbm=isch&tbnid=jbF3QNFAwJbqJM:&imgrefurl=http://www.inquisitr.com/152980/americas-war-in-iraq-to-end-this-december-all-troops-coming-home/&docid=A72MwPZMe7oDiM&imgurl=&w=800&h=600&ei=aPfpT6CMBOqF8AHQvY2RDA&zoom=1&iact=hc&vpx=320&vpy=220&dur=1428&hovh=194&hovw=259&tx=138&ty=96&sig=113115150776124221624&page=3&tbnh=136&tbnw=200&ndsp=18&ved=1t:429,r:1,s:33,i:67

On their own turf. Sure. Different rulez for the rest of us, though, huh?

Talk about riding for a fall...

To get elected to Congress, you have to be a senile weasel. Our standards for the White House are even more strict...

With you there...

http://www.nytimes.com/2012/06/26/business/surprised-taxpayers-are-paying-for-bonds-they-did-not-vote-on.html?_r=1

Surprised local taxpayers from Stockton, Calif., to Scranton, Pa., are finding themselves obligated for parking garages, hockey arenas and other enterprises that can no longer pay their debts.

Officials have signed them up unknowingly to backstop the bonds of independent authorities, the special bodies of government that run projects like toll roads and power plants.

The practice, meant to save governments money, has been gaining popularity without attracting much notice, and is creating problems for a small but growing number of cities.

Data from Thomson Reuters suggests that local taxpayers are backing so-called enterprise debt at five times the rate they did 10 years ago. The resulting municipal bonds are sometimes called “double barreled,” because they are backed by both the future revenue of a project and some sort of taxpayer backstop. The exact wording and mechanics can vary. ..bond guarantees have been time bombs, causing problems too severe to be solved in a workout. Stockton may be headed for Chapter 9 bankruptcy this week after pledging taxpayer money to backstop authorities’ debts for a hockey arena and other showcase buildings. Scranton, a faded former coal center, touched off a full-blown debt crisis this month, losing access to the capital markets when its City Council refused to honor a taxpayer guarantee for a parking authority’s bonds....

READ IT AND WEEP FOR THE SUCKERS--SOME POLITICOS HAVE TO GO TO JAIL!

Royal Bank of Scotland is discussing at a senior level whether to take legal action against US software maker CA Technologies after a computer update caused a systems failure that left millions of customers without access to their bank accounts

Read more >>
http://link.ft.com/r/73UJGG/AMGGJ3/IEP5S/TUZ3NW/2OUSFO/W1/t?a1=2012&a2=6&a3=26

WHAT? THEY NEVER HEARD OF VAPORWARE IN ENGLAND? IT'S PROBABLY CALLED VAPOURWARE THERE...

German Chancellor Angela Merkel has resisted all proposals to provide relief to Spain and Italy from the excessive risk premiums prevailing in the market, Mr Soros said. This week's summit of European Union leaders could turn into a "fiasco" because of Germany's aversion and will leave the rest of the eurozone without a strong enough firewall to protect it against the possibility of a Greek exit, he added.

"This may serve Germany's narrow self-interest but it will create a very different Europe from the open society that fired people's imaginations," said Mr Soros in an opinion piece in the Financial Times. "It will make Germany the centre of an empire and put the 'periphery' into a permanently subordinated position." ...

... He urged Merkel to abandon the "unrealistic and unreasonable" idea that a political union should precede a fully fledged fiscal and banking union.

"The three have to be developed together, step by step," Mr Soros said.

/more... http://www.telegraph.co.uk/finance/financialcrisis/9355776/Germany-risks-being-centre-of-empire-that-caused-eurozone-collapse-warns-George-Soros.html

(Posted same+ here: http://www.democraticunderground.com/1002859746 )