http://finance.yahoo.com/news/fugitive-fund-manager-stuffed-underwear-with-cash--fled-205325900.html

The German fugitive hedge fund manager who more than five years ago fled the Spanish island of Mallorca with $500,000 hidden in his underwear and luggage faces U.S. charges after his arrest at the Uffizi Gallery in Florence.

Florian Homm, 53, was taken into custody by Italian police at 12:30 p.m. on March 8 at the world-famous museum that houses Sandro Botticelli’s Birth of Venus and Leonardo da Vinci’s Annunciation.



Homm is accused in a criminal complaint filed March 6 in federal court in Los Angeles of defrauding investors in hedge funds he controlled, causing $200 million in losses. He is charged with four counts of conspiracy, wire fraud and securities fraud. He faces as long as 75 years in prison if convicted on all counts.

The founder and former chief investment officer of Absolute Capital Management Holdings Ltd. is accused of “cross trading” billions of shares of penny stocks between the company’s funds to boost the value of the otherwise illiquid securities.

http://www.ft.com/intl/cms/s/0/d3ba26ae-8754-11e2-9dd7-00144feabdc0.html#axzz2NDaOtmdw



Federal Reserve stress tests identified Goldman Sachs as one of the weaker financial groups on Wall Street but gave Citigroup confidence to announce a planned $1.2bn share buyback. The Fed’s annual assessment of how the biggest financial groups would withstand a severe financial crisis was positive for most US banks, paving the way for increased dividends and share buybacks.

Seventeen out of 18 institutions passed stress tests in results announced on Thursday, with only Ally Financial failing to meet minimum capital levels in the hypothetical scenario of a deep global recession and a shock to markets. Citi was first to announce its distribution plan, including a $1.2bn buyback in the next 12 months, its biggest return of capital since 2006 and its $45bn government bailout during the financial crisis.

Other banks looked less healthy under the Fed’s metrics. Goldman, normally renowned for its resilience, would suffer a $20bn loss in the depths of the hypothetical crisis and its ratio of core “tier one common equity” capital against risk-weighted assets would fall to 5.8 per cent, compared with a minimum requirement of 5 per cent, the Fed said. Morgan Stanley’s capital ratio would fall to 5.7 per cent. Goldman Sachs said based on its calculations its tier one ratio would be 8.6 per cent. Analysts at Credit Suisse had expected Goldman to have a minimum tier one common ratio of 7.3 per cent. Although both institutions “passed”, they are close enough to the limit to effectively rule out a significantly larger return of capital. Bank of America’s minimum was 6.8 per cent, JPMorgan’s was 6.3 per cent and Wells Fargo’s was 7 per cent. Ally, the auto finance-focused lender once part of General Motors, saw its ratio fall in the test to 1.5 per cent. Majority-owned by the US government after its 2009 bailout, Ally said the test was “fundamentally flawed”...MORE

I'LL SAY THEY ARE...AND THAT'S NOT THE ONLY THING THAT'S "FUNDAMENTALLY FLAWED".

http://www.economist.com/news/leaders/21573104-internet-everything-hire-rise-sharing-economy

LAST night 40,000 people rented accommodation from a service that offers 250,000 rooms in 30,000 cities in 192 countries. They chose their rooms and paid for everything online. But their beds were provided by private individuals, rather than a hotel chain. Hosts and guests were matched up by Airbnb, a firm based in San Francisco. Since its launch in 2008 more than 4m people have used it—2.5m of them in 2012 alone. It is the most prominent example of a huge new “sharing economy”, in which people rent beds, cars, boats and other assets directly from each other, co-ordinated via the internet.

You might think this is no different from running a bed-and-breakfast, owning a timeshare or participating in a car pool. But technology has reduced transaction costs, making sharing assets cheaper and easier than ever—and therefore possible on a much larger scale. The big change is the availability of more data about people and things, which allows physical assets to be disaggregated and consumed as services. Before the internet, renting a surfboard, a power tool or a parking space from someone else was feasible, but was usually more trouble than it was worth. Now websites such as Airbnb, RelayRides and SnapGoods match up owners and renters; smartphones with GPS let people see where the nearest rentable car is parked; social networks provide a way to check up on people and build trust; and online payment systems handle the billing.

Just as peer-to-peer businesses like eBay allow anyone to become a retailer, sharing sites let individuals act as an ad hoc taxi service, car-hire firm or boutique hotel as and when it suits them. Just go online or download an app. The model works for items that are expensive to buy and are widely owned by people who do not make full use of them. Bedrooms and cars are the most obvious examples, but you can also rent camping spaces in Sweden, fields in Australia and washing machines in France. As proponents of the sharing economy like to put it, access trumps ownership.

Rachel Botsman, the author of a book on the subject, says the consumer peer-to-peer rental market alone is worth $26 billion. Broader definitions of the sharing economy include peer-to-peer lending (though cash is hardly a spare fixed asset) or putting a solar panel on your roof and selling power back to the grid (though that looks a bit like becoming a utility). And it is not just individuals: the web makes it easier for companies to rent out spare offices and idle machines, too. But the core of the sharing economy is people renting things from each other.

Such “collaborative consumption” is a good thing for several reasons. Owners make money from underused assets....The sharing economy is the latest example of the internet’s value to consumers (see Free exchange). This emerging model is now big and disruptive enough for regulators and companies to have woken up to it. That is a sign of its immense potential. It is time to start caring about sharing.

MORE

http://www.nytimes.com/2013/03/07/business/economy/despite-job-vacancies-employers-shy-away-from-hiring.html?pagewanted=all


American employers have a variety of job vacancies, piles of cash and countless well-qualified candidates. But despite a slowly improving economy, many companies remain reluctant to actually hire, stringing job applicants along for weeks or months before they make a decision.

If they ever do.

The number of job openings has increased to levels not seen since the height of the financial crisis, but vacancies are staying unfilled much longer than they used to — an average of 23 business days today compared to a low of 15 in mid-2009, according to a new measure of Labor Department data by the economists Steven J. Davis, Jason Faberman and John Haltiwanger.

Some have attributed the more extended process to a mismatch between the requirements of the four million jobs available and the skills held by many of the 12 million unemployed. That’s probably true in a few high-skilled fields, like nursing or biotech, but for a large majority of positions where candidates are plentiful, the bigger problem seems to be a sort of hiring paralysis.

“There’s a fear that the economy is going to go down again, so the message you get from C.F.O.’s is to be careful about hiring someone,” said John Sullivan, a management professor at San Francisco State University who runs a human resources consulting business. “There’s this great fear of making a mistake, of wasting money in a tight economy.”

MORE

INSANITY

http://www.nytimes.com/2013/03/05/business/qualified-private-activity-bonds-come-under-new-scrutiny.html?hp&_r=0


The last time the nation’s tax code was overhauled, in 1986, Congress tried to end a big corporate giveaway.

But this valuable perk — the ability to finance a variety of business projects cheaply with bonds that are exempt from federal taxes — has not only endured, it has grown, in what amounts to a stealth subsidy for private enterprise.

A winery in North Carolina, a golf resort in Puerto Rico and a Corvette museum in Kentucky, as well as the Barclays Center in Brooklyn and the offices of the Goldman Sachs Group and the Bank of America Tower in New York — all of these projects, and many more, have been built using the tax-exempt bonds that are more conventionally used by cities and states to pay for roads, bridges and schools.

In all, more than $65 billion of these bonds have been issued by state and local governments on behalf of corporations since 2003, according to an analysis of Bloomberg bond data by The New York Times. During that period, the single biggest beneficiary of such securities was the Chevron Corporation, which issued bonds with a total face value of $2.6 billion, the analysis showed. Last year it reported a profit of $26 billion...Budget analysts say these bonds amount to a government subsidy, in the form of forgone tax revenue. While it is difficult to calculate the precise dollar amount of the subsidy, given the number and variety of these bonds, experts say the annual cost to federal taxpayers could run into the billions...MORE INSANITY

THAT WAS FAST...HOW LONG BEFORE WE FINALLY GET THE TRUTH ABOUT KENNEDY, AND 9/11?

http://www.alternet.org/tea-party-and-right/shocking-new-evidence-reveals-depths-treason-and-treachery-watergate-and-iran?paging=off

MUST READ IN ITS ENTIRETY

http://www.motherjones.com/mojo/2013/03/financial-crisis-inquiry-commission-lawsuit-documents-cause-action

In the aftermath of the 2008 financial meltdown, the US government launched a vast investigation, but it still doesn't want you to know the details of what it found.

In January 2011, the Financial Crisis Inquiry Commission (FCIC) created by Congress put out its final report. But it only released a portion of all the source documents it scoured, so last year the government accountability group Cause of Action filed a lawsuit seeking the release of those documents, including emails, memoranda, and draft reports. Last week, the DC district court announced it was dismissing the case. But it's not over yet: COA vowed on Tuesday that it will appeal the decision. In a statement, the group said the judge's ruling that the documents were not subject to the Freedom of Information Act was "a misapplication of the law," and said that "COA will continue to fight to shed light on the workings of our government."

The FCIC was created in 2009 and given an $8 million budget and a lot of power to subpoena witnesses and documents, and give whistleblower protections to those who would come forward with information. The commission was also plagued by partisan division. Its final report in 2011 faulted failures in financial regulation, excessive borrowing, a lack of transparency, and risky investments, among other causes—but Republicans on the committee put out their own conflicting report. Meanwhile, the commission said it could not release all related documents but vowed that they "will eventually be made public through the National Archives and Records Administration." (Which has yet to happen.)

As Jay Rosen, a journalism professor at New York University, told my colleague Nick Baumann at the time:



As Baumann reported, FCIC chairman Phil Angelides worried at the time that "there's going to be a very conscious, deliberate effort to rewrite [the] history [of the crisis], to wave this away like it was a bump in the road." Keeping the primary source documents hidden from the public makes that easier, of course...

ANOTHER IN A SERIES OF TERRA, TERRA TERRA FROM WALL ST...

http://www.marketwatch.com/story/10-things-medicare-wont-tell-you-2013-03-08

1. “We’re in the cross hairs like never before.”

The Centers for Medicare & Medicaid Services, or CMS, the federal agency that administers Medicare and other health programs, got smacked with cuts early this month as lawmakers failed to avert the sequester, $1.2 trillion in spending cuts designed to help trim the country’s budget deficit. Hospitals and doctors face 2% cuts in the amounts that Medicare reimburses them for services rendered to recipients—cuts of $10.7 billion this year and $118.8 billion over nine years, according to a report by consulting firm Tripp Umbach. While patients themselves won’t see any direct reduction in their benefits, experts say the ripple effects of the sequester could indeed hit older Americans. Doctors and hospitals had warned that their industries would have to slash more than 200,000 jobs this year alone if the sequester went through...Even if lawmakers were to restore the cuts, Medicare would remain in their sights, experts say. “Whether you’re a Republican or a Democrat, the fact of the matter is that something’s got to give,” says Ross Blair, CEO of PlanPrescriber.com, a Medicare division of eHealth, an online health insurance marketplace. Current and future projected rates of spending, Blair says, are “unsustainable.” The federal insurance program—which covers 49 million Americans, those ages 65-plus and those of any age with disabilities—accounts for 16% of federal spending, or $551 billion in 2012. To be sure, spending cuts to the popular program won’t come easy. While far from perfect, Medicare has provided vital coverage to hundreds of millions since its inception in the mid-1960s, experts say. “Medicare is more than a line item in the budget,” says Stuart Guterman, executive director of the Commission on a High Performance Health System at the Commonwealth Fund, a private foundation. “It’s one of the most successful programs ever.”

2. “Think Social Security is broke? Just look at Medicare.”

With the debate raging over the astronomical cost of entitlement programs, experts say, it’s easy to forget that Medicare and Social Security are two different programs under very different financial strains. In the short term, at least some parts of Medicare are worse off than Social Security, according to a 2012 report from the Social Security and Medicare Boards of Trustees. The Medicare hospital trust fund—which funds Medicare Part A—“faces depletion earlier than the combined Social Security Trust Funds,” according to a summary of the report. Hospital trust funds are expected to run out completely in 2024, versus in 2033 for Social Security. Medicare Part B, which funds doctors’ visits and other outpatient expenses, and Part D, which covers prescription drug benefits, are funded differently and “will remain adequately financed into the indefinite future,” according to the report. It’s easy to see why parts of Medicare are in such bad shape, experts say. A couple earning average annual wages of $44,600 each who turn 65 in 2020 will receive a total of $427,000 in lifetime Medicare benefits, but will have paid only $153,000 in lifetime Medicare taxes, according to an analysis by the Urban Institute, a research organization that studies social and economic issues. (All figures are in 2012 dollars.) By contrast, the couple will receive $632,000 in lifetime Social Security benefits after paying a total of $700,000 in Social Security taxes. The picture doesn’t look much better going forward. Medicare trustees project that Medicare costs will grow from approximately 3.7% of gross domestic product in 2011 to 5.7% of GDP by 2035, and will increase gradually thereafter to about 6.7% of GDP by 2086. And baby boomers account for a big part of this projected growth. Roughly 10,000 baby boomers will turn 65 every day over the next couple of decades, according to the nonpartisan Pew Research Center. The vast majority of people 65 and over rely on Medicare and not employer-based coverage, experts say.

3. “Marketing isn’t our strong suit.”

In 2011, Medicare launched a free, new benefit: annual “wellness” visits for recipients. Only 9% of beneficiaries took advantage of this benefit in 2012. And in a poll released last spring by the John A. Hartford Foundation, a philanthropy focused on training and research on geriatric health care, more than half of respondents said they had never heard of the wellness visit. Experts say it can take time for a new benefit to gain traction with both patients and doctors, but there’s another issue at play: When Medicare communicates with the public, the program’s written materials tend to be on the hefty side. “Medicare & You,” the official handbook for 2013, runs 140 pages. Some elder advocates praise the booklet as clearly written and relatively jargon-free—making it helpful for those who bother to crack the cover. Still, Medicare’s mailings are “intimidating by size,” says Mary Dale Walters, senior vice president of Allsup Medicare Advisor, a Belleville, Ill.-based provider of Medicare consultation services. “People look at the envelope and panic.” What’s more, those with private Medicare Advantage plans usually get a thick packet from their own plan each year, adding to the overload, Walters says. Those who took the time to look would discover that the wellness visit is mentioned on pages 50 and 51 of “Medicare & You.” (The booklet has an index.) But there are ways to cut through the paperwork, some experts point out. Retirees and caregivers can visit Medicare.gov to find details like whether a particular service is covered, how much premiums cost, and other information. People can call 800-Medicare, or 800-633-4227, for help with a variety of issues; those who are placed on hold will hear a recording mentioning the new wellness visit.

4. “Don’t expect a five-star plan.”

Medicare’s five-star quality-rating system, outlined in the Affordable Care Act, ranks Medicare policies sold by private insurers, known as Medicare Advantage plans. These plans are referred to collectively as Part C, and beneficiaries can choose a Medicare Advantage policy in lieu of traditional Parts A and B, which are often referred to as “original Medicare.”) These scores are based on multiple performance measures—in 2011, for example, CMS used 53 different measures derived from plan and beneficiary surveys and administrative data, according to the Kaiser Family Foundation, a nonprofit foundation that analyzes major health care issues. For 2013, there are about 11 five-star plans nationwide, according to CMS data. Consumers can switch to a five-star plan at any time during the year—they don’t have to wait for the annual open enrollment period. But “it’s a challenge” for beneficiaries to research all the offerings to see whether a five-star plan is available in their area, Walters says. There are an average of 22 Medicare Advantage plans in each market nationwide, she notes. A spokesperson for CMS says “a five-star rating is Medicare’s highest mark of excellence, and can only be obtained by those plans that are truly providing the highest quality care to beneficiaries.” More than 37% of Medicare Advantage enrollees are now in a four- or five-star plan, Blum said in his Senate testimony. In 2012, Medicare Advantage plans that receive four or five stars began to receive bonus payments aimed at encouraging more plans to meet the standards. Baby boomers, who have become accustomed to rankings in other aspects of their consumer lives, will likely embrace this system as they age into Medicare, experts say. “You see how consumers flock to cars that Consumer Reports rates highly,” says Joe Baker, president of the Medicare Rights Center, an advocacy group. “The expectation is that it will happen in the Medicare Advantage market as well.”

5. “We’re not popular with many doctors.”

Roughly 20% of physicians across all disciplines limit the number of Medicare patients they will take on at any given time, according to a 2010 study by the American Medical Association, the organization’s most recent look at the issue. For primary care physicians, this number jumps to 31%. The reason? Among doctors who limit Medicare patients, 85% say they think Medicare payment rates are often too low, according to the study. And 78% say they think “the ongoing threat of future payment cuts makes Medicare an unreliable payer.” The threat of future payment cuts stems largely from Congress’s inability to permanently fix the formula that Medicare uses to reimburse doctors to allow for increased payments, according to some critics, including the AMA.

6. “We get ripped off a lot.”

Thousands of doctors and other medical professionals have sharply increased the rates at which they bill Medicare for treating older patients, according to an investigation released last fall by the Center for Public Integrity, a nonprofit investigative news organization. Medicare allows doctors to pick from among five different codes to bill their services, from a low number for a simple visit to a higher number for a complex visit; the system largely relies on the honor system of doctors choosing the billing code that accurately reflects their level of service. From 2001 to 2010, this practice padded practitioners’ fees by $11 billion or more, signaling possible medical billing abuse, the study found. According to the Center for Public Integrity investigation, doctors have increasingly abandoned the lower-level codes for the better paying ones, a practice known as “upcoding.” The study—which analyzed a representative 5% sample of Medicare patients and their claims, submitted by more than 400,000 medical practitioners and 7,000 hospitals and clinics starting in 2001—found no evidence that Medicare patients are sicker and older than in the past, which if true might have justified doctors billing at the higher rates. “Medicare is susceptible to fraud not only because of its size and complexity, but because the system itself makes it easy to defraud the government,” says Ken Nolan, a partner at Nolan & Auerbach, a health-care fraud law firm. “Most of the scrutiny, if any, is made after the payment is made—not before, as in traditional business transactions.” Dr. Jeremy A. Lazarus, president of the American Medical Association, said in a statement that more analysis was needed on the issue: “Attributing the trend solely to fraudulent and abusive behavior remains an unproven assumption.” That said, fraud recoveries have increased to a record $4.2 billion collected in 2012, and $14.9 billion over the past four years, Blum told the Senate Committee on Finance. In addition, the Centers for Medicare & Medicaid Services recently launched a fraud prevention system, which aims to identify aberrant and suspicious billing patterns before payment, he said.

7. “We don’t cover a lot of the care seniors need most.”

If your aging mother needs care in a nursing home or even in her own home, she will have to meet some strict criteria to get Medicare to cover it. For the most part, Medicare pays for nursing home care only for those who were hospitalized for at least three days for an illness or injury and who require “skilled” care that only a medical professional like a registered nurse can provide. Even then, it only covers or partially covers up to 100 days per benefit period. (A benefit period begins the day you’re admitted as an inpatient to a hospital or skilled nursing facility and ends after you haven’t had any inpatient hospital care, or skilled nursing care, for 60 days in a row.) Qualifying to get reimbursement for home health care is also difficult, as you must meet all of the following criteria: be homebound; require skilled nursing care, physical therapy, speech-language pathology services or continued occupation therapy; and be getting regular services from your doctor under a plan of care he or she has ordered. Medicare does not cover meals delivered to a home, cleaning and laundry services or, in most cases, help with personal care like bathing, dressing or using the bathroom. See: 10 things assisted-living homes won’t tell you. What’s more, original Medicare doesn’t cover hearing aids, dentures or most dental services. (Medicare Advantage plans vary and may cover some of the services not covered by traditional Medicare.)

8. “And you’ll pay for the coverage we do provide.”

Many people reach age 65 thinking Medicare is free, according to Baker, of the Medicare Rights Center. In reality, it’s anything but. Premiums for Part B (medical insurance for doctors’ visits and other outpatient expenses) are $104.90 monthly if a recipient’s annual income is $85,000 or less; beneficiaries pay on a sliding scale after that, with the highest monthly premium $335.70 for those with gross incomes above $214,000. Beneficiaries don’t pay a monthly premium for Part A (hospital insurance) if they paid Medicare taxes and earned 40 Social Security credits while working (people can earn a maximum of four credits a year; for 2013, $1,160 earns one credit). The average premium for Part D, or optional drug coverage, is around $30 per month. On top of the premiums, seniors in original Medicare pay 20% of the cost of all doctors’ visits aside from some preventative services that are free. (That percentage climbs higher if a doctor doesn’t accept Medicare’s reimbursement rate for a given procedure, and also for certain treatments, like mental health coverage.) Hospital coverage, or Part A, requires a deductible of $1,184 for each benefit period in 2013 and then various coinsurance payments depending on the length of stay. The annual Part B deductible is $147 Many beneficiaries buy a supplemental, or Medigap, policy to help cover these out-of-pocket costs. But these don’t come cheap either: a comprehensive supplemental policy that eliminates almost all out-of-pocket expenses can cost as much as $350 a month, Blair of PlanPrescriber.com says.

9. “Paws off that cash, Grandpa: Your settlement is ours.”

Let’s say something goes terribly wrong, you sue your doctor for malpractice and win. Don’t go counting the money just yet. If Medicare paid some of your doctor bills, it can recoup out of the malpractice settlement what it paid out in claims, says Joan Robert, a partner at elder law firm Kassoff, Robert & Lerner. (Medicare only gets money for what it paid, not a percentage of punitive damages, she says.) A spokesperson for CMS says that claims are handled in this manner “in order to protect the Medicare trust funds when other sources of payment are available.” See 10 things 401(k) plans won’t tell you. The lawyers involved in the case should make sure that Medicare gets repaid as part of any malpractice settlement, says Glenn Jarrett, an elder law attorney in Burlington, Vt. This will help ensure that malpractice victims don’t get surprised if CMS tries to collect later, after they have already spent the money on something else, he notes. Medicare must be paid within 60 days of the receipt of the settlement from the “third party,” according to a fact sheet for attorneys on the CMS website. (The “third party” is usually the insurance company of the doctor or other person found liable.) If Medicare isn’t repaid in a timely manner, the fact sheet notes, interest may be assessed.

10. “Did we turn you down? Keep trying.”

When Medicare denies a claim, experts say, recipients will often simply pay out of pocket, even if they can’t afford it. That’s the wrong strategy. Oftentimes, it’s better to appeal, says Judith Stein, the executive director of the Center for Medicare Advocacy. “People are denied Medicare like any other kind of insurance,” she says. “Insurance wants your money and doesn’t want to give it back.” Only about 2.5% of people with original Medicare appealed their denied claims in 2011, but of those that did, 33% were granted a full overturn of their denial with Part A, and 50% were granted a full overturn with Part B, according to CMS data. Filing an appeal is not hard, experts say. Those with original Medicare need only fill out a Redetermination Request Form and send it to their Medicare administrator within 120 days of the date they received their Medicare Summary Notice (the form that Medicare sends when it pays or denies a claim). Those in a Medicare Advantage plan need to read the materials the plan sends each year to learn how to appeal.

http://hosted.ap.org/dynamic/stories/E/EU_EUROPE_FINANCIAL_CRISIS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-03-12-07-09-17

FRANKFURT, Germany (AP) -- The head of Germany's central bank is warning that the eurozone's financial crisis "isn't over" despite recent improvements in financial markets.

Bundesbank head Jens Weidmann underlined Tuesday that Europe needs to move ahead with reforms to keep troubles in the banking system from dragging down government finances - the proposed so-called "banking union."

Weidmann said a "central pillar" of the new system would be to have a way to restructure or wind down busted banks, with losses absorbed by shareholders and creditors before taxpayers are asked to pay. EU leaders are expected to come up with a concrete proposal this year.

He urged faster reforms at the European level and in the financially troubled countries, saying "only governments, and not the central bank system" can solve the crisis.

http://www.businessinsider.com/uk-industrial-output-falls-2013-3

Michael McKee @mckonomy

Bad #UK eco data: Industrial output -1.2% (forecast +0.1%); factory output -1.2% (forecast no change)

Michael Hewson @michaelhewson

UK Manufacturing Production y/y (Jan)
Actual: -3.0% Survey: -1.0% Prior: -1.5%

Louise Cooper @Louiseaileen70

Week before Budget appalling industrial production numbers. Not sure what else could go wrong for Osborne?

http://www.businessinsider.com/morning-markets-march-12-2013-3

Shocker! The hottest market in the world, Japan, actually fell last night.
The Nikkei's winning streak was stopped at 8 sessions, as the index fell 0.28% in a late day dive.
In the meantime, US futures are down a bit, and Europe is going nowhere.
It's unlikely to be a big news session for the market.
Expect the day to be dominated by news from the Conclave, which gets underway today, and the release of Paul Ryan's budget at 10 AM ET.


Read more: http://www.businessinsider.com/morning-markets-march-12-2013-3#ixzz2NKAwQi5l

http://www.bbc.co.uk/news/business-21753071

The pound has fallen against the dollar and the euro after official figures showed UK manufacturing output fell by 1.5% in January from the month before.

The drop came after a 0.9% rise in output in December, and has added to fears of a third recession since 2008.

The pound hit a new two-and-a-half-year low of $1.4832 against the US dollar. The euro also rose to a two week high versus the pound of 87.77 pence.

Separate data showed the goods trade deficit shrank in January.

http://www.guardian.co.uk/business/2013/mar/12/recession-manufacturing-slump

The UK's third recession since the financial crash could be on the cards after a dive in manufacturing output in January.

According to official data, a sharp fall in the production of pharmaceuticals and building materials pushed manufacturing 1.5% lower than December and 3% lower than the same month last year.

A wider measure of industrial production fell 1.2% compared with a poll of economists for Reuters that showed they expected a 0.1% rise.

The dismal news send the pound sliding by almost a cent against the dollar to a new two-and-a-half year low of 1.484. Since the beginning of the year sterling is down more than 7% from 1.62, though it has yet to make any material impact on trade.

http://www.guardian.co.uk/world/2013/mar/09/global-elites-change-face-of-europe

The beaches, resorts and assorted tourist attractions of Europe are undergoing a quiet revolution; a transformation to match the foreign-holiday boom unleashed by cheap package tours in the 1960s. The Russians are no longer coming. They have arrived. And the Chinese are on their way in even bigger numbers.

With its pretty piazzas and ancient churches, Montecatini is a typical Tuscan town. But it is also one where the mayor has proposed that all street signs should be written in Russia's Cyrillic script, reflecting an unprecedented invasion of pleasure-seekers from the east.

Across the rest of the continent, the picture is the same. Russians, Asians and Arabs are rewriting the rules of European tourism as newly enriched tycoons and middle-class beneficiaries of the world's booming economies buy properties and take up beach space once jealously guarded by northern Europeans.

Outbound tourists from western Europe and the United States have remained fairly static in recent decades but the numbers going in the other direction are startling. Take China, where a travelling boom has marched in step with the country's vertiginous economic growth. Five million making foreign visits in 1996 became 60 million by 2010. Over the same period, 12 million visitors from Moscow, St Petersburg and the rest of Russia multiplied into almost 40 million.

3/12/13 Did Intrade Do an MF Global? Rajiv Sethi

The peer-to-peer prediction market Intrade ceased operations yesterday and closed out all open positions without notice.

Translation: all open contracts have been closed out at current prices, account balances now reflect only cash positions, and no withdrawals can be made until further notice. Not a penny will be paid out to any member for the time being, no matter how large their cash balance may be.

What on earth is going on? My best guess is that the margin posted by traders was not held, as it should be, in segregated accounts separate from company funds. When bets are made on this market, both parties must post margin equal to their worst-case loss, so that neither is subject to counterparty risk. In effect, each party is taking a position against the exchange, but these positions are exactly offsetting so the exchange bears no risk. To ensure that all promised payments can be made, these funds must be held in the form of cash, insured deposits, or safe dollar-denominated securities such as Treasury bills. They cannot be invested in risky assets, and cannot be used for the payment of salaries or expenses.

much more...
http://rajivsethi.blogspot.com/2013/03/a-prediction-market-mystery.html

or
http://www.nakedcapitalism.com/2013/03/did-intrade-do-an-mf-global.html

http://www.guardian.co.uk/commentisfree/2013/mar/11/austerity-almost-never-works


Liam Fox has called for a £345bn cut in public spending. Photograph: Dan Kitwood/Getty Images

Vince Cable is shocked – shocked! – to find that he's been sharing a coalition with Tories waging an "ideological jihad" on public services. As if to back him up, Liam Fox yesterday obligingly decried Tony Blair's "great socialist coup", and called for a £345bn cut in public spending, as well as a complete suspension of capital gains tax (this last measure doesn't actually feature in General Pinochet's Little Book of Counter-Revolution – but from tiny acorns and all that).

Fox fits snugly into his former cabinet colleague's pigeonhole. Yet if the business secretary really is on the hunt for austerity jihadists in the government, he'd better pack a giant butterfly net. If one definition of an ideologue is one who clings on to a strategy long after it's been proven to be a failure, then on deficit reduction David Cameron is as swivel-eyed as they come. Last week, the prime minister claimed "signs that our plan is beginning to work", but next Wednesday will see George Osborne deliver yet another budget in which growth forecasts are lowered, borrowing projections raised and even more spending cuts laid out.

This will be completely in line with every other budget and mini-budget the chancellor has delivered since he first laid out Plan A. To revisit those debut budget predictions from June 2010 is as tantalising as a glimpse of heaven to a fallen sinner. Back then, Whitehall assumed that Britain would now be amid a roaring recovery, with GDP growing 2.8% in 2012 and 2.9% this year. Instead, national income shrank in the last three months of last year and we will be lucky to see a 1% increase this year. Back then, it was assumed that unemployment would now be drifting downwards, businesses would be investing like billy-o, while public debt would be about to peak before heading south and the government would be on its way to the polls in 2015, the work of fiscal consolidation done.

Clearly, none of those things are going to happen, which is partly why Tory backbenchers are now so restive. But you would have to be one of the austerity jihadists to believe that you could cut your way out of a slump. The entire modern history of expansionary fiscal contraction, as coalition ministers used to call it, is that it almost never works

http://www.bloomberg.com/news/2013-03-12/universities-pile-on-faculty-perks-as-student-costs-grow.html

The University of Chicago paid James Madara $2.5 million in severance when he stepped down in 2009 as medical dean and hospital chief. Madara, who remained on the faculty, later joined the American Medical Association.

Congress is taking a look at such payments following disclosures that Jacob Lew, the new U.S. Treasury secretary, received a $685,000 bonus when he left New York University and had $1.5 million in housing loans from the school.

Harvard and Stanford universities also offer real-estate loans with sweet terms, records show. While the amounts are small relative to university budgets, the perks insulate faculty and administrators from the costs upsetting many middle-class families, said Jonathan Robe, a research fellow at the Center for College Affordability and Productivity in Washington.

“It certainly gives the public a clear example of how out of touch some universities are,” Robe said. “Parents will think, ‘Here I am scraping by, raiding my retirement plan to pay for college. Why are they making me do this just to enrich these executives?”’

http://www.bloomberg.com/news/2013-03-12/u-k-inflation-expectations-gauge-rises-to-most-in-4-1-2-years.html

he U.K. 10-year break-even rate, a gauge of inflation expectations, climbed to the most since September 2008.
The rate, which measures the difference in yield between index-linked and nominal securities, rose six basis points to 3.35 percent at 12:43 p.m. London time.

http://www.bloomberg.com/news/2013-03-12/greece-faces-150-000-job-cut-hurdle-to-aid-payment-euro-credit.html

Greece is locked in talks with international creditors in Athens about shrinking the government workforce by enough to keep bailout payments flowing.

Identifying redundant positions and putting in place a system that will lead to mandatory exits for about 150,000 civil servants by 2015 is a so-called milestone that will determine whether the country gets a 2.8 billion-euro ($3.6 billion) aid instalment due this month. More than a week of talks on that has so far failed to clinch an agreement.

“Public sector job cuts are a major part of the program and they are one of the most politically difficult parts to achieve,” said Holger Schmieding, chief economist at Berenberg Bank in London. “And for the Greek government, which has two left-of-center parties, it is extremely difficult to really implement those job cuts. I’m afraid this will likely stay a point of contention, review after review after review.”

More than three years after revealing that Greece had misled its euro partners on the state of its finances, the nation remains reliant on loans from the euro area and the International Monetary Fund to pay pensions and wages. To qualify for payments from the total of 240 billion euros pledged to the country, it has to continue meeting economic targets, including reducing staff levels.

Consider Obama's Pick to Regulate Finance -- If We Were a Functioning Republic, It Would Be Called Insane

Something is really wrong with America.
March 11, 2013 |

By James Howard Kunstler




History has a special purgatory where it sometimes stashes feckless nations punch drunk on their own tragic choices: the realm where anything goes, nothing matters, and nobody cares. We've surely crossed the frontier into that bad place in these days of dwindling winter, 2013.

Case in point: Mr. Obama's choice of Mary Jo White to run the Securities and Exchange Commission. A federal prosecutor back in the Clinton years, Ms. White eventually spun through the revolving door onto the payroll of Wall Street law firm Debevoise & Plimpton, whose clients included Too Big To Fail banks JP Morgan, Bank of America, Morgan Stanley, and UBS AG, defending them in matters stemming from the financial crisis that began in 2008, as well as other companies that needed defending from allegations of financial misconduct, such as the giant HCA hospital chain (insider trading), General Electric (now a virtual hedge fund with cases before the SEC), and the German-based Siemens Corporation (federal bribery charges).

A republic with a sense of common decency -- and common sense -- would have stopped the nomination right there and checked the "no" box on Mary Jo White just for violating the most basic premise of credibility: that trip through the revolving door that shuttles banking regulators from the government agencies to the companies they used to oversee and sometimes back again.

Has there not been enough national conversation about the scuzziness of that routine to establish that it's not okay? Does it not clearly represent the essence of dysfunction and corruption in our regulatory affairs? Didn't President Obama promise to seal up the revolving door? So how could Mary Jo White possibly be taken seriously as a candidate for the job? And how is it possible that everyone and their uncle, from The New York Times editorial page to the Sunday cable news political shows to the halls of congress, is not jumping up and down hollering about this? Well, because anything goes, nothing matters, and nobody cares.

(snip) http://www.alternet.org/news-amp-politics/consider-obamas-pick-regulate-finance-if-we-were-functioning-republic-it-would-be

Predator Drones are nothing but tools of genocide. Using them on populations that cannot even remotely defend themselves, have no means or intention of ever retaliating, and haven't even attacked!...he might as well call the Waziristani "cockroaches" as he proceeds to terrorize and kill the civilians.

It's not going to end well. The question is, is it going to end at all?

Sooner or later, somebody will have a ready-made pretext to do unto US as we have done unto them...and the tools. Obama is the biggest fool alive, after W. He just has better presentation.

They feed off each other for survival.

The higher the market goes, the bigger the boom when it crashes