I've been wondering, ever since I took on this "job," why the [ center ] commands didn't work.

Now I'm wondering why they suddenly DO work.

I didn't change a thing about them since posting Thursday afternoon. . . . . .


It's a mystery!

That doesn't happen very often.

It's magic!



No need to panic... Looks like the <center> tag is werking again.

'bout time, too.

However, now I can't scroll down in the message box with this iThingie. So, all of my posts are going to be limited to 25 lines.

Most people try to get their software running BEFORE it's installed somewhere....note to the Management.

PS the market won't open today...MLK really rates.

the sinus infection is vanquished, but the virus that started it rages on....or maybe, whimpers

I don't know if pics will show up in PMs, so here are two of them. I have, literally, buckets more. The larger one is about 6 cm wide, the smaller about 4.5 cm.

what torture

I was telling her about some of the rocks I have, and to illustrate them, I found this sample picture



listed for sale on Amazon http://www.amazon.com/Chalcedony-Mineral-Specimen-Mountains-Imperial/dp/B004YTOFR2 For $24.98. That's just plain freaking absurd, because the stuff is just lying around out in the desert free for the picking. I know of places where I could gather a couple bucketfuls in a couple hours, and better specimens than that. In fact, I have buckets and boxes already. So I went out to the shop, brought in half a dozen or so samples, and took some quick pictures. Those were two of them.


They are chalcedony -- cal-SAID-a-knee -- which is a common form of common quartz. I have a lot of pink and white, unfortunately no blue and only a couple small pieces of purple.

Apologies for being off topic. I love rocks.



TG

Looks like it could be a long, short week!

The downgrades must have been already known , not a shocker.

Occupying Struggle Street

http://www.macrobusiness.com.au/2011/10/occupying-struggle-street/?utm_source=Media+List&utm_campaign=71fcfc1a2d-RSS_DAILY_MAILCHIMP_CAMPAIGN&utm_medium=email

The Occupy Wall Street movement has gained traction globally under the banner of speaking up for the 99% in an era of growing income inequality. But while the protesters camp out in cities around the globe, low-income earners in the US, and many other developed nations, have been camped out themselves for the past two decades – in Struggle Street. Families are now occupying the bottom rungs of the income ladder over generations, as observed by declining trends in upward mobility.

Inequality in a dynamic capitalist economy is to be expected. If equality arises as a result of variation in work effort and entrepreneurial endeavour, then its impact on social cohesion is limited, as opportunities are available for lower income individuals and families to climb the ladder of success with a good dose of hard work, entrepreneurship, and luck.

However two specific trends have arisen in the past three decades that are undermining this idealist notion of inequality under dynamic capitalism.

Inequality has increased beyond what appears reasonable from individual effort alone, and more importantly,
upward mobility, or the chances that a descendent generation will improve their position on the income distribution, has declined. Poor people in 2011 are more likely to stay poor, while the rich are likely to stay rich, and indeed, get richer...The modern welfare state evolved through a volatile history as a way to both promote and reward hard work and innovation (with private property and market pricing), and share productive gains amongst society (through redistribution policies). These fundamentally worthy goals appear to have become lost in the daily political grind, gradually becoming subverted by vested interests...What is often overlooked in debates over income inequality is that capitalism is fundamentally about risk taking. It should be difficult for the rich to stay wealthy, as preserving their wealth would involve risky investment, and some of the wealthy would lose out, while others would win. Indeed, many innovators and entrepreneurs from lower socio-economic backgrounds, who also play the risk-taking game, should rise to fill the place of the previously wealthy whose risk were realised....



ON OCCUPY OAKLAND AND POLICING AMERICA BY ABIGAIL CAPLOVITZ FIELD | OCTOBER 27, 2011

http://abigailcfield.com/?p=436

In law school I was lucky enough to be mentored by sociologist and law professor Jerome H. Skolnick. We studied policing together, co-authored a couple of papers. Policing in America is the history of power in our society, and it is important context for police-#Occupy interactions. In short, ‘undesirables’ have long been targets for violent social control tactics usually not seen, much less experienced, by everyone else. If the protesters can stay ‘desirable’ by honoring their to-date nonviolent and ethical tactics, they will win. Police brutality has sparked riots many times in American history, most famously the 1960s race riots. But the problem isn’t merely historical; remember how in 1992 Los Angeles burned because the Rodney King cops were acquitted. In 2001 Cincinnati went up in flames because cops had again killed an unarmed young black man.

One movement—Dr. King’s—was able to transform police brutality into greater social justice, through the alchemy of nonviolent but confrontational protest in the face of state violence. For example, brutality against the people marching for voting rights in Selma, Alabama on March 7, 1965 led to the Voting Rights Act. The confrontation came on the Edmund Pettus bridge. The videoed violence shocked the nation’s conscience. To the extent most people were aware of people brutality, they’d always assumed it was justified in an eye for an eye kind of way. Alabama cops were sending the message: You shall not pass. You will not get a meaningful right to vote. But the police violence backfired.

Perhaps the brutality against Occupy Oakland in the early hours of October 26, 2011 will have a similarly catalytic effect. The Oakland cops’ reprised Alabama thus: You shall not be here. You will not rock the boat.

Brutality Against Protestors Exposes Underlying “Ghetto Mentality” in Policing...

Dear Occupiers,

Whatever non-violent, ethical tactics you choose, if you can keep it together in the face of police brutality and state violence, you can change the world. We all understand what your courage means; what it exposes about our government and its policies. I mean, the Americans imprisoned by that icon of repressive government, Iran, understand and support you.

From all of us, thanks for trying.

Occupy first. Demands come later BY Slavoj Žižek

...Carnivals come cheap – the true test of their worth is what remains the day after, how our normal daily life will be changed. The protesters should fall in love with hard and patient work – they are the beginning, not the end. Their basic message is: the taboo is broken; we do not live in the best possible world; we are allowed, obliged even, to think about alternatives.

In a kind of Hegelian triad, the western left has come full circle: after abandoning the so-called "class struggle essentialism" for the plurality of anti-racist, feminist, and other struggles, capitalism is now clearly re-emerging as the name of the problem. So the first lesson to be taken is: do not blame people and their attitudes. The problem is not corruption or greed, the problem is the system that pushes you to be corrupt. The solution is not "Main Street, not Wall Street", but to change the system where Main Street cannot function without Wall Street.

There is a long road ahead, and soon we will have to address the truly difficult questions – not questions of what we do not want, but about what we do want. What social organisation can replace the existing capitalism? What type of new leaders do we need? What organs, including those of control and repression? The 20th-century alternatives obviously did not work...

http://www.alternet.org/story/152845/can_the_power_of_occupy_wall_street_make_obama_a_populist/?page=entire

The growing movement will force political leaders to choose between Big Money and popular legitimacy.(WELL, WE CAN GUESS HOW THAT WILL END...) It's been a little over a month since this bolt of political lightning known as Occupy Wall Street jolted through the political establishment. It's time to assess just what Occupy Wall Street has gotten done. That it has accomplished a great deal is beyond dispute. Franklin Foer in the New Republic and John Nichols in the Nation have both noted that Occupy Wall Street profoundly challenged President Obama and the Republicans. But what an odd challenge. A few thousand people camped out in parks around the country? Really? Yet this challenge has completely changed the dominant theme in Washington. Less than a year ago, JP Morgan's Bill Daley was the glad-handling centrist du jour, praised by everyone from Howard Dean to Bob Reich. The "austerity class," as Ari Berman so nicely put it, was in control of the debate, with the Tea Party waiting in the wings ready to slash and burn.

Fast forward to October 2011. Obama is increasingly taking on a populist tone and using executive orders to attempt stimulating the economy, with Democrats smacking around Mitt Romney for encouraging foreclosures as a way to clear the market (a policy Obama administration officials like HUD Secretary Shaun Donovan agree with. The centrists are losing, perhaps not power, but certainly the debate. Third Way, the political brain behind this centrist White House and Senate, is one of the few groups warning Democrats away from Occupy Wall Street, but few are listening.

There's a reason; the themes put out by the protesters are overwhelmingly popular. The poll numbers are out. If Occupy Wall Street were a national candidate for president, it would be blowing away every other candidate on the stage, including Barack Obama and Mitt Romney. Fifty-four percent of Americans agree with the protesters, versus 44 percent who think President Obama is doing a good job. Seventy-three percent of Americans want prosecutions for Wall Street executives for the crisis. Seventy-nine percent think the gap between rich and poor is too large. Eighty-six percent say Wall Street and its lobbyists have too much power in Washington. Sixty-eight percent think the rich should pay more in taxes. Twenty-five percent of the public considers itself upset, 45 percent is concerned about the country and 25 percent is downright angry.

That these themes are dominating establishment debates now is somewhat bizarre. It's not as if people didn't hate banks in 2008, 2009 or 2010. And when you think about it, camping out in various cities isn't a particularly radical act, in and of itself. Occupy Wall Street can't project political power, at least not in any traditional sense. It can't make decisions about how to relate to the police, or politicians... The protests are a ball of raw energy, with one basic message: The 1 percent on Wall Street have taken advantage of the 99 percent of the rest of us. Yet this message is resonating, deeply. What the occupiers have done, perhaps unwittingly, is force political elites to choose, at least publicly, between their funding stream and their popular legitimacy. Wall Street lobbyists are absolutely furious at Obama for embracing the protests, but protesters aren't particularly enthused to have establishment praise. Barney Frank goes to raise money from Wall Street, while lamenting how the protesters didn't vote in 2010. The occupiers as a group are split on voting; some think participation in politics is essential while others think participation in this system is immoral. One thing that's clear is that occupiers do not see Obama's reelection as a particularly significant goal, at least not now...

http://blogs.reuters.com/great-debate/2011/10/27/everyones-housing-market-profits-were-fictitious/

A big clue something had become dysfunctional at Fannie Mae and Freddie Mac came in the first week of 2011, when the government mortgage market makers announced the terms of a settlement agreement they’d reached with Bank of America, and were immediately pilloried for extending the bank another “backdoor bailout” by the likes of Maxine Waters and the American Enterprise Institute...By the end of January an internal investigation had convened, all other settlement negotiations had been suspended, and Edward J. DeMarco, the acting Fannie/Freddie overseer pending the confirmation of his replacement, found himself suddenly faced with the challenge of replacing himself as congressional Republicans vowed to stonewall Obama’s pick. Part one of this series traced DeMarco’s unlikely conversion in 2011 from coddler of banks to unyielding litigator of bank fraud. It’s a rare shift in Washington, where “corruption” is a process that’s practically synonymous with “aging.” What’s often forgotten when bureaucrats fail as spectacularly as they have at Fannie and Freddie is the critical roles played by cluelessness, incuriosity, faulty reasoning and fraudulent economic logic as well.

Consider what the inspector general learned about the corporate procedures for pursuing “putback” claims in place at Freddie Mac. While purchase contracts entitle the GSEs to force banks to buy back any delinquent loan in which it finds evidence of fraud, Freddie restricted examiners to screening only mortgages which had defaulted within two years of origination, a tiny sliver of total foreclosures comprising less than one-tenth of defaults from the years 2004 to 2007—the vintage of the Countrywide loans. When one of DeMarco’s deputies noticed this apparent oversight and began warning executives that “Freddie could passively be absorbing billions of dollars of losses” merely by refusing to glance at 90% of their files, the enterprise … chose to absorb the losses, repeatedly resorting to a boilerplate argument justifying the two-year policy holding that:

loans that had demonstrated a consistent payment history over the first two years following origination and then defaulted in later years…likely did so for a reason such as loss of employment, which is unrelated to fraud.

Oh really.

The deputy spent six or so months attempting to politely introduce his colleagues to the concept of the “teaser rate.” Perhaps, he writes in one email, Freddie was failing to take into account that “from 2005 through 2007 there was a substantial increase in non-traditional mortgage products[which frequently featured ‘teaser’ rates initially resulting in low payments” which would “increase dramatically two, three, or five years after origination” when “rates reset and/or the repayment of principal began”—thus rendering virtually any deliberate fraud essentially “invisible” for the first few years of the life of the loan. The examiner, though, was either himself mistaken, or trying to be polite, because those dates are off by a few important years. As he might have gleaned from the company’s annual survey of adjustable rate mortgage trends, a 28-year-old Freddie Mac tradition available online, the “substantial increase in non-traditional mortgage products” began well before 2005; what changed in 2005 is that housing prices in the hottest markets finally, slowly began to edge down a bit, meaning that each passing month was rendering increasing numbers of borrowers “underwater” on their loans.

But when Freddie executives attempted to get themselves off the hook by blaming plummeting housing values for the uptick in foreclosures, the inspector general shoots them down in a fascinating footnote (emphasis mine):



Causation is irrelevant to the issue in controversy? Pretty bold statement for a professional investigator! If only it didn’t so elegantly articulate the widespread attitude of the political establishment toward the crisis itself: We get it, we get it, “it’s the economy stupid etc.” so do yourselves a favor and stop nagging us with demands for truth and justice while we’re trying to pass this freaking jobs bill… But imagine if someone involved here had paused to contemplate the irrelevant just briefly, pondering the methodology with which one might calculate the likelihood that a particular defaulted loan conforms with…

Foreclosure Causation Hypothesis A: Borrower can afford to make mortgage payment of X but defaults when faced with a payment of 2X after the introductory teaser rate expires

vs.

Foreclosure Causation Hypothesis B: Borrower’s mortgage balance is now 2X the value of his house.

…only to think, Holy Cow, what if it turns out that each causation hypothesis might also serve as a causation hypothesis for the other causation hypothesis? That is, what if the “teaser rate” enabled so many Americans to pay the mortgage on houses they couldn’t otherwise afford that housing prices kept rising artificially, in turn enabling borrowers to refinance their loans just before their payments were scheduled to balloon? That is of course, the central dynamic of the post-2001 housing market: people buying houses they could not afford with the help of kickbacks that collectively, over time, wound up rendering the whole housing market (artificially) unaffordable to just about everyone — unless you used one of those new mortgage products.

In the absence of any underlying economic fundamentals that might plausibly justify an unprecedented expansion of homeownership in an era of total wage stagnation, obscene gas prices and the whole litany of other hardships the 99% endured throughout the Bush Administration, it is a Ponzi scheme. Fannie and Freddie knew this....

http://blogs.reuters.com/great-debate/2011/10/25/how-ed-demarco-finally-cried-fraud/

It took three years, but Fannie/Freddie Conservator Ed DeMarco is starting to channel his inner Irving Picard by acknowledging that among root causes of the financial crisis is fraud, and lots of it...Trying to parse the madness of Fannie Mae and Freddie Mac over the past few years has given me a new appreciation for Bernie Madoff. Bernie might not have left much for his victims, but at least they finally got a straight answer about what he’d been doing with their money all those years, and a sensible legal framework for recovering and winding down all that might be left....Like Madoff’s estate, Fannie and Freddie have spent the last three years under a kind of bankruptcy protection, led by a conservator, DeMarco, whose top priority is to maximize the value of the national “estate” and thereby minimize harm to the housing bubble’s innumerable victims. As both trustees’ travails demonstrate, it’s a thankless job: Madoff’s former investors smear Irving Picard in the press so regularly it’s as if they forgot about Madoff, and Fannie/Freddie conservator Edward DeMarco has alienated so many politicians with his long list of offenses that Timothy Geithner, who recommended him for the job in the first place, is now said to be plotting to oust him.

But where Picard has annoyed by taking a direct approach to the job, DeMarco’s actions have been mystifying. Picard has: canceled the car leases, gym memberships, etc.; listed Madoff’s houses/boats/jewelry for sale or waited until the market recovers; and (this is the controversial part, but it’s also brought in the big bucks) filed “clawback” suits against anyone who booked fictitious profits off their Madoff “investment” in order of biggest to smallish; reimburse, rinse, repeat.

By contrast, Fannie and Freddie have focused their clawback actions almost exclusively on the hardest hit victims of the housing crisis: struggling homeowners whose outstanding mortgage balances are worth more than their houses, and we taxpayers, who get hit up for a new cash infusion just about every month, for a total that should soon top $200 billion. DeMarco, whose enterprises own or guarantee half the outstanding mortgages in America, has not only flatly refused time and again to modify underwater mortgages, he’s actually promised to sue any delinquent borrower his agency suspects of taking Suze Orman’s advice and defaulting “strategically.” (Yesterday’s announcement by President Obama that some FHFA regulations were being scrapped to help homeowners refinance is the first let-up on underwater borrowers by DeMarco, and by all appearances, it was policy driven from the White House, not his office.)

Also: a whistleblower lawsuit filed last year accuses Fannie of deliberately sabotaging struggling homeowners who sought mortgage modifications ostensibly offered in the Administration’s 2009 mortgage relief program HAMP by pushing them into temporary modifications—for which Fannie executives drew fat rentention bonuses—with no follow-up or due diligence, then dropping the ball. More recently a harrowing three-part investigation in the Detroit Free-Press chronicled the GSE’s pattern of intervening in other banks’ mortgage modification negotiations, in which Fannie seems to be systematically using its authority as a mortgage guarantor to force (and accelerate) foreclosures even when banks would rather work out a deal....Tapped-out homeowners aren’t the only ones the mortgage monsters are fighting bitterly in America’s courtrooms: in September Freddie Mac sued the IRS to keep $3 billion in back taxes they allegedly owed from the Bush Administration years during which they had understated their earnings. (In this case they had inspiration: ward of the state AIG filed a similar complaint in 2009.) Meanwhile on the big fish end of operations, DeMarco has left “billions of dollars” at the negotiating table with other TBTF counterparts, according to an inspector general report just released. The report suggested that a $1.35 billion settlement Freddie Mac had struck to indemnify Bank of America over a bad batch of Countrywide loans might have been ten times that size if Freddie management had honestly estimated its losses in the deal....

http://www.businessweek.com/news/2012-01-13/home-seizures-may-jump-25-this-year-as-u-s-foreclosures-resume.html#fadetoblack

Banks may seize more than 1 million U.S. homes this year after legal scrutiny of their foreclosure practices slowed actions against delinquent property owners in 2011, RealtyTrac Inc. said. About 1.89 million properties received notices of default, auction or repossession last year, down 34 percent from 2010 and the lowest number since 2007, the Irvine, California-based data seller said today in a statement. One in 69 U.S. households received a filing. While the seizure process has been “highly dysfunctional,” there were “strong signs in the second half of 2011 that lenders are finally beginning to push through some of the delayed foreclosures in select local markets,” RealtyTrac Chief Executive Officer Brandon Moore said in the statement.

The number of home repossessions is likely to rise about 25 percent from the more than 804,000 properties seized last year as lenders resume foreclosure actions, Daren Blomquist, a spokesman for RealtyTrac, said in a telephone interview. Settlement talks are continuing with state attorneys general over documentation flaws, known as “robo-signing,” that surfaced in October 2010. About 400,000 additional homes would have been repossessed without the slowdown, Blomquist said. The ramp-up in foreclosure proceedings that began in 2011’s second half is likely to continue this year, Moore said in the statement. Foreclosure filings totaled almost 2.7 million last year as some properties got multiple notices, RealtyTrac said.

Nevada had the nation’s highest rate of foreclosure filings per household for the fifth straight year, at one in 16, while total filings were down 31 percent from 2010. A new state law that took effect in October requires lenders to file an additional affidavit before starting the foreclosure process. Arizona had the second highest foreclosure rate, with one in 24 households receiving a notice, and California ranked third at one in 31. Georgia was fourth, with one in 37, and Utah fifth at one in 43, according to RealtyTrac. Michigan, Florida, Illinois, Colorado and Idaho also ranked among the states with the 10 highest rates in 2011.

Las Vegas had the highest rate among metropolitan areas with populations over 200,000, at one foreclosure filing per 14 households. Stockton, Modesto, Vallejo-Fairfield and Riverside- San Bernardino, all in California, ranked second through fifth. Phoenix; Merced, California; Reno, Nevada; Bakersfield, California; and Sacramento, California, rounded out the top 10, said RealtyTrac, which sells default data from more than 2,200 counties representing 90 percent of the U.S. population.

Number of people in the streets demanding justice for the crimes of Wall St. = a few.
Number of people charging big bucks on their credit cards to see the Broncos lose.= thousands.
Priceless.

Just passing thru the room while spouse was watching the games. ALL those people, hundreds of thousands, either at the games or watching on TV. How many have a clue what is to befall this country, the world.

Or maybe some are thinking that this is the last game I can attend so I'm going to enjoy it.

http://thehill.com/blogs/on-the-money/1091-housing/204163-overhaul-of-fannie-mae-and-freddie-mac-unlikely-this-year

An overhaul of Fannie Mae and Freddie Mac is unlikely again this year despite recent Republican efforts to move the issue up the agenda. Congressional Republicans, along with some Democrats — and even GOP presidential candidate Newt Gingrich — are renewing calls to craft an agreement to reduce the involvement of Fannie and Freddie in the nation's mortgage market. But without a broader accord, passage of any legislation this year is slim, housing experts say.

Jim Tobin, senior vice president of government affairs for the National Association of Home Builders, concedes that despite a mix of Democratic and Republican proposals, including a push by the Obama administration last year, congressional leaders probably won't get far this year on a plan for Fannie and Freddie, the government-controlled mortgage giants. Tobin said there are "good ideas out there" and while he expects the House to put some bills on the floor and possibly pass legislation, the Senate is likely to remain in oversight mode without any "broad-based legislation on housing finance...We're bracing for a year where it's difficult to break through on important policy issues," he said this week. While the issue makes for a good talking point, especially in an presidential election year, congressional efforts are largely being stymied by the housing market's sluggish recovery, prohibiting the hand off between the government and private sector in mortgage financing, housing experts say. David Crowe, chief economist with NAHB, said that the market has hit rock bottom and is now undergoing a "slow climb out of the hole."

The House has taken the biggest steps so far — by mid-July the Financial Services Committee had approved 14 bills intended to jump-start reform of the government-sponsored enterprises. "As we continue to move immediate reforms, our ultimate goal remains, to end the bailout of Fannie, Freddie and build a stronger housing finance system that no longer relies on government guarantees,” panel Chairman Spencer Bachus (R-Ala.) said last summer. Meanwhile, a number of GOP and bipartisan measures have emerged — Democrats and Republicans generally agree Fannie and Freddie are in need of a fix but their ideas still widely vary. There are a handful of bills floating around Congress, including one by Reps. John Campbell (R-Calif.) and Gary Peters (D-Mich.), and another by Reps. Gary Miller (R-Calif.) and Carolyn Maloney (D-N.Y), which would wind down Fannie and Freddie and create a new system of privately financed organizations to support the mortgage market.

"Every one of those approaches replaces them (Fannie and Freddie) with what they think is the best alternative to having a new system going forward that would really fix the problem and would really give certainty to the marketplace and allow housing finance to come back, and therefore housing to come back, as well," Campbell said at a markup last month.

FANNIE AND FREDDIE WERE FINE--UNTIL THEY WERE FORCED TO BE PRIVATIZED--SOLD OFF TO THE HIGHEST BIDDERS, IN OTHER WORDS...

http://www.thenation.com/article/164216/its-time-debt-forgiveness-american-style?page=full

The rebellious citizens occupying Wall Street shock some people and inspire others with their denunciations of bankers, but everyone seems to know what they are talking about: it is the barbaric and suffocating behavior of the nation’s largest banks (yes, the same ones the government rescued with public money). Right now, these trillion-dollar institutions are methodically harvesting the last possible pound of flesh from millions of homeowners before kicking these failing debtors out of their homes (the story known as the “foreclosure crisis”). This is a tragedy, of course, for the people who are dispossessed. For the country, it is a generational calamity.

“We are in the reverse New Deal,” Christopher Whalen, a savvy banking expert at Institutional Risk Analytics, told me. He meant that events are dismantling the ingenious engine that helped generate America’s broad middle class. Homeownership was the main driver in accomplishing that great social change. For three generations, people of modest means could buy a house knowing it would secure their place in the middle class and allow them to accumulate significant savings. If the family held the standard thirty-year, fixed-rate mortgage, they were painlessly saving for the future every time they made a payment, acquiring greater equity in the home as they did so. With moderate inflation, the house would steadily increase in value even as their monthly mortgage payments stayed the same. So the cost of housing actually declined for the family, as a percentage of its income. Meanwhile, the accumulating equity became a nest egg for retirement or something to pass on to the kids.

That virtuous process, originated by New Deal reforms, is in peril and has already shut down for tens of millions, especially working-class families whose incomes are no longer rising. As described by the brokerage investment firm Amherst Securities, the housing picture is ugly. Among the 55 million families with mortgages, one in five is underwater—they owe more on their mortgage than their house is worth—or already delinquent. That’s 10.4 million families who are sliding toward failure and foreclosure. Virtually all of them will become renters, since no bank is likely to give them a new mortgage.

As a result, the housing market will remain depressed for years—too many houses for sale, too few buyers. Amherst estimates excess supply of 4–6 million in the next six years. Economic recovery may have to wait until that surplus is gone, because the housing sector has always led the way out of recession. The more housing supply exceeds demand, the more prices fall. The more prices fall, the more families get sucked into the deep muddy. The vicious cycle is known in the industry as the death spiral. So far, there’s no end in sight...

Too many countries are too optimistic about recovery when all the evidence is now pointing towards a eurozone-wide recession. Contracting output will only exacerbate the revenue shortfalls which have already placed countries on unsustainable fiscal paths.

Read more >>
http://link.ft.com/r/DHGUVV/MSGOVS/204L2/L93974/C4R2YY/XL/t?a1=2012&a2=1&a3=16

Faltering performance from Goldman Sachs, Morgan Stanley, Citigroup and Bank of America could dent optimism over the pace of corporate recovery

Read more >>
http://link.ft.com/r/UXDMSS/ZG4KG3/204L2/R3HUWO/FK3V8I/28/t?a1=2012&a2=1&a3=16


WHEN ARE THESE MORONS EVER GOING TO LEARN AND/OR ADMIT THAT CORPORATIONS CANNOT RECOVER BEFORE THE PEOPLE DO, BECAUSE THE PEOPLE ARE THE SOURCE OF ALL WEALTH AND GROWTH OF WEALTH!??

The move to involve German chancellor Angela Merkel and French president Nicolas Sarkozy comes after restructuring talks with investors broke down

Read more >>
http://link.ft.com/r/WDI4RR/97SJNC/Z87P0/XH0H9K/2OXP9A/SN/t?a1=2012&a2=1&a3=16

SO, BRINGING IN THE ENFORCERS, EH?

http://www.nytimes.com/2012/01/16/world/europe/europe-now-doubts-that-greece-can-embrace-reform.html?hp

As Greece and its lenders prepare for another week of tense negotiations, European officials now say that the task is less to help the country through its troubles than to avoid the sort of uncontrolled default that many experts fear could threaten the global financial system. Officials from the so-called troika of foreign lenders to Greece — the European Central Bank, European Union and International Monetary Fund — have come to believe that the country has neither the ability nor the will to carry out the broad economic reforms it has promised in exchange for aid, people familiar with the talks say, and they say they are even prepared to withhold the next installment of aid in March. TAKE THAT! HEDGE FUNDS!

Adding to the anxieties in financial markets, talks broke down Friday between the Greek government and private lenders over a plan to reduce Greece’s debt by $130 billion, a “voluntary” default that the troika has demanded before extending more aid. Those negotiations, aimed at forcing hedge funds and other private holders of Greek debt to accept large losses in order to make the country’s debt load more manageable, will resume Wednesday amid rising concerns about the consequences of failure.

The markets have taken into account a voluntary default by Greece, most experts say. But financial experts fear the possibility of an “involuntary” default if the negotiators are unable to reach an agreement. That could unleash violent market reactions that could conceivably produce another market cataclysm like the 2008 bankruptcy of Lehman Brothers and throw the world into another recession.

Fanning those fears is a growing conviction among the Greek political establishment and the country’s lenders that the old dynamic — with Greece pretending to make structural changes and its lenders pretending to save it from default — has become untenable, people close to the talks say...“The prime minister is a fine personality — he’s educated, he’s honest, he’s the best you can get around. But no one is helping him,” said George Kirtsos, the owner of a weekly newspaper, The Athens City Press. “Those that take the decisions at a national level believe that Greece will not make it.”...There is considerable posturing in these sorts of negotiations, and the troika has threatened to withdraw aid in the past, only to approve the next loan installment. It may do so again despite its misgivings, because the alternative of an uncontrolled default is too risky. But it will do so only if negotiations with private bondholders can be completed successfully. But, amid a stream of gloomy news from Europe, including the downgrade of the debt of France and eight other countries, the sense that default is inevitable is growing. “When you simply go over the bare figures I can’t really imagine another scenario,” said Michael Fuchs, a leading member of Chancellor Angela Merkel’s Christian Democratic Union in the German Parliament....
Greece’s dire economic condition can hardly be overstated. After two years of tax increases and wage cuts, Greek civil servants have seen their income shrink by 40 percent since 2010, and private-sector workers have suffered as well. More than $75 billion has left the country as people move their savings abroad. Some 68,000 businesses closed in 2010, and another 53,000 — out of 300,000 still active — are said to be close to bankruptcy, according to a report issued in the fall by the Greek Co-Federation of Chambers of Commerce. “It’s an implosion — it’s an endless sequence of implosions from bad to worse, to worse, to worse,” said Yanis Varoufakis, an economics professor at the University of Athens and commentator on the Greek economy. “There’s nothing to stop the Greek economy losing 60 percent of its G.D.P., given the path it is at.” Still, more than 70 percent of Greeks say they want to stay in the euro zone — and they continue to believe that Mr. Papademos is the right man for a tough job. Yet the prime minister faces stiff, if stealthy, resistance from politicians who calculate that it makes no sense to risk their careers backing radical changes in the Greek economy that may ultimately fail to solve the problems....

http://uk.reuters.com/article/2012/01/16/uk-greece-idUKTRE80F0IN20120116

(Reuters) - Greece sent senior officials to Washington on Monday for meetings with the International Monetary Fund as it raced against the clock to break a deadlock in debt swap talks that has prompted new fears of an unruly default.

Barely a month after an injection of bailout funds helped avert bankruptcy, Greece is back at the centre of the euro zone crisis as fears of a default and a subsequent euro zone exit overshadow a mass credit downgrade of euro zone countries.

Athens needs a deal with the private sector within days to avoid going bankrupt when 14.5 billion euros (11.9 billion pounds) of bond redemptions fall due in late March. But talks with its creditor banks broke down without an agreement on Friday.

Greece put a brave face on the standoff.

Despite some signs of progress at a national level, collective political mismanagement was the overriding factor for S&P

Read more >>
http://link.ft.com/r/WDI4RR/97SJNC/Z87P0/XH0H9K/JEL7OS/SN/t?a1=2012&a2=1&a3=16

http://www.marketwatch.com/story/gold-futures-gain-in-asian-trading-2012-01-16

HONG KONG (MarketWatch) – Gold futures advanced in electronic trading on Monday after Friday’s euro-zone debt downgrades by Standard & Poor’s focused investor attention back on Europe’s debt troubles.

Gold for February delivery /quotes/zigman/656382 GC2G +0.81% traded at $1,640.40 an ounce at midday in East Asia, compared to its previous U.S. settlement of $1,630.80 on the Comex division of the New York Mercantile Exchange.

Gold futures ended 1% lower on Friday in the U.S. session but were still up 0.9% for the week.

Scotia Capital’s managing director Sunil Kashyap in Hong Kong said there seemed to be support from regional Asian buyers on price dips

http://www.time.com/time/business/article/0,8599,2104519,00.html

...Investors had plenty of time to brace for the bad news. S&P put 15 countries, including Germany and France, on notice last month that they faced potential downgrades. The advance notice means the downgrades likely won't panic financial markets and drive up European governments' borrowing costs much higher than they already are. "People knew it was coming, and it was only one rating agency," said Marc Chandler, head of global currency strategy at Brown Brothers Harriman. Moody's and Fitch Ratings have yet to follow S&P.

Stocks fell Friday as downgrade rumors reached the trading floors of Europe and the United States. But the declines were nothing like the wrenching swings of last summer and fall, when the debt crisis threw the markets into turmoil.
When the news came Friday, it wasn't as harsh as it might have been. S&P had threatened last month to knock France's credit rating down two notches. Instead, it settled for one, demoting France to AA+, just where it put the U.S. credit rating in an August downgrade. S&P spared Europe's mightiest economy the indignity of a downgrade, leaving Germany with its AAA rating intact. Austria lost its AAA status, while Italy and Spain fell by two notches and Portugal's debt was consigned to junk. S&P also cut ratings on Malta, Cyprus, Slovakia and Slovenia...The downgrades in Europe are "going to create bad headlines for a day or two," said Jacob Funk Kirkegaard, research fellow at the Peterson Institute for International Economics. But "there's no underlying new information ... This will be quickly forgotten."

...The downgrade of France could have consequences. It will put pressure on the fund that Europe uses to bail out the weakest countries that use the euro. The fund, after all, is only as strong as the countries that contribute to it, and France is the second-biggest contributor after Germany. The bailout fund may have to pay higher interest rates to borrow — and may have to charge higher rates to countries like Ireland that rely on it. For now, the fund still has a rating of AAA. That means that it can borrow on the bond market at low rates.

http://www.france24.com/en/20120115-sarkozy-ratings-drop-aa%20-austerity-france-debt-crisis

President Nicolas Sarkozy, in his first public reaction to France's credit rating downgrade, called for calm Sunday and vowed to carry out more reforms to lead the country out of crisis. "The crisis can be overcome provided that we have the collective will and the courage to reform our country," he said at a memorial service for a former prime minister in the central town of Amboise. "We must resist, we must fight, we must show courage, we must remain calm," said the right-wing leader, who is trailing in the polls just three months ahead of presidential elections. Sarkozy, who has promised there would be further austerity packages this year, said he would give an address to the nation at the end of the month and would tell the French about "the important decisions that need to be made without delay."

He was due Wednesday to host a "social summit" with unions and employers to try to make France's job market more flexible and halt rising unemployment. His government has also promised to cut payroll charges on employers and workers to try to make French firms more competitive, and to recoup the revenue mainly by raising value added tax. Sarkozy has also vowed to quickly impose a new tax on financial transactions, a move which has irked his European partners. The president made no mention in his speech in Amboise of Friday's downgrade by Standard & Poor's, which cut France's top triple-A credit rating, which it has held since 1975, by one notch to AA+. His main opponent in the presidential race, the Socialist Francois Hollande, said Saturday that Sarkozy had staked his reputation on keeping the top credit rating but now, he said, it was clear that he had failed miserably.

Analysts said the downgrade of France has widened a gulf between Europe's north and south, leaving Paris politically weaker and Berlin stronger amid tough negotiations to resolve the eurozone crisis. Sarkozy -- who hosted crisis talks with his top economics ministers at the Elysee on Friday -- reportedly told allies last month: "If we lose the triple-A, I'm dead." He had staked his re-election bid on convincing voters that he was the only candidate with the stature and experience to save France from economic meltdown. Sarkozy justified pushing through two austerity packages as necessary to defend France's triple-A rating. He has said he will not impose a third package this year. An IFOP poll on Thursday showed that in the first round of the election in April, Hollande would take 27 percent of the vote, followed by Sarkozy at 23.5 percent and far-right National Front leader Marine Le Pen at 21.5 percent. Friday's downgrade left a sizeable hole in Sarkozy's reelection campaign. "It is the end of the myth of the protecting president," said Le Pen.

The downgrade added to already bleak economic figures for France, where unemployment is pushing towards the three million mark. INSEE, the national statistics office, says it expects France to fall into a brief recession, with the economy contracting 0.2 percent in the three months to December and another 0.1 percent in the first quarter of 2012...S&P said the downgrade of France "...reflects our opinion of the impact of deepening political, financial, and monetary problems within the eurozone." It said the outlook on the long-term rating on France is negative, which indicates that it believes that there is at least a one-in-three chance the rating could be lowered further in 2012 or 2013.

http://www.spiegel.de/international/europe/0,1518,809143,00.html

With Standard and Poor's decision to punish nine euro-zone countries with downgrades and to strip France and Austria of their AAA ratings, Germany is likely to face additional burdens in the euro bailout fund in order to ensure cheap lending to save the common currency. Some are calling for Chancellor Angela Merkel to abandon plans for a tax cut in Germany. In its decision on Friday, S&P stated that Germany's rating is in excellent condition, but experts in the country fear that Berlin's contributions to the euro bailout will have to be considerably greater than initially planned. And Chancellor Angela Merkel of the conservative Christian Democratic Union (CDU) said the downgrade of the nine countries will increase pressure for all the euro-zone countries to solve their budget and debt problems.

After a meeting of CDU leaders on Saturday, Merkel said, "We are now challenged to implement the fiscal compact even quicker ... and to do it resolutely, not to try to soften it." Merkel was referring to the deal agreed in December by 26 European Union member states, with the exception of Britain, to enter into a fiscal pact that would see consolidated budget legislation in all countries and sanctions for violaters. The move by S&P, she said, had not come as a surprise. "We have taken note of this decision," she said. Merkel also noted, however, that "S&P is just one of three ratings agencies."

Frank Schäffler, the finance policy spokesman for the Free Democratic Party (FDP), Merkel's junior coalition partner, said he felt his criticism of Germany's participation in the European Financial Stability Facility (EFSF), the current euro bailout fund, had been indirectly confirmed by S&P. He said the downgrading was likely to have direct consequences for Berlin. The downgraded rating for Austria alone, he told the financial daily Handelsblatt, would mean that "Germany would no longer just have to carry 40 percent, but close to 75 percent (of the burden) to ensure the euro bailout fund EFSF retained its AAA rating."

He said the current German guarantee of €211 billion would no longer be sufficient in order to achieve the volume of aid that had been originally planned. "Over time, that will also impose a burden on the German rating," the FDP politician warned, saying that the "socialization of losses" through the bailout fund could not go on forever.

MORE

http://www.macrobusiness.com.au/2012/01/sp-is-right-about-europe/

The outcome of these downgrades are as follows:

Country____Old Rating___New Rating___Cut

Austria______AAA________AA+_______One notch, loses top rating
Belgium_______AA________AA________None
Cyprus_______BBB________BB+_______Two notches to junk
Estonia_______AA-_______AA-________None
Finland______AAA________AAA________None
France______AAA________AA+________One notch, loses top rating
Germany____AAA ________AAA________None
Ireland_____BBB+________BBB+_______None
Italy_________A_________BBB+_______Two notches
Luxembourg_AAA_________AAA________None
Malta________A___________A-________One notch
Netherlands_AAA_________AAA________None
Portugal____BBB-__________BB________Two notches to junk
Slovakia_____A+___________A_________One notch
Slovenia____AA-__________A+_________One notch
Spain ______AA-__________A__________Two notches

Given the performance of the rating agencies in the lead up to the GFC, and the corresponding fall out, it would be easy to set aside this news as yet another overzealous attempt by the industry to compensate for their poor performance during that period. I expect some market players to do just that, however in my opinion in this case that would be a mistake.

As Macrobusiness readers will know, my long running assessment of the European financial crisis is that the competiveness imbalance between the core and periphery is the major issue and, although some of the current policies being implemented are stated to be aimed at addressing this, the reality is that they are actually making the problem worse. The latest Spanish employment figures are once again a reminder that austerity policy aimed at already deflating economies in order to make them more competitive are in fact counter-productive. What we have seen and continue to see from the periphery nations is a not growth at all, but a reduction in industrial production and a rise in employment, and therefore a renewed burden on the government sector meaning its attempts to deleverage fail while the private sector weakens further....As I said in my weekend post the issues of Europe aren’t purely economic. What we have also seen over the last 2 years is economics wrapped in a political ideology. The idea that private sector players should somehow be immune to the fallout of the failings of the European monetary system even though many of those same players profited immensely from its rise. It is well known that if you purchase an equity share or an unsecured bond then you are rewarded with an interest rate that reflects that there is a risk that you may not get repaid. The riskier the investment the higher the compensation, it is quite simple really, yet for some reason the political-elite of Europe insist that these basic tenants of investment need not apply.

This ridiculous situation simply adds to the problems because nations that have no capacity to deleverage without deflating their real economic outputs, and therefore income, are being forced to meet their existing obligations. It is a simple fact that “bills that can’t be paid won’t be”, yet for some odd reason this message appears to be lost whenever an EU summit gathers. The fact is that without some form of large compensatory income non-competitive nations will not be able to meet their existing obligations under a regime of supra-European austerity. What is likely to occur, as has become even more evident in the most recent European PMIs, is that the core nations will be become relatively stronger, the weak weaker, but overall the whole economy of Europe will shrink. MORE

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

Oil prices edged above $99 a barrel in Asia on Monday amid concerns that tensions in the Middle East could hurt crude supply but gains were tempered by jitters over Europe's ratings downgrade.

Benchmark crude for February delivery was up 48 cents to $99.16 a barrel at late afternoon Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract fell 40 cents to settle at $98.70 in New York on Friday.
Natalie Robertson, commodities analyst with ANZ Banking Group in Melbourne, said fears of supply disruption amid ongoing tension over Iran's nuclear program and a crippling nationwide strike in Nigeria supported crude prices but trade was subdued by headwinds from the declining debt crisis in Europe.

...A recession appears likely in Europe, and huge spending cuts will likely reduce European energy demand this year.
Robertson said there was a downward bias for crude prices given soft demand and weak sentiment in Europe but forecast a floor of $95 a barrel before sentiment improves in the second half of the year.
In other energy trading, heating oil was up 0.1 cent to $3.06 per gallon and gasoline futures rose 3.1 cents to $2.76 per gallon. Natural gas fell 14.3 cents to $2.55 per 1,000 cubic feet

http://www.reuters.com/article/2012/01/16/markets-oil-idUSL3E8CG17420120116

* Iran warns of consequences if Arabs back oil sanctions

* Nigerian president and unions fail to strike deal

* Asian shares fall as S&P downgrades 9 euro zone countries

* Brent target lowered to $108.75/bbl -technicals (Updates prices)

http://registeredrep.com/wealthmanagement/retirementplan/when_youre_66_a_checklist_on_social_security_and_medicare_112/


The oldest baby boomers will turn 66 this year. And, with all due apologies to Sir Paul McCartney, it's a much more significant number than 64 for retirement planning. As you advisors know, when you're 66, you can claim full Social Security benefits; 65 is a close runner-up, since it's the year most seniors will file for Medicare.

Social Security and Medicare may be outside the direct purview of most financial advisors. But advisors should understand the ins and outs of filing for both of these critical retirement benefits, and check up to make clients pursue smart strategies and file correctly. Social Security replaces one-third of income for the average retiree, and it's an especially important source of longevity insurance for seniors who reach very advanced ages – especially women. And Medicare is a critical component in meeting the escalating cost of health care in retirement.

With that in mind, here's a checklist of key points to remember when your clients are no longer 64. (And don't forget: You'll be older too -- if only down the long and winding road. Sorry, couldn’t resist the Beatles pun.)

Social Security

Filing age. About half of all Americans file for Social Security at age 62–the first year of eligibility for benefits. But for most, it’s a costly mistake that will mean foregoing thousands of dollars in higher benefits. Although seniors can begin receiving checks at 62, annual benefits will be boosted for every year that they wait, up to age 70.

Many seniors worry about the math of lifetime benefits — that is, they fear they won’t live long enough to make delayed filing “pay off.” But those concerns are off the mark.

Social Security is built around actuarial principles – essentially, the mathematics of risk. And a central actuarial idea behind Social Security is the Normal Retirement Age (NRA), a rule used by the Social Security Administration to ensure the system pays out fairly among all beneficiaries. But the main value of Social Security is replacement of current income, not accumulation of assets. That’s where filing later can help.

Monthly benefits for earlier filers are reduced accordingly to avoid paying then higher lifetime benefits. Under the rules, annual benefits are reduced 8 percent for most of the years you start early, based on an actuarial projection of average longevity. For a 62-year-old filing this year, the net effect will be a permanent reduction of annual benefits of 25 percent.

On the other hand, the SSA will bump up payments by eight percent for every year a senior delays filing beyond the NRA up until age 70, after which credits for waiting no longer are awarded.

Working while receiving benefits. The labor force is getting more gray as Americans work longer. If your client files for Social Security at her NRA, she can earn an unlimited amount of income and receive Social Security benefits. However, earlier filers are hit with a penalty on income over $14,640. (Social Security defines “income” in this context as wages from employment, or net earnings from self-employment). If earnings exceed the limit, $1 will be deducted from benefit payments for every $2 earned over that amount.

However, lifetime benefits wouldn’t be reduced because the withheld benefits are added back into benefits after the senior reaches the NRA.

Spousal benefits: Married couples need to pay attention to the interaction of both spouses’ benefits; certain provisions of the Social Security law can create powerful amplifying effects when the higher-earning spouse waits to file for benefits until the NRA or beyond. The bottom line is that it’s generally beneficial for the higher-earning spouse to delay taking Social Security benefits until the NRA or beyond. More details on the spousal rules can be found here and here.

Medicare

Filing isn't automatic. Although Medicare eligibility begins at age 65, enrollment is only automatic for seniors who already have begun receiving Social Security benefits. In that case, the government mails a Medicare card three months before the date of eligibility. Clients who aren't already receiving Social Security can apply for Medicare through the Social Security Administration, either by visiting a local office or online at the agency's website.

To ensure that your clients’ Medicare Part B coverage start date is not delayed, your clients should apply three months before the month you turn 65, or up to 3 months after.

File on time. It's best for your clients to start thinking about filing for Medicare before retirement, because failing to file within the enrollment window can lead to substantial Part B premium penalties – the monthly Part B premium jumps 10 percent for each full 12-month period that a senior could have had coverage but didn't sign up. A mistake can be costly; a senior who fails to enroll for five years ultimately would face a 50 percent Part B penalty – 10 percent for each year.

“If you’re still working and have healthcare coverage, Medicare’s probably not on your radar. But it’s important to think about it a little bit in advance, especially when you hit 65,” says Adrienne Muralidharan, senior Medicare specialist for Allsup, which offers Medicare plan selection services. “If you don’t enroll in Medicare when you are first eligible, you may face stiff penalties when you do go to enroll – and those penalties will be with you for as long as you rely on Medicare.”

Coordinate with employer-based coverage. For seniors who still are employed at age 65, Medicare is the primary payor under certain circumstances, not in others. At companies with fewer than 20 employees, Medicare is the primary payor; at larger companies, the employer is primary. In the latter situation, a senior can postpone filing for Parts A (hospitalization) or B (outpatient services), although many choose to enroll for Part A anyway since it doesn't require premium payments. Seniors can enroll later without penalty for up to eight months following retirement.

Employed seniors who opt to postpone enrollment should approach this decision with great caution – it should be discussed in person with the Social Security Administration and a workplace plan administrator. And, it's best to notify Medicare at age 65 of a decision not to file in order to ensure that there won't be problems with premium penalties later on. This can be done by checking off a box on the back of a Medicare card that has been sent, by calling the Social Security Administration or through the SSA website.

Traditional Medicare or managed care? Seniors can choose between traditional fee-for-service Medicare or Medicare Advantage, a managed care option that offers all-in-one medical and drug coverage. When a senior joins an Advantage plan, Medicare provides a fixed payment to the plan to cover Part A and Part B; there usually are additional co-payments and deductibles, depending on the plan. Here's a detailed guide to the ins and outs of Advantage plans.

Watch out for premium surcharges. High-income seniors pay surcharges on premiums for Part B and Part D. The surcharges are paid by individuals with $85,000 or more in annual income, and joint filers with income over $170,000, and they scale upwards through four income brackets. The surcharges affect just 5 percent of seniors, since most are retired and don't have that much income. But if you do have clients in these brackets, the payments are substantial.

Consider strategies that might keep the client under the income trigger. One possibility is taking portfolio withdrawals from a Roth IRA, which are not counted in Social Security's definition of taxable income. Or, alternate withdrawals from taxable accounts so that the client doesn't have to pay the surcharge every year.

Mind the gap. Many Medicare beneficiaries opt to purchase an optional Medigap policy, which charges an extra premium but caps out-of-pocket costs. If your clients plan to buy a Medigap policy, it's best to do so during the six-month open-enrollment period, which is open for six months at the time they turn 65 or enroll in Medicare Part B. While no late enrollment penalties are levied, after the open enrollment, seniors may be required to take medical screening tests and can be rejected because of preexisting conditions.

Resources
The non-profit Medicare Rights Center offers an excellent, free online toolkit to assist professionals with Social Security and Medicare enrollment issues.

Allsup offers a free guide to Medicare filing.

The federal government publishes an annual – and very comprehensive – guide to Medicare annually. Click here to download the 2012 edition of Medicare & You.

Medicare produces a guide that explains how Medicare works with other kinds of insurance or coverage and who should pay seniors' bills first.

My online guides to Medicare and Social Security basics are available at RetirementRevised.com

Visit the Medicare website to download a guide to Medigap plans.

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

About the Author
Mark Miller is a journalist and author who writes about trends in retirement and aging.

Mark edits and publishes RetirementRevised.com, featured as one of the best retirement planning sites on the web in the May 2010 issue of Money Magazine. He is a columnist for Reuters and also contributes to Morningstar and the AARP Magazine. Mark is the author of The Hard Times Guide to Retirement Security: Practical Strategies for Money, Work and Living (John Wiley & Sons, 2010).

http://www.aljazeera.com/news/europe/2012/01/201211611246874525.html

French President Nicolas Sarkozy is in Spain for talks with Mariano Rajoy, the country's new prime minister, that are likely to be dominated by a sweeping credit downgrade that has reignited fears over the financial stability of the eurozone.

Sarkozy, in remarks published on Monday, said he wanted to applaud the "extremely courageous" decisions taken by Spain to confront the crisis, and said he would present new reforms at the end of the month to get France growing again.

Standard & Poor's, a New York-based ratings agency, cut the credit rating of nine debt-laden European countries on Friday, including stripping France of its top-notch AAA rating and slashing Spain by two notches to A from AA-.

Sarkozy has been optimistic, saying the crisis would give France "the opportunity to make decisions quickly, because the situation demands it".

http://www.aljazeera.com/news/asia/2012/01/201211663514668124.html

India has opened its doors to individual foreign investors who want to put their money into Indian stocks.

The country has up until now limited how much foreigners can own or invest in Indian businesses by regulating it through packaged products offered by banks and financial institutions.

With India's economic growth increasing, opening the stock market to foreign investors indicates the country's willingness to do business with the global business community. But some people do not agree that this is a good move.

Al Jazeera's Sohail Rahman reports from Mumbai.

*** video report at link

http://www.slate.com/articles/business/small_business/2012/01/competition_and_big_business_should_we_ease_up_on_antitrust_enforcement_because_large_companies_innovate_more_.html

Americans love capitalism, and we also like underdogs, so nothing tickles the culture’s fancy quite like a dynamic small business. But when we boost small firms, are we selling short the value of big ones? That’s what Michael Mandel, chief economic strategist of the Progressive Policy Institute, argues. In a memo published last December, he contends that it’s big companies, not scrappy startups, that are the real drivers of innovation in the modern economy, and that as a consequence the United States needs to ease up on antitrust enforcement. The argument’s gained partial assent everywhere from Mother Jones on the left to National Review on the right to the Economist in between. But while there’s certainly something to it, the purported policy conclusion that we need to start caring less about competition policy is dangerously misguided.

Let’s start with what’s right about Mandel’s argument. An increasing body of formal research has found that a lot of small business’ role in job creation and economic growth is really just churn. Launching a small company is a risky endeavor, so in any given year lots of small businesses are shutting their doors and laying off their employees. This is counterbalanced by tons of new starts and minor employment increases, creating a huge gross flow of jobs but not necessarily a large net flow. The actual job-creation heroes of the economy are the relatively tiny minority of small businesses that grow fast and become big. Most small businesses, however, aren’t like that. The local hair salon or dental practice is not on the verge of becoming the next Google. Nor is the typical small business especially innovative, often by design. The majority of new restaurateurs, for example, have no intention of revolutionizing the food-service industry and expanding to become a multinational company. Small-business owners are happier than the average American, presumably because they enjoy more autonomy and control over their lives, and that’s an ample reason to become an entrepreneur.

Mandel is also right that large companies have the capacity to dedicate more funds to formal research and development activities. If you’re small, it’s difficult to make expensive investments with uncertain returns. Mandel, citing National Science Foundation data, writes that “big companies—those employing over 5,000 workers in the U.S.—spent an average of $3,368 per worker” while firms with 5 to 99 employees in the United States spent just $793 per worker.

Giants in innovation. In their wildest dreams, maybe.

http://www.americanbanker.com/issues/177_7/jpmorgan-chase-consumer-debt-collection-1045606-1.html?zkPrintable=1&nopagination=1

JPMorgan Chase & Co. has quietly ceased filing lawsuits to collect consumer debts around the nation, dismissing in-house attorneys and virtually shutting down a collections machine that as recently as nine months ago was racking up hundreds of millions of dollars in monthly judgments. A sampling of court records in the major cities in five states shows that Chase collection suits have virtually disappeared. In a sixth state, Illinois, contract attorneys continue to file small-dollar cases, though at a reduced rate. It is unclear whether Chase has stopped pursuing collection on many claims nationwide, or if intends to pursue the debts in some other fashion. The bank has not explained its apparent moratorium and declined comment. Chase's halt does, however, follow scattered defeats in state courts and a whistle-blower's allegation that it falsely overstated the balances of thousands of delinquent accounts it sold to a third party. Former Chase employees and debt collection experts insist that the bank would not have abruptly retreated from its collections efforts in the absence of trouble. In a sign that Chase acted with urgency, numerous regional collections teams were fired in mid-2011 at the order of the New York bank's headquarters, according to people familiar with the events. "Nobody told anybody anything. It was very traumatic," says a former Chase attorney who asked to remain anonymous because of a nondisclosure agreement. "I think there were investigations by the Office of the Comptroller of the Currency and other government entities. If we're not there, we can't be interviewed."

The OCC declined to comment. Chase declined to say whether its moves were related to government investigations or legal concerns. In an email to American Banker, a spokesman for the bank called its collection strategy "proprietary."...Chase and other credit card issuers have historically filed lawsuits to compel consumers to repay defaulted loans. Such suits typically involve only a few thousand dollars each, but en masse add up; Chase recovered $1.4 billion from defaulted credit card accounts last year, according to its financial filings with the Securities and Exchange Commission. (Not all of that necessarily came from judgments.)

Jerry Salzberg, a lawyer who represents debt collectors and banks in the Chicago area, was familiar with Chase's dismissed Illinois collections attorneys, whom he describes as experienced, productive and profitable. "Someone from New York brought in the three lawyers, kicked them out with no warning and dismissed all their cases," Salzberg says. "These were people who were by the book. … If they weren't the most profitable of Chase's regional collection teams, they sure as hell were making a lot of money for the bank. … Obviously something happened." Chase collections cases have dropped off sharply in Illinois in recent months, in addition to disappearing in five other states, an American Banker review indicates. The review focused on California, Florida Maryland, New York and Washington, where local court records are electronically searchable. In Dade County, Florida, which includes Miami, Chase filed 640 collections claims in January 2011, most seeking between $3,000 and $12,000. On Jan. 4 alone it filed suits seeking over $200,000, which represents a rate of $50 million annually. But in April of last year, Chase ceased filing claims altogether in Dade County. That month, The Wall Street Journal first reported that Chase had dropped "more than a thousand" consumer debt cases around the country. Some contract attorneys cited documentation irregularities for the move, the paper reported. Robo-signing, or the high-volume production of signed legal documents, has been a key element of the governmental and media foreclosure reviews. Chase's current pullback raises at least the possibility that at least some banks may have documentation problems in other business lines.

Academics and attorneys who defend consumers against debt claims have leveled their heaviest criticism at collection agencies rather than banks themselves. The agencies allegedly seek on a regular basis to collect debts in the absence of legitimate documentation. Efforts to collect a bank's own debt generally have been regarded by consumer advocates as more credible than those by collections agencies, which pursue secondhand claims. "If sloppy record keeping and problems with false affidavits is a problem with mortgages, it's 100 times bigger in credit card accounts," says Michelle Weinberg of the Legal Assistance Foundation of Metropolitan Chicago. Even so, Weinberg says, "On documentation issues, it wouldn't occur to me that Chase wouldn't be able to prove up its own account." So far judges have questioned the validity of banks' own consumer debt records in only a few low-profile cases. However, a whistle-blower claim settled last year raises further questions. Linda Almonte, a former team leader in Chase's San Antonio credit card services division, accused the bank of firing her for objecting to the sale of $200 million in legal judgments obtained by bank attorneys. Half the accounts lacked adequate documentation of judgment and one-sixth listed the wrong amounts owed, Almonte claimed in a suit filed in U.S. District Court for the Western District of Texas. In its response, Chase did not dispute inaccuracies in the debt balances and documentation. Instead, it said its sales agreement allowed for errors and thus was proper. "[T]he parties explicitly agreed that the judgments were purchased 'as is' and "with all faults," Chase's attorney wrote. Chase was unsuccessful in getting the case dismissed and settled it on undisclosed terms last April; it ceased filing new consumer debt lawsuits in many states the same month.

MORE

http://www.macrobusiness.com.au/2012/01/the-five-stages-of-economic-grief/

So, we go on holiday expecting the worst and when we return it’s all good! Europe is fixed (at least it was before S&P interfered), the US is powering, property and equity markets are set to boom. Holidays are wonderful things. There is no substitute for the calm that comes with relaxation and the perspective that that brings...revelation has overtaken me during the holidays. With a perspective cleared of the day-to-day cut and thrust of global markets, it was much easier to find clarity in long term strategic thinking. And, like my peers in global markets, I have refreshed my outlook. The direction for the world economy I described last year, with its ceaseless crises and troubled growth, is no longer so salient to from my revitalised perspective. These crises are merely symptoms of a greater underlying shift. And that shift takes me not further from my thoughts of last year but more deeply into them.

The paradigm shift of which I speak is not some new crisis in Europe. Nor is it the US’ emergence from an older crisis. Neither is Australia facing some temporary shift away from its debt-driven growth of yesteryear. It’s not even China and its massive investment model that has driven the mining boom. The shift is that yesterday’s demand driven economy, that relied upon debt to inflate assets and drive private balance sheet growth as well as consumption, has ended. It is finished permanently (or for so long that it might as well be permanent). The global growth of the future will be driven by the forces of investment, production and intensified competition for limited demand. This is nothing new of course. In 2009, PIMCO described it in an investment sense as the “new normal”. But the big leap one must make – of imagination and logic – is to conclude that this is a permanent change, not a passing crisis. It is easy to lose sight of this when engaged with the hysteria of daily market moves.

If you accept, as I do, that this paradigm shift has taken place, then the European “crisis” is nothing more than the latest expression of the underlying reality that countries will now need to compete successfully to grow. It reframes as visionary Germany’s recalcitrant insistence that its southern peers reform their economies in return for fiscal support (even if its various tactics for achieving this end are self-defeating). It repositions the period of relatively stable economic growth currently enjoyed in the US as little more than an oasis of demand-driven calm before the real work begins of addressing its growing fiscal burden and ongoing credit excess. It renders China, with its leadership in savings, industrial capacity and exports, the unquestionable front-runner in ideological and political economics for the future. It is the interplay of these Great Power strategies with the extant force of increasingly conservative capital market structures that forms the foundations of the great shift. All will feel it in their currencies, in their markets and in their understanding of economics itself.

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If 2011 was the year of denial then 2012 will introduce the next phases of grief at the passing of an economic order. There will be anger, bargaining and depression as the interests of the old order seek to duck the nation’s fate. But there will also be the beginnings of acceptance amongst businesses far and wide and, with that, renewal.

http://news.yahoo.com/troubled-ri-city-receivership-loses-democracy-164854804.html

When the state stepped in to take over financially struggling Central Falls in 2010, Rhode Island's smallest city lost something fundamental: its democratic government. Mayor Charles Moreau would be forced to give back his key to City Hall, and the City Council was relegated to advisory status — unsure for months whether it was even allowed to convene. "They're being governed without elected representation," state Sen. Elizabeth Crowley said of Central Falls' 19,000 residents. "That flies in the face of the democratic principle that our country is founded on, not only our little city. Maybe we should have a tea party and dump some tea in the Blackstone" River. Crowley, a Democrat and lifelong Central Falls resident, uses a twist on Abraham Lincoln's Gettysburg Address to describe government there, under a state-appointed receiver, these days: "of the receiver, by the receiver and for the receiver." That receiver, former state Supreme Court Justice Robert G. Flanders Jr., is often criticized for sweeping like a dictator into a city he doesn't know, where he doesn't live and where, with the state's blessing, he unilaterally decides matters that go far beyond the fiscal.

The General Assembly passed the "Fiscal Stability Act" in direct response to Central Falls' financial crisis — giving the receiver authority to file for bankruptcy, which city officials did not have. It allows him not only to "exercise the powers of the elected officials" on fiscal issues but says his powers supersede theirs. With virtually no pushback from the Legislature, the receiver's office has broadly interpreted that law as it works to get the 1.3-square-mile city, just north of Providence, back on sound financial footing...Flanders sought bankruptcy protection for Central Falls in August, saying it was the only option. He closed the library and community center, laid off the police chief and about 19 others and instituted a five-year "recovery" plan. It balances the city's budget through a combination of tax hikes, cuts to retirees' pensions and benefits and other budget savings.

But the receiver's office has appointed people to non-financial boards; approved business licenses, including, elected city officials say, a "massage parlor" they opposed; instituted new police promotional exams; approved a new ordinance banning overnight street parking; and even issued a congratulatory citation for a new Lions Club...Initially, the city's business was handled by a "Receiver's Council" consisting of three appointees, including one who had unsuccessfully challenged a sitting council member; the first receiver, former Superior Court Judge Mark Pfeiffer, said it was necessary because the real City Council wouldn't comply with his policies. Last year, that body was replaced by the receiver's "hearing officer," who is Flanders' chief of staff, Gayle Corrigan.

Those meetings are open to the public, but are typically sparsely attended — not unlike regular Council meetings.
Jeff Roter, a resident for 4½ years, said he's never been much involved in Central Falls' affairs: not when the state took over, or when the library closed. But a parking ban imposed by the city's unelected overseer was too much. He had collected nearly 300 signatures ahead of the City Council meeting last week. He wasn't sure who to give them to — the council or the receiver's office — but he thought Flanders had overstepped his bounds....In an unusual about face, Flanders' office suspended the ordinance a day later....In an interview, Flanders noted that the state Supreme Court upheld the constitutionality of the receivership law under a challenge by four of the city's five councilors; the judge interpreted the statute to allow him broad authority beyond just finances. He said the city needed to be rescued — from itself — and that everything he's done is related in some way to its fiscal stability anyway. "The law suspends the usual democratic process because the economic crisis that caused the city to be running out of cash — and having to go file for bankruptcy — needed drastic action," Flanders said. "I'm sensitive to the fact that I am not an elected official, that I don't live in the city and that people are leery of a situation where one person ... has as much power as one person does to run the city and to try and right the economic ship of Central Falls," he added. "That's the law that the General Assembly passed and I have to say, it's working, from my view, remarkably well."

MORE

Duty calls, I'm off (I'm usually off, but now I mean absent).

Lack of funding, money mis-spent, people don't pay attention until something personally affects them

I know people that didn't care on bit what was happening to others. When it was their turn and lost their job and or house they went WHY me. Still not enough people feeling the pain yet to take it to the streets in mass. I guess when the food, smokes and booze runs out, gas goes sky high they will wake up. When that happens it will be ugly. I'm thinking before the year is out. Like Miss Demeter said, March.

Greece is sliding....pun intended

http://lifeinc.today.msnbc.msn.com/_news/2012/01/13/10142795-role-reversal-employers-say-they-cant-find-workers

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With 13 million unemployed people seeking work in this country, it would seem like anyone who wants to hire someone would have little difficulty doing so.

But that’s not what many employers are saying.

More than half of U.S. employers surveyed by the staffing firm Manpower Group last year said they were having trouble filling job openings because they couldn't find qualified workers. That’s a huge 38 percentage point jump from 2010, when only 14 percent said they were having trouble filling positions.

Economists and labor experts say that in some industries, there is a legitimate talent shortage: There simply aren't enough workers with the skills needed to do the jobs available.

http://uk.reuters.com/article/2012/01/16/markets-japan-stocks-idUKL1E8CG13220120116

TOKYO, Jan 16 (Reuters) - Japan's Nikkei average fell
to a one-month closing low on Monday after downgrades of nine
European countries, including a cut in France's triple-A rating,
escalated fears over the region's ability to end its debt
crisis.

Adding to market unease was an impasse in negotiations
between Greece and private creditors on a debt swap deal,
raising the risk of a Greek default in March when massive bond
payments are due.

"Now markets are worrying about a possible downgrade of
European banks and the region's bailout fund, which would make
it even harder to raise capital," said Fumiyuki Nakanishi,
general manager of investment and research at SMBC Friend
Securities.

"It's as if Europe is in a dark spiral where people are
discussing the worst case scenario for the euro zone," he said.