New Year

http://www.businessinsider.com/oil-stocks-are-climbing-as-the-price-bounces-back-2014-12

Oil prices are recovering a little from their multi-year lows as markets open in Europe, and oil stocks are seeing some recovery.

At 9.45 a.m. GMT, WTI crude oil is up 1.14% to $58.75, after falling below $57 late on Friday. Brent crude fell below $61 per barrel at the same time, but is now back up 1.73% to $63.23.

Here's how the rise looks, erasing some of the decline seen at the end of last week:



But in the context of the recent fall, it's a pretty small jump.

The slide is just going on and on, after OPEC, the cartel of oil-trading nations, refused to agree on a cut in production this November. Saudi Arabia, the world's largest oil producer, still seems pretty relaxed with just letting the price slide.

This weekend, the oil minister of the United Arab Emirates suggested that OPEC would still not increase output even if oil dropped to $40 per barrel. Here's the slide since the summer put in context:



Read more: http://www.businessinsider.com/oil-stocks-are-climbing-as-the-price-bounces-back-2014-12#ixzz3LxmhaYog

Read more: http://www.businessinsider.com/oil-stocks-are-climbing-as-the-price-bounces-back-2014-12#ixzz3LxmY4stj

that old petro-dollar....it isn't over, yet!

I would have some underling order his underling's underling to look into ways of aiding ISIS head south to threaten the oil fields. Any threat to the Iraqi oil fields in the south also threatens the Iranian, Kuwaiti, and ultimately Saudi oil fields. They are all pretty close together. A remote threat to those will send shivers through the oil market and raise prices.

So, really, knowing that, if all I care about is making profit for my corporation, don't I have an obligation, a professional responsibility, to help an insurgent group that could indirectly raise the price of oil? Of course, I have to maintain plausible deniability for my role in it so some do-gooders don't try to accuse me of "evil" and "treason" and "villainy" just because they don't share the same profit-based ethical system I do.

In profit we trust.

http://www.businessinsider.com/10-most-important-things-in-the-world-dec-15-2014-12

1. A gunman is holding an unknown number of people hostage in a cafe in Sydney and forcing them to hold up a black flag with white Arabic writing in the window.

2. For the first time, a climate change deal has been made that commits every country in the world to reducing fossil fuel emissions.

3. Japan's Prime Minister Shinzo Abe pledged to increase wages a day after his election victory.

4. A spokesman for the French Interior Ministry said ride-booking service UberPop will be banned in France starting Jan. 1.

5. Police arrested protesters in Hong Kong as the last remaining pro-democracy site was cleared after more than two months of demonstrations.



Read more: http://www.businessinsider.com/10-most-important-things-in-the-world-dec-15-2014-12#ixzz3Lxs1S9ob

Not sure who killed who. The gunman's name was Man Haron Monis. Possible third death unconfirmed. Some additional hostages injured.

http://www.businessinsider.com/market-update-dec-15-2014-2014-12

France's CAC 40: +0.70%

Germany's DAX: +0.62%

UK's FTSE 100: +0.63%

Spain's IBEX: +0.86%

Italy's FTSE MIB: +0.74%

Asian markets closed mixed. Japan's Nikkei dropped 1.57%, after Shinzo Abe's re-election, Hong Kong's Hang Seng was down 0.95%, and China's Shanghai Composite was up 0.52% at the trading on Monday.

US futures are rising higher. The Dow is up 116 points from last week, and the S&P is 15 points higher.

There's no data out from Europe this morning, so we're waiting for figures from the US. At 2.15 p.m. GMT, industrial production figures are out for November, with analysts expecting a 0.7% boost from October. The NAHB housing market index comes 45 minutes later, with no change expected.



Read more: http://www.businessinsider.com/market-update-dec-15-2014-2014-12#ixzz3Lxsa7wPG

http://www.businessinsider.com/r-early-slowdown-signs-emerge-for-us-oil-states-after-crude-slide-2014-12

(Reuters) - After leading the U.S. economic recovery out of recession, some of the nation's top oil states are showing early signs of a slowdown as a result of the plunge in crude prices.

In Houston, Texas, the first oil industry layoffs have been announced, with realtors there predicting a sharp decline, up to 12 percent, in home sales next year.

Alaska's 2015 fiscal year budget revenue forecast will have to be lowered by almost $2 billion, according to Fitch Ratings, because of the sharp drop in the state's forecast crude prices. That will widen Alaska's budget gap to almost $3.4 billion, Fitch said in a Dec. 11 report.

States such as Texas, North Dakota, Alaska, Oklahoma and New Mexico are all likely to feel strains next year, Wells Fargo Securities municipal analyst Roy Eappen said in a recent report.



Read more: http://www.businessinsider.com/r-early-slowdown-signs-emerge-for-us-oil-states-after-crude-slide-2014-12#ixzz3Lxt5lTcR

http://www.businessinsider.com/energy-has-become-less-important-for-the-sp-500-2014-12



Technological advances in hydraulic fracturing in recent years have enabled drillers to extract oil and gas from America's shale basins. The subsequent shale boom has been a big source of business spending, new jobs, and cheap energy for America's consumers.

However, the shale boom has also added to the current global glut in oil supply, which is partially to blame for the recent crash in oil prices.

While lower oil prices might be trouble for the energy sector, US economists and investment strategists have argue that trouble in the energy sector will not cause systemic problems for the economy or financial markets.

BMO Capital's Brian Belski notes that while energy is a major portion of the S&P 500's market cap and earnings, it's been shrinking in share for almost six years. From Belski's note:

...Another concern we hear from clients is the “contribution drag” energy creates, given its meaningful weight in the index. Here again, we think investors are misinterpreting the data. For instance, energy EPS contribution for the S&P 500 has collapsed to roughly half its 2008 peak. Yet as Exhibit 5 (left) shows, S&P 500 EPS have had no issues rising to record levels despite the drag from energy stocks. In addition, energy is no longer as meaningful a part of the overall index – its sector weight has dropped roughly 50% from its 2007 peak and now only represents about 9% of the S&P 500 (Exhibit 5, right), ranking it sixth out of the 10 sectors in this regard. Therefore, we believe some investors are overemphasizing energy’s importance in this bull market...



Read more: http://www.businessinsider.com/energy-has-become-less-important-for-the-sp-500-2014-12#ixzz3LxwPRoEp

http://hosted.ap.org/dynamic/stories/F/FINANCIAL_MARKETS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-12-15-03-48-10

KEEPING SCORE: In early European trading, France's CAC 40 was up 0.3 percent at 4,120.44 and Germany's DAX gained 0.1 percent to 9,600.89. Britain's FTSE 100 added 0.1 percent to 6,307.59. Futures pointed to a rebound on Wall Street after Friday's decline, which produced the worst weekly loss in U.S. shares in more than two years. Dow futures were up 0.6 percent at 17,288 and S&P 500 futures gained 0.6 percent to 2,002.60.

OIL SLUMP: Oil inched higher after another rout on Friday that was sparked by the International Energy Agency saying that global demand will grow less than previously forecast next year. Oil has now fallen 47 percent since reaching a peak of $107 in June this year. On Monday, benchmark U.S. crude was up 41 cents at $58.22 a barrel in electronic trading on the New York Mercantile Exchange. Lower oil prices should be positive for many countries but there are also worries the recent plunge is a sign of a sickly global economy.

JAPAN ELECTIONS: Japan's ruling coalition won a convincing victory in lower house elections Sunday, giving Prime Minister Shinzo Abe's Liberal Democrats up to four more years to pursue economic and political reforms. But the "tankan" business survey released Monday highlighted challenges facing Abe's government which is using lavish monetary and fiscal stimulus to end two decades of economic stagnation. More than two-thirds of the large and medium-sized companies surveyed said they viewed the outlook for the coming quarter as "not so favorable."

THE QUOTE: "While the (Japan election) result was largely expected, I still feel there is room for buying dips in USD/JPY and the Nikkei given Prime Minister Abe is only likely to ramp up his strategy," said market strategist Stan Shamu at IG in Melbourne, Australia. "The fact that many continue to doubt whether Mr Abe is capable of delivering a successful economic strategy goes a long way toward contributing to the subdued price action. This only means Abe has to be even more aggressive to prevent failure."

http://www.marketoracle.co.uk/Article40250.html

More than two million emails that shed light on the biggest tax dodge in history - trillions of dollars hidden in offshore accounts - have been uncovered by the British newspaper The Guardian and the Washington, D.C.-based International Consortium of Investigative Journalists (ICIJ).

Some $32 trillion has been hidden in small island banking hubs which host a bevy of trust funds, shell corporations and other tax havens, the Tax Justice Network estimates. This money is to the financial world what the Higgs boson and dark matter are to particle physics: It's tough to prove it's there, but the universe doesn't make much sense without it. It's just a matter of connecting the money to the people hiding it...Everyone's nagging suspicions became decidedly more concrete as the implications of this leak sank in over the weekend.

An Unprecedented Tax Dodge

Next to this bombshell, Wikileaks looks like a first-grader's game of Telephone. In fact, the leak contains more than 200 gigabytes of data, compared with Wikileaks' two gigabytes. The information is still being sifted through, even as it's being released to the public, but here's some of what's been found so far:

■American Denise Rich, ex-wife of pardoned tax cheat Marc Rich, has been uncovered as the settlor and beneficiary of two large trusts based in the tiny Cook Islands. The ICIJ found that Denise Rich gave up her American citizenship in 2012. Her citizenship was convenient enough when President Clinton had the authority to pardon her ex-husband.

■French President Francois Hollande, ardent socialist and tireless champion of the 75% marginal tax rate, appears in these documents, mostly by association. His campaign co-treasurer, Jean-Jacques Augier, has been forced to reveal the name of his Chinese business partner in a Caymans-based distribution company. Augier says he used his offshore company to make a large investment in China.

■Australian actor Paul Hogan, of "Crocodile Dundee" fame, has lost about $35.3 million from an account that he used to offshore his "bonza" film royalties. His once-trusted tax adviser Philip Egglishaw ran off with Hogan's sizeable hidden offshore stash.

■French banking scion Elie de Rothschild, of the famous banking family, has been named in the leaks. He was instrumental in setting up some 20 trusts and 10 holding companies in the Cook Islands, all extremely opaque in nature. His heirs have, not surprisingly, refused comment.

■Brigitte Bardot's third ex-husband, Gunter Sachs, a millionaire industrialist, has been revealed as the owner of a huge, obscure wealth-masking machine: trust upon shell company upon holding company, almost ad infinitum, mostly based in the Cook Islands. The ICIJ has constructed an interactive map of Sachs' extensive offshore holdings and business networks. The network is fairly representative of the steps that many on this list have taken to hide their wealth away. You can marvel at its imponderable complexity here.

And these names are barely the tip of the iceberg. The shockwaves have already begun to spread through the corridors of wealth and power all over the world.

How Much is $32 Trillion?

It bears repeating: $32 trillion has been stashed away, off the books, by corporations and wealthy individuals. Let that sink in for a moment. The implications are stupefying. The real effects of this are far more subtle, and pernicious, but this makes for a fun thought exercise - even setting aside the fact that only some percentage of this huge sum would fairly be taken as tax revenue...The "CIA World Factbook" estimates the nominal Gross World Product is $71.83 trillion as of 2012. If you shine a light on that $32 trillion, and put it back on the books, the entire planet's total product jumps by more than 44%. Every country on Earth would get a $163.2 billion windfall. High-speed rail and space programs for everyone! If all $32 trillion was added to government coffers, that would be enough to give every man, woman and child alive on Earth today a roughly $4,600 "stimulus" check. Maybe we could all enjoy a two-week vacation in the British Virgin Islands. After all, it seems to be the destination of choice for monied types...

A Bright, Sunny Hub for Dark Business

The British Virgin Islands appear to be at the epicenter of this huge offshore stash. The small Caribbean islands specialize in tourism and financial services. Along with far-flung places like Liechtenstein, Sark in the English Channel, the Cook Islands in the South Pacific, the Caymans and others, the British Virgin Islands are home to thousands of shadowy front companies, trusts and funds that host the bulk of this $32 trillion stash. As of 2000, the last year verifiable data was available, roughly 400,000 companies were listed in the BVI offshore registry. The number certainly has increased. Some of these countries remain underdeveloped, their citizens impoverished, even though they have high per-capita GDPs, and trillions flow to and from their shores. Tax havens like these tend to have in common secretive banking laws and loose residency requirements, which make them appealing to those with money to hide. In one extreme case, The Guardian located an erstwhile British subject, Sarah Petre-Mears, who was the "nominal director" of nearly 1,200 companies across the world. Less a captain of industry and more a shill for dodgy investors, Petre-Mears ran companies fronting everything from porn sites to time-share vacation properties. She used dozens of different addresses across the globe, with most turning out to be post office boxes and mail drops.

The consequences of this enormous tax dodge are hard to calculate. How does one reckon who's entitled to what? Which country's tax rate do you use - Canada? Azerbaijan? Slovenia? There's almost certainly an impact to national budgets, from highway construction to military spending to social programs. It's safe to say that whenever anyone anywhere feels the sting of budget cutbacks, whether a brigadier-general in South Africa or a primary school teacher in England, they'll have a world-class selection of tax cheats in part to blame. Journalists are still sifting through the data contained in this massive leak, but as they go along, there're no telling who will appear in the data - and those people are running out of time and places to hide.

Source :http://moneymorning.com/2013/05/01/check-out-whos-hiding-32-trillion-in-offshore-accounts/

http://hosted.ap.org/dynamic/stories/L/LT_PERU_CLIMATE_TALKS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-12-14-17-08-28

LIMA, Peru (AP) -- A last-minute deal that salvaged U.N. climate talks from collapse early Sunday sends a signal the rich-poor divide that long held up progress can be overcome with a year to go before a landmark pact is supposed to be adopted in Paris.

Still, it remains to be seen whether governments can come up with a new formula for how countries in different stages of development should contribute in a way that keeps global warming from reaching dangerous levels.

"This issue will be contentious and it will need to be worked through all the way to Paris," U.S. climate envoy Todd Stern said after the marathon talks in Lima finished, more than 30 hours behind schedule.

The U.N. talks were still far away from reaching any agreement on reducing emissions of carbon dioxide and other greenhouse gases to a level that scientists say would keep global warming in check. But the Paris agreement would be the first to call on all countries to control their emissions.

http://hosted.ap.org/dynamic/stories/A/AS_JAPAN_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-12-14-22-57-16

TOKYO (AP) -- Japanese businesses are cautious over prospects for a recovery, according to a quarterly central bank survey released Monday that showed a mixed outlook for the world's third-largest economy.

The results of the Bank of Japan's "tankan" highlight the challenges Prime Minister Shinzo Abe faces following a landslide election victory Sunday.

The leading measure of business sentiment showed a slight deterioration in overall expectations among manufacturers. More than two-thirds of the large and medium-sized companies surveyed said they viewed the outlook for the coming quarter as "not so favorable."

Japanese businesses anticipate weak demand both at home and overseas for their products and higher costs for materials thanks to the weakening Japanese yen.

http://www.bloomberg.com/news/2014-12-15/wall-street-can-t-stop-stripping-bonds-as-inflation-deemed-dead.html

An obscure corner of the $12.4 trillion market for U.S. government debt is providing one of the clearest signs yet that bond investors are writing off the threat of inflation for years, if not decades, to come.

Demand for Strips, created when Wall Street banks separate the interest payments from the principal of U.S. debt and sell each at a discount, has boosted the amount outstanding to an average $211 billion this year, the most since 1999, data from the Treasury Department show. The securities, the most vulnerable to inflation of all U.S. government bonds, posted the biggest returns this year by rallying almost 50 percent.

While forecasters say the world’s largest economy will grow at the fastest pace in a decade next year and expose the securities to the deepest potential declines, debt investors are signaling their skepticism as commodities plunge and slowdowns in Europe and Asia threaten the U.S. recovery. Last week, the bond market’s outlook for inflation over the next three decades fell below 1.9 percent annually, the lowest in three years.

“The marketplace feels pretty comfortable that inflation is going to be contained,” Tom Girard, the head of fixed-income investments at NYL Investors, which oversees $200 billion and owns Strips, said by telephone on Dec. 11. There are still “some headwinds that the economy is facing.”

http://www.bloomberg.com/news/2014-12-14/u-a-e-says-opec-won-t-change-output-even-if-price-drops-to-40.html

OPEC will stand by its decision not to cut output even if oil prices fall as low as $40 a barrel and will wait at least three months before considering an emergency meeting, the United Arab Emirates’ energy minister said.

OPEC won’t immediately change its Nov. 27 decision to keep the group’s collective output target unchanged at 30 million barrels a day, Suhail Al-Mazrouei said. Venezuela supports an OPEC meeting given the price slide, though the country hasn’t officially requested one, an official at Venezuela’s foreign ministry said Dec. 12. The group is due to meet again on June 5.

“We are not going to change our minds because the prices went to $60 or to $40,” Mazrouei told Bloomberg yesterday at a conference in Dubai. “We’re not targeting a price; the market will stabilize itself.” He said current conditions don’t justify an extraordinary OPEC meeting. “We need to wait for at least a quarter” to consider an urgent session, he said.

OPEC’s 12 members pumped 30.56 million barrels a day in November, exceeding their target for a sixth consecutive month, data compiled by Bloomberg show. Saudi Arabia, Iraq and Kuwait this month deepened discounts on shipments to Asia, feeding speculation that they’re fighting for market share amid a glut fed by surging U.S. shale production. The Organization of Petroleum Exporting Countries supplies about 40 percent of the world’s oil.

http://www.nakedcapitalism.com/2013/01/robots-dont-destroy-jobs-rapacious-corporate-executives-do.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Americans are understandably upset about profits without prosperity. Corporate executives seem to be the big winners, while the middle class is declining and young people face a bleak economic future. How did this happen? It's easy to blame technology, especially the automation that supposedly displaces workers. But that's not the real story. The fact is that automation creates jobs. It's the misuse of corporate profits that are destroying them.

There was a time when high corporate profits meant bright employment prospects for most members of the US labor force. That relation between profits and prosperity was strongest in the immediate post-World War II decades when US corporations led the world in manufacturing, provided workers with career-long employment security, and reinvested profits in productive capabilities in the United States. For the past three decades, however, the pursuit of corporate profits has been at the expense of prosperity for an ever-growing proportion of the American population.

This disconnect between profits and prosperity began in the 1980s with permanent plant closings that cost production workers their middle-class jobs. It increased in the 1990s as major US corporations scrapped the career-with-one-company norm that had prevailed for salaried employees, and it became common even for college-educated people with a couple of decades of work experience to find themselves on the wrong end of the pink slip. Then in the 2000s, as US corporations accelerated the globalization of production activities, the jobs of all members of the US labor force, no matter what their level of educational attainment, became vulnerable to competition from qualified people in lower wage areas of the world.

Profits without prosperity is now starting to get attention in the mainstream press. In his New York Times op-ed, “Robots and Robber Barons” (Dec. 9, 2012), Paul Krugman seeks to explain why, with corporate profits up, labor compensation is down. As part of the ongoing digital revolution, he argues, robots are throwing American workers out of their jobs. In addition, he claims that corporations are making high profits through price gouging, and are not sharing these gains with their employees. Krugman is on to something important that needs to become part of the national policy debate. But he is off target in blaming a combination of automation and monopolistic practices for the disconnect between profits and prosperity...Automation is not the problem. As part of a process that could reconnect profits and prosperity, the US economy needs more, not less, corporate investment in automation. A company that successfully invests in automation creates far more, and typically better, jobs than those it destroys. Indeed, the study of industrial history reveals that when a nation’s leading companies fail to make sufficient investments in automation its economy runs into trouble...

http://www.bloomberg.com/news/2014-12-15/oil-spilling-over-into-central-bank-policy-as-fed-enters-fray.html

Norway’s central bank stunned investors last week by cutting its main interest rate to head off a “severe downturn” due to plunging oil prices. Ninety minutes later, Russia’s central bank raised its benchmark to bolster a currency weakened by crude’s decline.

The split among two of the largest oil exporters shows how the slump in the price of crude to its lowest in five years will make 2015 a year of divergence for global central banks and increased volatility in financial markets.

The U.S. Federal Reserve enters the fray this week. Some economists expect it to drop the commitment to hold rates near zero for a “considerable time.” Hiring is accelerating and officials including Vice Chairman Stanley Fischer have emphasized the boost to consumer demand from oil’s decline.

Cheaper oil “lends support to our expectation of monetary-policy divergence next year, making Fed tightening in the first half more likely, while pushing other central bankers to be relatively more dovish,” Credit Suisse Group AG economists led by Neville Hill and James Sweeney said in a Dec. 12 report to clients.

...Overall, this is a very positive report, but it still must be understood in the context of the hole created by the downturn. It would take two and half years at this growth rate to restore demographically adjusted pre-recession levels of the employment to population ratio.

http://truth-out.org/news/item/27831-economy-adds-321-000-jobs-strongest-gain-in-almost-three-years

http://www.bloomberg.com/news/2014-12-14/iran-s-300-stocks-rally-fizzles-as-nuclear-deal-eludes-rouhani.html

The five-year rally in Iranian stocks is coming to an end as optimism fades that President Hassan Rouhani can resolve an international standoff over the Islamic republic’s nuclear program.

The Tehran Stock Exchange Index has lost 20 percent in 2014, set for the first yearly decline since 2008, as petrochemical companies and lenders plunged, bourse data show. Over the previous five years, shares soared 910 percent, or about 300 percent in dollar terms after factoring in the rial’s declines.

Progress on talks with world powers stalled last month, undermining confidence that Rouhani’s election in June 2013 would spur a detente with the U.S. The two sides announced Nov. 24 they’d need another seven months to try to end a decade of international sanctions that are throttling the economy. The six-month plunge in oil, Iran’s biggest income source, deepened the selloff.

“After the spike on the back of the potential for rapprochement, continued negotiation extensions have weighed on” stocks, Emad Mostaque, a London-based strategist at Ecstrat Ltd., said by e-mail Dec. 12. “The market retains significant upside potential in the medium and long term, but low oil prices and continued economic adjustment are likely to weigh in the short term.”

http://www.bloomberg.com/news/2014-12-15/australia-s-budget-deficit-widens-to-a-40-4-billion-on-iron-ore.html

Australia’s government forecast a wider budget gap this year as plunging iron ore prices erode tax revenue and spending cuts are blocked by opposition lawmakers.

The underlying cash deficit will deteriorate to A$40.4 billion ($33.2 billion) in the fiscal year ending June 30, 2015 from a May estimate of A$29.8 billion, Treasurer Joe Hockey said in the mid-year economic and fiscal outlook today. The government forecast unemployment will climb to 6.5 percent by mid 2015, higher than its May projection of 6.25 percent.

“We are now witnessing the largest fall in the terms of trade since records began in 1959,” Hockey told reporters in Canberra, referring to export prices relative to import prices. “This has been faster and deeper than anyone expected.”

Tony Abbott’s Liberal-National coalition, which was elected 15 months ago promising to end the “debt and deficit disaster” of the former government, has faced Senate opposition to savings measures while falling prices of key exports have cut tax revenue. The fall in iron ore prices is forecast to reduce company tax payments by A$2.3 billion in 2014-2015 and A$14.4 billion over the forward estimates, today’s documents showed.

http://www.bloomberg.com/news/2014-12-15/riskiest-bank-debt-wins-moody-s-favor-in-sweden.html


Sweden’s decision to impose tougher bank capital rules earlier than most other countries is proving to be a gift to the industry that keeps on giving.

The country’s biggest banks are set to win investor approval when they step up issuance of the riskiest bank bonds, additional Tier 1 capital, according to Moody’s Investors Service. The rating company predicts Swedish banks will sell as much as $2.9 billion of the securities by 2016.

“We do think there will be investor interest in these,” Oscar Heemskerk, associate managing director in Moody’s EMEA Financial Institutions Group, said by phone on Friday. “That comes partly because the Swedish banks, if you look at their finances, have performed strongly compared with their European peers.”

The country’s biggest banks have already started issuing additional Tier 1 debt, which is written down if pre-set capital levels are breached, at record-low coupons. Nordea Bank AB (NDA), Scandinavia’s biggest lender, sold $1.5 billion in the securities in September at the lowest dollar yields recorded. One month later, Swedish banks topped the European Banking Authority’s stress tests by achieving the highest scores in an adverse scenario.

http://www.fool.com/investing/general/2014/12/14/8-reasons-why-i-bought-warren-buffetts-berkshire-h.aspx

PERFECTLY GOOD REASONS...AND HERE'S WHY!

http://www.bloomberg.com/news/2014-12-15/draghi-s-qe-battle-almost-won-as-economists-see-action.html

The battle over whether to start quantitative easing in the euro region is all but won, economists say.

More than 90 percent of respondents in Bloomberg’s monthly survey predict the European Central Bank will begin large-scale buying of government bonds next year, up from 57 percent last month. An announcement will most likely come in the first quarter, with any decision taken against the objections of some policy makers, the poll of 55 economists showed.

With less than six weeks to go before the ECB’s next monetary-policy meeting, President Mario Draghi’s drive to corner dissent on more stimulus is taking on added urgency. Plunging oil prices threaten to tip the 18-nation economy into deflation, and banks are showing little appetite to use cheap central-bank cash to boost lending.

“There is no doubt that the ECB will scale up its expansionary policies -- it’s just a matter of timing,” said Duncan de Vries, an economist at NICB Bank NV in The Hague. “The ECB will remain under huge pressure to protect its credibility and fulfill its price-stability mandate.”

http://www.bloomberg.com/news/2014-12-14/japan-s-communist-party-seen-doubling-seats-in-abe-protest-vote.html

The Japanese Communist Party more than doubled its seats in the lower house of parliament as its pacifist, anti-nuclear platform provided the clearest opposition to Prime Minister Shinzo Abe’s policies.

The JCP won 21 seats in yesterday’s lower-house election, up from 8 before the vote, even as the ruling coalition maintained its two-thirds majority. The Communists won their first single-seat district in 18 years, claiming a seat in the southern Okinawa island chain. The party can now submit legislation to parliament.

The Communists have called for a sales-tax increase planned for 2017 to be scrapped and for Japan to stay out of the Trans-Pacific Partnership, a regional trade agreement favored by Abe. Party leader Kazuo Shii has opposed restarting nuclear power plants closed after the 2011 Fukushima disaster, as well as the reinterpretation of the U.S.-imposed pacifist constitution to allow Japan to defend other countries.

“It’s the only opposition party that really acts like one,” said Tomoaki Iwai, a professor of politics at Nihon University in Tokyo. “It will be the choice of disgruntled voters.”

how it would operate....

The only opposition party that really acts like one....can we get one of those around here?

https://finance.yahoo.com/news/fca-bans-former-blackrock-employee-102324121.html

The Financial Conduct Authority has banned former BlackRock (BLK.N) senior official Jonathan Paul Burrows from any role in the financial services sector after he was caught evading 43,000 pounds in fares on his daily train commute into London. Burrows was a managing director at Blackrock Asset Management Investor Services and on 19 November 2013, he was stopped by ticket inspectors at the exit gates of London's Cannon Street railway station, the Financial Conduct Authority said in a statement on Monday. He was found to have failed to purchase a valid ticket for the entire journey from Stonegate railway station, East Sussex, the FCA said. Burrows was interviewed under caution and admitted to evading his rail fares on a number of occasions.

"Burrows held a senior position within the financial services industry. His conduct fell short of the standards we expect," FCA director of enforcement, Tracey McDermott said. "Approved persons must act with honesty and integrity at all times and, where they do not, we will take action."

Burrows said in a statement on Monday that he has always recognised that what he did was foolish. In March 2014 he paid a sum of money to Southeastern railways that was significantly more than the value of fares that he did not pay, and British Transport Police won't be pursuing a case against him, Burrows added.

"While I respect the FCA's decision today, I also regret it, coming as it did after a 20 year career in the City that was without blemish," Burrows said.

"I recognise that the FCA has on its plate more profound wrong-doing than mine in the financial services sector, and I am sorry that my case has taken up its time at this critical juncture for the future of the City and its reputation," Burrows added.

The FCA said that Burrows had on a number of occasions paid only 7.2 pounds, a third of the fare due, and had not told his employer.

"Although the FCA is not penalising Burrows for not informing his employer, the FCA has taken this into account, amongst other things, in deciding what action to take," the FCA said.

SET-UP? OR JUST BAD LUCK? THE PENALTY IS PRETTY STEEP...SOUNDS LIKE A SET-UP TO ME...

http://www.reuters.com/article/2014/12/15/us-usa-fed-idUSKBN0JT0G720141215?feedType=RSS&feedName=businessNews

Federal Reserve officials will decide this week whether to make a critical change to their policy statement that would widen the door for interest rate hikes next year and effectively bet the United States will continue to shine in a gloomy global economy.

In one of the last major wild cards for financial markets in 2014, the U.S. central bank's policy-setting committee is to issue the statement and fresh economic forecasts on Wednesday at 2 p.m., following a two-day meeting. Fed Chair Janet Yellen will then hold a news conference at 2:30 p.m.

The U.S. economy has strengthened and jobs have been created at a faster-than-expected clip since the Fed's last meeting in October, when it repeated that benchmark rates were unlikely to rise for a "considerable time." Officials will have to decide whether to replace that phrase despite below-target U.S. inflation and economic weakness in Europe and Asia.

Top Fed officials have suggested mid-2015 is a reasonable time to start tightening monetary policy after six years of near-zero rates, and financial markets generally agree.

JANET YELLEN IS LOOKING STRESSED OUT IN THE PHOTO

http://s3.reutersmedia.net/resources/r/?m=02&d=20141215&t=2&i=999410880&w=580&fh=&fw=&ll=&pl=&r=LYNXMPEABE087

http://www.inc.com/lolly-daskal/13-personalities-traits-that-can-keep-you-from-success.html

Here are 13 personality types that, left unchecked, can keep you from being as successful as you'd like to be:

• The procrastinator is always waiting for the right moment, the right circumstance, to act. Procrastination is the worst kind of self-fullfilling prophecy. It's demotivating and leads to apathy.
  
  
• The privileged feels entitled to success--but without passion, perseverance, and hard work, the only thing that's likely to appear is disappointment.
  
  
• The pessimist is always negative. Pessimism leads to fatalism and self-sabotaging despair.
  
  
• The distracted is always preoccupied with SOS--shiny object syndrome. Too much time spent on social media, e-mail, and the rabbit holes of the web instead of setting goals and working toward them brings ... nothing but lost time.
  
  
• The loafer passively assumes that things will just work out by themselves instead of tackling problems and working toward solutions.
  
  
• The dreamer has lots of big ideas. But every dream needs direction and a system of execution for success.
  
  
• The nonbeliever isn't built for faith, and can never see the possibility of their own success--another self-fulfilling prophecy.
  
  
• The frightened lacks the courage to jump in, to feel the fear and do it anyway. Fear of doing is another way of fearing success.
  
  
• The analytical becomes too paralyzed with overthinking to let go and make something happen. Everything plays out in their mind, but it never goes further.
  
  
• The lazy lacks any motivation. With no mojo, no drive, no ambition, there's not even anything to move toward.
  
  
• The visionless doesn't have a clue what they want to achieve, they just keep trying things and hope something will work. It makes for a hard road to success.
  
  
• The small-minded never looks beyond. What's here is good enough, no need for improvement or growth.
  
  
• The nonproducer is always busy but never really productive. There's a lot of action, but nothing happening.

I'M GOING TO GIVE MY CONDO BOARD A SCORE BASED ON THESE PERSONALITY TRAITS...

http://www.forbes.com/sites/patrickgleason/2014/12/15/republican-crony-capitalism-run-amok-out-west/

Businesses and industries too often seek to use the power of the state to eliminate or impair their competitors. Such protectionist proposals end up hurting consumers because they result in less choice, reduced convenience, and higher prices. A new protectionist effort is currently underway in Utah, a politically red state with a Republican governor and a state legislature completely controlled by the GOP. The target of this latest ill-advised push is Zenefits, a San Francisco-based startup company launched in 2013. As TechCrunch describes it, Zenefits helps businesses by providing “a cloud-based dashboard to HR departments designed to help small businesses manage hiring, termination and all the benefits and payroll details necessary in-between those events.” Zenefits also connects companies with health insurance providers.

This cutting edge startup has experienced great success early on in large part because, as the aforementioned TechCrunch article points out, Zenefits “makes it just that much easier to manage the insurance piece once a business has authorized the company as its broker. And, as a result, more traditional insurance brokers are finding it difficult to compete with the company’s business model.” Utah’s traditional insurance brokerage community is none too pleased about having to compete with Zenefits. On November 20, Utah Insurance Commissioner Todd Kiser sent a letter to Zenefits, informing the company that it is violating Utah inducement and rebating laws because it offers its software for free. Kiser said the company should be assessed $5,000 for each violation and twice the profit generated per violation. Because of this, Zenefits would currently be on the hook for at $97,000 penalty.

Kiser told Zenefits that it could come into compliance with state law by raising prices and ceasing to advertise. Zenefits does not charge businesses for their software, but they generate a profit from commission paid by the insurance providers with which they connect their clients. Zenefits understandably does not wish to go along with Kiser’s orders. It’s worth noting that Commissioner Kiser was an insurance broker for 25 years prior to being elected to the state legislature. Kiser’s dictate, at the expense of small businesses, will protect brick-and-mortar brokerages like the one he used to run. He even said, in his own words, “the ease of using Zenefits” is part of the reason why he went after them.

So in Utah, it’s apparently a bad thing for a new company to make it easier for employers to operate their business. That’s an odd approach and one that won’t help the state market itself to companies looking to move to and create jobs in Utah. It’s also at odds with Utah Gov. Gary Herbert’s stated commitment to foster and support tech innovation in the state. Other states have smartly welcomed Zenefits.

THERE'S A CATCHY TERM FOR THIS...I DON'T HAVE TIME TO FIND IT. ARROGANCE IS THE SHORT CATCHPHRASE, THOUGH.

http://www.forbes.com/sites/dougbandow/2014/12/15/how-many-enemies-does-america-want-congress-sacrifices-u-s-security-with-new-sanctions-against-russia/

Congress long ago learned that public scrutiny makes it harder to pass bad bills. So on Thursday in the midst of negotiations to avoid another government shut-down both houses of Congress rammed through new sanctions against Russia, the misnamed “Ukraine Freedom Support Act of 2014.”

Indeed, the House version, H.R. 5859, was introduced earlier the same day and approved by a sparse crowd late at night. The Senate legislation, S. 2828, passed on a voice vote. The measures sanction Russian weapons exports and oil production imports, and financial institutions which facilitate the such transactions; target Gazprom if it “is withholding significant” gas supplies from specified states; provide money to “strengthen democratic institutions and political and civil society organizations” in Russia; bar the lifting of sanctions so long as Moscow supports groups undermining “the peace, security, stability, sovereignty, or territorial integrity of Ukraine”; boost financial transfers to Kiev; order U.S. officials to work with Ukraine to solve such problems as electricity and fuel shortages; authorize weapons transfers to Kiev; and increase funds for government Russian-language broadcasting services.

Congress appears determined to turn an adversary into a forthright enemy and encourage retaliation against more significant American interests. Observed my Cato Institute colleague Emma Ashford: “the provisions in this bill will make it all the more difficult to find a negotiated settlement to the Ukraine crisis, or to find a way to salvage any form of productive U.S.-Russia relationship. No wonder Congress didn’t want to debate it openly.” President Barack Obama expressed some concerns about the bill, but is expected to sign it.

Unfortunately, the legislation offers a belligerent foretaste of what to expect from the incoming Republican Senate. The legislation’s chief sponsor was Sen. Bob Corker (R-Tenn.), slated to become chairman of the Senate Foreign Relations Committee. His earlier proposal, “The Russian Aggression Prevention Act of 2014,” was even more confrontational, providing for greater sanctions on Russia, more military aid for Ukraine, and intelligence sharing with Kiev; conferring “major non-NATO ally status” on Georgia and Moldova as well as Ukraine; expanding “training, assistance and defense cooperation” with Azerbaijan, Bosnia and Herzegovina, Georgia, Kosovo, Macedonia, Moldova, Montenegro, and Serbia, as well as Kiev; mandating non-recognition of Russian annexation of Crimea; and subsidizing energy development in Georgia, Moldova, and Ukraine. As chairman he is likely to encourage equally misguided military meddling elsewhere...

I WOULD MAKE BOOK ON THAT!

WITH A BIT OF A SLUR ON PUTIN...TO CONCLUDE:



The U.S. desperately needs foreign policy leadership. That is, leaders willing to set priorities and able to distinguish between vital and minor interests. Leaders willing to eschew cheap attempts to win votes and focus on advancing Americans’ welfare. Leaders willing to acknowledge their failings and America’s limitations. Leaders who obviously don’t exist in the White House or Congress today.

http://www.ft.com/intl/cms/s/2/14be0e0c-8255-11e4-ace7-00144feabdc0.html?ftcamp=published_links%2Frss%2Fhome_us%2Ffeed%2F%2Fproduct#slide0

The Afghanistan war, the longest overseas conflict in American history, has cost the US taxpayer nearly $1tn and will require spending several hundred billion dollars more after it officially ends this month, according to Financial Times calculations and independent researchers.

Around 80 per cent of that spending on the Afghanistan conflict has taken place during the presidency of Barack Obama, who sharply increased the US military presence in the country after taking office in 2009...

...With the Iraq war having already cost the US $1.7tn, according to one study, the bill from the Afghanistan conflict is an important factor in the broader reluctance among the American public and the Obama administration to intervene militarily in other parts of the world — including sending troops back to Iraq...

...Adjusted for inflation, Mr Sopko (John Sopko, the government’s special inspector-general for Afghanistan) said the amount the US had spent on reconstruction in Afghanistan was more than the cost of the Marshall Plan to rebuild western Europe....“We simply cannot lose this amount of money again,” he said. “The American people will not put up with it.” ...The future bill from the Afghan war is likely to run into hundreds of billions of dollars more. The Pentagon has indicated it wants funding of $120bn for 2016-19 for operations in Afghanistan, although the eventual cost will depend on the future mission that the White House decides on...As well as further interest payments, the health bills will start to rise dramatically, especially once veterans from the war reach their 60s and begin to use more medical services...forecasts future medical and disability costs for veterans from both Iraq and Afghanistan will reach $836bn over the coming decades. The two wars have also added to the Pentagon’s fast-growing pension bill: the military pension system has an unfunded liability of $1.27tn, which is expected to rise to $2.72tn by 2034.

EMAIL

Dear Friends and Activists,

We interrupt this activist channel for a policy emergency.

This action page goes to all the Attorney General, all members of
Congress, and President Obama.

Action Page: Prosecute Jamie Dimon And Members Of Congress For
Criminal Corruption: http:www.peaceteam.net/action/pnum1194.php

BEGIN ACTION PAGE TEXT:

We call on Attorney General Eric Holder to launch an immediate
investigation into the surreptitious insertion of a provision gutting
the Dodd-Frank law into the omnibus spending bill, favoring large
Wall Street campaign donors Jamie Dimon and JP Morgan, and the
circumstances behind which members of Congress voted for this.

Members of Congress may be able to contend that they did not know
what ELSE was in the 1603 page bill, because they had insufficient
time to read it when it was dropped at the last possible minute. But
they were on express notice that THIS provision was in there because
they were heavily "lobbied" by Dimon personally and everyone knew
about it.

As direct or indirect beneficiaries of Dimon's largesse over the
years, the "official act" of voting for this bill constitutes
sufficient "nexus" to justify prosecutions under 18 USC 201(b), 18
USC 201(c), or other available statutes.

President Obama's own intense whipping for this very provision may
not rise to the level of an "official act," but were he to sign the
bill under these circumstances, he too should be prosecuted at the
first available opportunity.

Only far reaching prosecutions on the grounds above can restore the
faith of the American people in the integrity of our government.

__________

The Citizens United decision has turned our government into an open
running sewer of corruption.

Not only did they sneak this Dodd-Frank disabling provision into the
spending bill virtually in the middle of the night, but they also
jacked up the amount that individuals can donate to political parties
by ten-fold. At a time when money already has obscenely inordinate
dominance in our policy process, all Congress wants to do is run
faster in the wrong direction.

We are so glad that we have just about completed post-production of
Citizens United, The Movie, taking on in a dramatic way the critical
issue of reversing the Citizens United decision. We will be working
on the final editing assembly straight through the holidays, and
allowing a couple weeks lead time to press up the discs once we have
the master, we reasonably anticipate getting out the advance DVDs no
later than January.

Citizens United, The Movie, could not be more timely.

Our final Kickstarter project for this movie production funded
successfully and is now closed.

But since there still will be additional expenses, and since the
movie is technically not quite completed yet and ready for actual
release, we'll leave a back door open for a very brief time on our
own site, including the option to claim our last available Associate
Producer movie credit (with private home screening with director Pen
personally), but only for those supporters who already know the
"secret."

Citizens United, The Movie, site:
http://www.citizensunitedthemovie.com

And we thank you all for your amazing support in making all this
happen.

It's time to speak out again.

You may forward this message to any friends who would find it
important.

nt

We are no longer a nation of laws, you know.

IF SO, IT SOUNDS LIKE A LAST MINUTE HAIL MARY PASS...AND IT MAY YET BE INCOMPLETE

http://www.nakedcapitalism.com/2014/12/did-wall-street-need-to-win-the-derivatives-budget-fight-to-hedge-against-oil-plunge.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Conventional wisdom among banking experts is that Wall Street’s successful fight last week to get a pet provision into the must-pass budget bill (or in political junkies’ shorthand, Cromnibus) was more a demonstration of power and a test for gutting Dodd Frank than a fight that mattered to them. But the provision they got in, which was to undo a portion of Dodd Frank that barred them from having taxpayer-backstopped deposits fund derivative positions, may prove to be more important than it seemed as the collateral damage from the 40% fall in oil prices hits investors and intermediaries...Mind you, all the howling by Big Finance over this measure can’t be seen as an indicator of its importance. Yes, they have been trying to get this passed for two years. In fact, as Akshat Tewary of Occupy the SEC points out:

Industry participants view any incursion on their right to make profit (as in pay themselves big bonuses) as a casus belli. That leads to regular histrionics about minor restrictions, like the TARP’s pathetically weak limits on executive bonuses. Exerts on regulation said that the Dodd Frank provision at issue, known as derivatives push-out, was simply about the big US financial firms keeping their profit margins via continued access to cheap funding. Banks weren’t barred from engaging in this type of business but they’d have to do it in different legal entities. As American Banker explained:


This interpretation may be too benign. As structured credit expert Tom Adams said via e-mail:



Yves here. To unpack this for generalists, CLOs or collateralized loan obligations, are used to sell highly leveraged loans, which are typically created when private equity firms take companies private. In the last big takeover boom of 2006-2007, which was again led by private equity buyouts, banks were left with tons of unsold CLO inventory on their balance sheets. The games banks played to underreport losses (such as doing itty-bitty trades with each other or friendly hedge funds to justify their valuations) and the magnitude of the damage didn’t get the attention they warranted because all eyes were on the bigger subprime/CDO implosion.

This CLO decay could eventually be to be more serious than the losses after the 2006-7 buyout boom. This time, the lending was less diversified by industry. Although it hard to get good data, by all account shale gas companies have been heavy junk bond issuers, and energy-related investments have also been disproportionately represented in recent acquisitions. The high representation of energy bonds in junk issuance means they are also the largest single industry exposure in junk bond ETFs, which were wobbly even before oil started taking its one-way wild ride. Here is one stab at estimating the concentration . From ETF.com:



Note that the ETF concern isn’t necessarily related to derivatives exposures except to the extent that ETFs use derivatives to manage liquidity (and that creates the notorious basis risk, that the derivatives trades are at prices that don’t mesh tidily with cash market trades). Bond market ETF risk is already an official worry; the SEC’s chairman Mary Jo White flagged it as a concern for the corporate bond ETFs.

Now how do all these energy-related trouble spots relate to the Dodd Frank pushout rule? Even though there are presumably large hedging-related losses on energy prices themselves, a lot of that was likely done via exchange-traded futures and hence would not hit the banks. Moreover, there is a large cohort of industrial buyers of energy like airlines who routinely hedge their purchases who are the losers on some of these trades. That mean those costs don’t hit the financial system, and they represent an opportunity loss rather than an actual outlay. Moreover, some experts contend that any energy hedging by banks would have been exempted from the push out but one wonders about the status of customized OTC derivatives written for customers. The fact that these issues loom large in understanding the potential economic costs to banks, and hence taxpayers, and the underlying information about exposures was so opaque as to keep it from being included in the debate is troubling in and of itself. As George Bailey of Occupy the SEC put it, “Liz’s hair isn’t on fire enough!”