STOCK MARKET WATCH, Friday, June 10, 2011

Source: du

STOCK MARKET WATCH, Friday, June 10, 2011

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Euro, Yen, Loonie, Silver and Gold

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

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

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

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This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.

Read more: du

Jun 10 08:30 Export Prices ex-ag. May NA NA 1.0%
Jun 10 08:30 Import Prices ex-oil May NA NA 0.6%
Jun 10 14:00 Treasury Budget May -$59.0B -$59.0B -$135.9B

Read more: http://www.briefing.com/investor/calendars/economic/2011/06/06-10/#ixzz1OrgYJObU

KUALA LUMPUR, Malaysia – Oil prices hovered near $102 a barrel Friday in Asia amid anxiety that global supply may not be able to meet growing energy demand.

Benchmark oil for July delivery was down 5 cents to $101.88 a barrel at midday Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract gained $1.19 to settle at $101.93 on Thursday.

In London, Brent crude for July delivery was up 24 cents to $119.81 a barrel on the ICE Futures exchange.

World oil demand is expected to outpace supplies later this year by the widest margin since 2007. OPEC has decided not to increase oil production but Saudi Arabia and a few other oil-producing nations are expected to boost exports anyway — which will drain spare capacity in the cartel that controls more than a third of global output.

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

The speculators are emboldened by events--and nobody's putting a stop to their predations.

“Although asset purchases are relatively unfamiliar as a tool of monetary policy, some concerns about this approach are overstated. Critics have, for example, worried that it will lead to excessive increases in the money supply and ultimately to significant increases in inflation. But the Federal Reserve has a particular obligation to help promote increased employment and sustain price stability. Steps taken this week should help us fulfill that obligation.” Ben Bernanke – Washington Post Editorial – November 4, 2010

so an increase in demand in the US will do WHAT?

My subconscious just provided me with a revelation--putting tiny scraps of data together and coming up with a solution. I love when that happens!

Of course, the fact that it ISN"T 80 and 80% probably had something to do with that...

This is our annual sister bonding weekend, leaving this afternoon for The Great American Brass Band Festival in Danville, Kentucky. One sister has been to the festival, and highly recommended it, so off we go...
http://www.centralkynews.com/amnews/entertainment/gabbf/schedule/

http://www.atimes.com/atimes/South_Asia/MF11Df04.html

DHAKA - Nitol-Niloy Group and Bhati Bangla Agrotec of Bangladesh aim to invest an initial US$18 million to lease around 40,000 hectares of African land by the end of this year to grow foodstuff, most of which they will be obliged to sell in Bangladesh.
The two companies are joining a global phenomenon of land purchases by the private sector and governments in foreign territories, much of it in Africa.

Nitol-Niloy is reportedly in negotiations with Uganda to invest around $12.5 million to lease around 10,000 hectares of land, and Agrotec, a concern of the Al Falah Group in Bangladesh, is about to sign a deal with Tanzania to lease 30,000 hectares at an estimated investment of $5.49 million. Both deals hinge on the


central Bangladesh Bank easing restrictions on investing overseas.

More than 200 other Bangladeshi companies are said to be interested in carrying out similar purchases; in Uganda alone there is a potential 220,000 hectares of land that could be bought. Kenya is also keen to let Bangladeshi businessmen invest in land there, according to Bangladesh Foreign Ministry sources.

About 75 entrepreneurs formed the Bangladesh Africa Business Organization (BABO) late last month to facilitate Bangladeshi investments to Africa and to press home their demands for amending Bangladesh's monetary policy, which at present does not permit money to be channeled out of the country for investment.

http://timesofindia.indiatimes.com/business/india-business/Mkts-down-for-third-day-in-a-row-Sensex-declines-116-pts/articleshow/8801863.cms

MUMBAI: The BSE benchmark sensex on Friday fell for the third straight session, losing over 116 points to 18,268.54, as poor industrial data for April sparked selling in heavyweights such as RIL and SBI.

The 30-share index, which has lost over 110 points in last two sessions, shed another 116 points.

Broad-based National Stock Exchange index Nifty dipped 35.25 points to below the crucial 5,500 mark at 5,485.80.

The sentiment turned bearish after reports of a slowdown in factory output. Marketmen said index of industrial production halving to 6.3 per cent in April came as a double blow as food inflation too had risen to two-month high yesterday.

http://www.atimes.com/atimes/Global_Economy/MF11Dj01.html

Ten-year Treasury yields are hovering around 3.00% and short-term yields around zero. Never mind the reasons for these unusually low rates: the European crisis, export-driven (better, the "stay-in-power") models of development, the fact that no other reserve currency is on the horizon, the Federal Reserve's quantitative easing, demographic changes, and so forth. The above numbers suggest, for the moment anyway, that Washington can put the US financial house in order at a relatively low price.

The 0% and 3% numbers show that the US government accesses credit on easy terms (assuming away the possibility that these rates reflect deflationary prospects, since with "Helicopter" Ben Bernanke at the helm of the Fed, deflation won't happen). Based on these numbers, investors do not expect Greece-type, or the


once common Latin-American type, default. The US has the investors' trust, relatively speaking, that it will correct its fiscal and regulatory mistakes in time. (I emphasize "relatively" since the dollar is way down).

How does one finance the deficits and pay down debts taking into account the aforementioned interest rates, and deal with the lack of expansion of smaller businesses and the unprecedented low percentage of civilian labor force employed?

How does one finance the deficits and pay down debts taking into account the aforementioned interest rates, and deal with the lack of expansion of smaller businesses and the unprecedented low percentage of civilian labor force employed?

PRINT FRN's

Seems to me the funny money is going from the Federal Reserve to the banks who are then gambling with it which makes the prices of food and gasoline skyrocket. It doesn't appear the debts are being paid down, rather the debt is increasing. Why else is there discussion to raise the debt ceiling.

Wait, today's payday! I'm ready for that. With so many people not getting to celebrate payday, those of us who can should really appreciate the day.

http://uk.reuters.com/article/2011/06/10/markets-europe-stocks-idUKLDE7590MV20110610

LONDON, June 10 (Reuters) - European shares fell on Friday on persistent concerns about the pace of global economic recovery, though stocks pared losses after the German parliament voted in favour of a motion to approve new aid for Greece.

At 0923 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was down 0.1 percent at 1,103.09 points after rising as high as 1,104.02 earlier in the session. The index rose 0.9 percent in the previous session following six days of declines. It is down 0.8 percent so far this week.

The STOXX Europe 600 basic resources index .SXPP fell 0.4 percent, tracking declines in copper prices CMCU3 that dropped after Chinese trade data showed a surprising fall in copper imports. Telecom shares .SXKP were down 0.7 percent.

"Markets are still in a defensive state of mind. A series of disappointing economic figures, especially coming out of the U.S., bring back memories of the slowdown we saw last summer," said Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.

http://www.irishtimes.com/newspaper/breaking/2011/0610/breaking11.html

German finance minister Wolfgang Schäuble stepped up his calls for bondholders to assume a "fair" share of further Greek aid, setting Europe's biggest economy on a collision course with the European Central Bank.

In a speech to lawmakers in Berlin in which he evoked the spirit of German unity and European integration, Mr Schäuble appealed for backing for a second bailout for Greece to ensure a stable euro and bolster the global economy.

In return, "we have to insist on the participation of the private sector," he said.

"I have proposed a fair distribution of risks between tax payers and private creditors for the phase of gaining time," Mr Schäuble said in his speech to the lower house today. "We pointed out as early as last year that in the future mechanism for the solution of debt crises in euro states a participation of private creditors in cases of insolvency is indispensable."

The German finance minister is not backing down in the face of an escalating clash with ECB president Jean-Claude Trichet, who yesterday rejected any direct ECB participation in a second Greek bailout. Euro zone governments are scrambling to forge a plan by a June 24th EU summit to avert Greece becoming the currency area's first sovereign default.

http://www.bloomberg.com/news/2011-06-09/trichet-rejects-ecb-participation-in-greece-bailout.html

Germany stepped up demands that investors pay some of the cost of a second Greek rescue after Jean-Claude Trichet rejected direct involvement by the European Central Bank.

“Participation of private creditors in cases of insolvency is indispensable,” German Finance Minister Wolfgang Schaeuble told lawmakers in Berlin today, ignoring warnings from credit- rating firms that his proposal to extend Greek debt maturities by seven years would be deemed a default. A working group set up this week is charged with “finding a good solution for the involvement of the private sector that can and has to be supported by the European Central Bank,” he said.

As politicians try to find a plan by June 24 that would share the cost of a new rescue with bondholders, Trichet yesterday ruled out the Frankfurt-based ECB setting an example with its own assets. While the bank has said it could accept a plan in which investors voluntarily agree to buy Greek bonds to replace maturing debt, President Trichet said the ECB has no intention of rolling over its own Greek holdings.

http://www.guardian.co.uk/business/2011/jun/10/manufacturing-output-drops-two-year-low

Manufacturing output dropped at its fastest pace for more than two years in April, official figures revealed on Friday, raising fears that Britain's fragile economic recovery is petering out.

Analysts had expected to see a slowdown during the month, due to the royal wedding bank holiday and the knock-on effects of industrial shut-downs in Japan, and the Office for National Statistics highlighted these factors. But the 1.5% decline in manufacturing output over the month was much worse than City forecasts.

Howard Archer, of consultancy IHS Global Insight, said: "Even allowing for these factors, the data heightens concern that the hitherto buoyant manufacturing sector is now faltering appreciably after seeing robust expansion over the first quarter of 2011 and through 2010."

He said the Bank of England was likely to delay any increase in interest rates until at least November, while it waits for firmer evidence that the economy is bouncing back.

http://www.guardian.co.uk/business/marketforceslive/2011/jun/10/fall-in-chinese-imports-hits-miners

Falling Chinese imports of copper have hit metal prices, leaving mining shares to drag the market lower.

Xstrata is down 14.5p at 1350.5p while Anglo American is off 16.5p at £29.72. Eurasian Natural Resources Corporation, which has been in the spotlight for a fractious boardroom dispute, is down 13p at 789p.

The latest Chinese trade data showed an unexpected drop in copper imports in May, although analysts said they may well pick up again in the current month.

On top of that the mining sector also faces a 30% mining tax in Australia, which the country's treasury said would be introduced in parliament in the next six months. The tax has been planned for more than a year but has been modified following protests from the likes of Rio Tinto, down 11.5p at £41.88 and BHP Billiton, off 2p at 2322.5p.

http://www.guardian.co.uk/business/2011/jun/10/20-million-britons-cutting-back-on-spending

The full extent of the squeeze on living standards in Britain has been revealed in a new report estimating that 20 million Britons tightened their belts in the first few months of 2011.

Registering a sharp drop in consumer confidence over the past year across eight different demographic groups, a survey by the financial firm Axa found people cutting back on going out, car usage, food shopping and holidays.

A poll of almost 2,000 people conducted by YouGov found a sharp drop in financial confidence over the 12 months to March, a period that coincided with a slowdown in the economy, rising taxes, higher inflation and the announcement of the coalition government's austerity plan.

Spending restraint was particularly evident among those the survey calls "the stretched" – people in their 20s and 30s on low incomes with few financial assets – and among young professionals of a similar age with no children hoping to move out of rented accommodation into their own homes.

http://www.irishtimes.com/newspaper/finance/2011/0610/1224298684057.html

THE GREEK bailout drama intensifies by the day. Faced with a new wave of angry street protests, Greek prime minister George Papandreou is battling to convince sceptics in his government to accept a severe new dose of austerity. What does this mean for Ireland?

It is a given that the chaotic political situation in Athens carries a grave new threat to the titanic effort to fix Ireland’s addled economy. After all, one of the great lessons of the debt debacle is that pressure on one euro zone weakling amplifies pressure on all.

Dublin is still angling for a return to private debt markets next year, a huge challenge in its own right. The unpredictable events in Greece, over which Taoiseach Enda Kenny has no control, will make that considerably more difficult.

This increases the likelihood that the Government will come under pressure from its international sponsors to tackle courageously the issues that lie within its own power.

http://www.marketwatch.com/story/greek-default-is-inevitable-2011-06-10?dist=beforebell

LONDON (MarketWatch) — The European Central Bank, with its staunch opposition to sovereign debt restructuring in Europe, is making a bad situation worse. By threatening to withdraw support for banks in countries such as Greece if they restructure their debts, the ECB is practically inciting runs on banks.

The argument that Greek state paper could no longer be used as collateral in such cases hardly justifies such a potentially destabilizing step. The ECB is effectively the lender of last resort to such banks. If depositors believe it is about to pull out, then they will withdraw money from the banks — and we will face a self-fuelling downward spiral.

The debt problem of peripheral Europe is structural. It cannot be solved by piling debt on debt. There is an analogy to a Ponzi scheme, under which more money is continually paid in to keep the pyramid-like edifice from collapsing. The debt/GDP ratio increases over time because new loans are given to pay old debt and to finance the remaining fiscal gaps.

In addition, the share of the debt in official hands continues to increase and eventually taxpayers bear the complete cost of the adjustment. This may, however, take time and, since the pyramid is unstable, the construction could break down at any moment –— a source of increasing uncertainty.

http://news.xinhuanet.com/english2010/business/2011-06/10/c_13922585.htm

SEOUL, June 10 (Xinhua) -- South Korea should make all-out efforts to curb inflation as price rises could hurt domestic demand and the livelihood of citizens, the nation's top economic policymaker said Friday.

"Price hike is an issue to affect everything from real income and domestic demand to national competitiveness, employment and the nation's ability to cope with external shocks," Finance Minister Bahk Jae-wan said at his first meeting to discuss anti- inflation measures since he took office last week.

"Particularly, inflation is closely tied with the livelihood of ordinary people, so the government should do its best to curb it," Bahk said.

"The minister noted the inflation has mainly come from supply- side factors until now, but consumer prices started being influenced by demand-side factors such as processed food products and personal service fees.

http://search.japantimes.co.jp/cgi-bin/nb20110610n3.html

Japan faces the rising risk of surging bond yields in the decade from 2015, according to SMBC Nikko Securities Inc.

The nation has maintained a current-account surplus in the past 30 years, with household savings financing the world's largest government debt and helping drive down bond yields, said Hidenori Suezawa, chief strategist at SMBC Nikko Securities, a unit of Japan's third-largest bank.

Japan will likely have difficulty sustaining the surplus as the population ages and as a record earthquake compels firms to move production overseas, he said. Lawmakers in the Liberal Democratic Party are planning for what they call "X-day," when Japan can no longer internally finance its budget deficits.

"X-day is the day when JGB yields will surge," Suezawa said at a forum in Tokyo Tuesday. "While Japan may need to rely on overseas investors for financing if the country incurs continuous current-account deficits, they won't buy JGBs if yields stay at current levels. Yields may approach the levels seen in the U.S. and Germany."

http://www.thejakartapost.com/news/2011/06/10/chinas-may-import-export-growth-slows.html-0

China's import growth accelerated in May despite government efforts to cool an overheated economy, while exports weakened.

Imports rose 21.8 percent, up from April's 28.4 percent and beating most forecasts, data showed. Export growth eased to 19.4 percent from April's 21.8 percent in a sign of weakening global demand.

China's politically sensitive monthly global trade surplus widened to $13 billion, the highest level this year and an increase over April's $11.4 billion but about the same level as a year ago.

Indicators of industrial activity have weakened in recent months as Beijing tightened credit and investment curbs, prompting forecasts of a decline in Chinese demand for oil, iron ore and other imports.

http://uk.reuters.com/article/2011/06/10/markets-precious-idUKL3E7HA05420110610

SINGAPORE, June 10 (Reuters) - Spot gold moved in a narrow
range on Friday, underpinned by a slightly weaker dollar and
ongoing concerns about the Greek debt crisis.

Platinum group metals built on recent gains, supported by
the outlook for demand recovery from the automobile industry
after the Japan earthquake as well as potential supply
disruption in South Africa.

The European Central Bank on Thursday signalled a July rate
hike as expected, but raised the stakes in its stand-off with
governments over a new bailout for Greece by rejecting any form
of debt restructure.

Lack of an immediate solution for Greece's debt crisis is
likely to keep gold sentiment underpinned, as investors seek a
safe haven in bullion during times of economic and political
uncertainty.

http://www.marketwatch.com/story/gold-investors-need-nerves-of-steel-2011-06-10?dist=beforebell

That’s particularly true in the current trading environment, where action in the U.S. dollar, commodities, stocks and global economies have pushed and pulled at investors’ heart strings.

“Many investors ‘date’ stocks, but some ‘marry’ gold,” said Philip Romero, a finance professor at the University of Oregon and former chief economist of California. The “holding period for stocks has been shortening, but I expect holding periods for gold have been lengthening.”

And for many gold bugs, their holding period is “forever — till death do they part,” he said.

U.S. stock futures were little changed, as the benchmark Standard & Poor’s 500 Index headed for a sixth straight weekly loss, its longest run of declines since July 2008.

Hewlett-Packard Co. decreased 0.6 percent in German trading. The company yesterday announced it will sell its new tablet computer, which will compete with Apple Inc.’s iPad, in July. Wal-Mart Stores Inc. (WMT), the world’s largest retailer, dropped 0.5 percent.

S&P 500 futures expiring in September retreated 0.1 percent to 1,280.6 at 11:06 a.m. in London. The S&P 500 index is heading for a 0.9 percent weekly loss as investors speculated that the economic recovery is faltering and Greece will default on some of its debt. Dow Jones Industrial Average futures lost 14 points, or 0.1 percent, to 12,030 today.

“We’re coming to the end of the downward correction on the growth issue, but we still need to see a solution of the Greek debt issue,” said Frank Velling, the Copenhagen-based chief strategist at Bankinvest, which manages about $18.2 billion.

http://www.bloomberg.com/news/2011-06-10/u-s-stock-futures-are-little-changed-hewlett-packard-declines.html

Neil Barofsky interviewed by Dan Rather

6/10/11 Former Bailout Inspector General Neil Barofsky: "You Should Be Scared. I'm Scared. You Can't Not Be Scared. You Can't Look At What Happened In The Run-Up To 2008 and See How It's Not Going to Repeat Itself, Given What We've Done"

click to watch short 2 minute video
http://www.zerohedge.com/article/former-bailout-inspector-general-neil-barofsky-you-should-be-scared-im-scared-you-cant-not-b
or direct link to video
http://blip.tv/hdnet-news-and-documentaries/dan-rather-reports-barofsky-more-bailouts-5247151

http://www.economist.com/blogs/democracyinamerica/2011/06/rightsizing-government

It's not my intention to plump for government health insurance, only to underscore Mr Bartlett's point: if you know the percentage of GDP government spends, you don't know that much. The practical equivalence of tax credits and government transfers muddies the picture considerably. And, as Mr Bartlett goes on to note, the typical American spends a larger portion of his or her income on health care than the typical Canadian or German in part because America's monstrous hybrid health-care system manages to avoid the efficiencies of either market or bureaucratic discipline. Ours is not too far from the system you'd design if you wanted health care to cost as much as possible. American health-care consumers not covered by Medicare or Medicaid (which together eat about as much GDP as other rich countries' entire universal coverage schemes!) bear these high costs. This isn't government spending, but the high prices consumers face are largely a function of government policy. Suppose, for the sake of argument, that health care under current American policy costs you $1,000 per year in personal spending over the amount you'd have to pay in additional taxes under a well-designed universal coverage scheme. (Mr Bartlett argues that "we could, in effect, give every American an increase in their disposable income of 8 percent of G.D.P. ".) In that case, paying more in taxes would leave you materially better off. This isn't to say that legalising competitive markets in insurance and health services wouldn't leave us better off still. I believe it would. The pertinent point here is just that a policy that increases government spending can increase the national standard of living relative to the baseline of a dysfunctional status quo.

Under the financing scheme for the long forgotten H.R.676, both employer and employee would have paid an additional 3.5% payroll tax. That would have translated into $1,750 per year for a family with a $50k income, with NO DEDUCTIBLES, AND NO CO-PAYS! $3,500 per year for both the employer and employee combined. Much cheaper than a bottom tier private policy that covers about nothing.

But, we have a President and a Congress that's more interested in protecting extortion profits for the insurance industry, than saving peoples lives.

I admit, however, to only having read the snippet above. But I have to ask in what universe is that writer dwelling - surely not this one, in which there is ABSOLUTELY NO EVIDENCE that FOR PROFIT health care will ever get us to good care.

(sorry about the CAPS - but I literally see red over this - wayyyyyyy back when Labor and Progressives were trying to figure out a strategy for health care and they came out with their - our, in my case, as part of the labor movement) - asinine "affordable" language I was ranting on the inclusion of that word - "affordable" - as sealing our fate before we ever started. There is no such thing as "affordable" for individuals. Period. I'm not ranting at you, btw - this is just such a great tragedy, that we keep going down this road. Serfs bound to our jobs for health care. If we're "lucky."

6/9/11 Shiller Says U.S. Home-Price Declines of 10% to 25% ‘Wouldn’t Surprise Me’

Robert Shiller, the economist who co- founded the S&P/Case-Shiller index of U.S. home prices, said a further decline in property values of 10 percent to 25 percent in the next five years “wouldn’t surprise me at all.”

“There’s no precedent for this statistically, so no way to predict,” Shiller said today at a conference hosted by Standard & Poor’s in New York.

U.S. home prices plunged 33 percent in 20 cities through March from their 2006 peak, reaching their lowest level since 2003, according to a Case-Shiller report on May 31. The decline signaled a “double dip” as the index fell below its previous post-housing-bubble low set in April 2009. Prices more than doubled from 2000 to July 2006.

A backlog of foreclosures poised to hit the market means prices may stay depressed, dissuading builders from starting new construction. Unemployment, which rose to 9.1 percent in May, and stricter lending conditions are signs that any recovery in housing may take years.

more...
http://www.bloomberg.com/news/2011-06-09/shiller-says-u-s-home-price-declines-of-10-to-25-wouldn-t-surprise-me-.html

http://www.truth-out.org/robert-reich-president-must-not-go-over-supply-side/1307640583

Can we get real for a moment? Businesses don’t need more financial incentives. They’re already sitting on a vast cash horde estimated to be upwards of $1.6 trillion. Besides, large and middle-sized companies are having no difficulty getting loans at bargain-basement rates, courtesy of the Fed. In consequence, businesses are already spending as much as they can justify economically. Almost two-thirds of the measly growth in the economy so far this year has come from businesses rebuilding their inventories. But without more consumer spending, there’s they won’t spend more. A robust economy can’t be built on inventory replacements.

The problem isn’t on the supply side. It’s on the demand side. Businesses are reluctant to spend more and create more jobs because there aren’t enough consumers out there able and willing to buy what businesses have to sell. The reason consumers aren’t buying is because consumers’ paychecks are dropping, adjusted for inflation. And job losses are mounting. The 83,000 new private-sector jobs created in May represent a net loss because 125,000 jobs are needed merely to keep up with an expanding labor force. The number of Americans filing new claims for unemployment benefits edged higher last week. At the same time, many Americans are falling behind in their mortgage payments. And housing prices continue to drop – making homeowners feel even poorer...Close to 60 percent of the half-trillion drop in household debt since the depth of recession has been defaults rather than repayments. This makes it harder for people who’d like to enter the housing market to get new mortgage loans, or for anyone to refinance. Other consumer debt burdens are rising. On Tuesday the Fed reported consumer credit outstanding rose in April – mostly from record-high levels of student-loan debt and an up-tick in credit-card borrowing due to food and gas price increases outpacing wage gains. All this translates into a continuing crisis on the demand side. Consumers can’t and won’t buy more. Between January and March, sales grew just .15 percent around the country – perilously close to no growth at all. May sales look even worse. Chain stores are reporting weaker sales. Consumer confidence has dropped sharply.

How to get jobs back, then? By reigniting demand. Put more money in consumers’ pockets and help them renegotiate their mortgage loans.

For example: Enlarge the payroll tax break for workers — not just for employers. Exempt the first $20,000 of income from payroll taxes for a year. Create a WPA for the long-term unemployed. Allow distressed homeowners to declare bankruptcy on their primary residence, thereby giving them more clout with lenders to reorganize their mortgage loans. Lend federal money to (rather than bail out) states and cities that are now firing platoons of teachers, fire fighters, and other workers because state and local coffers are empty...But we’re not hearing any of these sorts of demand-side solutions from the White House. In seeking Republican votes, Obama is putting forth Republican supply-side ideas – lowering the employer costs of hiring, cutting corporate taxes – that have nothing to do with this demand-side crisis. He may attract some Republican votes for these, but what’s the point if they’re irrelevant to the real problem?

The President’s putative embrace of the false notion that businesses need more financial incentives in order to hire also risks giving legitimacy to other Republican supply-side nostrums being pushed by House Republicans and GOP presidential aspirants. On Tuesday, Tim Pawlenty called for lower taxes on corporations (down to 15 percent from the current 35 percent), and lower taxes on the rich (to 25 percent from the current 35). Newt Gingirch wants to lower corperate income taxes to 12.5 percent and eliminate the estate tax altogether. And so on. Better that the President advance ideas that work, and go to battle over them. Supply-side economics doesn’t work. It’s been tried for thirty years, to no avail. And now, when our continuing economic crisis is so palpably being driven by inadequate demand, it’s bogus than ever.

The last thing we need is for the President to go over to the supply side.

Sheesh. You get tired of the willful ignorance after while, you know?

We can't call a President an a**h*** in the media, unless we are GOP in GOP propaganda media.

Personally, I'm not into much politeness towards public stupidity, but there it is...

LOL
Let me repeat
ROFL

http://www.truth-out.org/bereft-drama-amazon/1307632808

When reviewing a story about a recent deal between the government and Indians regarding multinational oil companies in the Peruvian Amazon, the editor of an important national news magazine said the story seemed "bereft of drama" and too full of "insidery negotiations."

He was right. And that was what made it news.

After having to seize oil facilities, capture airfields and blockade roads and rivers in recent years in order to grab attention and force talks, the Quechua people of Northern Peru this week won a landmark agreement with the regional government of Loreto - a virtual dream sheet, really, considering the decades of neglect - for services and projects in their communities along the Pastaza River near the border with Ecuador. A key feature of the freshly inked "Pastaza Act" is a sweeping investigation of health and environmental impacts that could bolster the Indians' case against Plus Petrol, the Argentinean oil company that they blame for polluting their rivers and ancestral territory for years.

The twist on an otherwise old story was that, after several years of violent protests over resource extraction throughout the Amazon, this group of 18 Quechua Apus, or community chiefs, confidently strode into the government building wearing face paint and headbands, flanked by a team of lawyers, anthropologists and media, and demanded to see the governor. They walked out three days later with a contract for new schools, doctors, and other infrastructure, as well as a government pledge to conduct blood and water tests that could be used as evidence in a possible lawsuit. And, with Gov. Iván Vásquez, they seemed to have made a powerful new friend.

It was all completely "bereft of drama."

http://www.truth-out.org/inflation-fears-rising-faster-prices-us-and-europe/1307641878

Two questions about inflation:

1. What would the European Central Bank be doing if it were the Federal Reserve?

2. Why have some measures of core inflation in the United States ticked up slightly recently?

On the first question, Eurostat offers a consumer price index online sans energy, food and tobacco (which is more or less U.S.-style core). If you look at the 12-month change, the euro zone looks like the United States — there is no good reason to raise rates. To be fair, on the labor side things look a bit different: there are actual labor shortages in some parts of Europe, reflecting both low labor mobility and the extreme asymmetry of the European shock. But raising rates for all of Europe because parts of Germany are doing well is, as I’ve written before, worse than the one-size-fits-all policy euroskeptics warned about. It’s one size fits one. And the case for a somewhat higher inflation target is even stronger for the euro zone than it is for the United States.

Meanwhile, back in the new country: Core inflation in the United States has ticked up slightly recently. What’s that about? I’ve suspected that what we’re really seeing is the inadequacy of even core inflation as a way to purge transitory effects of volatile prices: the measure takes out purchases of food and energy, but it doesn’t take out indirect effects of raw material prices on costs. New research from Goldman Sachs seems to support that view: It finds that core inflation is getting a temporary bump from the prices of imported raw materials, and will probably subside if the commodity surge is, in fact, over. This suggests that policy should really be based on some kind of “supercore” inflation.

Should this simply be wage growth? Economist Adam Posen at the Bank of England has certainly gone down this route, arguing that the relatively high rate of even core inflation in Britain reflects one-off factors and that stagnant wages show that there are few risks. And I totally agree with Mr. Posen about Britain’s policy issues. Yet there are problems with a wage target — mainly, you don’t want to base policy on the notion that wage gains are always a bad thing. Maybe adding a trend productivity adjustment would do the trick...Anyway, the bottom line for now is that neither the Fed nor the E.C.B. should be at all concerned about inflation. Unfortunately, the E.C.B. is not interested in having its orthodoxy challenged.

THE PROBLEM I HAVE WITH THIS ANALYSIS---WHERE ARE THE PEOPLE? IF IT DOESN'T TAKE PEOPLE INTO ACCOUNT, IT'S A NO-ACCOUNT POLICY....

It makes no difference if he's supposedly "on our side" or not.

And this whole macro vs micro economics is the big one for most economists.

and today we'd be at double digits :grr:

By Robert Reich

http://www.alternet.org/story/151248/wall_street_ceo%27s_bizarre_idea_about_why_the_recovery_has_stalled%3A_banks_are_too_regulated?akid=7086.227380.Iz50ye&rd=1&t=30

JP Morgan Chase CEO Jamie Dimon says regulating the banks whose antics caused the recession is stalling the economy's recovery....

DEAR JAMIE:

IT'S NOT ALL ABOUT YOU. IT'S NOT ALL ABOUT THE BANKS' BOTTOM LINE, EITHER. YOUR BANK FRAUD KILLED THIS ECONOMY. BUTT OUT.

LOVE,

DEMETER

Hey, Rich - I feel the same!

http://www.commondreams.org/headline/2011/06/09-1



Fine words, Rich - now let's put our money where your mouth is - let's use our funds to set up Hoovervilles outside Chamber of Commerce offices all around the country, and serve soup and new socks to the unemployed. Let's just camp there till we get some action. Let's start a movement to stop paying our medical bills till we have a national health system that cares for everyone - tell Dr's and hospitals that if they want to be paid they'd better put THEIR power and influence behind a sane system and until they do we're going to turn up at ERs and Dr's offices demanding care and not paying a cent. Let's occupy the mountaintops and demand clean energy JOBS.

Let's get off our deathbed and do SOMETHING besides ask our members to call their useless Congresscritters for the millionth time!

NO OFFENSE, BUT THAT'S ALL WE NEED!

http://www.reuters.com/article/2011/06/09/us-obama-clinton-worldbank-idUSTRE7586P720110609

Secretary of State Hillary Clinton has been in discussions with the White House about leaving her job next year to become head of the World Bank, sources familiar with the discussions said on Thursday...She has said publicly she did not plan to stay on at the State Department for more than four years. Associates say Clinton has expressed interest in having the World Bank job should the bank's current president, Robert Zoellick, leave at the end of his term, in the middle of 2012.

"Hillary Clinton wants the job," said one source who knows the secretary well.

A second source also said Clinton wants the position.

A third source said Obama had already expressed support for the change in her role. It is unclear whether Obama has formally agreed to nominate her for the post, which would require approval by the 187 member countries of the World Bank...A spokesman for Clinton, Philippe Reines, denied Clinton wanted the job, had conversations with the White House about it or would accept it.

People familiar with the situation, told of the denials from the White House and State Department, reaffirmed the accuracy of the report...

http://www.marketwatch.com/story/travelers-caps-stockbuybacks-amid-costly-disasters-2011-06-10

NEW YORK (MarketWatch) -- Insurer Travelers Cos. /quotes/zigman/455344/quotes/nls/trv TRV -2.90% said it was slowing its share buyback program after natural disasters cost the company about $1 billion over two months, already marking the second quarter as its most expensive for catastrophes since Hurricane Katrina struck the U.S. in 2005.

Deadly tornadoes that plagued the U.S. in April and May combined with other disasters to cost Travelers about $1 billion to $1.05 billion, the company said in a statement Friday. That's about equal to the amount the company spent on catastrophe claims for the past two years combined, and on par with the $1.01 billion in disaster costs Travelers incurred in the third quarter of 2005, when Hurricanes Katrina, Rita and Wilma combined to cause the insurance industry's worst quarter on record.

Travelers' disaster losses were concentrated in the company's business insurance and consumer insurance operations, the company said. The figures are after taxes and reinsurance.

Travelers said it now expects stock repurchases to be less than $250 million in the quarter. The company spent $1.4 billion on buybacks in the same period a year earlier. Disaster costs a year earlier were $285 million, which had, until now, been Travelers' highest ever second-quarter disaster tally.

http://www.marketwatch.com/story/cheaper-homes-hit-hardest-by-price-declines-2011-06-06

CHICAGO (MarketWatch) — The values on the country’s most modestly priced homes took a harder hit than their upscale counterparts during the downturn, according to a report released Monday from Harvard University’s Joint Center for Housing Studies.

Houses priced at the low end of housing markets typically fell about three times more than those at the upper end in the last year, according to the Center’s annual report, “The State of the Nation’s Housing.” High-end homes are those with original sales prices in the most expensive one-third of all homes in a market; low-end homes are those in the bottom third.

non-dischargeable by either chapters of bankruptcy and combined w/unmanageable servicing with a penalty that stretches well beyond a decade. How unexpected, in actuality, was the wholesale reductions-in-force that effective negated borrowers ability to pay? Both graduates and their indebted parents have been effectively shut out of lower-cost "first homes" or "retirement" cottages for an effective decade, notwithstanding a McJob. By the time these Americans have survived their penalties, age discrimination and/or health concerns or a feeling of a lifetime-on-hold takes center stage and graduates no longer have the specialized experience necessary to hold the jobs they'd been educated to hold though still tightly wed to their indebtedness and healthcare premiums while a government scoops up their piece of flesh from what's left of the involutarily retired seniors' SS.

:shrug:

all of the deregulation that really cut right at the middle & working classes -- shifting wealth away from them.

Our places Selling fast and high, because we are still the best deal in town, and we worked our butts off renovating...

* Slowing Chinese exports add to global economic worries

* U.S. crude slumps; world stocks head for weekly loss

* Lack of unity over Greece aid pressures euro (Updates prices, adds comment, details)



NEW YORK, June 10 (Reuters) - Major stock markets headed for their fifth weekly loss in six weeks on Friday on growing worries about the global economy, while U.S. crude oil prices tumbled $3 after Saudi Arabia began offering more oil to Asian refiners.

The euro fell against the dollar and yen as worries over Greece's debt crisis returned to center stage and investors scaled back expectations of the pace of future interest rate hikes in the euro zone.

Fears the global economic recovery is stumbling grew after data showed China's export growth slowed in May. That followed a barrage of reports in recent weeks showing the U.S. economy has hit a soft patch, which has rattled investors.

/... http://uk.reuters.com/article/2011/06/10/markets-global-idUKN1018932220110610

U.S. stocks extended losses on Friday, with the Dow and S&P 500 indexes briefly down more than 1 percent, as weaker trade data from China, the scrapping of a large IPO and ongoing disputes about a second Greece bailout weighed on sentiment.

/... http://uk.reuters.com/article/2011/06/10/markets-stocks-1pct-idUKWEN420820110610

http://www.marketwatch.com/story/stocks-slide-at-the-start-6th-down-week-likely-2011-06-10-106590

NEW YORK (MarketWatch) -- U.S. stocks accelerated their declines Friday, with the benchmark indexes headed towards a sixth consecutive week of losses, which would translate into the longest stretch for the Dow average since 2002.

Wall Street’s extended slide has come amid economic reports that have largely disappointed investors worried about the pace of the recovery, and follows a sell-off in Asian and European stocks.

The Dow Jones Industrial Average /quotes/zigman/627449/delayed DJIA -1.21% fell 104 points to 12,020, led by a 3.6% drop in Travelers Co. /quotes/zigman/455344/quotes/nls/trv TRV -3.50% shares after the insurer said it was slowing its share buyback program after natural disasters cost the company about $1 billion in April and May. Read related story on Travelers.

The Dow briefly touched the psychologically key level 12,000. All components were lower.

http://uk.reuters.com/article/2011/06/10/blackrock-idUKN1017881120110610

(Reuters) - U.S. economic growth could be trimmed by 1 percentage point a year for the next decade if plans to reduce the deficit by $4 trillion are enacted, BlackRock (BLK.N) Chief Executive Officer Laurence Fink said.

With analysts already predicting modest growth of 2 percent to 3 percent annually, that would leave the country with an economy expanding at only about 1 percent a year, Fink said at the Morningstar investment conference on Friday.

As a result, the government needs to work more closely with the private sector to bolster the economy, said Fink, who heads the world's largest money management firm.

He recommended raising tax rates on dividends so they are above those for capital gains and altering mark-to-market accounting standards that do not apply equally to corporate assets and liabilities.

Honestly, there is no friendly place to put your money. The bank isn't paying squat in interest. Equity funds have taken a royal dump. The bond funds are the only chance to grow a teeney weeney bit. BOOORRRING!

OK, pass the No More Tears.

Can I get an OY VEY?

Au - YTD up 15%
Ag - YTD up 20%

I'm running (kinda :rofl: ) in a 5k for a troubled teens charity tomorrow. I'll probably need it.

My only goal is not to finish last!

well, I guess it's time to head over to the bar and supply myself with plenty of carbs. Training, you know.

11,979

edit Doh!!! Misspelled Dow.

h/t Zerohedge:

and they are probably not too far off the mark

n/t

http://www.nakedcapitalism.com/2011/06/goldman-sycophants-of-the-world-unite-you-have-nothing-to-lose-but-your-virtually-non-existant-reputations.html">Goldman Sycophants of the World Unite! You Have Nothing to Lose but Your Virtually Non-Existent Reputations!

The Goldman defense against the Levin report is so late and so pathetic that it looks increasingly evident that the bank is simply hoping to cause confusion and muddy the waters rather than mount a frontal, fact-based rebuttal. Mind you, sniping and innuendo can prove reasonably effective if done persistently and loudly enough. The book Agnotology describes how Big Tobacco managed to sow doubt over decades of the link between smoking and lung cancer well after the medical evidence had gone from suggestive to compelling.

The first Goldman salvo was an Andrew Ross Sorkin piece on Monday which we deemed as unpersuasive. While it did point to an error in the Senate report, it failed to make a real dent the report’s findings, and most important, the notion that Goldman staffers, in particular Lloyd Blankfein, were pretty loose with the truth.

The most contested statement is the Blankfein denial that the firm had a “massive short” position; as Matt Taibbi points out today, the only way out on that one is to get into Clintonesque parsings of the word “massive”. Given the overwhelming evidence that Goldman intended to get out of its mortgage risk in late 2006 and its staff DID get the firm short in February 2007, then reversed that position in March to correctly catch a short term bounce (the market recovered from March to May, when it went into its free fall). And in the March-May period, it was still getting as much crap product out the door and lying to clients about its position in the deals, claiming its incentives were aligned when its effective short position in the deals meant the reverse, that it would profit if they tanked, which they did.

Read more: http://www.nakedcapitalism.com/2011/06/goldman-sycophants-of-the-world-unite-you-have-nothing-to-lose-but-your-virtually-non-existant-reputations.html

A Chinese ratings house has accused the United States of defaulting on its massive debt, state media said Friday, a day after Beijing urged Washington to put its fiscal house in order.

"In our opinion, the United States has already been defaulting," Guan Jianzhong, president of Dagong Global Credit Rating Co. Ltd., the only Chinese agency that gives sovereign ratings, was quoted by the Global Times saying.

Washington had already defaulted on its loans by allowing the dollar to weaken against other currencies -- eroding the wealth of creditors including China, Guan said.

Guan did not immediately respond to AFP requests for comment.

The US government will run out of room to spend more on August 2 unless Congress bumps up the borrowing limit beyond $14.29 trillion -- but Republicans are refusing to support such a move until a deficit cutting deal is reached.

http://ca.news.yahoo.com/china-ratings-house-says-us-defaulting-report-054309883.html

DOW 11951.91 -172.45 -1.42%
NASDAQ 2643.73 -41.14 -1.53%
S&P 500 1270.98 -18.02 -1.4%

There was a lot of thrashing about and rejiggering of portfolios as the market got wind of the banks, the poor, poor, banks, would face a surcharge if they exceed a certain size and girth. Like the size they were before a whole bunch of them failed. This was cover for some ugly intraday action, where giagantic houses took money off the table again and sold to others who always buy as the market sinks. Some of it due to their buying MBOs from the Fed at discount prices and sold some stocks to get liquid to buy those notes that common wisdom holds are worthless. ( hint: no, they are not) Yeah, makes sense to me. Oh yeah, the global economy is stalling, since every other country on earth bought in to that discredited Economic philosophy that austerity is the only way to handle a slowdown. Becasue that worked so well the last ten times. (it most notably DID NOT). Today is an example of the old adage "don't fight the tape" and right now the tape says go down, young man. My group has been on the sidelines for a couple of weeks now, and might look for some trading opportunity that doesn't involve a potential for the whole investment to crater. There's some action in the options and the FOREX pits- everyone is real excited about the long dollar-short TRY(Turkish Lira)because of the election over there. If you want to try this at home take that stack of Turkish Lira you brought back with you last summer after your Mediteranean vacation on your yacht and trade it in for Dollars at the intercambio next Thursday. Or mug Paris Hilton on her way back the same day.

:spray: :rofl: