Tuesday, January 1, 2013

Today's links

1--S&P 500 in 2012,  Big Picture (chart)

2--Government and Big Banks Joined Forces to Violently Crush Peaceful Protests, zero hedge

....-the reason why Barack Obama’s “Justice” Department refuses to prosecute even a single one of the mega-bank executives who profited so enormously from having defrauded both mortgagees and the investors in mortgage-backed securities, and who were bailed out by future U.S. taxpayers whose government purchased those remaining “toxic assets” at 100 cents on the dollar, is clear: we live in a police state, and these elite crooks control it. This is not real democracy.

3---Why the major global banks have become the enemy of the State and should be treated in the same way as Organised Crime or Financial Terrorists, Rowans blog

If there was any lingering doubt about the supremacy of the internationalist banker over the canons of law, the latest HSBC exemption from criminal charges proves that the real masters of the planet are the criminal banksters. If this settlement was an abnormality and not the rule, one might argue the expediency for pragmatism, while deployable, is necessary. Unfortunately, for the financial elites, the facts tell a very different story.

“...In court papers filed in federal court in Brooklyn, the federal government said the case against HSBC is related to the laundering of proceeds from narcotics trafficking via the Black Market Peso Exchange, a method by which money launderers convert cash narcotics dollars into Colombian pesos by buying and re-selling wholesale consumer goods. “The lack of an effective anti-money laundering program at HSBC Mexico and HSBC Bank USA, N.A. contributed to the conduct charged” in the money-laundering case against narcotics traffickers, Justice Department prosecutors said in court papers.”

“A year-long investigation by a Senate committee uncovered that HSBC acted as a conduit for drug money, disguised the sources of funds to evade U.S. sanctions against Iran, and included among its clients businesses with alleged ties to terrorism. HSBC’s internal culture has been “pervasively polluted for a long time,” said Carl Levin, a senator from Michigan, who helped lead the investigation.”...
 
I have tried to show just how little these institutions really do to help and provide support for the struggling British economy. They truly are major criminal enterprises and they don't give a damn for their country of operation. They operate solely on a zero-sum game, they will go to where the regulation is least and the profits can be maximised to the greatest potential. That is why they will never leave the UK.

These banks perform no useful social purpose, and they deserve no sympathy or support. They exist only to facilitate an international cadre of global white collar criminals and drug traffickers. They have no interest in their retail customers who they routinely despise, how else can you explain the level of institutionalised fraud they have perpetrated against them and their interests; they don't want to fund business, or underwrite social investment, you only have to consider the current minimalist level of funding being provided to businesses which are starved of investment capital to see the truth of this assertion, yet they expect the British tax-payer to bail them out when they are failing; they don't want to pay tax, consider their aggressive tax avoidance structures which they routinely seek to foist on the Revenue, they don't want to contribute in any way to the restructuring of the mess they have caused and in which they have dumped the British people, and frankly, we would hardly notice their passing if we took them down, one by one, and broke up their empires.
 
 
The budget deal passed by the Senate probably would crimp the U.S. economic recovery without stopping it.
The elimination of a 2 percent payroll tax cut, coupled with higher income taxes on the wealthy, will help reduce growth in the first quarter to 1 percent, from 3.1 percent in 2012’s third quarter, the latest data available, according to economists at JPMorgan Chase & Co. (JPM) and Bank of America Corp. The expansion will strengthen later in the year as the housing market continues to rebound, they forecast.

“It’s going to definitely present a headwind for the economy,” Michael Feroli, chief U.S. economist for JPMorgan Chase in New York, said of the fiscal pact that the Senate approved early today, sending it to the House of Representatives. “We’re looking for a downdraft in growth in the first half of the year, with the economy coming back in the second.”
The first half slowdown will mean that the U.S. will make limited progress in reducing unemployment in 2013, according to projections by Ethan Harris, co-head of global economic research for Bank of America in New York. He sees the jobless rate falling to 7.5 percent in the fourth quarter of 2013 from 7.7 percent in November 2012.

Jobless Benefits

The agreement forged in talks between Vice President Joe Biden and Senate Minority Leader Mitch McConnell, a Kentucky Republican, would avert some, though not all, of more than $600 billion in automatic tax increases and spending cuts slated to take effect this year. Under the accord, passed by the Senate early today, households making less than $450,000 per year would be spared an income tax rate increase. And the unemployed would still be eligible for extended jobless benefits.
Payroll taxes would rise, to 6.2 percent from 4.2 percent last year. And the wealthy would see an increase in their top income tax rate, to 39.6 percent, from 35 percent....

Bank Profits

Banks are bouncing back as well, with profits in the third quarter the highest in six years, according to the Federal Deposit Insurance Corp. in Washington.
The number of lenders on FDIC’s confidential list of so- called problem banks -- those deemed to be at greater risk of collapse -- fell from 732 in the second quarter to 694 in the third, the smallest number since a peak of 888 after the financial crisis.
Another encouraging sign: The job market has held up even in the face of concerns about the possibility of higher taxes and government spending cuts in 2013. Payroll gains this year through November averaged about 151,000 a month compared with 147,000 in the same period of 2011.

5---US credit expansion driven by corporate lending, sober look
 
2012 was marked by significant credit expansion in the US, as loans and leases on domestic banks' balance sheets hit a new post-recession high. Here is a quick overview of recent lending trends.

Loans and leases in bank credit; domestically chartered commercial banks; seasonally adjusted (source: FRB)

A great of that expansion has been driven by corporate loans, where credit expansion started in early 2011. Although the Fed doesn't break down this measure by company size, anecdotal evidence suggests that this credit growth is concentrated in large company lending. Small business loan growth has apparently been much more modest.
 
6---Settlement Expected on Past Abuses in Home Loans, NYT
 
Banking regulators are close to a $10 billion settlement with 14 banks that would end the government’s efforts to hold lenders responsible for foreclosure abuses like faulty paperwork and excessive fees that may have led to evictions, according to people with knowledge of the discussions. ......
 
Federal agencies like the Securities and Exchange Commission and the Justice Department are continuing to pursue the banks for their packaging and sale of troubled mortgage securities that imploded during the financial crisis.
Housing advocates were largely unaware of the latest rounds of secret talks, which have been occurring for roughly a month. But some have criticized the government for not dealing more harshly with bankers in light of their lax standards for making loans and packaging them as investments, as well as their problems with modifying troubled loans and processing foreclosures.
 
 
Punto Fijo, December 27th, 2012 (Venezuelanalysis.com) – Venezuelan President Hugo Chavez has signed a decree delegating certain responsibilities in economic matters to his vice president, Nicolas Maduro.
The decision was announced yesterday in the official newsletter of the Venezuelan government (Gaceta Oficial), but had been signed by President Chavez on December 9th, before undergoing surgery on December 11th.
The decree allows Vice President Nicolas Maduro to make a range of administrative decisions, including the appointment of vice-ministers and other public officials, the decree of expropriations, the transfer of funds among ministries, and oversee public credit operations.
President Chavez made a similar decision in July 2011 to delegate responsibilities to then Vice President Elias Jaua when he travelled to Cuba to receive chemotherapy.

8---Venezuela among the Most Positive Countries, Gallup Says, venezuelanaysis

9---Chavez: Every Venezuelan to Have Dignified Home by 2019 “Whatever it Costs

10---Canadian housing starts fell to their slowest pace in a year in November, while sales of existing homes were down 11.9 per cent from a year earlier, leaderpost

Canadian housing starts fell to their slowest pace in a year in November, while sales of existing homes were down 11.9 per cent from a year earlier. Still, the ratio of household debt to disposable income rose to a record in the third quarter. Prime Minister Stephen Harper added his voice this month to those warning Canadians not to take on too much debt, saying some consumers are "approaching the limit" of how much they can carry

11---Obama spearheads social counterrevolution, WSWS

12---Japan's PM Abe: Fiscal stimulus on the way, FT

Mr Abe on Wednesday unveiled a cabinet of close allies and policy experts to push his agenda of economic recovery, just hours after being formally appointed as the country’s seventh prime minister in six years.
He has vowed to create a “crisis-beating government” to tackle the deflation that has dogged Japan for more than a decade and also the strong yen. Mr Abe said he had instructed his cabinet to do their utmost to achieve economic recovery and reconstruction after last year’s devastating earthquake, and to ensure national security.
“I will direct the energies of my entire cabinet towards implementing bold monetary policy, flexible fiscal policy and a growth strategy that encourages private investment, and aim to achieve results with these three pillars,” Mr Abe said....


He has pledged to reflate the economy through fiscal stimulus and monetary easing. He has also called on the Bank of Japan to carry out “unlimited” easing and warned that the central bank risks losing its independence – through legislative changes – if it does not introduce a 2 per cent inflation target.
 

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