News links for 6 March 2013
My understandng is that Joe Stiglitz has denied this report that he is actively advising Beppe Grillo. But let’s see what comes out here. If Stiglitz or other top economists can council Grillo, it might be beneficial in terms of honing the politician’s message in terms that policy makers can understand.
Obama Administration: Yes, We Can Kill Americans on US Soil « Antiwar.com Blog
““It is possible, I suppose, to imagine an extraordinary circumstance in which it would be necessary and appropriate under the Constitution and applicable laws of the United States for the President to authorize the military to use lethal force within the territory of the United States,” Holder wrote.
Holder’s caveat is that this scenario is “entirely hypothetical” because “the US government has not carried out drone strikes in the United States and has no intention of doing so.” Furthermore, “as a policy matter…we reject the use of military force where well-established law enforcement authorities in this country provide the best means for incapacitating a terrorist threat.””
“Attorney General Holder stated in a letter to Sen. Paul dated March 4, 2013: “It is possible, I suppose, to imagine an extraordinary circumstance in which it would be necessary and appropriate under the Constitution and applicable laws of the United States for the President to authorize the military to use lethal force within the territory of the United States.”
“The U.S. Attorney General’s refusal to rule out the possibility of drone strikes on American citizens and on American soil is more than frightening – it is an affront the Constitutional due process rights of all Americans,” Sen. Paul said.”
“The stock market alone hasn’t repaired the damage done to American household finances in recent years. In many ways Americans are still sucking wind after the gut punch they suffered in 2008. Here’s a look.
HOUSEHOLD INCOMES ARE LOW
These haven’t gone anywhere but down since the recession hit. Real median US household income — that’s “real,” as in “adjusted for inflation” — was $50,054 in 2011, the most recent data available from the US Census Bureau. That’s 8% lower than the 2007 peak of $54,489.”
Dow Average Jumps to Record as Profits, Fed Stoke Rebound – Bloomberg
“About $10 trillion has been restored to U.S. equities as retailers, banks and manufacturers led the recovery from the worst bear market since the 1930s. It took the Dow less than 65 months to rise above its previous high set on Oct. 9, 2007, more than a year faster than the recovery from the Internet bubble.”
Banks urge judge to throw out Libor lawsuits | Reuters
“laintiffs including community banks and local governments have sued Bank of America (BAC.N), JPMorgan Chase & Co (JPM.N) and others for allegedly manipulating the London Interbank Offered Rate, commonly known as Libor.”
Australia Junk Loans Made in U.S. Surge to Record on High Yields – Bloomberg
“Australian companies borrowed a record $6.2 billion from high-yield investors in the U.S. since October as the lure of loans with looser terms offsets higher borrowing costs.
Fortescue Metals Group Ltd. (FMG) increased a loan to $5 billion from $4.5 billion after failing to syndicate the facility among Asian banks. One meeting with institutional investors in New York helped Nine Entertainment Co., rated Ba2 by Moody’s Investors Service, seal a $735 million transaction. Asia-Pacific borrowers have never raised funds from speculative-grade U.S. loan investors on such a scale, according to sale arrangers UBS AG and Credit Suisse Group AG.
North American asset managers, facing a fifth year of near- zero benchmark interest rates, are buying into the high-yield loan market at a record pace. The funding, which doesn’t require regular balance sheet checks and has maturities as long as seven years, is attracting borrowers as an exodus of European lenders and heightened banking regulations damp liquidity in Asia’s bank debt market.
“It’s not purely about the interest cost,” said Simon Kelly, chief financial officer of Nine Entertainment, which is paying 7.25 percent on its new debt. “There are some benefits of this type of financing including certainty of funding and financial flexibility. I’d have absolutely no hesitation tapping the market again and in fact I’ve been suggesting it to a number of other executives at other companies.””
Boogerd bekent dan toch dopinggebruik :: nrc.nl
Former top Dutch cyclist Michael Boogerd admitted to doping including using EPO and blood transfusions from 1997-2007. He is the latest to come clean about using PED during the Armstrong era.
Scotiabank, RBC, BMO, TD earnings fuelled by housing | FP Street | News | Financial Post
“Canada’s big five banks are riding high after another blow-out quarter driven by Canadian consumers’ seemingly unstoppable appetite for debt, especially mortgages.
The country’s dominant lenders brought in a collective record profit $7.33-billion, up more than 11% from last year and well ahead of analyst estimates as players streamlined their domestic retail operations to Hoover up mortgages at a rate that analysts speculate is greater than ever before.
Canadian households have been on a borrowing binge for the past decade despite repeated warnings from Bank of Canada Governor Mark Carney about the danger of excess debt and the threat it poses to the wider economy.”
Watch how people react to a (staged) attempted murder | The Sideshow – Yahoo! News
Must see
Sharp Said in Talks for 10 Billion Yen Samsung Investment – Bloomberg
“Sharp Corp. will sell 10.4 billion yen ($111 million) of stock to Samsung Electronics Co. as the Japanese display maker tries to rebound from a record loss amid slowing demand for TVs and Apple Inc. iPhones.
Samsung will pay 290 yen a share for about a 3 percent stake, according to a filing with Japan’s Finance Ministry. That’s 15 percent lower than today’s closing price. The Korean company, the world’s largest maker of TVs and smartphones, said the investment will secure a supply of liquid-crystal displays from Sharp, and it won’t be involved in management.”
House prices post largest annual rise in two years – Telegraph
“At £163,600 on average, prices were 1.9pc higher than a year earlier and the lender said it expects to see a national increase in house prices over the course of 2013.
The annual increase was the highest recorded since September 2010, and prices were also up by 0.5pc on a month-on-month basis. That follows a 0.3pc fall in house prices in January, according to Halifax.”
BBC News – Emerging markets’ growth slowing, HSBC PMI report says
“The PMI recorded a level of 52.3, down from from 53.8 in January, its lowest since August.
However, the index remained above the 50 level which indicates growth.
The index covers 16 leading emerging markets, including India, Brazil and China, which all saw their rate of growth fall.”
BBC News – Payday lenders told to improve by OFT
“The OFT is giving the biggest 50 firms 12 weeks to change their practices, or risk losing their licences.
It also plans to refer the market to the Competition Commission, after it found “deep-rooted” problems in how payday loan companies compete.”
China’s Push to Cool Down Housing Raises Questions – NYTimes.com
“One of the crucial questions, for which very smart people offer very different answers, is can bubbles burst in certain areas without bringing down the whole economy?
Regardless of how that question is answered, we should perhaps give China’s leaders some credit for acknowledging potential bubbles and taking steps to rein them in. What might have been different if American policy makers had recognized and tried to manage the risks of a housing bubble in 2005, 2006 or 2007?”
A Day in the Life of a Freelance Journalist—2013 | natethayer
The crux here is that the Atlantic didn’t want to pay for the article and had no funds available for free lancers. This is the state of media everywhere.
“Here is an exchange between the Global Editor of the Atlantic Magazine and myself this afternoon attempting to solicit my professional services for an article they sought to publish”
Australia extends growth run to 21 years as exports pick up | Reuters
“The Australian Bureau of Statistics reported gross domestic product (GDP) rose 0.6 percent in the fourth quarter, compared to the previous quarter when it grew an upwardly revised 0.7 percent. That was dead in line with forecasts.
The value of all goods and services produced was 3.1 percent higher than in the fourth quarter of 2011 at an inflation-adjusted A$372 billion (251 billion pounds).”
BBC News – Microsoft fined by European Commission over web browser
“Microsoft has been fined 561 million euros ($731m; £484m) for failing to promote a range of web browsers, rather than just Internet Explorer program, to users in the European Union (EU).
It introduced a Browser Choice Screen pop-up in March 2010 as part of a settlement following an earlier EU competition investigation.
But the US company dropped the feature in a Windows 7 update in February 2011.”
Ryan Budget Plan Draws GOP Flak – WSJ.com
“House Republican leaders, faced with the daunting task of writing a budget that would eliminate deficits within 10 years, are backing away from a proposal to revamp Medicare for more Americans than previously suggested.
House Budget Committee Chairman Paul Ryan (R., Wis.) has in recent weeks floated the idea of rolling back the GOP promise that people 55 and older would be exempt from his signature plan to offer future retirees a subsidy to buy private health insurance as an alternative to traditional Medicare.
House GOP centrists are balking at the idea, and in a meeting with them Tuesday, Mr. Ryan said he would leave it to his party colleagues to decide whether to raise the age cutoff to 56—or even higher—in the budget for the fiscal year that starts Oct. 1 that he is unveiling next week, according to a GOP aide familiar with the meeting.”
“The new HTC One unveiled last month is increasingly feeling like last-chance saloon for the troubled Taiwan handset maker. Today HTC noted that its sales for the month of February fell by nearly 44% to 11.37 billion Taiwan dollars ($384 million), from NT$20.3 billion for the same month one year ago. Looking at the bigger picture, that NT$11.37 billion is barely higher than what HTC made in January 2010, when it reported NT$11.12 billion in sales.
Compared to January 2013′s revenues of $15.54 billion, sales in February 2013 were down by nearly 27%.”
ECRIs Achuthan Reiterates Recession Call – Business Insider
I don’t buy this. I don’t believe the US has been in a recession. Though growth has been weak.
“While we have yet to hear any of the official agencies declare that the U.S. is indeed in recession, Achuthan continues to be convinced that the numbers speak for themselves.
“So that is the evidence from GDP and GDI, and you can begin to draw your own conclusions about the U.S. economy and if it is in recession,” said Achuthan.
“But what about the other key coincident indicators?””
Bankers warned thousands more mortgages have fallen into arrears – Independent.ie
“The grim news on arrears was laid out by Central Bank officials to bankers, credit union officials and credit card company executives.
Figures for the level of arrears for the last three months of last year are due out tomorrow and are set to show an additional 4,000 households are unable to meet home-loan repayments.
It is expected the figures will show that more than 90,000 residential mortgage accounts are now three months or more behind on their repayments. This is up from 86,000 accounts last September.”
As Dow Sprints to New High, the Middle Class and Manufacturing Languish « naked capitalism
It is interesting that S&P500 earnings were not at record levels in Q2 or Q3 of 2012 and that wage growth has been subdued. What could be driving stocks higher except low rates?
“the new high on the Dow appears mainly to be a reflection of the way corporations have been able to squeeze workers, even after the biggest economic upheaval since the Depression. So all the market giddiness is really about how secure the have feel in their advantaged position.
Yet despite all the talk about how great earnings are, actual S&P 500 quarterly earnings per share peaked in the first quarter of 2012 and were down in the following two quarters (the 4Q actual should be out shortly).
And a new report by MIT on innovation and production (hat tip Marcy Wheeler) has an almost desperate undertone. It starts by pointing out how the data understate how bad the competitive erosion is”
Euro-Zone Exports Plunge – WSJ.com
“Eurostat, the European Union’s statistics agency, said exports from the euro zone fell 0.9% in the fourth quarter compared with the third quarter, a sharp reversal from 1% growth in the period before. That is the steepest quarterly drop since the first three months of 2009, when the bloc was still in a deep recession following the collapse of U.S. investment bank Lehman Bros.”
Venezuelan Leader Chávez Dies – WSJ.com
“Hugo Chávez, a former tank commander turned populist politician who used Venezuela’s oil riches to pursue his vision of socialism and challenge the U.S., died Tuesday from complications related to cancer.
With Mr. Chávez just months into his fourth term, his death plunged Venezuela into political uncertainty. Vice President Nicolás Maduro will succeed Mr. Chávez as interim president, but must hold a new election within 30 days, according to the constitution.”
Don’t Blink, or You’ll Miss Another Bank Bailout – NYTimes.com
“last week’s details of the undisclosed settlement between the New York Fed and Bank of America are remarkable. Not only do the filings show the New York Fed helping to thwart another institution’s fraud case against the bank, they also reveal that the New York Fed agreed to give away what may be billions of dollars in potential legal claims.
Here’s the skinny: Late last Wednesday, the New York Fed said in a court filing that in July it had released Bank of America from all legal claims arising from losses in some mortgage-backed securities the Fed received when the government bailed out the American International Group in 2008. One surprise in the filing, which was part of a case brought by A.I.G., was that the New York Fed let Bank of America off the hook even as A.I.G. was seeking to recover $7 billion in losses on those very mortgage securities.
It gets better.
What did the New York Fed get from Bank of America in this settlement? Some $43 million, it seems, from a small dispute the New York Fed had with the bank on two of the mortgage securities. At the same time, and for no compensation, it released Bank of America from all other legal claims.”
Europe wants Spain to increase taxes AGAIN. At this point, I can just marvel at the insanity of European policy. It’s truly breathtaking. Europe also wants pension and labor market reform, two things that are more reasonable.
Basics of Banking: Loans Create a Lot More Than Deposits
“What we have here is a functioning bank, a demonstration of how the basic infrastructure of banking is not built on a foundation of a bunch of cash that is then lent out. It’s built on the loans themselves, with capital and reserves raised to meet regulatory requirements.”
Average new-car loan a record 65 months in fourth quarter | Reuters
“Auto lenders gave borrowers a record 65 months, on average, to repay new-car loans in the fourth quarter, credit-tracking company Experian said on Tuesday.
The average term for new-car loans was up from 63 months a year earlier. For loans on used cars, the average term was unchanged at 60 months.
The new-car loan term record came as lenders continued to finance more subprime borrowers. Subprime borrowers took 43.2 percent of all car loans, the most in any fourth quarter since 2007 and nearly seven percentage points more than in 2009, according to Experian.”
China to Raise Budget Deficit by 50 Percent to Boost Demand – Businessweek
“China plans to raise its budget deficit by 50 percent this year as the central government cuts taxes and boosts measures to support consumer demand in the world’s second-biggest economy.
The gap will widen to 1.2 trillion yuan ($193 billion) in 2013 from 800 billion yuan last year, amounting to about 2 percent of gross domestic product, the Ministry of Finance said in its budget report to the National People’s Congress in Beijing today. Local governments will run a combined deficit of 350 billion yuan and the Ministry of Finance will issue bonds to cover their shortfall, according to the report.”
How to Prevent Accidental Spending on In-App Purchases on Your iPhone
“If the recent news about the 5-year-old who managed to spend $2,500 in 15 minutes on in-app purchases on an iPad has you a little concerned: don’t worry, in-app purchases are incredibly easy to turn off so no one can accidentally spend money when you don’t want them to.”