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Monthly Archives: November 2012

With a Fiscal Cliff Deadline Weeks Away Politicians Have Room for a Bargaining Impasse


“(Reuters) – Republicans in the U.S. Congress on Monday called on President Barack Obama to detail long-term spending cuts to help solve the country’s fiscal crisis, while holding firm against the income tax rate increases for the wealthy that Democrats seek.

The White House has been equally firm in its position, threatening to veto any bill that does not include the tax rate increases opposed by Republicans.

While Congress returned from its Thanksgiving holiday break amid increasing talk about long-term tax reform plans and a need to compromise, the two parties showed no signs yet of having found a way around the short-term tax obstacle necessary to head off the “fiscal cliff” on December 31, which would bring steep mandated tax-rate increases and spending cuts in the new year.

“We remain at an impasse,” Senate Republican Leader Mitch McConnell said during a floor speech.”

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FABER: 44 Charts That Show Why The World Is Doomed

Marc Faber, publisher of the Gloom Boom & Doom Report, is well known for his ultra-bearish commentary.

But he’s not without reason.

In a new presentation given in Hong Kong to the London Bullion Market Association, Faber offers a thick stack of 44 charts that makes him very bearish on the global economy (via ZeroHedge).  They include overviews of the emerging and evolving trends on debt, trade, stocks and commodities.

Faber points to the explosion of public and private debt and how they have been far outpacing GDP growth for the last 50 years.  In this backdrop, the wealth gap between younger and older Americans have been widening.

Overseas, China has seen its economy boom on expansionary monetary policy, which has turned the world’s second largest economy into a giant credit bubble.

Considering all this, he offers two investment strategies: “aggressively shifting from one asset class to another” or “achieving safety though diversification.”

Thanks to Marc Faber for giving us permission to feature his presentation.”

Full article and chart porn

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The British Pound Spikes After The Announcement of a Canadian as the Head of the BoE

“The big news in the central banking world is the Bank of England announcement that current Bank of Canada chief Mark Carney would take over in the spring.

This is considered a great pick, as Mark Carney is incredibly well respected, and has successfully guided Canada through a challenging period without a big banking bust.

So what does this mean for currency markets?

SocGen’s Sebastien Galy sent out a one-liner explaining the impact on currencies:

It had to happen eventually. Not good for CAD, given now a loss of credibility, but that is temporary. One may take it as a reason to buy GBP, with someone who understands markets and financial stability.”

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Mary Schapiro to Step Down From SEC

“WASHINGTON (Reuters) – The head of the U.S. Securities and Exchange Commission, Mary Schapiro, will step down in December after a tumultuous four years in which she tried to rehabilitate the agency’s battered reputation.

In a statement issued on Monday, Schapiro said she would leave the agency on December 14.

SEC Commissioner Elisse Walter will serve as chairman-designate on a temporary basis, the White House said. A White House official said President Barack Obama plans to nominate a full-term replacement in the near future.

Candidates rumored to be on the shortlist include Walter, Treasury official Mary Miller and SECenforcement director Robert Khuzami.

When Schapiro took over the agency in 2009, it was lambasted for lax oversight that critics said helped lead to the financial crisis and for its failure to catch now-convicted Ponzi schemers Bernard Madoff and Allen Stanford.”

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Three Cheers for Technology Boosting Employment

“Nerds are no longer the only ones benefiting from the innovation boom.

Having left the heavy-lifting to technology companies until early this year, San Francisco’s non-tech employers are playing a growing role in the city’s labor recovery. Positions in everything from retail to construction to hospitality now comprise about 75 percent of the city’s job growth, helping the Northern Californian hub add jobs at among the fastest rates in the nation and reduce its unemployment rate to 6.5 percent.”

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Will Regulation Restore Investor Confidence ?


“With the uncertainty of the U.S. presidential election behind us, it’s time for regulators of financial markets to get serious about preventing market malfunctions — from out-of-control algorithms to initial public offerings marred by technology breakdowns.

To some wary investors, these incidents show that the markets are unstable, unreliable and tilted against them. Given the extraordinary complexity of today’s lightning-fast equities markets and the speed of technological change, there is no single solution. Yet a logical place to start is a fresh approach to the regulation of U.S. stock exchanges.”

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Robert Dole Becomes Chief Equity Strategist at Nuveen

“Nuveen Asset Management hired Robert Doll as chief equity strategist, less than six months after he announced his retirement from the same role at BlackRock Inc. (BLK), where he was known for his bullish stance on stocks.

Doll, 58, will also serve as senior portfolio manager directly overseeing about $1.5 billion and reporting to David A. Chalupnik, Nuveen’s head of equities, the Chicago-based company said today in a statement. Doll will offer a weekly markets commentary, just as he did at BlackRock, and continue his annual list of 10 market predictions, he said in a telephone interview today.”

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Market Update

U.S. equities give back some ground after a week of Turkey God driven rally.

Currently, the DOW is off 10o. Most of the downside can be attributed to continued worries over the fiscal cliff and that Europe is meeting for a third time to try and resolve the Greek financing problem. Everyone in Europe except the Greeks are against writing down debt.

Spanish elections in Catalonia have elected  the independent party which is causing some speculation as to the future of bailing out Spain as a whole. This has caused European markets to accelerate to the downside.

Market Update

World indices

[youutbe://http://www.youtube.com/watch?v=MsutmzhslyY 450 300]


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Report Sees Record 2013 for Silver, Gold Trends into Fiscal Cliff

“ETF Securities has released its weekly metals outlook. With big gains in silver and gold in recent days, we have been tracking the moves in ETFS Physical Silver Shares (NYSEMKT: SIVR) and iShares Silver Trust (NYSEMKT: SLV).

This morning’s refers back to last week’s report from the Silver Institute that industrial demand for silver, aka The Devil’s Metal, is now expected to rise by 7% in 2013 to a new record. The report also highlights that investment demand will remain a key issue in 2013. Effectively, the report is calling for a rebound in 2013 after silver lost ground in 2012.

ETF Securities said:”


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Protect Yourself From Cybergang Style Scams to Steal Your Identity as You Cyber Shop

“Here’s how cybergangs are targeting online holiday shoppers, and here’s what you can do to protect yourself.

9:16AM EST November 26. 2012 – SEATTLE — Bad guys are poised to plunder online holiday shoppers.

On Black Friday, Cyber Monday and throughout the 2012 holiday shopping blitz, cybergangs are expected to unleash a variety of old and new Internet-based scams to steal identities and hijack online accounts.

“This is prime time for cybercriminals,” says Brendan Ziolo, vice president at security firm Kindsight.

Crooks’ incentive: Some 41% of consumers plan to use their PCs, tablets and smartphones to shop online, up from 37% last year, according to PriceGrabber.

That means millions of people will be using computers at home and work to shop for gifts. What’s more, roughly half of them use Web browsers lacking the latest security patches, making them prime targets for computer infections that saturate the Web.

“Users of all major browsers are using outdated software containing known vulnerabilities,” says Wolfgang Kandek, chief technical officer at patch management firm Qualys.

Qualys recently analyzed more than 1 million Internet-connected Microsoft Windows PCs and Macs. It found 56% of users of Microsoft’s Internet Explorer surfed the Internet using an older version of the popular Web browser carrying widely known security flaws. Hackers are expert at tapping into such flaws to seed infections.

Some 49.2% of users of Mozilla’s Firefox, 47.5% of Google’s Chrome and 37.4% of Apple’s Safari also used browser versions lacking the latest security updates. Using an outdated browser — and clicking on a Web page booby-trapped with a hidden virus — can turn control of your computer over to an intruder.”

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Five Reasons America Won’t Fall Off the ‘Fiscal Cliff’

“Relax, America. You can put your parachutes away. Washington isn’t likely to take the country over the dreaded “fiscal cliff.” Even a capital city as deadlocked and dysfunctional as Washington has been in recent years is not likely to risk a move that has so many economic and political ramifications, according to a wide range of experts.”

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Dick Durban: Fiscal Cliff Talks Stalled

“U.S. lawmakers have made little progress in the past 10 days toward a compromise to avoid the harsh tax increases and government spending cuts scheduled for Jan. 1, a senior Democratic senator said on Sunday.

The United States is on course to slash its budget deficit nearly in half next year. Closing the gap that quickly, which in Washington is referred to as going over a “fiscal cliff”, could easily trigger a recession.

“Unfortunately, for the last 10 days, with the House and Congress gone for the Thanksgiving recess… much progress hasn’t been made,” Dick Durbin, the No. 2 Senate Democrat, told ABC’s “This Week” program.

Serious negotiations are expected to resume this week. Democratic and Republican lawmakers have been trying to convince the public — and financial markets — that they are willing to compromise and can reach a deal before the end of the year.

Durbin indicated Democrats might accept a reform of the government’sMedicare health insurance program for the elderly that would make higher-income seniors pay more for their care.

Democrats traditionally oppose limiting Medicare benefits according to income, a practice known as “means testing.” Durbin said Medicaid, a public health insurance program for the poor, also could be overhauled.

But Durbin said social security, the federal government pension program, needs only small tweaks to ensure long-term solvency rather than major reforms.

A deadline looms over the talks. Without action by lawmakers and President Barack Obama, roughly $600 billion in tax increases and spending cuts will start to hit households and companies in early January.

‘Test Of Political Courage’ “

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Ex-Olympus CEO: Type 5 Japan Over Business Culture

“Japan has a miserable future ahead of it without radical changes to the business climate, the former chief executive of camera and medical equipment maker Olympus has told CNBC.

Michael Woodford, who was fired in October 2011 after he highlighted irregular payments made by the firm, said a poor business attitude and ethos is endemic throughout Japan.

“There’s a great engineering class in Japan but there’s a lousy management class,” he said. “They’re bureaucrats, they don’t understand the basics of business, closing what’s weak and investing in what’s strong.”

Woodford, who settled his claim for unfair dismissal back in June, is about to publish a book, “Exposure: Inside the Olympus Scandal: How I Went from CEO to Whistleblower.”

Japan’s demographics are notoriously skewed towards an aging population. It may be the world’s third largest economy but its people are growing old at a faster rate than any other country in the world. Nearly a quarter of the population is above the age of 65 according to World Bank data, and the country has a negative birth rate.

“How are they going to pay that down? I would short Japan,” he said.”

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ETF Considerations for Obama’s Second Term


“Election Day is in the rearview mirror, but the aftershocks will reverberate in the market for years. There is a threat of recession, yet if a deal can be struck averting the “fiscal cliff,” it would pave the way for respectable returns in 2013 and 2014. “Rational minds believe something will get done, but I’m just not sure how many rational minds there are inWashington,” quips Charles Schwab chief strategist Liz Ann Sonders.

Thus, caution is the mantra on Wall Street. Most agree that the housing recovery is real. Housing has been a huge winner in 2012, but it’s still early–new housing starts have rebounded to more than 800,000 at an annualized rate, well below a peak rate of more than 2 million. The SPDR S&P Homebuilders ETF is up 50% in the last 12 months….”

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