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“US Federal Reserve is reporting a major deposit withdrawal from the nation’s bank accounts. The financial system has not seen such a massive fund outflow since 9/11 attacks.

The first week of January 2013 has seen $114 billion withdrawn from 25 of the US’ biggest banks, pushing deposits down to $5.37 trillion, according to the US Fed. Financial analysts suggest it could be down to the Transaction Account Guarantee insurance program coming to an end on December 31 last year and clients moving their money that is no longer insured by the government.

The program was introduced in the wake of the 2008 crisis in order to support the banking system. It provided insurance for around $1.5 trillion in non-interest-bearing accounts with a limit of $250,000. It was aimed at medium and small banks as the creators of the program believed bigger banks would cope with the crisis themselves.

So the current “fast pace” of withdrawal comes as a surprise to financial analysts because the deposits are slipping away from those banks which supposedly were safe. Experts expected savers in small and medium banks would turn to bigger players come December 31.

There are a number of reasons behind this unpredicted fund outflow. Some experts believe it has to do with the beginning of the year when the money is randomly needed here and there. Others have concluded the funds are getting down to business and being invested.

Another set of data from the US Federal Reserve shows some deposits may have moved within the banking system from one type of account to another.”

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“Investor “euphoria” is taking stocks higher but eventually will be their undoing, market bear Marc Faber told CNBC.

The author of the widely followed Gloom Boom & Doom Reportsaid the current rally, which has seen the Standard & Poor’s 500gain more than 5 percent in 2013 and 12 percent since its November 2012 low, is getting tired and will run out of steam soon.

“We are very overbought, but it is also possible that we have a mild correction in February and then a further increase in stock prices,” Faber said on “Closing Bell.”

He added it would be “something that would be similar to ’87 where in the first half of the year until August the market went up by 41 percent (only) to lose 40 percent in months in October and November. So it’s a possibility that we have a lot of volatility this year in equity prices.” …”

Full article and video

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“Chesapeake Energy CEO Aubrey McClendon will retire effective April 1, according to a company release.

A spokesman says the company is not for sale, according to Bloomberg.

As the Wall Street Journal’s Russell Gold Tweets, McClendon cites unspecified “philosophical differences” with the board as his reason for stepping down in the release.

Shares of CHK are surging in after-hours trading, up more than 10 percent.

Last year, McClendon was the subject of a series of Reuters investigations alleging conflict of interest at the country’s second-largest natural gas producer….”
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“Stocks have headed higher without respite to start 2013.

Many strategists are warning that a sell-off is in order (see here and here), especially given a wide range of indicators that suggest investor sentiment is at historical highs.

Today, we get an indication from BofA equity strategist Savita Subramanian that hedge funds are now selling stocks – and they’re selling them to private investors, who are picking up their pace of buying.

Below is a chart showing that BofA “private clients,” or individual investors, have been buying stocks since mid-January…”

Full article and charts

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“Despite its huge rally from its March 2009 low, the stock market has effectively gone sideways for the last decade.

Many have characterized the current market as a secular bear market.

But in a new research report, Fidelity portfolio manager Jurrien Timmer writes that from a technical perspective, this secular bear may be turning into a secular bull.

Timmer examined how the S&P 500 has been performing since 1871 and discovered that on average, prolonged periods of below-average returns, or secular bear markets, last about 14.5 years on average.

By that measure, the secular bear market that we’re currently in is “getting a bit long in the tooth” now that it’s in its 13th year, and going by historical patterns, is likely to end.

But it’s no sure thing that we are entering a bullish super-cycle.  Many investors, especially pension funds that have lowered their risk profiles dramatically, aren’t really expecting the market to go into a secular bull market.

Nevertheless, Timmer thinks that the end of this bear market isn’t too far off….”

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“Republican lawmakers in several key swing states are considering plans to allocate their electoral college votes by Congressional district, in  a move that would give Republican presidential candidates a new advantage in future elections.

 

The policy, if applied nationally, would seriously impact the way presidential elections turn out by giving out electoral votes by congressional districts already drawn to be favorable for Republicans.

Here, we look at the past eleven presidential elections to see how they would turn out if every state allocated their presidential electoral votes along congressional district lines. The electoral college numbers are estimates, arrived at by finding the number of congressional districts each candidate’s party won, and adding two votes for each outright majority in a state.

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“NEW YORK (Reuters) – American Eagle silver coin sales in January surged to an all-time monthly high as the U.S. Mint resumed sales after huge demand triggered a brief suspension, and gold coins also posted their best performance since July 2010.

As of January 29, silver Eagle sales for the month were 7.1 million ounces, data from the U.S. Mint’s website showed, surpassing its previous record of 6.1 million ounces set in January 2012. (Graphic: http://link.reuters.com/myb35t)

“Not only do we have clients calling in, they are buying in huge quantities,” said David Beahm, vice president of Blanchard & Co, a New Orleans-based retail coin dealer.

“They are buying the entire 500-ounce boxes that are sealed by the U.S. Mint, that’s what people want right now,” said Beahm, referring to the standard sealed silver Eagle “monster” box containing 500 one-ounce coins the Mint sells only to its handful of authorized wholesalers….”

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Revenues did rise 22%, but the company reported $0.21 vs $0.38 from a year prior….

Preliminary report

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[youtube://http://www.youtube.com/watch?v=Y9oAi8agPmk 450 300]

Link for iPod users: http://www.youtube.com/watch?v=Y9oAi8agPmk

 

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“Common bugs in networking systems are placing PCs, printers and storage devices at risk, according to security researchers.

According to the security team at Rapid7, technology used worldwide in both routers and standard networking equipment is making it possible for hackers to potentially infiltrate approximately 40 million to 50 million devices worldwide.

The vulnerability lies in the standard known as Universal Plug and Play (UPnP). This standard set of networking protocols allows devices such as PCs, printers and Wi-Fi access points to communicate and discover each other’s presence. After discovery, devices can be connected through a network in order to share files, printing capability and the Internet.

In a white paper released today, researchers from the security software maker say that while UPnP might make network setup cheaper and more efficient, it harbors a severe security risk.

The paper focuses on programming flaws in common UPnP discovery protocol (SSDP) implementations which can be exploited to crash the service and execute arbitrary code, the exposure of the UPnP control interface (SOAP) on private networks, and programming flaws in both UPnP HTTP and SOAP overall….”

Full article

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“China, whose government is short on cash, is disingenuously agreeing to join with other nations in pursuing reduction of emissions from its industries, but there’s a catch: they want U.S. taxpayers to buy more products from Chinese industries to offset the fees they incur from their pollution.

The Doha conferences in November and December of last year called for the Kyoto Protocol to extend to 2020, an essentially meaningless gesture because China abandoned Kyoto in 2011; Russia, Canada and Japan have walked out, too. Only 15% of the world’s emissions are now covered by the Protocol. The U.S. never ratified the Kyoto Protocol because it left China, the worst producer of greenhouse gases, without an emissions cap….”

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“The mainstream media bullied professional golfer Phil Mickelson into apologizing for criticizing California’s high taxes andthreatening to leave the state because of California’s high income tax rate.

But California’s high taxes have been forcing many athletes–including those far from the limelight and who have not made as much money as Mickelson–to leave the state for fiscal reasons.

Tiger Woods said he left California because of high taxes in 1996.  According to the Wall Street Journal, Woods’ net savings over those 16 years come to about $100 million. Mickelson, meanwhile, earned nearly $60.7 million last year. After Proposition 30, Mickelson will owe California nearly $8 million in taxes.

In contrast, the Journal notes Woods made $56.4 million in 2012. By living in Florida, he gets to keep $7.5 million in taxes he would have paid had he lived in California.

One tax accountant told the publication he received “three calls from concerned athletes” the day California passed Proposition 30 last November. He also said several of his clients play for “teams in California but live elsewhere for tax reasons.” Proposition 30 raised taxes on all Californians making more than $250,000. Californians making more than $1 million will have to pay a 13.3% tax rate.

Torii Hunter, who used to play for the Los Angeles Angels of Anaheim, said he moved from California to Texas “because it doesn’t have state income tax.”

Venus and Serena Williams learned to play tennis in Compton, California. They now live in Florida. Female golfer Michelle Wie and her parents briefly lived in Palo Alto, California while she was attending Stanford. When she graduated, she moved to Florida.

But the higher taxes also hurt players who are not in the limelight….”

Full article

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“Separate movements are afoot across the United States to ban the taking of food photos, whether it’s haute cuisine at five-star restaurants or animals being abused on factory farms.

To date, lawmakers in six states have adopted so-called “Ag-Gag” laws that make it a crime to take videos or still photos on industrial farms that reveal illegal or unethical practices towards livestock.

The legislation adopted in North Dakota, Montana, Kansas, Missouri, Iowa and Utah was suggested by the American Legislative Exchange Council (ALEC), a conservative organization known for promoting corporate agendas.

Preventing customers in restaurants from taking photos of their meals also has expanded of late, although the crackdown is not centrally organized like the Ag-Gag laws….”

 

Full article

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“At the Detroit Auto Show earlier this month, luxury was in the air. Pricey new Bentleys and Maseratis glittered – including a Maserati 2014 Quattroporte with a $132,000 price tag; U.S. Cabinet Secretaries and dignitaries rubbed shoulders; and many of the well-heeled attendees ponied up for a $300-a-ticket black-tie charity ball.

But in a city that is slowly dying, the glitz didn’t extend much beyond the Cobo Center exhibition hall.

General Motors and Chrysler, which along with Ford gave the Motor City its identity, survived near-death experiences after filing for bankruptcy during the financial crisis. Now, Detroit itself is edging closer to a similar precipice, only unlike the automakers, its chances of getting a federal bailout are almost nonexistent.

The story of Detroit’s decline is decades old: Its tax revenue and population have shrunk and labor costs have remained out of whack. But the city’s budget problems have deepened to such an extent that it could run out of cash in a matter of weeks or months and ultimately be forced into what would be the largest-ever Chapter 9 municipal bankruptcy filing in the United States.

Frustrated by the lack of concrete progress, Michigan Governor Rick Snyder, a Republican, last month appointed a team to scour the city’s books. The audit could result in a state takeover of Detroit’s finances through the appointment of an emergency financial manager. Such a manager, who would seize control of the city’s checkbook, could then propose federal bankruptcy court as the best option….”

Full article

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“Alex Rodriguez, Melky Cabrera, Gio Gonzalez and Nelson Cruz among baseball stars linked to Miami ‘biochemist’ Anthony Bosch who is target of drug probe by DEA, MLB

The names of the baseball stars — and more than a dozen other athletes — were found on records from Anthony Bosch’s now-shuttered anti-aging clinic, Biogenesis, that were leaked to a South Florida weekly paper by a former employee of the clinic.

MIAMI – Detailed patient files, payment records and handwritten notes link Alex Rodriguez, Melky Carbrera, Gio Gonzalez, Nelson Cruz, Bartolo Colon and other players to a self-described Miami “biochemist” under investigation by the Drug Enforcement Administration and Major League Baseball in what is being described by investigators as “the new BALCO.”

The names of the baseball stars — and more than a dozen other athletes — were found on records from Anthony Bosch’s now-shuttered anti-aging clinic, Biogenesis, that were leaked to a South Florida weekly paper by a former employee of the clinic….”

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“Washington — The Obama administration approved the sale of most of bankrupt battery maker A123 Systems’ assets to Chinese firm Wanxiang Group Corp.

The company’s U.S. subsidiary, Chicago-based Wanxiang America, said it has received approval from the Committee on Foreign Investment in the United States to complete its acquisition of substantially all of the non-government business assets of A123 Systems, Inc.

“We’re pleased the government has completed its review and provided us with the go-ahead to finalize this transaction,” said Pin Ni, president of Wanxiang America. “The future is bright for A123. It is a company with exceptional talent and potential, and Wanxiang America is committed to its long-term success and the continuance of its U.S. operations. Wanxiang America looks forward to closing the transaction and to continuing to foster the technologies A123 has worked so hard to develop.”

In December, Wanxiang won a bankruptcy court auction to acquire most of A123 for $256.6 million, including its grid and commercial business assets and its U.S. facilities in Michigan, Massachusetts and Missouri.

A123 had vowed to create 3,000 jobs by the end of 2012, but only has 1,300. It won $249.1 million in grants from the Obama administration in 2009 to build battery plants in Romulus and Livonia, but has only spent $132 million. It also received more than $125 million in tax credits and funding from the state of Michigan….”

Full article

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“* Overhaul could boost housing, productivity, tax revenue

* Reforms could boost growth 0.8 pct point a year-economist

* Some argue gains to economy won’t be significant

* Report says gov’t should raise money by auctioning visas

* Guest worker program seen essential part of any reform

By Edward Krudy

NEW YORK, Jan 29 (Reuters) – The sluggish U.S. economy could get a lift if President Barack Obama and a bipartisan group of senators succeed in what could be the biggest overhaul of the nation’s immigration system since the 1980s.

Relaxed immigration rules could encourage entrepreneurship, increase demand for housing, raise tax revenues and help reduce the budget deficit, economists said.

By helping more immigrants enter the country legally and allowing many illegal immigrants to remain, the United States could help offset a slowing birth rate and put itself in a stronger demographic position than aging Europe, Japan and China.

“Numerous industries in the United States can’t find the workers they need, right now even in a bad economy, to fill their orders and expand their production as the market demands,” said Alex Nowrasteh, an immigration specialist at the libertarian Cato Institute.

The emerging consensus among economists is that immigration provides a net benefit. It increases demand and productivity, helps drive innovation and lowers prices, although there is little agreement on the size of the impact on economic growth.

President Barack Obama plans to launch his second-term push for a U.S. immigration overhaul during a visit to Nevada on Tuesday and will make it a high priority to win congressional approval of a reform package this year, the White House said.

The chances of major reforms gained momentum on Monday when a bipartisan group of senators agreed on a framework that could eventually give 11 million illegal immigrants a chance to become American citizens…”

Full article

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“There has been some confusion about the quality of the ongoing Q4 earnings season, which has seen some 47% of the S&P 500 companies report to date (and with 53% still left things can certainly change). The confusion apparently is that this has been a “good” earning season so far. Nothing could be further from the truth, and as Goldman shows in its midterm Q4 earnings report, the reality, not spin, is that earnings are tracking at $24.03, or some 6% below the consensus estimate at the start of earnings season of $25.51. This revised number, which could well drop even more from here, means that Q4 earnings will post a minuscule 1% growth in EPS year over year compared to Q4 of 2011 when Europe was imploding, and when the world’s central banks had to arrange a global bailout to prevent yet another Armageddon…”

Full article and infograph

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The markets grind higher on better manufacturing data from yesterday along with better housing news this morning.

The bears will stew in camel oil! DO NOT FIGHT THE LAW!

Oil and gold are higher off a weaker dollar, but gold remains cautious going into the Fed  meeting today.

Lower rates and QE combine for a new law in physics: Markets can not go down by law of bearded clam action.

Europe which was largely lack luster this morning ends up with U.S. wind in their sails into the closing bell.

Market Update 

European close

3 D Heat Map 

[youtube://http://www.youtube.com/watch?v=MBeT4ptY9sY 450 300]

 

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“This is not a prediction of future prices of gold and silver; it is an indication of what could happen in a speculative bubble environment based on the history of previous bubbles.

I’ll summarize a simple analysis of past bubbles.

Definitions

• Bubble: A speculative mania in a market that is priced well beyond what the fundamentals and intrinsic value indicate.
• Phase 1: The first phase of the bubble begins with the price bottoming and initiating a long rally. It is often indicated by a triggering event such as Nixon closing the “gold window” on August 15, 1971 – the beginning of the gold and silver bubbles that terminated in 1980. The market rallies for some years, hits a new “all-time” high, and then corrects.

When the market proceeds into a bubble phase, it rallies beyond that new high and continues much higher. The end of phase 1 and the beginning of phase 2 are the point at which the market rallies from its correction low and exceeds its previous high. See the graph of the silver market with the indicated beginning and end points for phase 1 and phase 2.

• Phase 2: The final phase of the bubble starts when the price exceeds the “new high” and then rallies to a much higher and unsustainable level.

I looked at the time and price data for the South Sea Bubble in England from 1719 -1720, the silver bubble from August 1971 to January 1980, the NASDAQ bubble from August 1982 to March 2000, the Japanese Real Estate bubble from 1965 to 1991, the gold bubble from August 1971 to January 1980, and the S&P mini-bubble from August 1982 to March of 2000. A spreadsheet will not display well, so I’ll list my results. Please realize that all prices and dates are approximate – this is “big picture” analysis.

The conclusion is that bubbles start slowly and then accelerate to unsustainable highs (on large volume) that are largely created by greed and fear but not fundamental evaluations. Bubbles generally follow the “Pareto Principle” where approximately 80% of the price move occurs in the LAST 20% of the time. Consider…”

Full article

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