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Monthly Archives: June 2014

US Corporations Dump Dollar for Chinese Renmindi to Buy Imports

“The U.S. dollar is being increasingly dropped as the currency for settling international trade. But perhaps the latest trend provides the most startling evidence yet that the dollar is doomed as the world reserve currency.

The Financial Times reported today that U.S. corporations are using the Chinese renmindi to buy imports over three times more than they had the previous year:

China’s renminbi is rapidly displacing the US dollar as a trading currency not only in Asia and Europe but now also in the US home market.

The value of renminbi payments between the US and the rest of the world rose by 327 per cent in April this year from the same month a year ago (see chart) as more US corporations switched to using the Chinese currency to pay for imports from China, according to data from SWIFT, the international currency settlement firm.

First, US importers can slash the cost of imports from China by agreeing to trade in renminbi rather than US dollars, Lodge said. Second, a recent surge in the popularity of a host of renminbi-denominated financial market instruments are making it easier for US corporates both to hedge currency risk and to earn an investment return from the renminbi they hold.

 

U.S. corporations are just following the global trend where the largest economies in the world are jumping from the dollar Titanic. Last April, the world’s 12th-ranked economy joined a growing list of nations that have agreed to bypass the dollar in bilateral trade with China. China, ranked 2nd behind the U.S., also has similar agreements with Japan (3rd), Brazil (6th), India (9th), and Russia (10th).

Further, the BRICS nations appear ready to shake up the ‘world order’ with the deployment of their own development bank as reported today by Al Jazeera:

After more than six decades of dictating development policy in much of the emerging world, the Western-led International Monetary Fund and World Bank may soon have some competition.

The BRICS nations — Brazil, Russia, India, China and South Africa — are reportedly close to finalizing their long-awaited development bank and currency reserve, each valued at $100 billion, in what has been billed as a historic challenge by the world’s emerging economies to a global financial architecture that has been dominated by the U.S. and Western Europe since its post–World War II inception.

The IMF and World Bank also appear to be pushing for a global economic “reset”. “We need to push the reset button. The world is still much too much caught in a crisis-management mode,” said Klaus Schwab founder of the World Economic Forum earlier this year.

A sentiment echoed by IMF head Christine LeGarde during the same event….”

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The ECB Cuts Rates Less Than Expected

“Congratulations Europe: you now get to pay your insolvent bank to keep your deposits for you.

The full announcement:

At today’s meeting the Governing Council of the ECB took the following monetary policy decisions:

  • The interest rate on the main refinancing operations of the Eurosystem will be decreased by 10 basis points to 0.15%, starting from the operation to be settled on 11 June 2014.
  • The interest rate on the marginal lending facility will be decreased by 35 basis points to 0.40%, with effect from 11 June 2014.
  • The interest rate on the deposit facility will be decreased by 10 basis points to -0.10%, with effect from 11 June 2014. A separate press release to be published at 3.30 p.m. CET today will provide details on the implementation of the negative deposit facility rate….”

Full report

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Is the Housing Crisis Over? Not According to Popular Opinion

“For all the talk about a recovery, pundits, especially those who peddle expensive newsletters, continue to forget one key distinction of the New Normal: there are those for whom the recovery has never been stronger, well under 10% of the population, i.e., the already wealthy whose net worth is allocated in financial assets. And then there is everyone else, that vast majority of Americans, who not only have not benefited by the Fed’s relentless balance sheet expansion and accompanying asset reflation but whose incomes just posted the first declinein real terms since 2012.

It is this latter segment that should be concerned by a recent survey conducted by the MacArthur Foundation titled “How Housing Matters”.

According to the survey during the past three years, over half of all U.S. adults (52%) have had to make at least one sacrifice in order to cover their rent or mortgage. Such sacrifices included getting an additional job, deferring saving for retirement, cutting back on health care and healthy foods, running up credit card debt, or moving to a less safe neighborhood or one with worse schools.

More disturbing, the survey also found that while there are some indicators that the American public’s views about the housing crisis are shifting toward the positive, large proportions of the public are not feeling the relief: seven in 10 (70%) believe we are still in the middle of the crisis or that the worst is yet to come. ……”

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BOJ Warns of Eurozone Deflation, What Does the ECB Have to Offer ?

“OITA, Japan—On the day of a closely eyed European Central Bank policy meeting, a Bank of Japan board member warned of the risk of Europe slipping into chronic deflation, adding that slower growth in Europe could muddy the prospects for global growth.

The remarks by Takehiro Sato on Thursday highlight the divergence in the trajectory of inflation in Japan and the euro zone, a difference that will likely play out in their central banks’ respective policy choices.

The BOJ doesn’t need to “make adjustments” to its current policy at present amid an absence of risks coming into play but the central bank is “carefully observing if Europe will fall into Japan-style deflation” and what action it takes, Mr. Sato said. He declined to suggest what, if any measures, the ECB might implement….”

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“FRANKFURT–Thursday’s ECB meeting is shaping up to be one of the most important in recent years. The bank’s president, Mario Draghi, put financial markets on high alert for June action four weeks ago when he said the ECB was “comfortable acting next time.”

Other officials have since struck a similar tone. Time is running out. Annual euro-zone inflation weakened last month to just 0.5%, far below the ECB’s target of just below 2%. Grim economic reports have led to widespread expectations that the ECB will unveil a package of stimulus measures Thursday but stop short of large-scale asset purchases.

What will the European Central Bank do Thursday?

The ECB is widely expected to reduce all three of its key interest rates, on deposits, normal bank loans and emergency lending by 10-15 basis points (though it could go a bit more on the emergency rate because that is the highest of the three). That would bring the main lending rate at which banks can tap the ECB for cash–currently 0.25%–close to zero. The deposit rate, currently zero, would turn negative (see the chart below to see why that’s necessary). The ECB may also extend its policy of making unlimited loans available to banks well into 2016 and unveil a targeted lending program to help steer money to the private sector.

Is there anything else in the toolkit?

Other possibilities include a suspension of its weekly absorption of bank funds–called sterilization–under a previous bond-purchase program. That would add as much as €165 billion to the banking system. It could also do more on the liquidity side by making cheap loans available at long maturities with no strings attached or announce their intention to buy some asset-backed securities at a later date.

Which of these is the biggest deal?….”

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WSJ Puts Out an Investor Worry List

“The S&P 500 is up nearly 10% since its 2014 low in the first week of February. The index, which tracks the largest stocks, is now at a record high, up 4.1% for the year.

Behind the rebound is a view that stocks will continue to benefit from robust earnings, low interest rates and scant inflation. If those conditions persist, the market’s climb could very well continue.

But it’s important to examine the issues that have the worrywarts up at night and the justification bears have for their downbeat outlooks.

Below are some critical investor concerns, with a 1 to 10 “worry level” ranking—1 being the least worried and 10 the most.

 

Earnings and the economy: worry level 8.

The U.S. economy just can’t seem to take off, and recent earnings have disappointed. On Thursday, government data showed the nation’s gross domestic product declined at an annual pace of 1% in the first quarter, worse than economists expected and the first time economic output contracted since the first quarter of 2011.

Meanwhile, profits for S&P 500 companies in the quarter rose about 2% from the same period a year earlier, below the previous quarter’s 8.5% rise.

Rising prices for Treasurys are a sign the bond market is more skeptical about growth than the equity market.

The bond market is giving “a thumbs-down vote on economic growth,” says Peter Boockvar, chief market analyst at Lindsey Group.

Adds Daniel Alpert of Westwood Capital: “The bond and equity markets are expressing dramatically different views of the economy. When this happens, bonds typically have it right about 80% of the time.”

 

Jeff Mangiat

What the Fed might do: worry level 6.

A key reason stocks have done well since 2009: The Federal Reserve has kept interest rates low while buying huge volumes of bonds, trying to stimulate the economy. That’s forced investors to flee fixed-income investments and shift to equities.

But the Fed is paring its bond purchases and eventually will raise interest rates, raising questions about the market’s underpinnings…..”

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Is Low Volume and Complacency Something to Worry About?

“Federal Reserve officials are starting to wonder whether a tranquillity that has descended on financial markets is a sign that investors have become unafraid of the type of risk that could lead to bubbles and volatility.

The Dow Jones Industrial Average, up a steady if unspectacular 1% since the beginning of the year, has consolidated big gains registered last year. The VIX, a measure of expected stock-market fluctuations based on options trading, has gone 74 straight weeks below its long-run average—a string of steadiness not seen since 2006 and 2007, before the financial crisis and recession.

Moreover, the extra return that bond investors demand on investment-grade corporate debt over low-risk Treasury bonds, at one percentage point, hasn’t been this low since July 2007. The lower this “spread,” the less risk-averse are bond investors.

The Fed’s growing worry—which could influence future interest rate decisions—is that if investors start taking undue risk it could lead to economic turbulence down the road.

“Volatility in the markets is unusually low,”William Dudley, president of the Federal Reserve Bank of New York and a member of chairwoman Janet Yellen‘s inner circle, said after a speech last week. “I am a little bit nervous that people are taking too much comfort in this low-volatility period. As a consequence, they’ll take more risk than really what’s appropriate.”

One example of increased risk taking: Issuance of low-rated U.S. dollar-denominated junk bonds last year hit a record $366 billion, more than twice the level reached in the years before the 2008 financial crisis, according to financial-data provider Dealogic.

Richard Fisher, president of the Federal Reserve Bank of Dallas, added to the chorus of concern over complacency in an interview Tuesday. “Low volatility I don’t think is healthy,” he said. “This indicates to me a little bit too much complacency that [interest] rates are going to stay at abnormally low levels forever.”

Many officials appear more inclined to talk about market risks than act to pre-empt them given the worry about cutting off a fragile recovery with early interest-rate hikes. Though risk-taking is on an upswing, they don’t see a buildup of serious threats to the broader stability of the financial system.

Fed officials are expected at their June meeting to keep gradually scaling back their purchases of mortgage and Treasury bonds and stick to the plan to keep short-term interest rates near zero, where they have been since the height of the financial crisis in late 2008…..”

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ADP Reports 179k in Job Creation vs Estimates of 215k

 

“The post-weather bounce is over in exuberant employment trends appears to be over. After January’s plunge, the last 3 months have seen beats but May’s data – printing at 179k (against expectations of 210k) is a major disappointment for the extrapolators and presses job griwth back to its lowest since January. Rubbing salt in the wound of recovery, April’s data was revised downward. It was so bad, even the permabullish Mark Zandi was unable to spin the data:  “Job growth moderated in May. The slowing in growth was concentrated in Professional/Business Services and companies with 50-999 employees. The job market has yet to break out from the pace of growth that has prevailed over the last three years.”

 

 

 

From the report….”

Full report 

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All Eyes on Draghi and the ECB to Do Something in the Way of Stimulus

“A special European Central Bank edition of the CNBC Fed Survey shows the stakes are high for Mario Draghi and his fellow European central bankers going into their meeting Thursday.

The survey of 30 market participants, including economists, strategists and fund managers, finds that 65 percent of them expect the ECB to take at least one of three substantial actions: lowering the refinance rate, cutting the deposit rate or announcing a long-term refinance operation or LTRO. About half of the respondents expect two of those three actions to be announced and a quarter think all three will happen.

The leading choice: 55 percent think the ECB will cut the refi rate by an average of 11 basis points from the current level of 25 basis points; 52 percent think the deposit rate will be reduced to negative 10 basis points, on average. That would make the ECB one of the few central banks ever to have posted a negative official rate. A third of respondents look for an LTRO and a third say the ECB could do quantitative easing outright.

“Monetary policy is approaching a critical split in the road as the ECB shifts to more ease, the Fed begins to tighten, and the BOJ maintains its current stance,” Lynn Reaser of Point Loma Nazarene University wrote in response to the survey.

Respondents forecast euro zone gross domestic product to rise 1.11 percent this year compared to 2013 and……”

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Your Tax Dollars at Work: The Millionaire’s Club

“Wealthy members of Congress are living the high life at taxpayer expense, while most of the rest of the country continues to suffer through one of the worst economic periods in our lifetimes.  According to an analysis conducted by the Center for Responsive Politicsearlier this year, more than half of the members of Congress are millionaires.  This is the first time that this has ever happened in U.S. history.  In addition, the same study found that a hundred members of Congress are actually worth at least five million dollars.  We have a government of the wealthy, by the wealthy and for the wealthy, but as you will see below, that isn’t stopping members of Congress from wasting taxpayer money in some incredibly bizarre ways.  Millions of dollars are being spent on “office expenses” and on the hair care needs of Senators, but very little is being done to stop this abuse.  It is almost as if the American people have just accepted that this is how “big government” is supposed to operate.

No matter what your political affiliation is, it should bother you that we are overwhelmingly being represented by the very wealthy.  We are supposed to be a government “of the people”, but instead Congress is rapidly becoming a millionaire’s club

For the first time in history, most members of Congress are millionaires, according to a new analysis of personal financial disclosure data by the Center for Responsive Politics.

Of 534 current members of Congress, at least 268 had an average net worth of $1 million or more in 2012, according to disclosures filed last year by all members of Congress and candidates. The median net worth for the 530 current lawmakers who were in Congress as of the May filing deadline was $1,008,767 — an increase from the previous year when it was $966,000.

And this is true on both sides of the aisle.  In fact, when you break the numbers down by political party, they come out almost exactly the same

Breaking the numbers down further, congressional Democrats had a median net worth of $1.04 million, while congressional Republicans had a median net worth of almost exactly $1 million. In both cases, the figures are up from last year, when the numbers were $990,000 and $907,000, respectively.

Of course wealthy people should not be prevented from serving in Congress.

All Americans should have that opportunity.

But when it gets to the point that only wealthy people are being elected, then we have a major problem on our hands.

Yes, a million dollars does not go as far as it used to.  But it still puts you in the upper stratosphere of American society.

And these days, there are nearly 200 members of Congress that are multimillionaires

Nearly 200 are multimillionaires. One hundred are worth more than $5 million; the top-10 deal in nine digits. The annual congressional salary alone—$174,000 a year—qualifies every member as the top 6 percent of earners. None of them are close to experiencing the poverty-reduction programs—affordable housing, food assistance, Medicaid—that they help control. Though some came from poverty, a recent analysis by Nicholas Carnes, in his book White Collar Government: The Hidden Role of Class in Economic Policymaking, found that only 13 out of 783 members of Congress from 1999 to 2008 came from a “blue-collar” upbringing.

Wow.

Shouldn’t we actually want to have some representatives that come from “blue collar” backgrounds?

So why do we have so few?

Has our political system failed?

Those are some important questions that we should be asking.

And then when all of these wealthy individuals get to Congress, they see absolutely no problem with spending U.S. taxpayer money like it is going out of style.  For example, according to the Weekly Standard, more than five million dollars has been spent on the hair care needs of U.S. Senators alone over the past 15 years…

Senate Hair Care Services has cost taxpayers about $5.25 million over 15 years. They foot the bill of more than $40,000 for the shoeshine attendant last fiscal year. Six barbers took in more than $40,000 each, including nearly $80,000 for the head barber.

All of this is just for 100 U.S. Senators?

Many of them don’t even have much hair left anymore.,,,,”

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Warren and Piketty on the Same Stage

“Senator Elizabeth Warren is not shy about being a crusader for the middle class.

The senior Massachusetts lawmaker had some choice words for the rich in an online dialogue Monday with French economist Thomas Piketty on economic inequality. Theforum, hosted by The Huffington Post’s Ryan Grim, was organized by MoveOn, a liberal political action group.

Warren and Piketty have each just written best-selling books on income inequality. Warren authored a memoir called “A Fighting Chance,” which also discusses what Washington can do to help the middle class. Piketty analyzed data from 20 countries in his tome on income inequality and the concentration of wealth, entitled “Capital in the Twenty-First Century.”

Here is a list of choice quotes from Warren on how the rich have rigged the system.

On Piketty’s findings: Wealth does not trickle down. It trickles up. It trickles from everyone else to those who are rich.

On taxes: When people feel like we’re not all in this together, we’re not all sharing, we’re not all paying a fair share of our income or our wealth, then I think what you get is it all comes all unraveled. Everyone moves towards I will pay the least because he’s paying the least.

On small businesses: Small business owners pay and pay and pay on taxes because the loopholes aren’t as available to them. You look at Fortune 500 companies, companies that are profitable and end up paying zero in taxes.

Elizabeth Warren: ‘The game is rigged’

On rewriting the rules…”

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Why Was MSN So Quiet On…..

“COPENHAGEN — If 120 to 150 celebrities were gathered at a hotel for a private three-day meeting, there would be no end to the media coverage, analysis, pictures, manufactured scandals, and ridiculous hype. Supposed “journalists” would have a field day. Just this weekend, about that many top globalists, whose decisions collectively affect the lives of virtually every person on the planet, gathered for the Bilderberg summit in the Danish capital. Establishment media outfits such as CNN, BBC, ABC, CBS, NBC, MSNBC, Fox, the New York Times, the Washington Post, the Associated Press, and others, however, were nowhere to be found.

The deafening lack of press coverage surrounding what many analysts say is perhaps one of the most important meetings of the year was not due to a lack of information about Bilderberg. This magazine and numerous reporters for alternative media outlets in the United States and Europe were there covering the summit. The Danish press was there, too, as were a handful of reporters for major European newspapers. A few government-funded media outlets from Russia, China, Iran, and other nations also reported on the summit. In the increasingly discredited and wildly mischaracterized American “mainstream” media, though, scarcely a word appeared about Bilderberg.

Incredibly, in attendance at the secrecy-obsessed gathering of globalists were numerous high-powered media executives and supposed “journalists” — from editors and publishers of major publications to influential columnists and corporate media magnates. All of them were mingling with over 100 figures representing the upper echelons of banking, politics, the Internet, business, war, government, foreign policy, the EU, NATO, military, spying, royalty, the Chinese Communist Party, and more. Naïve readers and viewers, though — for reasons that remain unclear, one in five Americans still trust the establishment media to keep them informed — were none the wiser…..”

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If Big Banks Can Borrow Money For Nothing Then Why Not Students & Municipalities?

“Funding infrastructure through bonds doubles the price or worse. Costs can be cut in half by funding through the state’s own bank.

“The numbers are big. There is sticker shock,” said Jason Peltier, deputy manager of the Westlands Water District, describing Governor Jerry Brown’s plan to build two massive water tunnels through the California Delta. “But consider your other scenarios. How much more groundwater can we pump?”

Whether the tunnels are the best way to get water to the Delta is controversial, but the issue here is the cost. The tunnels were billed to voters as a $25 billion project. That estimate, however, omitted interest and fees. Construction itself is estimated at a relatively modest $18 billion. But financing through bonds issued at 5% for 30 years adds $24-40 billion to the tab. Another $9 billion will go to wetlands restoration, monitoring and other costs, bringing the grand total to $51-67 billion – three or four times the cost of construction.

A general rule for government bonds is that they double the cost of projects, once interest has been paid….”

Full article

“Sen. Elizabeth Warren introduced her first bill, a simple proposal to give students the same loan rates as the nation’s biggest banks. Her proposal would allow the cut-rate loans for students for one year, to give Congress the time to come to agreement on a long-term solution to interest rates. Federal Stafford subsidized loan rates for new students are set to double on July 1 to 6.8 percent.

Here’s a snippet from her floor speech introducing the bill….”

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Euro Inflation Slows Tripping Up Chances of Bazooka Style Liquidity

Euro-area inflation slowed more than economists forecast in May, cranking up pressure on the European Central Bankto deploy measures as soon as this week to kindle prices and drive growth.

The rate fell to 0.5 percent from 0.7 percent in April, the European Union’s statistics office in Luxembourg said today. Themedian forecast in a Bloomberg News survey of 38 economists was for a decline to 0.6 percent. The rate has been less than half the ECB’s target for eight months.

With ECB President Mario Draghiwarning about the risk of a negative price spiral, the Governing Council is considering measures from negative interest rates to conditional liquidity for banks. The central bank is also contending with high unemployment, which unexpectedly decreased in April while remaining near a record, a separate Eurostat report showed.

“It’s a surprise, but not enough of a surprise to change materially the global economic outlook that the ECB will release on Thursday,” said Michel Martinez, an economist at Societe Generale SA in Paris. “What seems highly likely is that the ECB will cut key rates and probably also inject further liquidity.”

The euro erased losses against the dollar after today’s date were released, trading at $1.3610 at 12:14 p.m. in Brussels, up 0.1 percent on the day.

Of 50 economists surveyed by Bloomberg News, 44 expect the Frankfurt-based ECB to become the first major central bank to take interest rates into negative territory by cutting its deposit rate. All but 2 of 60 respondents said the benchmark rate would also be reduced.

‘Ready to Act’

The ECB has prepared investors for the prospect of stimulus ….”

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More Data Suggests China’s Economy May Be Firming Up

“BEIJING—Two more measures of China’s economic health showed improvement in May, adding to signs that the economy is stabilizing after its sluggish start this year and suggesting that government support policies may be starting to show results.

The government’s index of activity in the nonmanufacturing sector in May hit its highest level since November last year, according to data released Tuesday, while a private sector gauge of factory activity showed gains for the month as well.

Added to a stronger reading in May for the official manufacturing Purchasing Managers’ Index, released on Sunday, the overall economic picture appeared somewhat brighter following moves to accelerate spending on railways, offer business tax breaks and make more financing available to smaller companies.

“These are good signs,” said Citigroup C +0.40% economist Ding Shuang. “But real economic activity may not rebound that quickly,” he cautioned.

The official nonmanufacturing Purchasing Managers’ Index rose to 55.5 in May from 54.8 in April, according to the China Federation of Logistics and Purchasing, which releases the data along with the statistics bureau. The nonmanufacturing PMI covers services, including retail, aviation and software, as well as real estate and construction. The upturn was largely a result of the important services sector, a key source of employment, while construction was less robust as a result of weaker property prices.

A reading above 50 means expansion from the previous month while anything below that shows contraction.

Meanwhile, the HSBC China Manufacturing Purchasing Managers’ Index, a gauge of nationwide factory activity, rose to a final reading of 49.4 in May from 48.1 in April, HSBC Holdings HSBA.LN -0.64% PLC said Tuesday. The reading still remained below 50, where it has been every month this year, showing contraction from the previous month but at a slower pace.

“The final (manufacturing) PMI reading for May confirmed that the economy is stabilizing, but it is too early to say that it has bottomed out, particularly in light of a weaker property sector,” said Qu Hongbin, HSBC’s chief economist for China, in a statement accompanying the data.

China posted economic growth of 7.4% year on year in the first quarter, down from 7.7% in the final quarter of last year…..”

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Dark Pools Shed Some Light on Their Trading Practices

“After years of operating in the shadows, dark pools are coming into the light.

Goldman Sachs Group Inc. GS +0.14% and Credit Suisse Group AG CSGN.VX -1.35% , two of the biggest operators of opaque trading venues known as dark pools, which execute trades away from stock exchanges, on Monday published documents explaining in detail how their venues work.

The disclosures came on the day that the Financial Industry Regulatory Authority issued for the first time data on volume of shares traded on dark pools.

Goldman Sachs has been weighing the move for more than two months. The bank has grown concerned that increases in complexity and instability in the stock market are harming investor confidence and hopes to address the issue by being more transparent about its own trading operations, said Brian Levine, co-head of Goldman’s Global Equities Trading and Execution Services.

Goldman executives have raised the possibility of closing its dark pool, known as Sigma X, in conversations with market participants in recent months, The Wall Street Journal reported in April.

Goldman is concerned that complexity is hurting investor confidence. Reuters

Dark pools, private, lightly regulated trading venues where buyers and sellers can swap shares with greater anonymity than on stock exchanges, have come under criticism recently as part of a wider complaint that the U.S. stock market has become too complex. Together with so-called internalizers—firms that execute trades on behalf of retail brokerages—they account for nearly 40% of all stock trading, according to Tabb Group.

Critics say that off-exchange trading hurts the ability of the market to accurately price securities, since buy and sell orders aren’t published. Some have also questioned the role played by high-frequency firms, superfast traders that use turbocharged computers and telecommunications networks to buy and sell stocks, in dark pools.

Dark-pool proponents say their venues offer big institutional investors the opportunity to buy or sell stocks without moving prices as much as they would by displaying their order on an exchange…..”

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Comdey Files: John Maynard Keynes and Paul Krugman Discuss Eating Dogshit

“………The following joke perfectly explains the ludicrosity of GDP.
Two Keynesian economists, John Maynard Keynes and Paul Krugman, were walking down the street one day when they passed two large piles of dog shit.

Keynes said to Krugman, “I’ll pay you $20,000 to eat one of those piles of shit.” Krugman agrees and chooses one of the piles and eats it. Keynes pays him his $20,000.

Then Krugman, feeling richer, says, “I’ll pay you $20,000 to eat the other pile of shit.” Keynes, feeling bad about the money he lost says okay, and eats the shit. Krugman pays him the $20,000.

They resume walking down the street.

After a while, Krugman says, “You know, I don’t feel very good. We both have the same amount of money as when we started. The only difference is we’ve both eaten shit.”

Keynes says: “Ah, but you’re ignoring the fact that we’ve increased the GDP by $40,000.

That is really all you need to know about GDP… it’s all dogshit….”

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