Josh Barro

Below is a chart of total government spending (federal, state and local) as a share of GDP, going all the way back to 1929, the first year for which Bureau of Economic Analysis Data are available. This chart shows that government spending in 2010 was as high as it’s ever been as a share of the economy, 36.2 percent, slightly outstripping the previous high water mark of 35.3 percent reached in 1945, during World War II.

This chart has a lot to teach us about what we can expect from the coming fiscal adjustment.

Read the rest here.

FOR IMMEDIATE RELEASE
2012-66

Washington, D.C., April 16, 2012 – The Securities and Exchange Commission today charged an online brokerage and clearing agency specializing in options and futures as well as four officials at the firm and a customer involved in an abusive naked short selling scheme.

The SEC’s Division of Enforcement alleges that Chicago-based optionsXpress failed to satisfy its close-out obligations under Regulation SHO by repeatedly engaging in a series of sham “reset” transactions designed to give the illusion that the firm had purchased securities of like kind and quantity. The firm and customer Jonathan I. Feldman engaged in these sham reset transactions in a number of securities, resulting in continuous failures to deliver. Regulation SHO requires the delivery of equity securities to a registered clearing agency when delivery is due, generally three days after the trade date (T+3). If no delivery is made by that time, the firm must purchase or borrow the securities to close out the failure-to-deliver position by no later than the beginning of regular trading hours on the next day (T+4).

The former chief financial officer at optionsXpress – Thomas E. Stern of Chicago – was named in the SEC’s administrative proceeding along with optionsXpress and Feldman. Three other optionsXpress officials – head of trading and customer service Peter J. Bottini and compliance officers Phillip J. Hoeh and Kevin E. Strine – were named in a separate administrative proceeding and settled the charges against them for their roles in the scheme.

“Feldman and optionsXpress used sham reset transactions to avoid, sometimes for months, compliance with Reg. SHO’s stock delivery requirements,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “In effect, they ‘kited’ shares of stock, thus depriving buyers of the benefit of their bargain – prompt delivery of their shares.”

Daniel M. Hawke, Chief of the Division of Enforcement’s Market Abuse Unit, added, “Reg. SHO compliance continues to be a high enforcement priority. Broker-dealers, their employees, and their customers must ensure that they comply with the close-out requirements of the short sale rules and regulations.”

According to the SEC’s order, the misconduct occurred from at least October 2008 to March 2010. In September 2011, optionsXpress became a wholly-owned subsidiary of The Charles Schwab Corporation.

The SEC’s Enforcement Division alleges that the sham reset transactions impacted the market for the issuers. For example, from Jan. 1, 2010 to Jan. 31, 2010, optionsXpress customers including Feldman accounted for an average of 47.9 percent of the daily trading volume in one of the securities. In 2009 alone, the optionsXpress customer accounts engaging in the activity purchased approximately $5.7 billion worth of securities and sold short approximately $4 billion of options. In 2009, Feldman himself purchased at least $2.9 billion of securities and sold short at least $1.7 billion of options through his account at optionsXpress.

According to the SEC’s order, by engaging in the alleged misconduct, optionsXpress violated Rules 204 and 204T of Regulation SHO; Feldman willfully violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5 and 10b-21 thereunder; optionsXpress and Stern caused and willfully aided and abetted Feldman’s violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rules 10b-5 and 10b-21 thereunder; and Stern caused and willfully aided and abetted optionsXpress’s violations of Rules 204 and 204T.

In the separate settled administrative proceeding, Bottini, Hoeh, and Strine consented to a cease-and-desist order finding that they caused optionsXpress’s violations of Rules 204 and 204T of Regulation SHO and ordering them to cease-and-desist from committing or causing violations of Rule 204. They neither admitted nor denied the SEC’s findings.

The SEC’s investigation was conducted by Deborah Tarasevich, Jill Henderson, and Paul Kim. Market Surveillance Specialist Brian Shute, Market Abuse Unit Trading Specialist Ainsley Fuhr, and Financial Economist Michael P. Barnes provided assistance with the investigation. The litigation will be led by Frederick Block.

Source

via CalculatedRisk, some very interesting graphs and stats related to port traffic and exports.

COPENHAGEN (Reuters) – Billionaire George Soros warned on Monday that the euro crisis is growing deeper, tearing at the fabric of European Union cohesion, because policymakers are prescribing the wrong remedies.

“I’m afraid that the euro crisis is getting worse. It’s not over yet, and it is going in the wrong direction,” Soros said in discussion with Denmark’s economics minister hosted by the daily newspaper Politiken.

“The euro is undermining the political cohesion of the European Union, and if it continues like that could even destroy the European Union,” Soros said. “That is due to a misunderstanding of what the problem is.”

Soros, the Hungarian born U.S. investor, said that the creators of the single European currency believed that imbalances were created in the public sector without understanding that markets themselves can create imbalances.

He said the euro crisis is being dealt with by policymakers as a fiscal crisis though the crisis began as a collapse of the banking system in the United States and was compounded by a divergence of competitiveness among European countries.

He said that failure to deal with the crisis was creating tremendous tensions because people, who see that policy is failing, are driven into anti-European positions and dissent is growing within and between the countries of Europe.

“It could be reversed at any time if only the authorities understood that the box is broken and you need to find some out-of-the-box invention to bring it back inside the box and then put it right, change the rules of cohesion,” he said.

Soros said the crux of the problem was that debt reduction was coming at a bad time for the European economy. “You can grow out of excessive debt, you cannot shrink out of excessive debt.”

Read here:

Retail sales rose 0.8% in March, better than expected and another sign U.S. consumers can keep spending, despite high gasoline prices.

While many economists have wrongly been predicting high gas prices would crush consumers, Mark Zandi, chief economist at Moody’s Analytics, as been more upbeat, a view reinforced by Monday’s retail sales data.

“Growth isn’t as strong as it appears in the data that came out of the winter because it was incredibly warm, but even [accounting for] that underlying growth is pretty solid,” Zandi says.

Notably, retail sales excluding auto and gasoline sales — which Zandi calls a “key gauge of where consumer are” — rose 0.7% in March and are up 5.6% on a year-over-year basis. “It’s not boom times, but that’s pretty good,” he says. Overall retail sales are “up and up in a solid way.”

Zandi attributes two main forces to the surprising strength of U.S. consumers: jobs and the stock market.

While the labor participation rate is down and the “real” unemployment rate remains stubbornly high, Zandi notes job growth has been “increasingly broad based,” across various industries, regions and occupations. He believes payroll growth will average 175,000 to 200,000 per month this year, which is enough to bring the unemployment rate down and sustain solid consumer spending.

Meanwhile, strength in the stock market, until very recently at least, has provided further impetus for spending by wealthier households, who account for a disproportionate of overall consumer spending.

Many have complained over the use of fluoride in  public water use. It is suppose to prevent tooth decay. Well a new report shows it does not matter.

From Wiki: The goal of water fluoridation is to prevent a chronic disease whose burdens particularly fall on children and on the poor.

Report

Source

“Is the new Consumer Financial Protection Bureau (CFPB), under attack since the moment of its conception, already in danger of becoming a paper tiger? Congress created CFPB in 2010 as part of the Dodd–Frank Wall Street Reform and Consumer Protection Act, to protect consumers from the sort of unfair, deceptive, and abusive practices that banks and other financial companies engaged in and that helped crash the economy in 2007. Nevertheless, the financial industry and its allies in Washington have never stopped trying to kill the agency.

What are you smoking Farrakhan ?

MSFT killed the Nokia Star…. 

In a word nationalization…..

Obey and eat what we serve you even if it was once dog food….

See ya….

Interesting commentary here….

“Jim Yong Kim was chosen to be president of the World Bank, becoming the first physician and Asian-American to head the lender after emerging markets failed to rally around a challenger to the U.S. monopoly on the job.

The World Bank board of directors said today it chose Dartmouth College President Kim to succeed Robert Zoellick, whose term ends June 30. A specialist in HIV/AIDS with a Ph.D. in anthropology, Kim, 52, faced rival bids from Nigeria and Colombia.

The candidacies “enriched the discussion of the role of the president and of the World Bank Group’s future direction,” the board said in an e-mailed statement. “The final nominees received support from different member countries, which reflected the high caliber of the candidates.”

Kim, a graduate of Harvard Medical School, breaks the mold of World Bank presidents, who have been drawn from government and finance. Kim, who was born in Korea and grew up in the U.S., has pledged to be a bridge between developed and advanced economies at the poverty-fighting institution, which committed $57 billion last year on everything from building roads to taking stakes in companies in emerging economies.

Kim’s expertise on health and development issues, as well as his experience at Dartmouth, “puts him in a prime position to initiate a much-needed reorientation of the World Bank’s role in global development,” said Eswar Prasad, a senior fellow at the Brookings Institution and a former official at the International Monetary Fund.”

Read more

Source

“Apple Inc. (AAPL) shares fell for a fifth day amid speculation that demand for the iPad may wane and that mobile-phone carriers will cut subsidies for the iPhone, eroding profitability of Apple’s best-selling products.

Verizon Wireless, a U.S. partner of Apple, said last week that it will begin charging customers $30 to upgrade to a new phone. The move suggests mobile-phone service providers may take other steps, including trimming subsidies, to keep sales of the iPhone from eating into their margins, said Walter Piecyk, an analyst at BTIG LLC in New York.

“Operators are trying to fight back against the impact that Apple is having on their business,” Piecyk, who last week reduced his rating on Apple to neutral from buy, said in an interview with Bloomberg TV’s “InBusiness With Margaret Brennan.”

Apple fell as much as 3.8 percent, the largest intraday decline since Oct. 19, after rising 49 percent this year before today. It had fallen 2.8 percent to $588.40 as of 12 noon in New York.

Analysts at Wedge Partners said in an April 13 research note that demand for the newest version of Apple’s iPad is beginning to wane, citing the prospect that Apple’s earnings report, due next week, will show sales of the tablet missed analysts’ predictions last quarter.

“Is Apple best name in tech? Yes,” they wrote. “Have we seen the stock price plummet in the past, when expectations were out of whack with results? Yes. In our view, there is some risk to this happening again in the March quarter, and the result would likely be the stock coming back down to earth.”

‘Snowball Effect’

Apple, based in Cupertino, California, has added $400 billion in market value since 2008, making it the world’s most valuable company.

“These stocks don’t just go straight up,” said Shaw Wu, an analyst at Sterne Agee & Leach Inc. After such a big increase over the past several months, investors have quicker triggers to sell if the stock dips, he said. “There is a little bit of snowball effect,” Wu said.”

Source

“2:00 pm : The dollar index has been under pressure after slipping back below the 80.00 level and now trades on session lows near 79.75. The yen continues to see safe-haven buying as worries over the health of Spain make their way back into the headlines. Today’s strength ran the yen up to 80.40 against the dollar. Meanwhile, the euro is stronger despite the uncertainty regarding Spain. Early selling dropped the single currency to a session low of 1.2995, but some fresh buying now has it trading up 60 pips and at session highs near 1.3135. The move in the euro comes even as Spanish CDS hit another record high, and as the Spanish 10-yr yield climbed back above 6.00%. Elsewhere, the pound is riding the coattails of the euro and trades up 35 pips at 1.5890.DJ30 +134.04 NASDAQ -12.38 SP500 +5.26 NASDAQ Adv/Vol/Dec 1456/982.5 mln/1017 NYSE Adv/Vol/Dec 1975/385.6 mln/1046

1:30 pm : Markets continue to trade in a relatively tight midday range, with the technology sector underperforming the broader market to a large degree. Although there aren’t any influential earnings reports after tonight’s close, the flow of important earnings really picks up over the remainder of the week.

Tomorrow morning, results from the following big names are scheduled to be released: Coca-Cola Co. (KO 72.58, +0.64), Goldman Sachs Group Inc. (GS 116.13, +1.04), Johnson & Johnson (JNJ 64.04, +0.50), Omnicom Group (OMC 49.34, +0.61), Northern Trust (NTRS 45.88, +0.18), State Street (STT 43.34, +0.15), TD Ameritrade (AMTD 18.81, -0.05) and U.S. Bancorp (USB 31.11, +0.21).

Then tomorrow afternoon we get results from the following: IBM (IBM 204.32, +1.52), Intel (INTC 28.28, +0.19), Yahoo! (YHOO 14.78, -0.09),Seagate (STX 28.43, +1.05), Stryker (SYK 54.15, +0.19) and CSX Corp. (CSX 22.07, +0.15).

Over the remainder of the week there is a heavy flow of earnings from major companies, with 17% of the S&P 500 components scheduled to release results.DJ30 +85.83 NASDAQ -24.08 SP500 -0.33 NASDAQ Adv/Vol/Dec 1289/891.7 mln/1173 NYSE Adv/Vol/Dec 1695/344.3 mln/1305

1:00 pm : The major averages continue to see mixed results in afternoon trade. The Dow continues to see gains, trading up 0.5% while the Nasdaq and S&P 500 hold respective losses of 0.9% and 0.2%.

Shares of Citigroup (C 34.05, +0.64) are trading up 1.9% despite the company missing on both the top and bottom lines. The banking giant announced earnings per share of $0.95 on revenues of $19.41 billion as both numbers missed their consensus estimates by fairly wide margins. The Capital IQ Consensus estimate was calling for earnings of $1.00 per share on revenues of $19.94 billion. Credit Value Adjustment/Debt Valuation Adjustment was a negative $1.3 billion during the first quarter, resulting from the tightening of the company’s spreads, compared to -$256 million in the prior year.

Endocyte (ECYT 7.80, +4.00) is up 105.5% after Merck (MRK 38.00, +0.22) announced it purchased the rights to Vintafolide, the company’s experimental cancer drug for as much as $1 billion. The drug is currently being evaluated in a Phase III clinical trial for platinum-resistant ovarian cancer and a phase II trial for non-small cell lung cancer.

Mobile phone ringtone maker Vringo (VRNG 4.37, +1.33) is higher by 43.8% following a disclosure filed by Mark Cuban which indicates he owns a 7.4% stake in the company.

Technology giants Apple (AAPL 586.74, -18.49) and Google (GOOG 606.00, -18.60) are under notable selling pressure with both Nasdaq heavyweights trading down in excess of 3.0%.

YPF Sociedad Anonima (YPF 19.25, -2.70) is under heavy selling pressure on reports the Argentine government will attempt to take a stake of as much as 50.01% in the company. The government says the takeover would be in “public interest.” There had been reports circulating early in 2012 suggesting a move like this may occur at some point in the future.

Shares of homebuilders are flat following this morning’s disappointing NAHB Housing Market Index number with the SPDR S&P Homebuilders ETF (XHB 20.75, +0.02) up fractionally.

Treasuries are seeing a safe-haven bid as worries over Spain have maturities at their best levels since March 7. Buying has dropped the 10-yr yield to a session low of 1.946%. DJ30 +69.97 NASDAQ -26.83 SP500 -1.75 NASDAQ Adv/Vol/Dec 1167/821.8 mln/1259 NYSE Adv/Vol/Dec 1539/316.3 mln/1445

12:30 pm : The major averages are slipping back towards session lows as trade remains mixed. The Dow continues to lead with a gain of 0.5% while the Nasdaq and S&P 500 hold losses of 0.9% and 0.2% respectively.

Shares of YPF Sociedad Anonima (YPF 18.67, -3.28) are under heavy selling pressure on reports the Argentine government will attempt to take a stake of as much as 50.01% in the company. The government says the takeover would be in “public interest.” There had been reports circulating early in 2012 suggesting a move like this may occur at some point in the future.DJ30 +60.74 NASDAQ -25.94 SP500 -2.00 NASDAQ Adv/Vol/Dec 1138/759.4 mln/1284 NYSE Adv/Vol/Dec 1481/292.6 mln/1483

12:00 pm : The major averages continue their mixed trade with the Dow up 0.3% while the S&P 500 and Nasdaq hold respective losses of 0.2% and 0.9%.

Mobile phone ringtone maker Vringo (VRNG 4.04, +1.00) is higher by 32.2% following a disclosure filed by Mark Cuban which indicates he owns a 7.4% stake in the company.DJ30 +49.61 NASDAQ -25.70 SP500 -2.56 NASDAQ Adv/Vol/Dec 1108/674.8 mln/1307 NYSE Adv/Vol/Dec 1446/262.7 mln/1503

11:30 am : The major indices remain mixed as the Dow holds a 0.6% gain, the S&P 500 trades flat, and the Nasdaq is down 0.6%.

Endocyte (ECYT 7.70, +3.90) is up 102.6% after Merck (MRK 38.00, +0.22) announced it purchased the rights to Vintafolide, the company’s experimental cancer drug, for as much as $1 billion. The drug is currently being evaluated in a Phase III clinical trial for platinum-resistant ovarian cancer and a phase II trial for non-small cell lung cancer.  DJ30 +76.78 NASDAQ -17.86 SP500 -0.05 NASDAQ Adv/Vol/Dec 1169/591.6 mln/1205 NYSE Adv/Vol/Dec 1546/229.0 mln/1369

11:00 am : The major averages continue their mixed trade with the Dow and S&P 500 seeing respective gains of 0.5% and 0.1% while the Nasdaq holds a loss of 0.5%.

Shares of Citigroup (C 34.19, +0.78) are trading up 2.3% despite the company missing on both the top and bottom lines. The banking giant announced earnings per share of $0.95 on revenues of $19.41 billion as both numbers missed their consensus estimates by fairly wide margins. The Capital IQ Consensus estimate was calling for earnings of $1.00 per share on revenues of $19.94 billion. Credit Value Adjustment/Debt Valuation Adjustment was a negative $1.3 billion during the first quarter, resulting from the tightening of the company’s spreads, compared to -$256 million in the prior year. DJ30 +66.60 NASDAQ -16.42 SP500 +0.52 NASDAQ Adv/Vol/Dec 1159/501.7 mln/1191 NYSE Adv/Vol/Dec 1594/193.0 mln/1290

10:30 am : Apple (AAPL 590.42, -14.81) is showing notable relative weakness amid a generally stronger market. Apple shares are now -2.5% and at a new four-week low, weighing on the technology sector. So far the move doesn’t appear to be related to a specific fundamental catalyst. In addition to Apple, Google (GOOG 607.64, -16.96) has moved below its 50-day moving avearges in early trade, continuing last Friday’s negative reaction to earnings and adding pressure to the tech sector. Overall, the technology sector, as measured by the Nasdaq 100, is down 0.9% versus a 0.2% decline in the broader S&P 500.DJ30 +59.75 NASDAQ -29.97 SP500 -2.27 NASDAQ Adv/Vol/Dec 844/401.4 mln/1468 NYSE Adv/Vol/Dec 1275/158.0 mln/1581

10:05 am : Just released, business inventories for February increased by 0.6%, which is slightly greater than the 0.5% increase that had been expected, on average, among economists polled by Briefing.com.

Meanwhile, The Housing Market Index for April fell to 25 from 28 in the prior month, exceeding the Briefing.com consensus call for an improvement to 29. The drop was the first in seven months for the index. Shares of homebuilders have been hit hard on the news, resulting in a quick drop to session lows by the SPDR S&P Homebuilders ETF (XHB 20.65, -0.08). DJ30 +77.50 NASDAQ -25.14 SP500 -0.11 NASDAQ Adv/Vol/Dec 982/242.7 mln/1241 NYSE Adv/Vol/Dec 1556/105.8 mln/1242

09:45 am : The major averages are seeing solid gains in the opening minutes of trade, buoyed by the better than expected retail sales data. The Dow is leading this morning’s climb with a 0.9% advance while the S&P 500 and Nasdaq trail with respective gains of 0.4% and 0.2%. Financials are the top performing sector, trading up 1.2%, despite the earnings miss by Citigroup.DJ30 +109.74 NASDAQ +6.02 SP500 +6.09 NASDAQ Vol 107.0 mln NYSE Vol 67.1 mln

09:13 am : [BRIEFING.COM] S&P futures vs fair value: +7.80.  Nasdaq futures vs fair value: +15.00.   Equity futures are trading at their best levels of the session following the strong retail sales figures, and despite the weak Empire Manufacturing survey. S&P futures are up 9 and Dow Jones futures are higher by 90 as markets are set to open the week on a positive note. The strong open will also come on the heels of disappointing earnings from Citigroup, which announced earnings of $0.95 per share on revenues of $19.41 billion. The Capital IQ Consensus Estimate was calling for earnings of $1.00 per share on revenues of $19.94 billion. Data still to be released today includes business inventories and the NAHB Housing Market Index with both due out at 10 am ET.”

They used a video projection. It was not a hologram.

_________________________

http://www.youtube.com/watch?v=DQgrce1VflI

via

SF Examiner Critic Unterman Dismissed After 20 Years

In many parts of the world there is a feeling that war crimes are being committed and that the Hague and Geneva conventions have been violated.

In this instance we have a tit for tat scenario….

Full article