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Monthly Archives: August 2012

Unemployment Rates Rise in 44 States in July

“Unemployment rates rose in 44 U.S. states in July, the most states to show a monthly increase in more than three years and a reflection of weak hiring nationwide.

The Labor Department said Friday that unemployment rates fell in only two states and were unchanged in four.

Unemployment rates rose in nine states that are considered battlegrounds in the presidential election. That trend, if it continued, could pose a threat to President Barack Obama’s re-election bid in less than three months. ”

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Petroleum Deliveries Lowest Since September 2008; Weakest July Demand Since 1995

“While the Achilles heel to the endless “economic data” BS coming out of China may be its electric production and demand, both of which show a vastly different picture than what the Beijing politburo’s very wide brush strokes paint, the US itself is not immune from indicators that confirm that anything the BEA dishes out should be taken with a grain of salt. One data set that we showed recently that paints a drastically different (read slowing) picture of the US economy which we noted recently is railcar loading of waste and scrap for the simple reason that “The more we demand, the more waste is generated by that production.” Of course, the propaganda manipulation machinery only focuses on the “entrance” of production, and completely ignore the “exit.” But an even far more important metric of the general health of the US economy may be none other than broad energy demand, in the form of petroleum deliveries and gasoline demand. ”

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Is $GM Heading for Bankruptcy Again ?

“President Obama is proud of his bailout of General Motors.  That’s good, because, if he wins a second term, he is probably going to have to bail GM out again.  The company is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market.

Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company.  It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday.  This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.”

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26 CEOs Who Made More Than Their Companies Paid In Federal Tax

“A liberal-leaning think tank, the Institute for Policy Studies, yesterday released a 45-page studyblasting the corporate tax code. The study describes how tax policy subsidizes exorbitant CEO pay at 26 big U.S. companies, includingAT&TBoeing and Citigroup, which paid their bosses more than they paid in federal income tax last year.

“Our nation’s tax code has become a powerful enabler of bloated CEO pay,” the study says.  It describes how deductions and credits allow companies to give bosses huge pay packages in order to cut tax bills, at a time when the government is running enormous deficits. That’s a controversial conclusion, but before I get into why, here are the 26 CEOs who made more than their companies paid in taxes last year. They took home average compensation worth $20.4 million, while their companies paid little or no federal tax on big profits, says the study.”

Full List

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The West Has Just Become A Giant Banana Republic

“Wikileaks founder Julian Assange has made an admirable habit of enraging western governments over the last few years, particularly the United States.

Most notably, his release of classified diplomatic documents in 2010 proved ruthlessly embarrassing, shining a spotlight on the absurd, petty little world of international relations.

Ever since, the US government has done everything it can to stop him. Short of assassination. They shut down his website, but mirror sites instantly popped up. They sought legal action, but their efforts have been impeded by the bureaucratic deftness of his attorneys. They froze his bank accounts… but donations have poured in from all over the world.

Along the way, Uncle Sam co-opted a number of allied nations to set aside their principles for the sake of US interests–Switzerland rolled over immediately and shuttered Assange’s bank accounts.”

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$AAPL Tops $600 Billion

Apple Inc. (AAPL)’s shares rose to a record and the company’s market value surpassed $600 billion on speculation that production has started on a smaller version of the iPad tablet as well as a new television product.

The shares climbed 1.9 percent to $648.11 at the close in New York yesterday, for a market capitalization of $602.3 billion. The stock of the world’s most valuable company has gained 60 percent this year.”

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Deustche Bank Under Investigation for Money Laundering

Deutsche Bank AG (DBK) is among four European banks being investigated by U.S. regulators for alleged money-laundering violations, according to an attorney with knowledge of the matter.

Federal regulators, including the U.S. Treasury’s Office of Foreign Assets Control, the Federal Reserve, the Justice Department and the New York District Attorney’s office are all involved in the probe of Deutsche Bank and three other European banks, said the attorney, who asked not to be identified because the investigations are confidential.”

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Apocalypse Not: Here’s Why You Shouldn’t Worry About End Times

A great essay…Here is a tease:

When the sun rises on December 22, as it surely will, do not expect apologies or even a rethink. No matter how often apocalyptic predictions fail to come true, another one soon arrives. And the prophets of apocalypse always draw a following—from the 100,000 Millerites who took to the hills in 1843, awaiting the end of the world, to the thousands who believed in Harold Camping, the Christian radio broadcaster who forecast the final rapture in both 1994 and 2011.

Religious zealots hardly have a monopoly on apocalyptic thinking. Consider some of the environmental cataclysms that so many experts promised were inevitable. Best-selling economist Robert Heilbroner in 1974: “The outlook for man, I believe, is painful, difficult, perhaps desperate, and the hope that can be held out for his future prospects seem to be very slim indeed.” Or best-selling ecologist Paul Ehrlich in 1968: “The battle to feed all of humanity is over. In the 1970s [“and 1980s” was added in a later edition] the world will undergo famines—hundreds of millions of people are going to starve to death in spite of any crash programs embarked on now … nothing can prevent a substantial increase in the world death rate.” Or Jimmy Carter in a televised speech in 1977: “We could use up all of the proven reserves of oil in the entire world by the end of the next decade.”

Read the rest here.

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Documentary: Waiting for Superman

Cheers on your weekend!

[youtube://http://www.youtube.com/watch?v=1bzFhrkqE8g&feature=related 450 300]

“Waiting for “Superman” is a 2010 documentary by director Davis Guggenheim and producer Lesley Chilcott. The film analyzes the failures of American public education by following several students through the educational system, hoping to be selected in a lottery for acceptance into charter schools. The film’s title is based on an interview with Geoffrey Canada wherein he recounts being told (as a child) by his mother that Superman was not real, and was frightened because there was nobody to save him.”

 

 

 

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Short Selling Bans Found to Be Ineffective and Raises Liquidity Costs

“There’s been a lot of talk about short-selling bans and their effectiveness over the last couple of years.  From Jim Chanos with Enron and David Einhorn with Lehman Brothers then and Green Mountain Coffeenow, there have been many cases of short-sellers effectively targeting companies that markets eventually condemned.  Yet regulators have insisted with short-selling bans in order to stanch the bleeding when market turmoil turns up the heat on beleaguered financial stocks, most recently in Spain and Italy.

In the latest of the debate, an economist for the New York Fed teamed up finance professors from Notre Dame University and published a research paper in which they note that not only are short-selling bans ineffective (i.e. the stocks targeted by the ban actually performed worst than others), but it also raises liquidity costs to the point where in 2008, it cost equity and options trades more than $1 billion.  Furthermore, short-sellers do have a positive effect on markets, by targeting overpriced companies, but at times, they may have too much power.”

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Marc Faber: Beware, a False Rally May Be Coming

” Marc Faber is one of the most widely followed strategists working today.  His insights are highly valued for being remarkably accurate.

A celebrated economist and author of the Gloom Boom Doom newsletter Faber is a renowned bear, who first rose to prominence after he correctly predicted the Crash of ’87.

Since that time he predicted the rise in the price of oil, precious metals, and other commodities as well as the decline in the dollar and the 2007 Great Recession.

Affectionately named Dr. Doom because his commentary is often negative, it’s fair to say that when Faber speaks the Street listens.

And on Wednesday Faber told CNBC’s Fast Money to beware a false rally in the late summer or early fall.

Faber believes catalysts are currently in place that could trigger an advance.”

Watch his commentary

 

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BoA Tries to Explain the Recent Sell Off in Bonds

 

“The sell-off in Treasury bonds has sent yields racing higher over the past few weeks, and no one really seems to be sure of exactly what is driving the move.

It even caused Bill Gross, who runs the world’s biggest bond fund at PIMCO, to pitch a strange explanation for the move on CNBC yesterday: that Paul Ryan was helping to drive the latest sell-off in the bond market.

BofA fixed income strategists Priya Misra and Shyam Rajan chalk up the drop in bond prices to three main factors – relative stability in European financial markets recently, better economic data out of the United States, and mortgage originators hedging against interest rate risk now that rates have begun to rise due to the first two factors.”

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Congress on Track to Set Do-Nothing Record

“If lawmakers on Capitol Hill wanted to encapsulate the current session of Congress in a t-shirt slogan, they could go with: Support your party and don’t compromise.

The highly partisan environment in Washington has resulted in the most “do-nothing” congressional session since the end of World War II.
Of the more than 3,900 bills introduced, lawmakers have adopted just 147 this year—a passage rate of less than 4%. It is worth noting that 32 of the successful bills involved the naming of post offices and other buildings, while many others were of similar import.”

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