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Monthly Archives: August 2012

FLASH: FREE COCAINE FROM THE FED UNTIL LATE-2014!!!! (STATEMENT) BUT…

No new QE…and stocks are down. Hawkish?

For immediate release

Information received since the Federal Open Market Committee met in June suggests that economic activity decelerated somewhat over the first half of this year. Growth in employment has been slow in recent months, and the unemployment rate remains elevated. Business fixed investment has continued to advance. Household spending has been rising at a somewhat slower pace than earlier in the year. Despite some further signs of improvement, the housing sector remains depressed. Inflation has declined since earlier this year, mainly reflecting lower prices of crude oil and gasoline, and longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects economic growth to remain moderate over coming quarters and then to pick up very gradually. Consequently, the Committee anticipates that the unemployment rate will decline only slowly toward levels that it judges to be consistent with its dual mandate. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee anticipates that inflation over the medium term will run at or below the rate that it judges most consistent with its dual mandate.

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee expects to maintain a highly accommodative stance for monetary policy. In particular, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions–including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014.

The Committee also decided to continue through the end of the year its program to extend the average maturity of its holdings of securities as announced in June, and it is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities. The Committee will closely monitor incoming information on economic and financial developments and will provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions in a context of price stability.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Dennis P. Lockhart; Sandra Pianalto; Jerome H. Powell; Sarah Bloom Raskin; Jeremy C. Stein; Daniel K. Tarullo; John C. Williams; and Janet L. Yellen. Voting against the action was Jeffrey M. Lacker, who preferred to omit the description of the time period over which economic conditions are likely to warrant an exceptionally low level of the federal funds rate.

 SOURCE–KEEP READING

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Over Half US Counties Drought Disaster Zones

(CNN) — More than half of all U.S. counties have been designated disaster zones, the Department of Agriculture reported, blaming excessive heat and a devastating drought that’s spread across the Corn Belt and contributed to rising food prices.

Agriculture Secretary Tom Vilsack on Wednesday declared disaster zone designations for an additional 218 counties in 12 states because of damage and losses caused by drought and excessive heat.

The states are Arkansas, Georgia, Iowa, Illinois, Indiana, Kansas, Mississippi, Nebraska, Oklahoma, South Dakota, Tennessee and Wyoming.

Read here:

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Scandalized GSA Employees Took 10% Of ALL Federal Bonuses Last Year

Employees at the obscure General Services Administration are quietly gobbling up 10 percent of the entire federal government’s bonus checks, a top Republican lawmaker revealed Wednesday, with the tab reaching a stunning $44 million last year.

The $44 million amount is far more than was previously reported. As House lawmakers convened a hearing Wednesday digging deep into alleged mismanagement and waste at the embattled agency, Transportation Committee Chairman John Mica, R-Fla, called the latest revelations “absolutely outrageous.”

Disclosing the results of what he described as a preliminary investigation, Mica said bonuses totaled $44 million, with many bonuses worth $50,000 apiece and some going to workers now under investigation. One employee, he said, received a $79,000 bonus, adding up to nearly $260,000 in total compensation.

Read more:

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South Florida No. 2 in the Housing Rebound

via miamiherald.com 

The latest Case-Shiller numbers show South Florida trailing Phoenix in rising home values. Having two of the country’s worst housing bubbles helps make the recovery look stronger.

BY DOUGLAS HANKS

[email protected]

South Florida enjoys the country’s second-best housing rebound this year.

That’s one result from the Economic Time Machine’s ranking of the latest figures from Case-Shiller, the top yardstick for the country’s housing crisis. Since January, South Florida’s Case-Shiller real estate index increased 5 percent. Only Phoenix had a better showing, with a 10 percent gain over five months. (The ETM used a two-month average to wash out monthly quirks in the Case-Shiller numbers.)

Change from a year ago Change from January Change from peak Change from May 2002
Phoenix 10% 10% -51% -2%
Los Angeles -3% 2% -39% 30%
San Diego -1% 2% -39% 12%
San Francisco 0% 4% -39% 0%
Denver 3% 3% -8% 4%
Washington, DC 2% 4% -27% 40%
South Florida 3% 5% -48% 12%
Tampa 2% 4% -45% 5%
Atlanta -16% -1% -36% -23%
Chicago -4% 0% -36% -9%
Boston 0% 1% -16% 11%
Detroit 2% -2% -46% -39%
Minneapolis 4% 4% -33% -10%
Charlotte 1% 2% -16% 6%
Las Vegas -5% 3% -61% -20%
New York -3% 0% -25% 25%
Cleveland -1% 1% -20% -9%
Portland, Ore 0% 2% -27% 21%
Dallas 3% 3% -6% 4%
Seattle 0% 3% -29% 20%
Average metro area -1% 2% -33% 11%
Change from a year ago Change from January Change from peak Change from May 2002

The ETM analysis also compared the May reading to peak levels for all 20 metropolitan areas that Case-Shiller tracks. The gap from the top of the market to now helps explain South Florida’s current rebound.

According to Case-Shiller, South Florida’s housing bubble continues to be one of the worst in the country. Values are off 48 percent in South Florida from peak levels set in 2006. That’s only slightly worse than Phoenix’s 51-percent drop, but considerably better than the ultimate bubble: Las Vegas, where values are down 61 percent.

Read more here: http://www.miamiherald.com/2012/08/01/2925090_south-florida-no-2-in-the-housing.html#storylink=addthis#storylink=cpy

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BATH SALTS STRIKES AGAIN–HILLBILLY STYLE

Phillip and Donna Walls were under attack Monday — or at least they thought they were.
The couple was using bath salts — a type of synthetic drug — when they called 911 to complain that phantom gang members were camped out under their house, police in Kings Mountain, N.C., said.
“They were there yesterday and last night,” Donna told the dispatcher.
The couple then allegedly hauled a military bag full of weapons outside, and Donna fired about seven shots into the air.
Their neighbors, Richard and Debra Robinson, got caught in between the couple’s delusions and a terrifying reality when the paranoid suspected shooters forced their way into the Robinsons’ home, WSOC-TV reported.
“They were delusional,” Debra Robinson said. “They really thought somebody was out to kill them.”
Despite the danger, Richard Robinson, a pastor, said he knew the couple needed help.
“I was little afraid, don’t get me wrong,” he recalled. “But even in that state of mind, he had enough presence to ask me to pray for him.”

Full Article

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Market Update

U.S. equities try to reclaim yesterday’s losses. Coming close the DOW managed to be up almost 50, but is now up about 25.

All eyes on the clam and Europe’s ECB meeting tomorrow.

Europe is flat. The U.K. is the only country managing to hold on to decent gains despite poor manufacturing data.

GLT

Market Update

European markets

3D Heat Map

[youtube://http://www.youtube.com/watch?v=ItLzdZV004s 450 300]

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Attack of the Robots

CNBC is reporting an unusually high amount of stocks experiencing volatility do to what Knight Capital and other trading outfits arte calling buy and sell programs by algorithmic robots.

Developing….

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Timothy Geithner: Congress Can ‘Make Growth Stronger’ In ‘Near Term’

“* EU leaders committed, have the means to resolve crisis – Geithner

* U.S Congress must also do more to boost growth – Geithner

* Expectations mount on ECB action at Thursday policy meeting

Aug 1 (Reuters) – United States Treasury Secretary Timothy Geithner has called on European leaders to do more to solve the region’s debt crisis, including lowering interest rates for those countries that are undertaking painful reforms.

Interviewed on Bloomberg Television in Los Angeles on Tuesday, Geithner said the euro zone had to take steps including “bringing down interest rates in the countries that are reforming and making sure those banking systems can provide the credit those economies need.”

Full article

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Why the FOMC May Engage in More Operation Twist

“The most probable outcome of the FOMC meeting currently under way is the continuation of “Operation Twist” and possibly the extension of the current “exceptionally low… through late 2014” rateguidance to “mid 2015.”

Other policy changes are much less likely. A drop in the rate paid on bank reserves is possible but not preferable because it could destabilize money markets functioning (potentially pushing repo rates deep into negative territory with a sharp drop in liquidity). A UK style policy to lend to banks below market rates (to encourage lending) is also unlikely because of legal limitations and political ramifications of the Fed lending to banks again. And there is almost no chance that any sort of unsterilized asset purchases (QE3) will be announced.”

Full article

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Burger King Watches Profits Rise 60%, Eyeing Overseas Growth

“(AP) NEW YORK – Burger King Worldwide Inc.’s (BKW) net income surged 60 percent in the second quarter as the fast food chain reworked its menu and focused on expanding overseas.

As the fast-food market becomes increasingly crowded at home in the U.S., Burger King has concentrated on growing abroad. In the past year, 80 percent of new store openings have been in Europe, the Middle East and Africa.”

Full report

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Harley Davidson Sees Profits Rise 30%

“(AP) MILWAUKEE – Harley-Davidson Inc. (HOG) says its second-quarter net income jumped 30 percent on higher U.S. demand for motorcycles.

Harley reported net income of $247.3 million, or $1.07 per share, for the three months ended July 1. That’s up from $190.6 million, or 81 cents per share, a year ago.

Analysts polled by FactSet expected earnings of $1.05 per share.”

Full report

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Central Banks Can’t Stop the Weakness

“There is nothing they can do to stop the weakness from coming. They can mask it any way they want, and they should try their best to protect the economy, but the central banks of the world are walking a tight rope, and any slip could spell disaster.

Global economies aren’t on sound footing, yet by economic- and market-related numbers, the United States is seemingly fairing well.”

Full article

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Wharton’s Siegel: Pimco’s Gross Dead Wrong About Stocks

“Wharton School of Business economist Jeremy Siegel says that Bill Gross, Pimco’s co-chief investment officer, is dead wrong about stocks being dead.

Gross wrote in his monthly investment outlook on his firm’s website, “The cult of equity is dying. Like a once bright green aspen turning to subtle shades of yellow then red in the Colorado fall, investors’ impressions of ‘stocks for the long run’ or any run have mellowed as well.”

Read more

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Amazon Instant Video Comes To The iPad

“Amazon Prime members who like to rock an iPad, not the Kindle Fire, now have access to Amazon’s ever-growing collection of movies and TV with today’s launch of theAmazon Instant Video app, which just popped up this morning in the App Store for iPad. As with the desktop and Kindle tablet version, the app allows users to watch videos for free, but only if they’re already a paying member of Amazon Prime ($79/year).”

Full article

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