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The End of QE – What Ben Bernanke Is Really Saying

Jul 22, 2013 – 06:27 PM GMT By: Raul_I_Meijer Ever wonder what Bernanke is saying? Well, it boils down to this: at the same time that Jimmy Carter says the US doesn’t have a functioning democracy, Ben Bernanke says the US doesn’t have a functioning economy. Unfortunately, people understand what Carter says, though they may not agree […]

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Barclays Warns End-Of-QE.. Would Make 2000 Bubble Look Like A Day At The Beach

“It’s hard to make the case that [US stocks are up 17% on a 2.5% earnings rise] based on fundamentals alone – it’s money in motion,” is how BofA’s CIO Hans Olsen describes the unreality occurring in US asset markets currently. He noted in last wee…

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CFTC Fines Algorithmic Trader $2.8 Million For Spoofing In The First Market Abuse Case Brought By Dodd-Frank Act, And Imposes Ban

There has been some degree of concern among regulators during the course of this year with regard tohigh speed algorithmic trading and what certain authorities consider to be the disruptive behavior in which certain traders engage by using algorithms to outpace other market participants.
Today, the US Commodity Futures Trading Commission (CFTC) has brought a successful case against two parties, citing them for engaging in what the CFTC considers to be the disruptive process of spoofing. This is a milestone case, as it represents the first time that a trading firm has been prosecuted under the Dodd-Frank Act’s prohibition of spoofing, which is defined under the act as the illegal practice of bidding or offering with intent to cancel before execution.
Britain’s Financial Conduct Authority (FCA) collaborated with the CFTC on this matter, and has also issued a penalty to the same parties.
One of the reasons that algorithmic trading is on the agenda of regulators is that it facilitates positions to be opened and closed at extremely high speeds, using extremely high technology, therefore giving certain traders a distinct advantage over others.
In this particular case, Panther Energy Trading LLC and its Principal Michael J. Coscia utilized a computer algorithm that was designed to illegally place and quickly cancel bids and offers in futures contracts.
The resultant toxic order flow of firms that use algorithms without contravening any laws has resulted in German regulator BaFIN proposing a mandatory delay in trade execution times to prevent disruptions, and go against latency arbitrage by those with quicker systems and complex automated algorithms.
Certain firms, without any encouragement from regulators, are also considering imposing a latency floor in order to absolve them of any such business. EBS recently embarked on such a consideration.
The CFTC’s order against Mr. Coscia and his firm finds that this unlawful activity took place across a broad spectrum of commodities from August 8, 2011 through October 18, 2011 on CME Group’s Globex trading platform.
The CFTC Order requires Panther and Coscia to pay a $1.4 million civil monetary penalty, disgorge $1.4 million in trading profits, and bans Panther and Coscia from trading on any CFTC-registered entity for one year.
According to the Order, Coscia and Panther made money by employing a computer algorithm that was designed to unlawfully place and quickly cancel orders in exchange-traded futures contracts.
For example, Coscia and Panther would place a relatively small order to sell futures that they did want to execute, which they quickly followed with several large buy orders at successively higher prices that they intended to cancel.
By placing the large buy orders, Mr. Coscia and Panther sought to give the market the impression that there was significant buying interest, which suggested that prices would soon rise, raising the likelihood that other market participants would buy from the small order Coscia and Panther were then offering to sell.

http://forexmagnates.com/cftc-fines-algorithmic-trader-2-8-million-for-spoofing-in-the-first-market-abuse-case-brought-by-dodd-frank-act/

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G20 backs plan to stop global tax avoidance and evasion

Finance ministers from the G20 group of leading nations have formally backed plans to tackle international tax avoidance and evasion.
A statement issued earlier supports the automatic exchange of tax information between countries.
It also backs plans by the Organisation for Economic Cooperation and Development to stop firms moving their profits across borders to avoid taxes.
The OECD said some firms “abuse” current rules to avoid tax.
UK Chancellor George Osborne said the announcement, which came after a two-day G20 meeting in Moscow, was an “important step towards a global tax system that is fair and fit for purpose for the modern economy”.

‘Aggressive tax avoidance’

Last month, the G8 group of leading economies agreed a deal to “fight the scourge of tax evasion”, and nations including the UK, France, Germany, the USA and Australia are taking part in a pilot information exchange scheme.
British Prime Minister David Cameron made the issue a priority for the UK’s presidency of the G8 this year, and Australia has agreed to do the same during its G20 presidency next year.
The OECD said current tax rules, some dating to the 1920s, were created to avoid “double taxation” of companies working in more than one country – but it said they were being abused to allow “double non-taxation”.
BBC business correspondent Joe Lynam said the “bandwagon of clamping down on aggressive tax avoidance” was moving on from developed economies to emerging ones like Brazil and India.
The rules should mean bigger bills for companies which could previously “pit one country off against another in terms of tax”, our correspondent added.
The G20 asked the OECD to come up with a plan to improve tax cooperation, and the finance ministers said they “fully endorse the OECD proposal for a truly global model” of information sharing.
Their statement called on all countries to make automatic information sharing a reality “without further delay”, adding that “capacity-building support” would be provided for poorer nations.

Closing loopholes

The G20 said the changes should be in place within two years, but our correspondent called that “very ambitious” because hundreds of tax treaties exist between countries and “thousands of amendments” might be needed.
Many multinational firms currently avoid tax – legally – by means including loopholes and tax havens, but the new rules could require them to pay more in the countries where they do business.
Firms including Google, Starbucks, Amazon and Apple have been criticised for the amount of tax they pay.
Earlier this year, MPs attacked Google for routing £3.2bn of UK sales through Dublin and paying little tax as a result.
Starbucks has been questioned for transferring money to a Dutch sister company in royalty payments, though the firm agreed to pay more tax after strong public criticism.
The companies point out that these schemes are legal and they have a duty to shareholders to minimise their tax bills.
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Did A Raging Fire Burn Down JPMorgan’s Gold Vault?

Overnight there has been a flood of viral reports that ‘there was a fire at JPM’s gold vault’ based on a self-made video showing a barrage of fire trucks located on Broad Street between Wall Street and Exchange Place, further substantiated additio…

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Savers And The ‘Real’ $10.8 Trillion Cost Of ZIRP

Via Chris Turner,
  1. Total Savings – FRED
  2. Average interest rates on savings deposits – FRED (M2OWN)
  3. Interest Income – IRS tax stats, NIPA tables
  4. Effective Federal Funds Rate (FRED)
The good news behind the bottom 85% of close-to-retiree status Baby Boomers that participate in the “markets” via sub $50,000 retirement money is that at some point, the voters might actually get smart and get mad at how much money has been siphoned from them.  Consult the chart below to see a historical relationship between total savings and amount of interest income earned on the savings.
 [6]
Note that prior to 2001, as savings increased (blue line), interest income received increased (red line) proportionally.  However, after 2001, the interest earned stopped increasing.  The green line shows the effective interest paid on interest bearing accounts.
Scaling into the shaded area representing 1986 to present, the following chart depicts the actual Fed Funds rate determined by FOMC.
 [7]
As savings increased when Fed Funds rate remained around 5%, interest income continued to rise.  However, post 2001, the interest income received stopped growing at the same rate.  With the exception of 2005 to 2008 when rates went back to “normal” in the 5% range – the interest income earned has remained stable at just under 1 trillion (Ben Bernanke is so smart).
Let’s apply some thought experiments and make a couple calculations – what would happen if the FOMC were removed and the Fed Funds rate “floated?”  Using average historical rates from the 1920’s for the 10 year note– the mean rate would sit around 5.82%.  With a floating Fed Funds rate, banks would be competing for money and providing responsible savers with some interest income.  Voila, a calculation is borne:
 [8]
By calculating the estimated interest income from historical ratios (orange shaded area), we can see that as of July 2013, approximate interest income would be just over 3 trillion (1/5th of GDP) on savings of 6.8 trillion (using the left scale).  Whereas the actual interest income reported by NIPA remained at 1.1 Trillion, the difference in interest received and lost interest equals roughly 2 Trillion.  Remember, this is interest income to SAVERS forever lost since 2001.  By aggregating the entire shaded orange area, SAVERS have missed out on a whopping 10.8 Trillion in earned interest usage.  The final chart above makes a loud and clear statement toward the beneficiaries of the low interest rate environment.

http://www.zerohedge.com/print/476537

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Wells Fargo ad: Dollar will lose its real value

http://dollarvigilante.com/blog/2013/7/10/a-major-bank-makes-a-freudian-slip-about-the-dollar.html#4912

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Tradestation free until 2014

Get TradeStation FREE until 2014 when you open an account today.TradeStation offers online trading in stocks, options, futures, forex & ETFs, plus award-winning market analysis software, education and customer service.Get TradeStation FREE unt…

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Stratfor: The Problems with Background Investigations

The Problems with Background Investigations By Scott StewartIn the wake of the case of National Security Agency leaker Edward Snowden, the company that conducted the background investigation for his security clearance is under heavy scrutiny. USIS…

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Americans’ Confidence in Congress Falls to Lowest on Record

Congress ranks last on list of 16 institutions; military earns top spot again

by Elizabeth Mendes and Joy Wilke
WASHINGTON, D.C. — Americans’ confidence in Congress as an institution is down to 10%, ranking the legislative body last on a list of 16 societal institutions for the fourth straight year. This is the lowest level of confidence Gallup has found, not only for Congress, but for any institution on record. Americans remain most confident in the military, at 76%.
I am going to read you a list of institutions in American society. Please tell me how much confidence you, yourself, have in each one -- a great deal, quite a lot, some, or very little? June 2013 results
Small business and the police also continue to rank highly, with 65% and 57% of Americans, respectively, expressing “a great deal” or “quite a lot” of confidence in these institutions. Joining Congress at the bottom of the list are Health Maintenance Organizations (HMOs) and organized labor. Congress’ low position is further underscored when one looks at the percentage of Americans who have little or no confidence in each institution. The slight majority of Americans, 52%, have this level of confidence in Congress, compared with 31% for HMOs.
Americans’ confidence in several institutions measured in the June 1-4 Gallup poll has shifted since last year. Americans have become more confident in banks, organized religion, and public schools, and less confident in the U.S. medical system, the Supreme Court, and Congress.
Confidence in Congress Falls to Record Low
The percentage of Americans expressing a great deal or quite a lot of confidence in Congress is the lowest for a trend that dates back to 1973. The high point for Congress, 42%, came in that year.
Confidence in Congress has been at its lowest points for several years, while it was higher in the mid-1980s and in the early 2000s.
Confidence in Congress, Trend Since 1973
In Contrast to Past, Republicans, Democrats Hold Congress in Equally Low Regard
Democrats, independents, and Republicans are about equally likely to express low confidence in Congress. This is a change from the past and likely reflects the split control of Congress.
Historically, members of each major party expressed greater confidence in Congress when their party held control of both houses. During most years of the Republican-controlled House and Senate in the early to mid-2000s, Republicans were at least slightly more likely than Democrats to express confidence in Congress. After the Democratic Party took over both houses in 2007, however, Democrats began reporting more confidence than Republicans in the institution.
Between 2009 and 2012, a period that saw Congress come under split control, these partisan differences gradually diminished, and this year, Democrats are a mere two percentage points more likely than Republicans to report having a great deal or quite a lot of confidence in Congress.
Trend: Confidence in Congress, 2000-2013, by Party ID
Bottom Line
Americans’ confidence in Congress is not only at its lowest point on record, but also is the worst Gallup has ever found for any institution it has measured since 1973. This low level of confidence is in line with Americans’low job approval of Congress, which has also been stuck below 30% for years.
The divided Congress, with Democrats controlling the Senate and Republicans the House, is likely part of the reason for the low levels of confidence rank-and-file Democrats and Republicans express, and is tied to Americans’ frustrations with Congress’ inability to get much done.
Gallup will explore the long-term trends in Americans’ confidence in other key institutions in future stories.
Survey Methods

Results for this Gallup poll are based on telephone interviews conducted June 1-4, 2013, with a random sample of 1,529 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.
For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±3 percentage points.
Interviews are conducted with respondents on landline telephones and cellular phones, with interviews conducted in Spanish for respondents who are primarily Spanish-speaking. Each sample of national adults includes a minimum quota of 50% cellphone respondents and 50% landline respondents, with additional minimum quotas by region. Landline telephone numbers are chosen at random among listed telephone numbers. Cellphone numbers are selected using random digit dial methods. Landline respondents are chosen at random within each household on the basis of which member had the most recent birthday.
Samples are weighted to correct for unequal selection probability, nonresponse, and double coverage of landline and cell users in the two sampling frames. They are also weighted to match the national demographics of gender, age, race, Hispanic ethnicity, education, region, population density, and phone status (cellphone only/landline only/both, cellphone mostly, and having an unlisted landline number). Demographic weighting targets are based on the March 2012 Current Population Survey figures for the aged 18 and older U.S. population. Phone status targets are based on the July-December 2011 National Health Interview Survey. Population density targets are based on the 2010 census. All reported margins of sampling error include the computed design effects for weighting.
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.
For more details on Gallup’s polling methodology, visit www.gallup.com.

http://www.gallup.com/poll/163052/americans-confidence-congress-falls-lowest-record.aspx

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