ragerunner

As I posted a few pages back, by the time this Libor issue is over it will be the biggest financial theft in recorded history. We are talking billions and billions. I guess main street really should not be upset, this was needed to support the lifestyle of the world's elite. Behind the Scenes in the Libor Interest Rate Scandal "There have been plenty of banking scandals, but none quite like this: Investigators and political leaders believe that the manipulation of the Libor benchmark interest rate was the result of organized fraud. Institutions that participated could face billions in fines and penalties. By SPIEGEL Staff" "The Libor manipulation is presumably the biggest financial scandal ever," says Majcen, a man with slightly disheveled-looking hair and Viennese sarcasm. Yes, he says, it did shock him that something like this was even possible, namely that a group of international banks had been manipulating interest rates for years. But Majcen takes a matter-of-fact approach to it all. As a financial professional, he is only one of many who want to get back the money that they feel they've been cheated out of." "Deutsche Bank and more than a dozen other financial giants have come under sharp criticism due to the alleged manipulation of the Libor ( London Interbank Offered Rate), a benchmark interest rate. Some are even referring to the banks that are instrumental in calculating that rate a cartel, the sort of vocabulary not normally associated with the financial industry. Regulators are using terms like "organized fraud." European Justice Commissioner Viviane Reding has suggested that bankers ought to be called "banksters." But in the case of some agencies, especially in New York and London, the outcry is also convenient; it diverts attention away from their own failures. For years, regulators overlooked what was happening right in front of their eyes." http://www.spiegel.de/international/business/the-libor-scandal-could-cost-leading-global-banks-billions-a-847453.html

Manufacturers see little improvement in July "Companies scale back plans to hire workers, ISM survey finds WASHINGTON (MarketWatch) — The latest snapshot of the U.S. manufacturing industry suggests growth has cooled off considerably over the past few months. A gauge that measures the strength of the manufacturing sector remained under the key 50% mark for the second straight month. It’s the first time that’s happened since the tail end of the last recession." http://www.marketwatch.com/story/manufacturers-see-little-improvement-in-july-2012-08-01

Looks like another Libor type manipulation might be starting to unfold. Son of LIBOR: Muni Market Eyes All-American Rate-Rigging Scandal "As the LIBOR scandal continues to encircle global banks, an All-American version of banks manipulating a key lending rate may be unfolding. The municipal bond industry's self-regulator the Municipal Securities Rulemaking Board is "concerned about the transparency" of the Municipal Market Data (MMD), a benchmark rate for state and local government debt, The NY Times reports. The MMD Index is owned and published by Thomson Reuters, which calculates the data based, in part, by surveying banks. As with LIBOR, the potential for manipulation is high. "For years I have been hearing from bankers, usually underwriters, complaining about how the [MMD] scale is manipulated somehow," says one veteran muni bond market watcher." http://finance.yahoo.com/blogs/daily-ticker/son-libor-muni-market-eyes-american-rate-rigging-142813097.html

Eurozone break-up would trigger £1 trillion of QE, see banks nationalised and deep recession, warns Fathom "A Eurozone break-up would plunge the UK into an even deeper recession than the last one, force the Government to nationalise the banks, and trigger a £1 trillion bout of money printing, leading economic consultancy Fathom has warned. Fathom’s Danny Gabay said the UK would be hit hard by a euro break-up because “the policy cupboard this time is nearly empty”. To prevent the pound strengthening as investors ploughed into the relative safety of the UK, he reckoned the Bank would have to launch £1 trillion round of quantitative easing. Deanne Julius, a former member of the Bank’s rate-setting Monetary Policy Committee, said companies have already begun preparations for a break-up but she warned that the markets are not prepared and could inflict enormous damage. “The next global shock will be like an earthquake,” she said." http://www.telegraph.co.uk/finance/financialcrisis/9441120/Eurozone-break-up-would-trigger-1-trillion-of-QE-see-banks-nationalised-and-deep-recession-warns-Fathom.html Debt crisis: live "Greece's deputy finance minister warns that the near-bankrupt country is "on the brink" with cash reserves at "almost zero," as eurozone unemployment hits a record level of 11.2pc." http://www.telegraph.co.uk/finance/debt-crisis-live/9439261/Debt-crisis-live.html The stock market spike over the last week or so was all based off of 'hope' for German support for massive EU funds. How many times can the stock market spike off of the same hope? U.S. stocks steady as Germany curbs confidence "NEW YORK (MarketWatch) — U.S. stocks held near unchanged Tuesday as an increase in U.S. consumer confidence neutralized media reports that chilled hope that Europe would take bold steps to curb its debt crisis." http://www.marketwatch.com/story/us-stocks-fall-as-germany-curbs-optimism-2012-07-31

Thank you for the very informative charts.

July consumer sentiment at lowest point of year "WASHINGTON (MarketWatch) — Despite a slight upward revision from the preliminary report, a gauge of consumer sentiment in July came in at the lowest point of the year, according to an indicator released Friday." http://www.marketwatch.com/story/july-consumer-sentiment-at-lowest-point-of-year-2012-07-27 If you subtract inflation we are now experiencing negative GDP. U.S. growth slows to 1.5% in second quarter "Consumers pare spending, and business investment slows WASHINGTON (MarketWatch) — The U.S. economy took a turn for the worse in the spring as consumers pared spending and businesses invested at a slower pace, with little sign growth will sharply accelerate anytime soon." http://www.marketwatch.com/story/us-growth-slows-to-15-in-second-quarter-2012-07-27?link=MW_story_insert Who cares about Main Street? I am sure incomes will increase nicely to cover the increase in food prices along with increase in other commodities do to another round of QE. Just suck it up boys and girls, what the FED needs to do is for the betterment of? Why the Fed will look past rising food prices "WASHINGTON (MarketWatch) — The most far-reaching drought in fifty years in the United States is pushing corn prices to new records, signalling higher food price inflation by the end of the year. But the prospect is not expected to stop the Federal Reserve from easing to help the struggling economy, analysts said. “Corn prices won’t factor in the Fed’s thinking,” said Michelle Meyer, senior U.S. economist at Bank of America Merrill Lynch. Meyer expects the Fed to launch a new round of bond buying, or QE3, in September." http://www.marketwatch.com/story/why-the-fed-will-look-past-rising-food-prices-2012-07-27

U.S. jobless claims sink 35,000 to 353,000 Big swings in data linked to temporary auto-sector conditions "WASHINGTON (MarketWatch) — The number of people who filed applications for unemployment benefits fell sharply last week, marking the third straight week of big swings related to changing employment patterns in the auto industry. The Labor Department said jobless claims sank by 35,000 to a seasonally adjusted 353,000 in the week ended July 21, putting them just above a four-year low. It was also the biggest one-week decline of the year." http://www.marketwatch.com/story/us-jobless-claims-sink-35000-to-353000-2012-07-26?dist=lcountdown Durable-goods orders rise for 2nd straight month "Demand for airplanes, defense equipment boosts orders by 1.6% However, the details of the report were not as strong as the headline suggested. Outside of the volatile aircraft and defense sectors, orders were mainly flat or lower. Despite the recent increases, the level of new orders for big-ticket items during June was still below the level hit in February. Excluding an 8% rise for transportation equipment, durable orders fell 1.1% in June, the biggest decline since January". http://www.marketwatch.com/story/durable-goods-orders-rise-for-2nd-straight-month-2012-07-26?dist=lcountdown Debt crisis: Mario Draghi pledges to do 'whatever it takes' to save euro "Mario Draghi, President of the European Central Bank, has pledged to do "whatever it takes" to protect the eurozone from collapse - including fighting unreasonably high government borrowing costs. Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough," he told an investment conference in London. "To the extent that the size of the sovereign premia (borrowing costs) hamper the functioning of the monetary policy transmission channels, they come within our mandate." When asked what probability he would assign to the euro zone having the same number of members it has today in two years, he added: "I don't venture into speculations about things like changes in the treaty. The treaty was meant to have the number of countries that we see today, so frankly I can't really estimate the probability of that." "We think the euro is irreversible." http://www.telegraph.co.uk/finance/financialcrisis/9428894/Debt-crisis-Mario-Draghi-pledges-to-do-whatever-it-takes-to-save-euro.html More good news for great housing recovery. Pending Sales of U.S. Homes Unexpectedly Fell 1.4% in June "Contracts to purchase previously owned homes unexpectedly dropped in June for the second time in the last three months, a sign of limited momentum in housing. The index of pending home resales decreased 1.4 percent to 99.3 after a revised 5.4 percent gain in May that was less than initially reported, figures from the National Association of Realtors showed today in Washington." http://www.bloomberg.com/news/2012-07-26/pending-sales-of-u-s-homes-unexpectedly-fell-1-4-in-june.html

How dare anyone recommend the banks not win from both directions. Plus, such action would put more pressure on the banks to loan to main street and not just play the stock market, commodities game with the easy money from the FED. One Fed tool that gives Wall Street heartburn "WASHINGTON (MarketWatch) — Wall Street is enthusiastic about the prospect of more Federal Reserve easing but want the central bank to jettison one tool: reducing the interest rates paid to banks for reserves they park at the Fed. At the moment, the Fed pays banks 0.25% for reserves they park at the Fed. These reserves currently total $1.46 trillion. Proponents of the measure say that cutting the rate would make banks work harder to make loans." http://www.marketwatch.com/story/one-fed-tool-that-gives-wall-street-heartburn-2012-07-25?dist=afterbell

Debt crisis: live "The UK economy has shrunk by a shock 0.7pc in the second quarter, official statistics show, as Spanish officials are forced to deny that Germany is pushing the country to accept a €300bn bail-out." http://www.telegraph.co.uk/finance/debt-crisis-live/9424694/Debt-crisis-live.html Ford doubles projected Europe losses "US carmaker reports large drop in second-quarter profit" http://www.ft.com/home/us Caterpillar warns on industrial slowdown "US manufacturer cuts sales outlook amid growth fears" http://www.ft.com/home/us

Subprime mortgage market up 24% in 2012 "Bloomberg: The market for the same sub prime mortgage bonds that caused the financial crisis is up 24% so far in 2012." http://www.marketwatch.com/story/subprime-mortgage-market-up-24-in-2012-2012-07-25?dist=lcountdown The housing euphoria that hit in the spring seems to have been overstated. Usually June and July are the peak of homes sales and prices for the year. What would the market be like if rates were not at historically low levels? New U.S. home sales decline 8.4% in June "WASHINGTON (MarketWatch) - Sales of new single-family homes fell 8.4% in June to an annual rate of 350,000 after reaching a two-year high in May, the U.S. Commerce Department said Wednesday. The median price of new homes, meanwhile, fell 1.9% in June to $232,600, the lowest level since January." http://www.marketwatch.com/story/new-us-home-sales-decline-84-in-june-2012-07-25?dist=lcountdown This also shows just how unsustainable new home prices are compared to the average income of American households (about $46,000). This prices is 5 times the household income, way above the historic numbers of 2.5% to 3%.

We still have a printing press and we are not afraid to use it. Fed moving closer to action: WSJ "WASHINGTON (MarketWatch) - Federal Reserve officials are moving closer to taking new action to try to spur the economy, according to a report Tuesday by the Wall Street Journal. Officials at the central bank are growing impatient with the sluggish growth and high unemployment and worried that growth is too slow. The report said that conversations inside the Fed had turned toward how and when to move but did not find a consensus for what steps the Fed might take at its meeting next week." http://www.marketwatch.com/story/fed-moving-closer-to-action-wsj-2012-07-24?dist=afterbell

Negative data is starting to really take hold and getting deeper. Richmond Fed Data Signals Ongoing Broader Weakness "The market is getting to digest some additional manufacturing data this morning, with the latest installment of economic weakness coming out of the Richmond Federal Reserve. The manufacturing index fell to -17 in July, versus only -1 in June. The services revenue also was down sharply at -11 for July, versus a positive 11 reading from June. Bad news continues on the retail front as the July data came down to -18, versus a positive reading of 3 in June. The shipments component was the worst component here at -23 in July, versus a flat reading of zero in June." Read more: Richmond Fed Data Signals Ongoing Broader Weakness - 24/7 Wall St. http://247wallst.com/2012/07/24/richmond-fed-data-signals-ongoing-broader-weakness/#ixzz21ZM9ULMd Oops, our bad. JPMorgan Chase settles with credit card customers for $100 million "JPMorgan Chase & Co has agreed to pay $100 million to settle litigation by credit card customers who accused the largest U.S. bank of improperly boosting their minimum payments as a means to generate higher fees." http://bottomline.msnbc.msn.com/_news/2012/07/24/12929479-jpmorgan-chase-settles-with-credit-card-customers-for-100-million?lite

Libor arrests 'imminent' as US authorities close in "International law enforcement agencies are close to arresting traders under suspicion of attempting to manipulate inter-bank interest rates." http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9420432/Libor-arrests-imminent-as-US-authorities-close-in.html Spain, Italy bond yields soar on bailout fears "FRANKFURT (MarketWatch) -- Fears that Spain will require a full-fledged sovereign bailout helped push Spanish government bond yields to another round of euro-era record highs Monday." http://www.marketwatch.com/story/spain-italy-bond-yields-soar-on-bailout-fears-2012-07-23?dist=lcountdown Greece reportedly faces IMF aid cut-off "LOS ANGELES (MarketWatch) — The International Monetary Fund is set to stop aid payments to Greece, raising the odds that the nation will become insolvent as early as September, according to a German press report Sunday citing unnamed European Union officials." http://www.marketwatch.com/story/greece-reportedly-faces-imf-aid-cut-off-2012-07-22?dist=lcountdown Insider trading probe dethrones 'King of Tokyo' "England had its 'London Whale' but Japan has the 'King of Tokyo' Dubbed the "King of Tokyo" by traders, the 53-year-old American seemed to have it all: wealth, professional acclaim and status as a patron of contemporary art. In his best year, Brogan had managed over one billion dollars in his flagship Whitney Japan Fund, although much of that has been withdrawn. Now Brogan is at the center of a probe of insider trading. His Tokyo-based firm Japan Advisory has been closed since regulators imposed a fine and revoked its license at the end of June." http://www.marketwatch.com/story/greece-reportedly-faces-imf-aid-cut-off-2012-07-22?dist=lcountdown US poverty on track to rise to highest since 1960s "US poverty on track to reach 46-year high; suburbs, underemployed workers, children hit hard WASHINGTON (AP) -- The ranks of America's poor are on track to climb to levels unseen in nearly half a century, erasing gains from the war on poverty in the 1960s amid a weak economy and fraying government safety net." http://finance.yahoo.com/news/us-poverty-track-rise-highest-113013239.html

You have to give the banking industry one thing, they are on a roll right now for all of their illegal activity. Capital One to pay $210M for deceptive credit card practices "Capital One, the fifth largest bank in the country, said Wednesday it reached an agreement with regulators to pay $210 million to resolve charges that it misled and pressured customers into purchasing unnecessary products. The McLean bank has agreed to refund $150 million to 2.5 million consumers enrolled in debt cancellation as well as credit and identity monitoring products on or after Aug. 1, 2010." http://www.washingtonpost.com/blogs/capital-business/post/capital-one-to-pay-210m-for-deceptive-credit-card-practices/2012/07/18/gJQAKodetW_blog.html?hpid=z3

Picking the winners of this battle would be tough. Feeding Frenzy Seen If Wall Street Sues Itself Over Libor "Wall Street, grappling with mounting regulatory probes and investor claims over alleged interest-rate manipulation, may face yet another formidable foe: Itself. Goldman Sachs Group Inc. (GS) (GS) and Morgan Stanley (MS) (MS) are among financial firms that may bring lawsuits against their biggest rivals as regulators on three continents examine whether other banks manipulated the London interbank offered rate, known as Libor, said Bradley Hintz, an analyst with Sanford C. Bernstein & Co. Even if Goldman Sachs and Morgan Stanley forgo claims on their own behalf, they oversee money-market funds that may be required to pursue restitution for injured clients, he said. Because Libor is based on submissions from only some of the world’s largest banks, the probes threaten to pit firms uninvolved in setting the rate against any implicated in its manipulation, Hintz said. Libor serves as a benchmark for at least $360 trillion in securities." http://www.businessweek.com/news/2012-07-19/feeding-frenzy-seen-if-wall-street-sues-itself-over-libor Deutsche Bank, HSBC Traders Investigated in Libor Probe "Traders at Deutsche Bank AG (DBK), HSBC Holdings Plc (HSBA), Societe Generale SA (GLE) and Credit Agricole SA (ACA) are under investigation for interest-rate manipulation in a global probe that led to a record fine for Barclays Plc (BARC) last month, a person with knowledge of the matter said." http://www.bloomberg.com/news/2012-07-18/traders-at-deutsche-bank-and-hsbc-investigated-in-libor-probe.html

Philly factory activity stays weak in July "WASHINGTON (MarketWatch) — Factory activity in the Philadelphia region contracted for the third straight month in July, the Philadelphia Federal Reserve Bank said Thursday." http://www.marketwatch.com/story/philly-factory-activity-stays-weak-in-july-2012-07-19-101033855 Sales of existing homes drop 5.4% in June "WASHINGTON (MarketWatch) — Sales of existing homes in June fell to the slowest pace since October, a decline that goes against the grain of more positive indicators from the housing market and one which a trade group on Thursday blamed on foreclosure delays and tough mortgage availability." “There are millions of homes either still tied up in the legal process surrounding foreclosure or which at some stage will be in foreclosure (mortgage delinquencies, while declining, are still very high), and these units are not yet recorded as available for sale,” said Josh Shapiro, chief U.S. economist at MFR, in a note to clients. “The huge supply overhang of existing homes promises to keep pressure on prices and to weigh on demand for new homes and hence on housing starts.” Median prices jumped for a third month, rising 7.9% from year-ago levels to $189,400. This is due to the mix of homes being sold, rather than re-sale prices, Yun said. CoreLogic, for instance, reported that re-sale prices were up 2% year-on-year." http://www.marketwatch.com/story/sales-of-existing-homes-drop-54-in-june-2012-07-19 Leading economic index declines in June ‘The U.S. economy is growing very slowly,’ economist says "WASHINGTON (MarketWatch) — The index of leading economic indicators fell 0.3% in June to 95.6, mostly reversing the increase in May, the Conference Board reported Thursday. Weakness in business orders, consumer confidence and building permits contributed to the decline, the board said." http://www.marketwatch.com/story/leading-economic-index-declines-in-june-2012-07-19 U.S. weekly jobless claims shoot back up "Applications for benefits jump 34,000 to 386,000 Claims in the prior week were revised up to 352,000 from 350,000." http://www.marketwatch.com/story/us-weekly-jobless-claims-shoot-back-up-2012-07-19

The Daily Show has two very good videos on the international banking issues, libor and what it means to main street. Part 1 - http://www.thedailyshow.com/watch/wed-july-18-2012/international-banking-actuality-part-37 Part 2 - http://www.thedailyshow.com/watch/wed-july-18-2012/international-banking-actuality-part-37---libor-fallout

Of course he didn't do so good with what he expected last time. He didn't see a recession, said banking was very stable, subprime is contained and no major house bubble/bust coming. Actually, these types of comments seemed to start appearing just about the time the wheels started to fall off last time. Bernanke doesn’t expect double-dip recession Holds door open for more easing "WASHINGTON (MarketWatch) — The economy isn’t likely to slide back into recession, Federal Reserve Board Chairman Ben Bernanke said Wednesday in his second day of questioning by lawmakers. “At this point we don’t see a double-dip recession — we see continued moderate growth,” Bernanke said in testimony to the House Financial Services panel. On Tuesday, Bernanke presented a pessimistic outlook on the economy to the Senate Banking Committee." http://www.marketwatch.com/story/bernanke-doesnt-expect-double-dip-recession-2012-07-18

We shall see.

Many of these cities that are seeing increases are core areas of the foreclosure issues (Florida, Arizona, California). What is happening is inventory is being restricted in may places and this is causing prices to increase. Home prices rise in nearly all major US cities "WASHINGTON (AP) — Home prices rose in nearly all major U.S. cities in April from March, further evidence of a housing market that is slowly improving even while the job market slumps. The Standard & Poor's/Case-Shiller home price index released Tuesday showed increases in 19 of the 20 cities tracked. That's the second straight month that prices have risen in a majority of U.S. cities." http://www.sfgate.com/news/article/Home-prices-rise-in-nearly-all-major-US-cities-3663322.php

Its becoming more and more apparent that the only real ammo left for the western world economics is to attempt to print economic growth. Even the headlines for the US stock market is mostly based off of the 'hope' for more QE. Debt crisis: live "The International Monetary Fund warned the eurozone was in "critical danger", urging the European Central Bank to tackle the crisis by turning on the printing presses, as Greek leaders continue to wrestle over spending cuts." http://www.telegraph.co.uk/finance/debt-crisis-live/9406901/Debt-crisis-live.html

I think it would be one thing if they are releasing at a rate not to cause significant home price declines quickly, but its a whole different story if their goal is to juice the price of housing.

Are they no matter what the economic ramifications to the average citizen is? Maybe, but it doesn't mean that their efforts are the path to a stable housing market/US economy. I think we have clearly seen that what is good for the banks is not nessarily good for the overall economy or main street.

I actually work with several brokers that do just foreclosure sales for major banks. And they are currently very organized on how many units they release each month onto markets. Your definition of stabilizing and my definition of stabilizing the US housing market is very different. I believe that what is best is to have a market that has housing in balance with incomes and where people don't pay more than 30% (which was the historic norm until the 2000s) of the household income to housing. We are not at that place in most markets, so we continue to have more people cost burdened by their homes. By having housing in balance with incomes we can create long term stability in the housing market. The efforts to maintain housing above these historic norms create unstable market conditions.

Industrial production edges up 0.4% in June "WASHINGTON (MarketWatch) — Industrial production continued a see-saw pattern in June, advancing after a gain in business equipment output but finishing the second quarter with the slowest rate of growth in a year. Industrial production rose a seasonally adjusted 0.4% in June after a 0.2% dip in May, the Federal Reserve said Tuesday. The Fed initially reported the May drop to be 0.1%, so even though the June growth was stronger than the 0.3% forecast in a MarketWatch-compiled poll, the level of industrial production was below what economists estimated." http://www.marketwatch.com/story/industrial-production-edges-up-04-in-june-2012-07-17 Pessimistic Bernanke doesn’t commit to action "WASHINGTON (MarketWatch) — Federal Reserve Chairman Ben Bernanke sketched out for members of Congress the weaker economic outlook and stressed that the central bank is prepared to take further action to try to give the recovery a jolt." http://www.marketwatch.com/story/job-gains-to-be-frustratingly-slow-bernanke-says-2012-07-17?link=MW_story_insert QE3 is pointless as we head over the cliff "Commentary: Fed’s powerless about Europe or U.S. fiscal crisis WASHINGTON (MarketWatch) — The U.S. economy faces two major risks, and there’s nothing Ben Bernanke or the Federal Reserve can do about it. That’s the message Bernanke himself delivered to the Senate Banking Committee on Tuesday. The message wasn’t received by either politicians or markets. In his twice-a-year official testimony on the state of the economy, Bernanke repeated the warning he’s delivered many times before: The economy is weak, threatened with a renewed recession because policy makers here and in Europe are hell-bent on disaster." http://www.marketwatch.com/story/qe3-is-pointless-as-we-head-over-the-cliff-2012-07-17