Nov 162014
 
 November 16, 2014  Posted by at 1:15 pm Finance Tagged with: , , , , , , , ,


Wyland Stanley Indian guides and Nash auto at Covelo stables, Mendocino County, CA 1925

We Need To Ramp Up Global Growth: OECD (CNBC)
G-20 Plans $2 Trillion Growth Boost to Uneven Global Economy (BW)
The G-20 Doesn’t Need a Growth Target (Bloomberg)
How The UK Coalition Has Helped The Rich By Hitting The Poor (Observer)
The Centre Is Falling Apart Across Europe (Observer)
Across Europe Disillusioned Voters Turn To Outsiders For Solutions (Observer)
How Can The Eurozone Escape A Lost Decade? (Guardian)
Europe Should Fear The Spectre Of Austerity, Not Communism (Observer)
Putin Leaves G20 After Leaders Line Up To Browbeat Him Over Ukraine (Guardian)
Why We Need Stock Prices To Fall 25% (MarketWatch)
Time to Hide Under the Covers (Martin Armstrong)
Forex Banks Prepare To Claw Back Bonuses (FT)
JPMorgan Settles Claims It Cheated Shale-Rights Owners (Bloomberg)
EC Says Starbucks’ Dutch Tax Deal At Odds With Competition Law (Guardian)
Shipbrokers In Merger Talks After 30% Plunge In Oil Price (Guardian)

Blind clowns run this world, and we let them. Don’t tell me you don’t deserve what you’re going to get.

We Need To Ramp Up Global Growth: OECD (CNBC)

The global economy should be growing at a much faster pace, the chief economist of the Organization for Economic Co-operation and Development (OECD) warned on Sunday, as world leaders agreed on hundreds of measures they hope will boost expansion. “As the emerging markets become a greater share of the global economy, we really ought to be seeing the global economy growing at 4% or more, so the tone is dour,” said OECD Chief Economist Catherine Mann, speaking to CNBC at the G-20 summit in Brisbane over the weekend. Growth of 4% is well behind the group’s projected global gross domestic product (GDP) of 3.3% for this year. In its latest Economic Outlook, published earlier this month, the OECD warned of “major risks on the horizon” for the world’s economy, such as further market volatility, high levels of debt and a stagnation in the euro zone recovery.

Mann’s comments come as world leaders at the G-20 agreed on measures they said will equate to 2.1% new growth, inject $2 trillion into the world economy and create millions of jobs. The Paris-based OECD has previously outlined a target of adding around 2 percentage points to global gross domestic product (GDP) by 2018, relative to the 2013 level. To achieve a faster growth rate, Mann said that countries had given the OECD a range of commitments – and the focus was now on holding them accountable. “Our job is to say to countries: OK, you’ve told us what you’re going to do, so next year we’re going to look at what you’ve said you’re going to do and determine whether or not you’ve done it. It’s challenging. It’s absolutely a process,” she said. World leaders at the summit in Brisbane agreed on around 800 new measures on issues including employment, global competition and business regulations.

Mann was optimistic that job creation would increase in tandem with global growth, as countries ramped up infrastructure investment. “We know that there’s usually a relationship between growth and jobs. It’s not always a tight relationship. There’s always an issue about the distribution, where the jobs are being created, what sectors, what countries and some of the disconnect there can be,” she said. “Mismatch can be a problem, but I do think we are going to see job creation go hand in hand with global growth.” One way to boost global growth is a renewed focus on infrastructure, and Mann stressed there was a “significant deterioration” in infrastructure around the world. “Every country needs to have more bridges, or rebuild bridges and ports,” she said.

Read more …

Because, as we all know, all it takes to foster growth is deciding to have some. The emptiness that emanates from this is blinding.

G20 Says Growth Plans To Boost GDP By 2.1% If Implemented (BW)

Group of 20 leaders agreed to take measures that would boost their economies by a collective $2 trillion by 2018 as they battle patchy growth and the threat of a European recession. Citing risks from financial markets and geopolitical tensions, the leaders said the global economy is being held back by lackluster demand, according to their communique following a two-day summit in Brisbane. The group submitted close to 1,000 individual policy changes that they said would lift growth and said they would hold each other to account to ensure they are implemented. “There are some worrying warning signs in the global economy that are threats to us and our growth,” U.K. Prime Minister David Cameron said after the meeting ended. “If every country that has come here does the things they said they would in terms of helping to boost growth,” including trade deals, then growth will continue, he said.

Action to bolster growth comes as policies around the world are diverging with the U.S. tapering its monetary easing as it boasts the strongest economy among advanced nations, while Europe and Japan add further stimulus to ward off deflation. The IMF last month cut its projection for world economic growth next year to 3.8%. The mostly structural policy commitments spelled out in each country’s individual growth strategy include China’s plan to accelerate construction of 4G mobile communications networks, a A$476 million ($417 million) industry skills fund in Australia and 165,000 affordable homes in the U.K. over four years.

IMF Managing Director Christine Lagarde told the leaders that in order to avoid the “new mediocre” of low growth, low inflation, high unemployment and high debt, all tools should be used at all levels. “That includes not just monetary policy, which is being significantly used, particularly in the euro zone, but also fiscal policy, structural reforms and, under certain conditions, infrastructure,” she said. The IMF and OECD assessed the policy commitments and said they would raise G-20 gross domestic product by an additional 2.1% from current trajectories by 2018, according to the communique. “It’s a worthy objective for the G-20 as global growth is still lagging,” said Shane Oliver, head of investment strategy at AMP Capital, which manages about $125 billion. “But a lot of those measures might not be fully implemented and, even if they do, they may not deliver the results.”

Read more …

But Pesek still thinks it needs growth.

The G-20 Doesn’t Need a Growth Target (Bloomberg)

Group of 20 host Tony Abbott went to great lengths to keep one topic — climate change — off the agenda at this weekend’s confab in Brisbane. There’s little mystery why: While the world hails China and the U.S. for moving forward on curbing carbon emissions, Australia is backsliding by scrapping a tax on carbon and resisting pressure to expand the use of renewables. Abbott’s justification? The need for growth. In fact, Australia’s prime minister wants the rest of the G-20 also to pledge to grow by an additional 2% or more over five years. The goal sounds unobjectionable, until one considers how much trouble arbitrary growth targets are already causing China. The mainland government’s annual pledge to generate a fixed expansion in gross domestic product – 7.5% this year – is also the biggest roadblock to clearing its air and eventually reducing emissions.

Pressure to meet that arbitrary target leads local officials to ignore anti-pollution directives. It could prompt additional stimulus, a second wind for investment in smokestack industries and even more smog. China may be considering a reduction in next year’s target; it shouldn’t set one at all. Neither should the broader G-20. This indiscriminate emphasis on a specific data point encourages short-term policy behavior. In the quest for higher growth at the lowest political cost, governments from Washington to Tokyo have abdicated their responsibility to unelected central bankers. The reliance on monetary easing to prop up growth is clearly dangerous. Too much liquidity chasing too little demand for credit and too few productive investments can only lead to fresh bubbles in a world already filled with them. The consequences are worryingly unpredictable.

Chinese officials like Vice Finance Minister Zhu Guangyao have begun to warn that “divergence” in monetary policies – ultra-loose ones among developed economies, tighter conditions among emerging ones – could have unforeseen effects. “It will create new risks and uncertainties for the global economy,” Zhu told Bloomberg yesterday, calling the global financial environment “uneven and brittle.” Ceding control to central banks relieves political leaders of the pressure to make more difficult changes – the kind that will sustain growth in the long run and broaden its benefits. The only way China can make good on its climate targets, for example, is by rebalancing the economy way from heavy industry. That requires a level of political will Xi has yet to display.

Read more …

All the talk about growth serves only to implement more of this.

How The UK Coalition Has Helped The Rich By Hitting The Poor (Observer)

A landmark study of the coalition’s tax and welfare policies six months before the general election reveals how money has been transferred from the poorest to the better off, apparently refuting the chancellor of the exchequer’s claims that the country has been “all in it together”. According to independent research to be published on Monday and seen by the Observer, George Osborne has been engaged in a significant transfer of income from the least well-off half of the population to the more affluent in the past four years. Those with the lowest incomes have been hit hardest. In an intervention that will come as a major blow to the government’s claim to have shared out the burden of austerity equally, the report by economists at the London School of Economics and the Institute for Social and Economic Research at the University of Essex finds that:

• Sweeping changes to benefits and income tax have had the effect of switching income from the poorer half of households to most of the richer half, with the poorest 5% in the country in terms of income losing nearly 3% of what they would have earned if Britain s tax and welfare system of May 2010 had been retained.

• With the exception of the top 5%, who lost 1% of their potential income, it is the better-off half of the country that has gained financially from the changes, with an increase of between 1.2% and 2% in their disposable income.

• The top 1% in terms of income have also been small net gainers from the changes brought in by David Cameron’s government since May 2010, which include a cut in the top rate of income tax.

• Two-earner households, and those with elderly family members, were the most favourably treated, as a result of direct tax changes and state pensions respectively.

• Lone-parent families did worst, losing much more through cuts in benefits and tax credits and higher council tax than they gained through higher income tax allowances. Families with children in general, and large families in particular, also did much worse than the average.

• A quarter of the lowest paid 10% have shouldered a particularly heavy burden, losing more than 5% of what would have been their income without the coalition’s reforms.

Read more …

Brussels is blowing itself up. It’s not going to be pretty.

The Centre Is Falling Apart Across Europe (Observer)

Wednesday morning in Brussels and Beppe Grillo has brought his anti-establishment roadshow to the European parliament. The committee room is packed, standing room only for the former standup act. Once he gets going, Grillo resembles a force of nature. He declines to sit on the parliamentary rostrum alongside the other participants. Instead he prowls the floor, spitting out a staccato torrent of abuse and grievance, unscripted, unstoppable, laugh-a-minute. “I’m a bit over the top,” Grillo admits when he first pauses to draw breath after half an hour. “Maybe I should stop here.” Grillo is the Mr Angry of Italian and, increasingly, European politics. His Five Star Movement is running a consistent second in the opinion polls at around 20% behind the modernising centre-left of the Democratic Centre of prime minister Matteo Renzi.

If Grillo is hammering on the establishment’s doors, across Europe upstarts, populists, mavericks, iconoclasts and grassroots movements are performing even more strongly, radically changing the face of politics, consigning 20th-century bipartisan systems to the history books, and making it ever trickier to construct stable governing majorities. Fragmentation is the new norm in the parliaments and politics of Europe. Voter volatility, the death of deference, the erosion of party loyalties,, the dissolution of the ties of class make for a chaotic cocktail and highly unpredictable outcomes. Especially during and in the aftermath of economic slump.

“The crisis has shredded voters’ trust in the competence, motives and honesty of establishment politicians who failed to prevent the crisis, have so far failed to resolve it, and who bailed out rich bankers while imposing misery on ordinary voters, but not on themselves,” said Philippe Legrain, a former adviser to the head of the European commission and author of European Spring: Why Our Economies and Politics are in a Mess – and How to Put Them Right. If elections were held tomorrow in half a dozen EU countries, according to current polls, the biggest single parties would be neither the traditional Christian nor social democrats of the centre-right and centre-left, but relative newcomers on the far right or hard left who have never been in government – from Greece and Spain, where far-left anti-austerity movements top the polls, to anti-EU, nationalist, anti-immigrant parties of the extreme right in France, the Netherlands, Austria and Denmark.

Read more …

Lengthy article with reports fom France, Italy, Greece, Germany, Sweden, Ireland, Spain.

Across Europe Disillusioned Voters Turn To Outsiders For Solutions (Observer)

Ever since Matteo Renzi became Italy’s youngest prime minister at 39 in February, styling himself as a political outsider and promising to prise open Italy’s closed-shop economy, commentators have been writing off Italy’s other great anti-establishment figure, Beppe Grillo. The former standup comedian, who rose to fame with rants at the establishment and a wildly popular blog, won a staggering 8.7 million votes in the 2013 elections to Italy’s lower house, running the centre-left Democratic Party a close second. But since then, the MPs and senators who flooded into parliament to represent him have been criticised for refusing to team up with other parties on key legislation. The few that did risked expulsion from his Five Star Movement. “There are continual divisions within Grillo’s parliamentary group – it’s pretty chaotic,” says Roberto D’Alimonte, a professor of politics at LUISS university in Rome. “They are still waiting for Renzi to fail so they can inherit whatever’s left after the disaster.”

Furthermore, Grillo’s anti-Europe rhetoric is now being matched by a resurgence of the rightwing Northern League. After being decimated by scandals, this party has dropped its focus on autonomy for northern Italy, and charismatic new leader Matteo Salvini is now picking up votes nationally with attacks on immigration. So why, despite the setbacks, are Grillo’s poll ratings still healthy? A survey of voting intentions this month put his movement at 19.9%, more than double the Northern League’s, albeit trailing Renzi’s 38.9%. “Until the economy turns around, Grillo will win votes – there is so much frustration in Italy,” says D’Alimonte, who adds that Grillo’s raging against corruption continues to strike a chord. “We still read every day about scandalous misuses of public funds.” Silvio Berlusconi’s decline is also helping the tousle-haired comedian, says D’Alimonte. “Grillo cuts across the political spectrum, taking votes from the left and the right, just like Ukip.”

Read more …

There’s only one answer to that question: by disbanding itself.

How Can The Eurozone Escape A Lost Decade? (Guardian)

It says something about the diminished expectations that the reaction to the latest growth figures for Germany and France was one of relief. Such is the gloom that has descended on the eurozone in the past few months, there was a fear that the data from the eurozone’s two biggest economies could have been worse. That’s true. Germany might now be in technical recession had the 0.1% contraction in the second quarter been followed by a further fall in gross domestic product in the third. As it was, growth of 0.1% was eked out. Similarly, France’s 0.3% expansion was a tad better than feared. But the headline growth number disguised underlying weakness. The growth was entirely due to government spending and the build-up of unsold stocks of goods.

The private sector in France remains painfully weak. What’s true of Germany and France is true of the 18-nation eurozone as a whole. Unlike the US and the UK, the eurozone has never really shown signs of emerging strongly from the financial crisis and recession of 2008-09. The recovery that began in 2013 has petered out. There are a number of reasons for that. The European Central Bank has been slower than the Bank of England and the Federal Reserve in taking action to boost growth – and less imaginative in its choice of weapons. Quantitative easing is now in the offing for the eurozone – almost six years after it was deployed in Britain and America. Blanket austerity for the eurozone has weakened domestic demand.

Attempting to slash budget deficits before growth returned has been a terrible mistake, and one for which Germany has to take the blame. With consumers not spending and businesses not investing, the eurozone has been dependent on exports to keep growth ticking over. But the slowdown in some of the world’s leading emerging markets this year – China, Brazil and Russia to name but three – has made it harder to sell goods overseas. Internal eurozone trade has also faltered. All is not completely lost. The plunge in oil prices will reduce energy bills and boost the real disposable incomes of consumers. A sharp fall in the value of the euro will make exports to the rest of the world more competitive.

Read more …

The Observer sounds as hollow as the rest of them here.

Europe Should Fear The Spectre Of Austerity, Not Communism (Observer)

The approach to macroeconomic policy in Brussels is dominated by Germany. The problem is that the Germans are urging further cuts on economies that are rapidly nearing the end of their tether. One close observer of policymaking in Germany says, only half jokingly, that advice is dominated by a combination of “those who don’t understand Keynes and those who do but are too scared to admit it”. The Tories, who may yet save the beleaguered Ed Miliband by tearing themselves apart over Europe, would be well advised to heed the words of one George Soros, who has pointed out that by being members of the European Union but not of the eurozone, we in Britain enjoy “the best of both worlds”. The Bank of England pointed out in the inflation report that “the potential positive impact of ECB policy actions” is likely to be outweighed in the near term by the factors that are already depressing growth in the euro area.

Carney, who has not hesitated on occasion to acknowledge that Osborne’s fiscal policy impeded the British recovery, manifested some sympathy with Draghi’s view that there needs to be a relaxation of fiscal policy. This means at the very least going easy on budget cuts, but ideally adopting a major expansionary policy involving much-needed infrastructure projects. Indeed, even Germany itself is crying out for renewal of its infrastructure. For “structural reform” read “infrastructure reform”! This does not seem to be understood in Berlin – or, for that matter, in Brussels. They go on relentlessly about the need to honour the EU’s “stability and growth pact”, with its strict targets for budgets and debt. But that pact was drawn up in what were reasonably normal times. The financial crisis changed everything. I always thought it significant that the word “stability” came before “growth” when the pact was signed. The problem now is that there is precious little growth, even in Germany itself, and the danger is that stability may soon turn into deflationary instability.

Read more …

Fools like Harper, Cameron, Abbott are not going to make Putin nervous. All they’ve done over the summit is show him face to face just how stupid they are. Harper allegedly told Putin to get out of Russia. Nobody in the room wanted to provide his reply, but it may well have been: ‘You first’.

Putin Leaves G20 After Leaders Line Up To Browbeat Him Over Ukraine (Guardian)

Vladimir Putin quit the G20 summit in Brisbane early saying he needed to get back to work in Moscow on Monday after enduring hours of browbeating by a succession of Western leaders urging him to drop his support for secessionists in eastern Ukraine. With the European Union poised this week to extend the list of people subject to asset freezes, the Russian president individually met five European leaders including the British prime minister, David Cameron, and the German chancellor, Angela Merkel, where he refused to give ground. Putin instead accused the Kiev government of a mistaken economic blockade against the cities in eastern Ukraine that have declared independence in votes organised in the past month. He said that action was short-sighted pointing out that Russia continued to pay the salaries and pensions of Chechenya throughout its battle for independence.

Justifying his early departure Putin said: “It will take nine hours to fly to Vladivostok and another eight hours to get Moscow. I need four hours sleep before I get back to work on Monday. We have completed our business.” In an interview with German TV he also accused the west of switching off their brains by imposing sanctions that could backfire. Putin said: “Do they want to bankrupt our banks? In that case they will bankrupt Ukraine. Have they thought about what they are doing at all or not? Or has politics blinded them? As we know eyes constitute a peripheral part of brain. Was something switched off in their brains?” The Russian leader also complained he had not been consulted by the EU about the recognition of Ukraine. However, British officials insisted behind Putin’s bluster, that they detected a new flexibility about the Ukraine orientating towards the EU so long as this did not extend to Nato assets being placed on Ukrainian soil.

Read more …

Because that’s by how much, at the very least, they have been distorted (?!)

Why We Need Stock Prices To Fall 25% (MarketWatch)

In early October, as share prices wobbled, I had high hopes that U.S. stocks would plummet to attractive levels. Instead, shares have shot higher, adding to the rip-roaring bull market that has seen stocks triple since March 2009. The long rally has done wonders for my portfolio’s value. But it also means stocks are now more richly valued—and expected returns are lower. Unless you never again plan to add to your stock portfolio, you should have mixed feelings about the market’s heady gains. Think about all the money you’ll invest in stocks in the years ahead, whether it’s with new savings, reinvested dividends or by shifting money from elsewhere in your portfolio. Wouldn’t you rather buy at 2009 prices than at today’s nosebleed valuations? Indeed, I find it hard to get enthused about the prospects for U.S. stocks over the next 10 years. Consider the three components of the market’s return: the dividend yield, corporate-earnings growth and the value put on those earnings, as reflected in the market’s price/earnings ratio.

We already know the dividend yield: It’s 2% for the S&P 500. But big question marks hang over the other two components of the market’s return. How fast will earnings grow? Over the 10 years through mid-2014, the per-share earnings of the S&P 500 companies grew 6.3% a year, far ahead of the 3.6% nominal (including inflation) growth in GDP. But there are three reasons to fear slower earnings growth over the next 10 years. First, the recent gains have been driven by rising profit margins. After-tax corporate profits rose from 7.9% of GDP in mid-2004 to 10.6% in early 2014. Without that boost, the S&P 500’s earnings would have lagged behind GDP growth. Suppose profits remain at 10.6% of GDP, rather than reverting to 7.9%. Even in that scenario, investors likely wouldn’t be happy, because corporate profits would grow no faster than the economy. That brings us to the second reason for worry: Economic growth may disappoint.

Over the past 50 years, roughly half the economy’s 3% after-inflation growth has come from increases in the working population and half from productivity gains. But the labor force is now growing more slowly, as the entrance of new workers barely outpaces retiring baby boomers. The Bureau of Labor Statistics projects that the civilian labor force will expand 0.5% a year over the 10 years through 2022, versus 0.7% for 2002-12 and 1.2% for 1992-2002. On top of that, many American families simply can’t afford to spend freely, either because they’re unemployed or underemployed or they remain handcuffed by hefty amounts of debt. That, too, could crimp economic growth. A third reason to worry: Over the past 10 years, companies have bought back as much stock as they’ve issued. That’s unusual—and it may not last. Historically, shareholders have seen their claim on the nation’s profits diluted by two percentage points a year, as new companies emerge and existing companies issue new shares.

Read more …

“The liquidity is still off by 50% from 2007. Retail participation in the US share market is at historic lows. When the global economy turns down, it will drop faster than ever before BECAUSE liquidity is not there. We NEED to RESTRUCTURE the world economy NOW – RIGHT THIS VERY INSTANT.”

Time to Hide Under the Covers (Martin Armstrong)

The USA may not be as all-powerful as its tells its people or our politicians believe. For all the spying going on against American citizens to hunt them down for taxes intercepting all cell phone calls, the USA is vulnerable on many fronts. The Chinese have been able to compromise the US defense systems. Meanwhile, in the Black Sea, Russia sent a Su-24 jet which then simulated a missile attack against the USS Donald Cook. It carried a new device that rendered the ship literally deaf, dumb, and blind. The Russian aircraft repeated the same maneuver 12 times before flying away. Obama better wake up. This is not some video game. The world is on the brink of war and governments need this war because they are dead in the water economically. The government in Ukraine has told its people it cannot reform now, it is in war. So be patient. We will see this same excuse migrate to Europe and the USA. Government NEED such a diversion. It also does not hurt to kill off those anticipating being taken care of by the state.

The US economy is holding up the entire world economy right now and the growth rate is minimal. When we turn the economy down, look out below. These morons have been hunting taxes everywhere and as a result they have shut down global capital flows. Government lives in an illusion. They simply assumed they could always tax and never funded anything presuming they could always shake money from us. It has been the FREEDOM of investment capital on a global basis that built the economies of the world after World War II. This was the same aspect that built the Roman Empire. Conquering everything enabled global capital flows. Capital flows around the globe at all times and has done so since ancient times. Cicero commented that any event in Asia (Turkey) be it financial or natural disaster, sent waves of panic running through the Roman Forum. If capital has been restricted in movement as it is today, no American would have ever been able to invest in Europe or Asia. Where would the world be today had FATCA been around in 1945?

These idiots have destroyed the world economy and we will only understand this full impact after 2015.75. If you outlaw short-selling, there is nobody to buy during a panic. This is the same problem. The liquidity is still off by 50% from 2007. Retail participation in the US share market is at historic lows. When the global economy turns down, it will drop faster than ever before BECAUSE liquidity is not there. We NEED to RESTRUCTURE the world economy NOW – RIGHT THIS VERY INSTANT. Raising taxes and stopping global flows is the absolute worse case scenario you can possibly ever do in times like the present. This is turning VERY ugly. You better buy some extra heavy blankets because you are going to want to just hide in your bed when this chaos erupts. There are boggy-men under the bed and in the closet and he is listening and watching everything you do. Why? Because he is scared to death he may be losing power. They are in the final stages of insanity – the Stalin Phase where they are paranoid about what everyone even thinks and says.

Read more …

Let’s hope this pisses off the traders enough to tell on their bosses.

Forex Banks Prepare To Claw Back Bonuses (FT)

Five banks at the heart of the forex rate rigging probe are preparing to claw back millions of dollars in bonuses from traders as the City seeks to shore up its reputation in the wake of the latest scandal to hit the banking industry. This would be the first time that banks have applied this draconian measure on such a large scale. Under European rules, they have the power to take this step, but in practice they have largely restricted themselves to withholding as yet unpaid bonuses. This week’s move, however, by UK, US and Swiss regulators to fine six banks $4.3bn for their role in the global foreign exchange scandal has reignited calls for the sector to take tougher action against wrongdoers.

Royal Bank of Scotland, Citigroup, HSBC, JPMorgan Chase and UBS, five of the banks fined this week, are all looking at taking back bonuses from dozens of traders – although people familiar with their thinking say the plans are subject to internal reviews of the individuals’ cond[uit]. RBS is considering going even further by reducing this year’s overall bonus pool for the whole investment bank. Such a move would echo RBS’s stance last year after the Libor rate-rigging scandal, when the state-owned bank reduced its incentive pool by £300m after paying a £390m penalty to UK and US regulators. The forex scandal revealed that groups calling themselves “the players”, “the three musketeers” and “a co-operative” tried to rig key currency benchmarks including at least one provided by central banks, according to the UK’s Financial Conduct Authority.

Read more …

JPMorgan fraud no. 826.

JPMorgan Settles Claims It Cheated Shale-Rights Owners (Bloomberg)

JPMorgan settled a lawsuit by Texas mineral-rights owners who accused it of cutting sweetheart deals with oil company clients to cheat them out of $681 million in compensation. The dispute centered on payments for rights to drill in the Eagle Ford, a shale formation underlying much of central and southwest Texas that has helped put the U.S. in competition with Saudi Arabia and Russia for title of world’s largest oil producer. Beneficiaries of the South Texas Syndicate Trust accused the bank, which was supposedly working on their behalf, of instead hatching favorable deals with commercial-banking clients Petrohawk Energy and Hunt Oil for cut-rate prices on the trust’s rights in the Eagle Ford, the highest-yielding oil field in the U.S. Deal talks between the bank and the trust stalled and forced the start of a trial Nov. 12 in state court in San Antonio while negotiations continued.

The settlement was completed Nov. 14 as jurors heard a third day of testimony, according to lawyers for both the bank and trust’s beneficiaries. “The case was resolved with some conditions, and the jury was excused,” Dan Sciano, a lawyer for the trust beneficiaries, said yesterday in a phone interview. Sciano said he was optimistic “a sufficient number of beneficiaries” will sign the accord at their annual meeting in San Antonio this weekend. “Otherwise, we would not have dismissed the jury,” he said. Sciano declined to discuss the amount of the settlement. [..] The San Antonio Express News reported that the beneficiaries would receive $40 million from the bank. The trust beneficiaries claimed they got only $32.5 million on rights that yielded benefits worth $1.1 billion because JPMorgan wanted to curry favor with its oil company clients at their expense. The bank rejected the claims as speculation and hindsight.

Read more …

Luxembourg, Holland, Ireland, they’re all doing the same, and they all claim it’s fully legal. Morals don’t enter the picture.

EC Says Starbucks’ Dutch Tax Deal At Odds With Competition Law (Guardian)

Brussels has accused the Dutch government of cooking up an illegal deal with Starbucks that allowed the coffee chain to pay a very low rate of tax. In a preliminary report into an alleged sweetheart deal the European commission said the coffee shop’s tax arrangements in the Netherlands were at odds with EU rules on competition, which are intended to stop a government using state funds to give a company an unfair advantage. The report, published today, had been sent to the Dutch government on 11 June, when the commission officially launched its investigation into the tax affairs of Apple, Starbucks and Fiat. Starbucks ran into a political furore when it emerged in 2012 that it had paid just £8.3m in corporate taxes since coming to the UK in 1998, despite racking up sales of more than £3bn.

The British subsidiary of the coffee chain was classified as loss-making – so did not pay taxes on profits – largely because it made payments to other companies in the Starbucks group for its coffee supplies, use of the Starbucks logo and shop format, and interest on loans within the group. The commission’s investigation is focusing on these so-called transfer payments and has homed in on the role of the coffee chain’s roasting facility in Amsterdam and its relationship with other parts of the Starbucks business. Officials have also expressed doubts about the legality of a decision by the Dutch tax authorities to allow Starbucks to book in the Netherlands revenues it has earned in other countries. In 2012, Starbucks’ chief financial officer, Troy Alstead, told the UK’s public accounts committee of MPs that the group had legitimately secured a tax deal with the Netherlands that allowed it to pay tax at a “very low rate”. According to the commission, the coffee chain’s Dutch companies paid €716,000 (£570,000) of tax in 2011 in the Netherlands and between €600,000 and €1m in 2012.

Read more …

An insanely overbuilt market faces reality.

Shipbrokers In Merger Talks After 30% Plunge In Oil Price (Guardian)

Plunging oil prices have triggered merger talks among London’s shipping and offshore brokers, with key companies including Clarkson, Icap and Howe Robinson all in discussions. With shipping in the doldrums, brokers have been relying over the last couple of years on the offshore oil industry to boost profits but a 30% plunge in the crude price has caused panic. Clarkson, the world’s largest shipbroker, confirmed on Friday it was hoping to acquire RS Platou, a major Norwegian-based rival which also controls a significant operation in the UK. Icap and Howe Robinson are also understood to be looking at options and sources predicted some kind of merger deal between those firms could be unveiled as early as next week.

Clarkson said the purchase of privately-owned Platou, which some believe could cost up to £200m, made commercial sense: “Given the complementary activities, in terms of geographic locations, operations and industry specialisation, the boards of both Clarksons and Platou believe the enhanced offering of the combined business positions the enlarged group as a leading integrated global shipping and offshore group.” The move could have reunited Clarkson with its flamboyant former chief executive, Richard Fulford-Smith, who left and joined Platou, but the Ferrari-driving shipbroker has unveiled his own plans to buy out Platou’s UK business. While key parts of the shipping market such as dry bulk carriers and container ships have continued to struggle against massive overbuilding of tonnage and tepid volume growth, Clarkson has continued to prosper.

Read more …

Home Forums Debt Rattle November 16 2014

This topic contains 1 reply, has 2 voices, and was last updated by  Formerly T-Bear 4 years, 4 months ago.

Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • #16638

    Wyland Stanley Indian guides and Nash auto at Covelo stables, Mendocino County, CA 1925 • We Need To Ramp Up Global Growth: OECD (CNBC) • G-20 Plans $
    [See the full post at: Debt Rattle November 16 2014]

    #16642

    Formerly T-Bear
    Participant

    In addition to Italy’s Beppe Grillo’s Movement 5 Star has company growing in Spain’s Podemos (We Can) development, augmented also by Greece’s Syriza political party. From The Guardian:
    https://www.theguardian.com/commentisfree/2014/nov/16/podemos-left-crisis-ukip-anti-immigrant
    reviews the growing political opposition to orthodox economic dysfunction. Just as Franklin Delano Roosevelt depended on ‘brain trusts’ to flesh out the goals of the New Deal, and the neoliberal thought collective has adopted ‘think-tanks’ to accomplish its Chicago School of Economics nefarious agendas, it will be interesting to watch the newly forming parties to see what equivalent resources are developed or not, thus indicating their viability to address the existential economic duress being imposed through political austerity. This may be the last chance for the EMU to get itself corrected. For sure, the troika as it is presently constituted and controlled must be completely replaced with organizations adhering to their original design functions.

Viewing 2 posts - 1 through 2 (of 2 total)

You must be logged in to reply to this topic.