No6's Financial Markets Thread

[No6]

FTSE has now failed to breach the 6100 level five times since the beginning of the year. The good side is that each time it has failed the mood to fall too far hasn't been sustained. Can't help but feel that the traders are using any excuse right now to play the tradeable ranges, Italy being the latest "scare". We will have a couple of weeks of US default scare to come, so markets will remain volatile.

[jerpy]

FTSE has now failed to breach the 6100 level five times since the beginning of the year. The good side is that each time it has failed the mood to fall too far hasn't been sustained. Can't help but feel that the traders are using any excuse right now to play the tradeable ranges, Italy being the latest "scare". We will have a couple of weeks of US default scare to come, so markets will remain volatile.

 

Fear seems to be on a high gas mark of late, in fact a whole lot of gas leaking out(or rather hot air) in the quiet summer months, is leaving the markets and traders jittery I sense.

 

Personally i'm trading very little bar a few odd longs I hold and a slight temptation to increase P.M's there seems few tradeable positions. Although BSY looked a good downside call at the weekend and so it came to pass. Shame I didn't do it myself, too many outdoor distractions in summer

 

Cash waiting for shortable bets

[No6]

Fear seems to be on a high gas mark of late, in fact a whole lot of gas leaking out(or rather hot air) in the quiet summer months, is leaving the markets and traders jittery I sense.

 

Personally i'm trading very little bar a few odd longs I hold and a slight temptation to increase P.M's there seems few tradeable positions. Although BSY looked a good downside call at the weekend and so it came to pass. Shame I didn't do it myself, too many outdoor distractions in summer

 

Cash waiting for shortable bets

 

You just might get those shorts.

 

The next two weeks will probably set the stage for the rest of the year. The US debt ceiling talks look like going to the wire, they have to be agreed by 22nd July to be passed so that the US doesn't default on 2nd August. Failure to agree will hit the markets hard, I don't think there is any doubt about that, the question is whether those wanting big cuts in Congress will push it knowing that a many times Lehmann's event is waiting to happen if they stall or refuse to raise the debt limit. The thing is everyone thought that TARP would go through straight away, but originally it was voted against and set a tailspin in the markets. History could be repeating with Congress looking to make a point by pushing things beyond 2nd August. A deal will ultimately have to be made, but straight away I'm beginning to doubt.

 

Despite mounting concern in the financial markets, America's political leaders remain some distance apart over the issue of the debt ceiling. Little progress appeared to be made on Wednesday. Republican House majority leader Eric Cantor claimed that Obama had shoved back the table and walked out of White House talks, after Cantor refused to discuss the president's proposal to raise taxes on wealthier Americans.

 

"The president told me, 'Eric, don't call my bluff. I'm going to take this to the American people,'" Cantor said after the meeting.

 

Democrats, though, disputed whether Obama had quit the meeting prematurely.

 

"Left abruptly is perfectly fair," one official told the LA Times. "But the meeting was over – in no sense did he walk out on it."

 

Officials have warned that, as things stand, America will run out of money to pay its bills on 2 August. Federal Reserve chairman Ben Bernanke said on Wednesday that without agreement, the US would continue to service its debts and stop benefits like Social Security payments instead.

 

http://www.guardian.co.uk/business/2011/jul/14/us-debt-ceiling-moodys-downgrade-threat

 

In a stunning vote that shocked the capital and worldwide markets, the House on Monday defeated a $700 billion emergency rescue for the nation's financial system, ignoring urgent warnings from President Bush and congressional leaders of both parties that the economy could nosedive without it. The Dow Jones industrials plunged 778 points, the most ever for a single day.

 

Democratic and Republican leaders alike pledged to try again, though the Democrats said GOP lawmakers needed to provide more votes. Bush huddled with his economic advisers about a next step. The House was to reconvene on Thursday instead of adjourning for the year as planned.

 

The stock plunge began even before the 228-205 vote to reject the bill was officially announced on the House floor. The decline for the day surpassed the 721-point previous record, on the day after the Sept. 11, 2001, terror attacks, though in percentage terms it was well short of the drops on Black Monday of October 1987 and at the start of the Depression.

 

http://www.msnbc.msn.com/id/26884523/ns/business-stocks_and_economy/t/house-meet-thursday-after-rejecting-bailout/

 

It appears that whatever cuts they may be talking about, some people don't need to worry.

 

Labrador, Simpson vote to add $17 billion to national defense budget

 

Even as leaders of their own party were in high-level talks to cut the nation’s deficit, Idaho Congressmen Raul Labrador and Mike Simpson voted Friday to add $17 billion to national defense budget for fiscal year 2012.

 

The new, non-emergency money represents an increase of 3.4 percent over the 2011 defense budget. The total defense budget for 2012 sits at $649 billion. About $530 billion of that amount is non-emergency money, while $119 billion is emergency funding related to the war on terror.

 

The House approved the budget on a 336-87 vote.

 

http://www.idahoreporter.com/2011/labrador-simpson-vote-to-add-17-billion-to-national-defense-budget/

 

[jerpy]

 

It appears that whatever cuts they may be talking about, some people don't need to worry.

 

One thing I notice the U.K press tslking about is rampant "nationalism". Walked past a news stand today, just glancing at the headlines all were screaming anti european headlines. Express, Mail, Sun Just wondering if other western countries tabloids in these dark days are launching the same agenda.

 

All looks very orchestrated to bash europe and unnerve markets.

[No6]

One thing I notice the U.K press tslking about is rampant "nationalism". Walked past a news stand today, just glancing at the headlines all were screaming anti european headlines. Express, Mail, Sun Just wondering if other western countries tabloids in these dark days are launching the same agenda.

 

All looks very orchestrated to bash europe and unnerve markets.

 

Seems to be the standard approach by the largely anti-EU press here in the UK. Someone I know occasionally buys the Express and a few weeks back during the latest Greek protests, they ran a headline along the lines of "Greece Euro crisis threatens our British Banks". I thought it was quite funny, in that it fulfilled the usual attack on the EU while trying to make out that UK banks were an innocent party to events elsewhere. It ignored the reality that what is happening in Europe is not a EU/Euro crisis, but a financial system crisis, no different than that faced by the UK and USA and all the other inflationary money economies. The threat to the EU/Euro is a bi-product of the financial crisis. The idea that the UK is better off because we are not in the Euro is a joke considering that the UK has chosen the inflationary route to try and solve the problem, while promising deflationary measures for ordinary people, lower wage settlements, lower savings rates, austerity, etc. The ordinary people of Greece are getting the same medicine but on a larger, shorter timeframe scale. I doubt being in or out of the EU/Euro would make a lot of difference to them, they would have had to do an Iceland and then our "innocent" banks would have really felt the heat.

[No6]

Some are still making money on the High Street.

 

Sports Direct shop staff to each net '£43,000 bonus' after Britain's biggest sports retailer sees profits soar

 

* Profits up 25 per cent at sports wear retailer

* Share price more than DOUBLES in past 12 months

* Analysts say sales boost is thanks to the World Cup

 

Two thousand shop staff at Sports Direct were celebrating yesterday after landing a shares windfall worth on average more than £43,000 each for beating sales and profits targets.

 

Sports Direct, founded by former squash coach Mike Ashley 29 years ago, has hit its target for the second year in a row, with profits up 25 per cent for the year ending this April.

 

This means its staff are set for a shares windfall worth more than twice their average salary of £20,000.

 

It is believed to be the largest shares bonanza of its kind ever to be handed out to shop staff in Britain.

 

http://www.dailymail.co.uk/news/article-2014721/Sports-Direct-shop-staff-net-43k-bonus-profits-soar.html

 

 

Solid uptrend.

 

http://www.digitallook.com/companyresearch/215818/Sports_Direct_International/company_research.html

[littledavesab]

The threat to the EU/Euro is a bi-product of the financial crisis. The idea that the UK is better off because we are not in the Euro is a joke considering that the UK has chosen the inflationary route to try and solve the problem, while promising deflationary measures for ordinary people, lower wage settlements, lower savings rates, austerity, etc. The ordinary people of Greece are getting the same medicine but on a larger, shorter timeframe scale. I doubt being in or out of the EU/Euro would make a lot of difference to them, they would have had to do an Iceland and then our "innocent" banks would have really felt the heat.

 

I understand thats not the ideal route to prosperity. But surely being outside the Euro and applying currency devaluation is preferable to being in the situation of one of the PIGS. It might be the same type of medicine applied in a different manner but it is necessary medicine and it is easier for the polulation to accept + it has side benefits of making UK a supposedly better place for extenal investors to stick their loot.

 

So surely the UK must be better off out not in the Euro ?

[DontPanic]

I also think the option of devaluation (being out of euro) is better that the alternative Greek style cuts. At least devaluation is accepted by the population or at least not noticed since most of them dont know its happening and therefore dont take to the streets.

 

Another good day to buy stocks today, earnings still look good and they are much cheaper than yesterday.

Once the politicians fudge a deal on US debt and euro debt should bounce up nicely as earnings still look good - thats my call anyway.

[No6]

I understand thats not the ideal route to prosperity. But surely being outside the Euro and applying currency devaluation is preferable to being in the situation of one of the PIGS. It might be the same type of medicine applied in a different manner but it is necessary medicine and it is easier for the polulation to accept + it has side benefits of making UK a supposedly better place for extenal investors to stick their loot.

 

So surely the UK must be better off out not in the Euro ?

 

Or we should be thankful that the Euro exists and that others are trying to solve their problems within it, while we can operate quitely on the periphery? This is part of the problem with such an analysis. If the Euro didn't exist and all these European countries had their own currencies, own economic and financial policies, own banking bubbles as they surely would, all the PIGS and probably more would have gone under by now. Don't think that would have been good for the UK considering our bank's exposure to problems elsewhere.

 

 

Another good day to buy stocks today, earnings still look good and they are much cheaper than yesterday.

Once the politicians fudge a deal on US debt and euro debt should bounce up nicely as earnings still look good - thats my call anyway.

 

I agree. A US deal and I would expect a very quick stock market rebound. Question is, until it comes buying anything is a bit of a gamble as both sides may push this one to the wire.

 

Treasury Secretary Timothy Geithner said on Monday there’s progress on the debt talks and he is “absolutely” certain that President Barack Obama and congressional Republicans will be able to reach a deal to raise the ceiling ahead of the August 2 deadline.

 

“Despite what you hear, and this is a complicated place, Washington, people are moving closer together,” Geithner said in a morning interview on CNBC.

 

http://www.politico.com/news/stories/0711/59246.html

 

WASHINGTON (AP) — As budget and debt talks founder at the White House, the top Democrat and Republican in the Senate have already turned to Plan B.

 

It involves an unprecedented plan to give President Barack Obama broad authority over the government's borrowing cap while allowing a bitterly polarized Congress whatever spending cuts it can muster.

 

GOP leader Mitch McConnell of Kentucky got the ball rolling Tuesday when he announced a dramatic plan that would allow Obama to force through an increase in the debt limit without the approval of Congress. McConnell's plan would have to pass both the House and Senate and receive Obama's signature to go into effect.

 

=====================

 

Here's how it would work:

 

—Obama would first order a debt limit increase of $700 billion, along with a proposal to cut spending by a greater amount. Some $100 billion in new debt authorization would take effect immediately to avoid a default on Aug. 2.

 

—Congress would have 15 days to reject the request. If a resolution of disapproval were passed, Obama would likely veto it, and if his veto were upheld, the debt limit increase would go into effect. It takes two-thirds of both the House and the Senate to override a veto.

 

—Obama would be permitted to order two additional debt limit increases of $900 billion in the fall of 2011 and in the summer of 2012, along with commensurate spending cut proposals.

 

http://news.yahoo.com/budget-talks-lag-senate-leaders-plan-b-202103423.html

[DontPanic]

Well I agree they could become even more of a bargain tomorrow, so buy a few more !

 

Guess I'm betting that whilst politicians are stupid they are not that stupid and as soon as its announced the can has been kicked a little further the market pops up again.

Even if it doesn't the dividend yield on some stocks is looking good with earning to support it going forward.

[Mabon]

Well I agree they could become even more of a bargain tomorrow, so buy a few more !

 

Guess I'm betting that whilst politicians are stupid they are not that stupid and as soon as its announced the can has been kicked a little further the market pops up again.

Even if it doesn't the dividend yield on some stocks is looking good with earning to support it going forward.

 

What are you buying mate? Or is that privee?

 

I was looking for potential 'bargains' today. Very tempting to load up...

 

Good Luck

[littledavesab]

Or we should be thankful that the Euro exists and that others are trying to solve their problems within it, while we can operate quitely on the periphery? This is part of the problem with such an analysis. If the Euro didn't exist and all these European countries had their own currencies, own economic and financial policies, own banking bubbles as they surely would, all the PIGS and probably more would have gone under by now. Don't think that would have been good for the UK considering our bank's exposure to problems elsewhere.

 

I agree. A US deal and I would expect a very quick stock market rebound. Question is, until it comes buying anything is a bit of a gamble as both sides may push this one to the wire.

 

Operating quietly on the side and leaving the EU to get on with it sounds kind of smart!

If the Euro didn't exist and all these European countries had their own currencies - then maybe their debt bubbles would not have got so over extended, the UK/German et al banks lending would not have had any excuses for such loans and one hopes the markets would have raised the relevant interest rates before the event (ya hopes!).

 

Still if I were Scottish or Welsh the idea of exiting the UK and joining the Euro might appeal - Brussels or London, choose the

poison !!!

 

Hoping the US reaches a smart compromise.

 

Re the Euro "crisis" - whats George Soros old saying - "the markets have a way of getting what they want" ! Judging by recent events, they sure do !!!

[littledavesab]

Or we should be thankful that the Euro exists and that others are trying to solve their problems within it, while we can operate quitely on the periphery? This is part of the problem with such an analysis. If the Euro didn't exist and all these European countries had their own currencies, own economic and financial policies, own banking bubbles as they surely would, all the PIGS and probably more would have gone under by now. Don't think that would have been good for the UK considering our bank's exposure to problems elsewhere.

 

I agree. A US deal and I would expect a very quick stock market rebound. Question is, until it comes buying anything is a bit of a gamble as both sides may push this one to the wire.

 

Operating quietly on the side and leaving the EU to get on with it sounds kind of smart!

If the Euro didn't exist and all these European countries had their own currencies - then maybe their debt bubbles would not have got so over extended, the UK/German et al banks lending would not have had any excuses for such loans and one hopes the markets would have raised the relevant interest rates before the event (ya hopes!).

 

Still if I were Scottish or Welsh the idea of exiting the UK and joining the Euro might appeal - Brussels or London, choose the

poison !!!

 

Hoping the US reaches a smart compromise.

 

Re the Euro "crisis" - whats George Soros old saying - "the markets have a way of getting what they want" ! Judging by recent events, they sure do !!!

[No6]

Noticed that the spreadbetting company IG Index announced results today and they were pretty good. I've been surprised by the weakness in their share price recently, they are trading close to their 52 week low. Volatile markets are usually good for spreadbetting companies, so I wonder if the market has overlooked this one. 4.9% div yield as well, so one for both growth and income I would have thought.

 

LONDON (ShareCast) - IG Group’s full year results have come in a shade of expectations, with the spread-betting company continuing to bag new clients in spite of tough economic conditions.

 

In the year to 30 May, adjusted pre-tax profits came in £163m, up by 3.4% from the previous year, ahead of IG’s previous prediction of a 3% rise.

 

Revenues rose by 7.3% to £320.4m. Broker Espirito Santo said ahead of the results that a rise above 7% would be a “relatively robust” performance.

 

“The results reflect the continued growth opportunity for the Group as we focus on developing our core businesses,” said chief executive Tim Howkins.

 

“Through the year we have extended our share in some of our largest markets and have taken a number of steps to further strengthen our competitive position.”

 

The full-year dividend per share rises to 20p from 18.5p.

 

http://www.digitallook.com/cgi-bin/dlmedia/security.cgi?csi=112605&action=news&story_id=4371015

[No6]

Steve Sjuggerud is a stock market bull, but I think with good reason as he believes that the inflationary policies being pursued can only be good for stocks. He's still bullish and I think baring the odd shock here and there he's still right (although I'd disagree with his "buy everything" thought. I'd say, buy the good stocks that have momentum going for them.

 

In the April 2009 issue of True Wealth, I wrote...

 

I am extremely bullish on stocks, starting now. I believe the entire stock market could rise by 50% from its lows last week over the next 18 months. And the next seven to 10 years could be phenomenal...

 

Predicting a 50% gain in the stock market was a foolish thing to do. The stock market never rises that much, that quickly.

 

You have to keep in mind, March 2009 was the stock market's bottom. Despair was thick in the air. I might have been the most bullish investor out there at the time.

 

As it turned out, my big, bold prediction turned out to be conservative... Stocks were up 50% in 12 months after I wrote that. From the bottom in March 2009 to the top this year, stocks doubled.

 

But where do we go from here? After all, stocks have doubled since their March 2009 lows...

 

Doesn't this bull run in stocks have to end already? Absolutely not.

 

It's still "the best time to buy in a generation" – as I wrote in the June 2011 issue of True Wealth.

 

And I want to repeat our key theme from that issue...

 

I never imagined we'd see all these things come together at the same time in my investing lifetime. Right now, we have:

 

• Major stocks trading at record-low valuations, while we have near-zero interest rates.

• House prices more affordable than ever, with record-low mortgage rates.

• Gold investments that are record-cheap, during a bull market in gold.

• We also have a fearful public, which is good, because it means the peak is not here yet. And we have a sputtering economy, which is good, because we have a government that is committed to keeping interest rates near zero for a long time.

 

In short, the "setup" conditions are still in place for this bull market to continue.

 

The script has stayed the same for years now – it's the Bernanke Asset Bubble... And it should continue for longer than anyone can imagine.

 

Close your ears to just about everything else. Rest easy knowing you have the script in your hands.

 

Buy everything (just about). A soaring stock market is just "collateral damage" on the way to getting the economy going. So is a weakening dollar (which means higher gold prices).

 

If you're following the script, you know there's money at your feet. All you have to do is own stocks and gold, and that money is yours.

 

http://www.dailywealth.com/1788/We-re-up-100-Does-the-Bull-Market-Have-to-End-Now-Absolutely-Not-

 

 

 

[No6]

Debt ceiling latest. Have to decide soon.

 

WASHINGTON, July 19 (Reuters) - Two weeks before their final deadline, President Barack Obama and top lawmakers will face more pressure on Tuesday for a debt deal amid a growing sense that a last-ditch plan taking shape in Congress may be the only way to avoid a devastating U.S. default.

 

With talks at an impasse and time growing short for raising the U.S. debt ceiling, attention will shift to a congressional vote on a Republican deficit-cutting measure seen as mostly symbolic but a stark reminder of their ideological divide with Obama's Democrats.

 

More important than Tuesday's political theater will be any progress behind-the-scenes on a fallback option that would give Obama almost all the authority -- and the blame -- for raising the $14.3 trillion debt limit before the government runs out of money to pay its bills on Aug. 2.

 

The stalemate in Washington, along with debt problems in Europe, is unnerving financial markets worldwide amid fears of a spiral into a global crisis, and the situation could worsen unless a U.S. deal is struck soon.

 

While insisting Obama has not given up on forging far-reaching $4 trillion deficit-reduction deal, the White House has finally signaled that a broader plan may be out of reach -- something many in Washington accepted days ago.

 

"We must pursue a fallback or last-ditch option ... Conversations about that have been ongoing," White House spokesman Jay Carney told reporters.

 

http://www.reuters.com/article/2011/07/19/usa-debt-idUSN1E76H1Y020110719

[DontPanic]

What are you buying mate? Or is that privee?

 

I was looking for potential 'bargains' today. Very tempting to load up...

 

Good Luck

 

Mainly mini futures contracts on indexes but some individual shares with a leverage of around 3.

Not sure if you can buy them in the UK - http://markets.rbsbank.se/SV/Showpage.aspx?pageID=5

[No6]

FTSE100 could be getting ready to turn here if a US deal is announced in the next few days.

 

[Mabon]

Mainly mini futures contracts on indexes but some individual shares with a leverage of around 3.

Not sure if you can buy them in the UK - http://markets.rbsbank.se/SV/Showpage.aspx?pageID=5

 

Thank You D.P

[No6]

Bond investors still hungry for U.S. debt

 

There are small signs of progress. The bipartisan Gang of Six's debt-reduction framework announced Tuesday got President Obama's nod of approval.

 

Congress has until Aug. 2 to break its stalemate and reach a deal over the debt ceiling. After that, it is not clear exactly how the government will make good on its debts.

 

As the deadline creeps closer, the bond market seems unfazed.

 

"The most obvious explanation for Treasury market resilience is simply that the vast majority of bond market participants do not believe that a default will occur," said Anthony Valeri, market strategist at LPL Financial, in a research note.

 

Further, Valeri noted that should lawmakers push the deadline, the Treasury will figure something out.

 

"In the absence of a new debt ceiling, the Treasury will do everything in its power to maintain timely interest payments and repayment of principal on existing Treasury obligations," said Valeri.

 

http://money.cnn.com/2011/07/20/markets/bondcenter/treasuries/

 

 

Or could they be acting like ostriches? Still time for a shock. Don't forget TARP, first vote.

 

Debt ceiling: Investors acting like ostriches?

 

There is a lot of talk about how politicians are playing a game of chicken with the debt ceiling.

 

But when you consider how calm the market -- especially bond investors -- have been as the August 2 D-Day approaches, another avian creature comes to mind: the ostrich.

 

Are fixed-income investors burying their head in the sand and ignoring the possibility that Republicans and Democrats won't play nice and raise the debt ceiling?

 

================

 

"When you look at Treasury yields, the market does not seem to be disturbed by this at all," said Jeffrey Cleveland, senior economist at Payden & Rygel, a money management firm in Los Angeles. "There are lots of questions about whether the U.S. will default, but it seems unlikely to happen."

 

In other words, the hope is that even though Washington may push the market to the precipice, it will not actually take it over the cliff like it did in the autumn of 2008 with the bank bailout.

 

Remember those fun days? Congress actually voted against TARP the first time it came to the floor, only to watch the Dow plummet nearly 800 points.

 

You have to think that the buffoons in Washington (many of whom were in Congress in 2008) remember that market plunge. So you would think they would want to do everything they could to avoid a sequel, right? Right?

 

One would hope. But sadly, lawmakers may feel that they can afford to wait. First, they apparently need to prove to their base that they are not going to be the ones to cave in to the demands of their political opponents. Essentially, they are holding off on shopping for presents until Christmas Eve.

 

"Investors just do not believe politicians won't come to an agreement on the debt ceiling," said Keith Springer, president of Springer Financial Advisors in Sacramento. "We are used to the partisan jockeying by now. It seems to me they are close to a deal but are just bickering and waiting to the last minute."

 

http://money.cnn.com/2011/07/14/markets/thebuzz/index.htm

[No6]

Slightly off-topic, but in line with the issue of debt ceiling and spending cuts, why is it so unpopular in the US to even talk about cuts in military spending? The US military are not even audited properly! Even the Republicans and Tea Party types don't want to know about military cuts, they are more happy talking about welfare cuts, safe ground for their supporters I suppose.

 

America’s defense spending addiction

 

29 December, 2010

 

If there is one issue that the both major political parties in the United States agree on it’s the need to decrease federal spending to accommodate the national debt. Even the Pentagon’s Joint Chiefs of Staff Michael Mullen allotted to the problem.“The biggest threat we have to our national security is our debt," he said.

 


The Federal government's debt is now stands at $13.8 trillion and is projected to hit $20 trillion by the end of the coming decade. The breakdown would mean every American holds more than $10,000 worth of America’s debt. However, the largest portion of the country’s federal budget is hardly ever questioned. Congressman Jim Moran told RT: “We’re not going to cut the defense budget in half.” The country’s military budget, now at $725 billion dollars, has become a price tag of epic and historic proportions. It’s the largest military budget ever! It includes $159 billion dollars for America's wars in Iraq and Afghanistan.

 

At the Brookings Institute, a prominent Washington Think Tank, the issue of America’s defense budget was discussed in depth with both neoconservatives and liberals. Despite concerns coming from the audience, the discussion quickly turned to the need to sustain the defense budget and the military apparatus.

 

One of the headliners of the Brookings event was U.S. historian Robert Kagan. A well known Neocon in Washington, Kagan was one of many who urged war with Iraq long before 9/11. Kagan equates America’s military might to global leadership and world domination.

 

Kagan said the reason America needs to ramp up its military establishment is because “the reality is this is what America does” and listed a number of events which illustrate America’s hegemony worldwide: “We intervene in Grenada in 1983, In Panama 1989, Iraq 1991, Somalia 1992, Haiti 1994, Bosnia 1995, Kosovo 1999, Afghanistan 2001, and Iraq 2003.”

 

The United States spends nearly as much on military hardware, fixture and training as all other countries combined.

 

Brian Becker, the National Coordinator for the ANSWER Coalition explained how the country has become dependent and obsessed with military spending: “We see at a time when there are 25 – 30 million people who are unemployed or underemployed, where 47 million Americans can’t go to a doctor when they are sick, there are limitless funds, limitless resources for the war budget”.

 

But the military budget is hardly ever questioned in a town that is dominated by its industrial complex. Advertisements for the defense contractors line the metros while TV and print commercials showcase the latest hardware as politicians cave into the lobbying campaigns of the contractors.

 

==================

 

Meanwhile, a congressional watchdog group found in 2008, over 150 Members of Congress had $196 million collectively invested in defense contractors. As lawmakers scream louder to cut spending and federal spending for education, healthcare and social services has been reduced, cutting the military budget, which makes up over 20% of the federal budget, is not on Washington’s agenda.

 

http://rt.com/usa/news/america-spending-debt-budget/

 

Senators call for an audit of the Pentagon

 

16 May, 2011

 

A bipartisan group of US Senators are questioning whether the Pentagon will be able to adequately conduct and complete a self-audit on deadline by 2017 and are calling on the Government Accountability Office (GAO) to investigate.

 

A joint statement released by Democratic Senators Tom Carper and Claire McCaskill, and Republican Senators Scott Brown, John McCain and Tom Coburn, expressed concerns over the abilities of the Pentagon to audit itself on time in accordance with a law put in place in 1990.

 

==================

 

Concerns over the audit come as US military spending has found itself under increased scrutiny and the government makes cuts to numerous non-military programs to avert defaulting. President Barack Obama’s fiscal 2012 budget has called for $78 billion in cuts to Pentagon spending – a notion unpopular with many Republicans.

 

http://rt.com/usa/news/senators-gao-pentagon-audit/

 

The 2012 Defense Budget Is The Highest Since World War II

 

The Pentagon faces $400 billion in budget cuts over the next 12 years. The Analysis of the 2012 Defense Budget lists the allocation as follows.

 

The FY 2012 budget requests a total of $676 billion for the Department of Defense (DoD). The base budget for DoD includes $553 billion in discretionary funding and $5 billion in mandatory funding, and an additional $118 billion is requested for the wars in Afghanistan and Iraq. The budget request also includes $19 billion for defense-related atomic energy programs and $8 billion for defense-related activities in other agencies, bringing the total national defense budget to $703 billion.

 

Adjusting for inflation, the level of funding proposed for the base defense budget in the FY 2012 request is the highest level since World War II, surpassing the Cold War peak of $531 billion (in FY 2012 dollars) reached in FY 1985.

 

http://www.businessinsider.com/2012-us-defense-budget-largest-since-world-war-ii-2011-7

 

 

 

[No6]

For now the markets seem to have reacted positively to the Europe/Greece deal and now everyone's attention will probably turn towards the US debt ceiling date. Agreement on that and I wouldn't be surprise if we see new stock market highs, breaking through resistance points over the next 3 months or so. As long as the markets are convinced that the debt issues are addressed or going to be addressed, even if it means effective defaults for countries like Greece, they will price it in.

[No6]

Meanwhile, corporate results continue to deliver on the upside.

 

Microsoft revenues hit a record as Xbox sales soar

 

The US technology giant Microsoft said its annual revenues hit a record of $69.94bn (£43.4bn).

 

Sales of the company's Xbox 360 videogame console and its Office software helped fuel the growth.

 

Net income at the world's biggest software maker jumped 23% to 23.15bn for the year.

 

The figures, which beat earnings estimates, also showed final quarter revenues reached a record high of $1.37bn, leading to profits of $5.87bn.

 

http://www.bbc.co.uk/news/business-14243831

 

Earnings Season Off to Strong Start (And It’s Not Just Apple)

 

So, how’s earnings season shaping up so far? Not too bad.

 

Impressive reports by Apple and IBM have gotten plenty of attention this week, but there’s more than those two tech titans. Earnings season is so far topping views at a pace above typical quarters.

 

Of 88 S&P 500 companies that have reported as of Wednesday morning, 78% beat the Street’s earnings expectations, versus the typical 62%, according to Thomson Reuters. The miss rate is 9%, half of the average.

 

http://blogs.wsj.com/marketbeat/2011/07/20/earnings-season-off-to-strong-start-and-its-not-just-apple/

 

[jerpy]

Seems to be the standard approach by the largely anti-EU press here in the UK. Someone I know occasionally buys the Express and a few weeks back during the latest Greek protests, they ran a headline along the lines of "Greece Euro crisis threatens our British Banks". I thought it was quite funny, in that it fulfilled the usual attack on the EU while trying to make out that UK banks were an innocent party to events elsewhere. It ignored the reality that what is happening in Europe is not a EU/Euro crisis, but a financial system crisis, no different than that faced by the UK and USA and all the other inflationary money economies. The threat to the EU/Euro is a bi-product of the financial crisis. The idea that the UK is better off because we are not in the Euro is a joke considering that the UK has chosen the inflationary route to try and solve the problem, while promising deflationary measures for ordinary people, lower wage settlements, lower savings rates, austerity, etc. The ordinary people of Greece are getting the same medicine but on a larger, shorter timeframe scale. I doubt being in or out of the EU/Euro would make a lot of difference to them, they would have had to do an Iceland and then our "innocent" banks would have really felt the heat.

 

Just coming back to you on this, it seems to me the ordainary people of Greece are sick of politicians and papers alike. If a few minor soundbites I experienced are anything to go by, they would scrap the whole system and start again.

 

Such a friendly folk, but I sat wondering as I have done on many previous visits, whether the heat and general laziness it causes, typifies the Greek attitude. Funny in a way, a nation that says no problem, is full of them.

[littledavesab]

Just coming back to you on this, it seems to me the ordainary people of Greece are sick of politicians and papers alike. If a few minor soundbites I experienced are anything to go by, they would scrap the whole system and start again.

 

Such a friendly folk, but I sat wondering as I have done on many previous visits, whether the heat and general laziness it causes, typifies the Greek attitude. Funny in a way, a nation that says no problem, is full of them.

 

Seen many perfect examples of this on a recent trip to the Carribeam. Its not just the heat that causes laziness, food is abundent and local distilled rum is dirt cheap - but does more damage that a can of special brew. One of the few places where you can see real life zombies walking around (seriously that what the locals call them) !!! I found it fascinating to see more than a few examples of rows of wooden shacks with a nice brick villa type building in the middle. Really made me think re winners and loosers.