pragMAGMAtic view of Marsili

Guambat, sitting smack dab in the middle of the Ring of Fire as he does, was very keen to understand the news of the day that the Marsili underwater volcano, sitting like a soccer ball above the Boot of Italy, was very fragile and could blow or collapse as soon as tomorrow, inundating swaths of the Mediterranean Sea, not to mention all those pizzas and piazzas in Southern Italy.

See, e.g., this: Volcano tsunami could sink southern Italy 'at any time'

But a quick squidge at some of the more rationally informed indicates it's a beat up of media frenzy, with perhaps a bit of budget boosting hyperbole salting the minestrone.

Marsili seamount: tsunami threat for Southern Italy?

Marsili is currently unmonitored, observes Dr Boschi: ‘A network of seismometers should be installed around the edifice, connected on land to a volcano monitoring centre. But this is beyond the budget’.

And it seems reasonable to suggest that the budget is what this article is actually all about. Despite the new attention this story will bring to Marsili as it gets cut-and-pasted around the web, there is nothing substantially new here, as Aldo Piombino notes in a very comprehensive post published on his blog today. No new activity lies behind this report, and nor has the potential threat, such as it is, changed in any way. The novelty, he observes, is in public attention being drawn to the need to monitor Marsili, which has been invisible in every sense as far as the Italian public is concerned.

The Eruptions blog also pours a bit of cold Italian soda on the flames:

The long and short of what I can tell from the articles is that Marsili, a submarine volcano in the Tyrrhenian Sea, could be a threat to create a significant tsunami that would hit Italy (amongst other Mediterranean countries).

thus future activity is likely - it could be soon, it could be hundreds or thousands of years from now, but the volcano is likely not extinct.

Guambat will settle back down now and sip on a Sambuca, knowing that when they come seeking a virgin to throw into the volcano to appease the gods, they will scuttle right past Guambat's burrow.

Shaking up Malaysia's race-based economic and political system

Malaysia's Najib Outlines Affirmative Action Overhaul

Malaysian Prime Minister Najib Razak Tuesday outlined his plans to modernize the country's economy, including proposals to overhaul one of the world's most entrenched systems of race-based preferences and quotas, which many economists say has held back this Southeast Asian nation's growth potential.

Mr. Najib said the country's decades-old affirmative action policies will be recalibrated to help disadvantaged members of all ethnic groups and not just the country's majority ethnic Malay population, which comprises about 54% of Malaysia's 28 million people.

Malaysia introduced race-based preferences and quotas for ethnic Malays in the early 1970s to help them catch up with their generally better-off ethnic-Chinese and ethnic-Indian compatriots. Supporters of the program say it has helped provided stability in this racially and religiously diverse nation, which was rocked by race riots in the late 1960s.

Many critics say the affirmative action program, known as the New Economic Policy, has hindered Malaysia's competitiveness in recent years. The U.S. and European Union have singled out Malaysia's insistence on maintaining preferences for ethnic-Malay owned businesses in government procurement contracts for stalling the development of free-trade pacts.

Mr. Najib said, "But for the long-term strength of our nation, we cannot afford to duck these issues any longer. If we are to truly tackle inequality and become a beacon of progress in our region, we must bring a sense of urgency to reform."

Resist magnetic attraction

Magnets 'can modify our morality'

Scientists have shown they can change people's moral judgements by disrupting a specific area of the brain with magnetic pulses.

And by using magnetic pulses to block cell activity they impaired volunteers' notion of right and wrong.

The small Massachusetts Institute of Technology study appears in Proceedings of the National Academy of Sciences.

the researchers found that when the RTPJ was disrupted volunteers were more likely to judge actions solely on the basis of whether they caused harm - not whether they were morally wrong in themselves.

Morally dubious acts with a "happy" ending were often deemed acceptable.

OK, so does the ubiquitous telephone, and now cell/mobile phone, have any part to play in this loose morals phenomenon?

They identified a region of the brain just above and behind the right ear which appears to control morality.

Keep your hands outa my genes

Judge Invalidates Human Gene Patent

A federal judge on Monday struck down patents on two genes linked to breast and ovarian cancer. The decision, if upheld, could throw into doubt the patents covering thousands of human genes and reshape the law of intellectual property.

In fact, many in the patent field had predicted the courts would throw out the suit.

Judge Sweet, however, ruled that the patents were “improperly granted” because they involved a “law of nature.” He said that many critics of gene patents considered the idea that isolating a gene made it patentable “a ‘lawyer’s trick’ that circumvents the prohibition on the direct patenting of the DNA in our bodies but which, in practice, reaches the same result.”

The case could have far-reaching implications. About 20 percent of human genes have been patented, and multibillion-dollar industries have been built atop the intellectual property rights that the patents grant.

“If a decision like this were upheld, it would have a pretty significant impact on the future of medicine,” said Kenneth Chahine, a visiting law professor at the University of Utah who filed an amicus brief on the side of Myriad. He said that medicine was becoming more personalized, with genetic tests used not only to diagnose diseases but to determine which medicine was best for which patient.

Mr. Chahine, who once ran a biotechnology company, said the decision could also make it harder for young companies to raise money from investors. “The industry is going to have to get more creative about how to retain exclusivity and attract capital in the face of potentially weaker patent protection,” he said.

Edward Reines, a patent lawyer who represents biotechnology firms but was not involved in the case, said loss of patent protection could diminish the incentives for genetic research.

Chris Hansen, an A.C.L.U. staff lawyer, said: “The human genome, like the structure of blood, air or water, was discovered, not created. There is an endless amount of information on genes that begs for further discovery, and gene patents put up unacceptable barriers to the free exchange of ideas.”

More of the same is not corrobative evidence

Guambat would really like to jump on this as a harbinger, a swoop, an "I was just saying". But reading the same thing several times is not corroboration.

BUT, just in case I might later be able to crow, "I told you so", there's this:

Swooning canaries, exploding debt

The FT’s Gillian Tett makes the point in her Tuesday column that the recent inversion of 10-year swap spreads could be heralding something important, namely worries over US sovereign risk.

It’s a theme that was picked up by Bloomberg on Monday, in relation to US Treasury yields generally, and again on Tuesday with its chart of the day, which is focused on what negative swap spreads might be saying about the US dollar’s fortunes.

[There's a quote and a reference to this Bloomberg article, which Guambat had read at the time, as well as that chart, and thought "hummmmm. There might be something in this." But then his mind went blank.]

Of course, correlation ≠ causation, and there are still plenty of people who think negative swap spreads have absolutely zip to do with how the market views US debt, and by extension, its currency.

But still, something to think about as the dollar slides for a second consecutive day.

Presumably, someone will at some point for no particular reason snap their fingers, and Guambat will come out of it.

Bonding with the RNC

Bondage strip club turns up in GOP expenses

The GOP confirmed Monday that it reimbursed a California consultant for $1,946 spent at Voyeur, a high-end bar/lounge that's described on one Web site as "classic slutty" where "you might not be completely shocked at the almost naked women writhing on each other, but you will undoubtedly be in awe."

"It was obviously improper for more than one reason," said party spokesman Doug Heye. "It was not a sanctioned RNC activity. It was improper because of the venue."

He said the party will get its money back from Erik Brown, the president of Orange County-based Dynamic Marketing, who submitted the bill for reimbursement.

PS: RNC Fires Employee Over Bar Expense

The expense was incurred after an RNC event for young Republican donors in Los Angeles, according to a memo issued Monday by Ken McKay, the committee's chief of staff. After the event, several Republicans went to the club on their own, Mr. McKay wrote.

On Monday, after news of the event became public, the RNC said Mr. Brown had agreed to repay RNC. Mr. McKay also said the committee fired a staffer who was at the bar and had told Mr. Brown he could obtain reimbursement for the tab.

There. All better now?

No, not the MidEast, the MidWest

Raids target Christian militia

Federal authorities plan to unseal charges Monday against several people arrested in a series of weekend raids in Michigan, Ohio and Indiana, prosecutors in Detroit said Sunday.

Mike Lackomar, a county leader for the Southeast Michigan Volunteer Militia, said the target of the raid was a Christian militia group called the Hutaree. The group proclaims on a Web site that it is "preparing for the end time battles to keep the testimony of Jesus Christ alive."

Official: Gun Charges After FBI Raids In Midwest

Michael Lackomar, a spokesman for the Southeast Michigan Volunteer Militia, said one of his team leaders got a frantic phone call Saturday evening from members of Hutaree, a Christian militia group, who said their property in southwest Michigan was being raided by the Bureau of Alcohol, Tobacco, Firearms and Explosives.

"They said they were under attack by the ATF and wanted a place to hide," Lackomar said. "My team leader said, 'no thanks.' "

Lackomar said none of the raids focused on his group. Lackomar said about eight to 10 members of Hutaree trained with SMVM twice in the past three years. SMVM holds monthly training sessions focusing on survival training and shooting practice, Lackomar said.

Feds confirm raids in southeastern Michigan

The group's logo is a cross with the initials CCR, Colonial Christian Republic. In one of its videos, a group of men in military gear take down a burning United Nations flag and replace it with their flag, which has a cross.

Other militia groups [??!!] said they have nothing to do with the federal raids.

Hutaree means "Christian warrior," according to the group.

"The Hutaree will one day see its enemy and meet him on the battlefield if so God wills it." [Imshalla?]

Dawud Walid, head of the Michigan branch of the Council on American-Islamic Relations, said he was told that the Christian militia group may have been plotting against American Muslims.

"We salute the FBI for breaking up a militia that was seeking to harm American Muslims," Walid said.

MORE ON THE STORY: See name, pictures and more detail here and elsewhere.
Family Defends Christian Militia Group, Says Hutaree Did Nothing Wrong
Group arrested not Christian or militia, insider says

Relationship management

George the 43rd set America's course, free of worldly engagement. America went it alone, no longer content to be the consensus taker, it tried the consensus maker route.

That probably didn't work out too well, and things changed along the way.

Things like "special" relationships.

This has allowed Obama to re-engage the world on an international stage, free of the co-stars to which it had become habitually mated. Ergo, this about US and Israel.

Rift Exposes Split in Views on Mideast

When Israel announced new housing units for Jews in East Jerusalem at the start of a visit this month by Vice President Joseph R. Biden Jr., Prime Minister Benjamin Netanyahu apologized for the timing and expressed regret at the embarrassment. Mr. Biden accepted his explanation, and the two sides seemed prepared to move on.

Since then, though, that event has remained lodged at the center of American-Israeli relations.

No easy resolution likely as Obama pressurises Israel

Just how much of these ill winds is Israel’s doing and how much is due to the shifting sands on the international stage?

Still, Israelis are concerned about the status of their country’s special relationship with the US

And this about George the 3rd's United Kingdom.

Special relationship between UK and US is over, MPs say

The Commons Foreign Affairs committee said it was wrong to speak of "the special relationship" with the US, as it was fostering other alliances. However, the MPs did agree that the link between the countries was "profound and valuable".

"The perception that the British government was a subservient 'poodle' to the US administration leading up to the period of the invasion of Iraq and its aftermath is widespread both among the British public and overseas," it said.

"This perception, whatever its relation to reality, is deeply damaging to the reputation and interests of the UK."

A Foreign Office spokeswoman said the British media's "preoccupation" with the state of the relationship was often at the "expense of coverage of the more substantive aspects of the relationship".

"The overuse of the phrase by some politicians and many in the media serves simultaneously to de-value its meaning and to raise unrealistic expectations about the benefits the relationship can deliver to the UK."

Guambat reckons the feeling is mutual. Mutually good.

The case for a very extended recovery

John Mauldin, in this week's Thoughts from the Frontline, rationalizes his impression that recovery, in the US and around the world, will be a long time comin'. Guambat finds it pretty convincing, not the least because he puts the bigger picture in the context of the "fingers of instability" lesson he explained to us years ago.

He relates that theory of order in chaos to Minsky's observation that stability leads to instability, with the corollary that the longer the period of stability, the greater the degree of instability.

He then places those notions up against some economic data, namely, a "60 year debt supercycle", illustrated by this chart (which Guambat doesn't dispute but notes that a very quick google-search to find other such charts was not corroborative):


Finally, he brings in Professors Ken Rogoff and Carmen Reinhart, authors of This Time It's Different, to make the point that we've only begun a recovery process; the return to some form of normalcy is way off, maybe another decade.

We borrowed (and not just in the US) like there was no tomorrow. And because we wereso convinced that all this debt was safe, we leveraged up, borrowing at first 3 and then 5 and then 10 and then as much as 30 times the actual money we had. And we convinced the regulators that it was a good thing. The longer things remained stable, the more convinced we became they would remain that way.

this time is really different from all the other crises we have gone through since the Great Depression

every debt crisis always ends this way, with the debt having to be paid down or written off or defaulted upon. That part is never different. One way or another, we reduce the debt. And that is a painful process. It means that the economy grows much slower, if at all, during the process.

If it were not for the fact that we are coming to the closing innings of the debt supercycle, we would already be in a robust recovery. But we are not. And sadly, we have a long way to go with this deleveraging process. It will take years.

You can't borrow your way out of a debt crisis, whether you are a family or a nation.

We built a very unstable sandpile and it came crashing down and now we have to dig out from the problem. And the problem was too much debt.

And here's where I have to deliver the bad news. It seems we did not learn the lessons of this crisis very well. First, we have not fixed the problems that made the crisis so severe. We have not regulated credit default swaps, for instance.

And this next time, we won't be able to fight the recession with even greater debt and lower interest rates, as we did this last time. Rates are as low as they can go, and this week the bond market is showing that it does not like the massive borrowing the US is engaged in.

Guambat has pared down his list of subscriptions to this last one, but not only because Mauldin's Frontline Thoughts is a free one. It is interesting. Not always agreeable, not always rewarding, but usually interesting enough. (You can subscribe yourself here: http://www.frontlinethoughts.com/learnmore.)

For instance, in his fingers of stability discussion, he mentions the "power law", with its impact on critical mass.

Going back to the sandpile game, you find that as you double the number of grains of sand involved in an avalanche, the likelihood of an avalanche is 2.14 times as unlikely. We find something similar in earthquakes. In terms of energy, the data indicate that earthquakes simply become four times less likely each time you double the energy they release. Mathematicians refer to this as a "power law," or a special mathematical pattern that stands out in contrast to the overall complexity of the earthquake process.

Guambat wonders if there are any implications in that idea to suggest that the market lows we saw back in early 2009 released sufficient "energy" or stress from the system that they will mark the lows for this cycle? He hopes Mr. Mauldin might provide his own conjecture.

Straying off the subject

Fox News Producer Megan Whittemore Joins Eric Cantor's Office As Deputy Press Secretary (March 18th)

Megan Whittemore was research producer for "Fox News Sunday with Chris Wallace" before joining Cantor's office. Cantor appeared on the show this past Sunday.

"Megan brings exceptional energy, enthusiasm, and experience to our leadership office communications team," Cantor said in an announcement. "We welcome her talents to help deliver our message and manage media coverage. She will play a critical role working with media outlets in Virginia to deliver important and breaking news

Rep. Bart Stupak on Receiving Death Threats After Health Care Vote (March 25th)

GRETA VAN SUSTEREN, HOST: House Minority Whip Eric Cantor took to the microphone this morning, announcing his office was shot at and he is receiving threatening e-mails. Congressman Cantor says the incidents should not be politicized.

REP. ERIC CANTOR, R-VA., MINORITY WHIP: It is reckless to use these incidents as media vehicles for political gain. That is why I have deep concerns that some — DCCC chairman Van Hollen and DNC chairman Tim Kaine in particular — are dangerously fanning the flames by suggesting that these incidents be used as a political weapon.

"By ratcheting up the rhetoric, some will only inflame these situations to dangerous levels. Enough is enough. It has to stop," said House Republican Whip Eric Cantor.

Cantor's Office Claims Ignorance In Pumping Up Random Shot Incident (March 26th)

The office of Rep. Eric Cantor (R-VA) is pushing back against criticism of the congressman's dramatic press conference Thursday in which he claimed that his Richmond campaign office was shot at -- only hours before police said that a bullet had penetrated the window, but not the blinds, of the office on a downward trajectory, after someone fired into the air.

The [shooting] incident occurred at 1 a.m. Tuesday morning -- more than two days before the Cantor press conference.

TPM Live Wire got a screen grab of FoxNews' breathlessly breaking news when the Cantor statements were first released:



LEFTISTS HATE PALIN’S LOCKING, LOADING & RELOADING METAPHOR

Liberal heads are exploding all over the United States. Three words, “Don’t retreat. RELOAD!!!” created quite the stir. So did the image of cross hairs on targeted congressional districts on a SarahPAC ad. The Alinsky trained leftists are in a hissy fit over Governor Palin’s use of gun metaphors. They find it “offensive.” They find it “threatening.” Too bad for them.

Leftists have no problem with threatening Governor Palin and her family.

Obama’s supporters routinely call for her to be assassinated or harmed in grievous ways all the time on various Internet forums.

We have a little news for you Obama-philes: You better get used to Gov. Palin’s locking, loading and reloading. She won’t sit down and shut up. She’ll keep speaking up and voicing the will of the American people. Get used to the cross hairs on her ads. I hope she puts more cross hairs on the next run of that ad. And if you don’t like our celebration of it, go to another site, because at US for Palin, our lock and load party runs 24 hours a day seven days a week, 365 days a year – 366 on a leap year. We make no apologies for it, and are quite proud of it. Just like Gov. Palin, we don’t retreat. We reload.

//

AND MORE IN A SIMILAR VEIN:

Pennsylvania man arrested for alleged threats to kill Rep. Cantor
How the FBI busted one YouTube nutjob in under a day
A Tennessee man accused of planning a "killing spree" against African-Americans in a 2008 plot that included then-presidential candidate Barack Obama as a target, pleaded guilty Monday to eight charges in connection with the crime,

Yeah, but who's counting?

No, really. Does anyone care? Does it matter?

Four Lenders Shuttered as U.S. Bank Failures Reach 41 This Year

Four banks in Georgia, Florida and Arizona were shut down by regulators, bringing the total for the year to 41 as smaller lenders are pressured by bad loans tied to commercial real estate.

The banks seized yesterday had total assets of $1.24 billion and deposits of $1.1 billion, according statements from the Federal Deposit Insurance Corp. Regulators have seized 181 U.S. lenders since the start of 2009.

U.S. lenders are collapsing at the fastest pace in 17 years amid losses on loans made at the height of the market. The number of banks on the FDIC’s “problem” list climbed to the highest level since 1992 in the fourth quarter. FDIC Chairman Sheila Bair said on Feb. 23 that the pace of failures will exceed last year’s total of 140.

Yesterday’s closings will drain $320.3 million from the FDIC’s deposit insurance fund, the agency said.

Want names? Read the article.

A Big Bank conspiracy hypothesis

JPMorgan, Lehman, UBS Named in Bid-Rigging Conspiracy (Update1)

JPMorgan Chase & Co., Lehman Brothers Holdings Inc. and UBS AG were among more than a dozen Wall Street firms involved in a conspiracy to pay below-market interest rates to U.S. state and local governments on investments, according to documents filed in a U.S. Justice Department criminal antitrust case.

A government list of previously unidentified “co- conspirators” contains more than two dozen bankers at firms also including Bank of America Corp., Bear Stearns Cos., Societe Generale, two of General Electric Co.’s financial businesses and Salomon Smith Barney, the former unit of Citigroup Inc., according to documents filed in U.S. District Court in Manhattan on March 24.

CDR, a Los Angeles-based local-government adviser, was indicted in October along with David Rubin, Zevi Wolmark and Evan Zarefsky, three current or former executives. The company and the three men have denied wrongdoing. Since last month, three former CDR employees who weren’t charged in the initial indictment have pleaded guilty and agreed to cooperate with the Justice Department.

None of the firms or individuals named on the list has been charged with wrongdoing.

In a court filing yesterday, defense lawyers said they “inadvertently” included the names of individual and company co-conspirators in a motion asking the court to compel the government to provide more specific evidence of the alleged misconduct. They asked the court to strike the entire exhibit in which the list appears. Judge Marrero granted the request.

The government’s case centers on investments known as guaranteed investment contracts that cities, states and school districts buy with the money they receive through municipal bond sales. Some $400 billion of municipal bonds are issued each year, and localities use the contracts to earn a return on some of the money until they need it for construction or other projects.

The Internal Revenue Service sometimes collects earnings on those investments and requires that they be awarded by competitive bidding to ensure that governments receive a fair return. The government charges that CDR ran sham auctions that allowed the banks to pay below-market interest rates to local governments.

“When someone goes to jail for five years, that resonates,” he said. “When a company pays $200 million, it’s simply a balance sheet issue. Jail time is what captures corporate America’s attention.”

That last excerpted quote certainly resonated with Guambat.

Trixy divergence

Many stock jocks are at least passingly familiar with the MACD indicator. MACD is the acronym for Moving Average Convergence/Divergence.

It's essentially a momentum indicator. It takes two moving averages of an index, a longer one and a shorter one, and combines the net difference. Thus, because shorter term averages more closely follow daily movements, as the shorter one rises faster, say, than the longer average, the MACD shows positive movement. The stronger that correlation, the stronger the positive reading on the MACD.

It is trend following, obviously because it is a moving average indicator, but it also suggests the strength of a move. It's all a bit more complicated than that, as you can see here.

But it is not only the movement of the 2 averages against each other, but the movement of both of them against the index that provides implication for index strength or weakness. As prices rise when the MACD is falling, it suggests a weakening of buying strength, and vice versa.

The StockCharts link above includes several textbook charts on the predictive (or, more accurately, betting) value of that divergence.

Now, the MACD uses exponential moving averages to highlight the influence of recent movements, although it can be adapted to longer averages to smooth events. In a bigger picture, it may prove useful to take that a step further and smooth the MACD with triple exponential values, which is what the TRIX does. The TRIX is an exponentially smoothed MACD, basically.

The TRIX is not so much a trader's tool than an investor's, trying to capture, as it does, the bigger picture. As StockCharts describes it, "TRIX is designed to filter out stock movements that are insignificant to the larger trend of the stock".

Guambat, being the slothfully slow creature that he is, keeps a sloe eye on the TRIX.

This is what it looks like in the S&P index context at the moment:

Click on these charts for a larger version (right click and open in new tab to keep this place handy).

And to put that in a larger context, this is what the major indexes (Dow, Nasdaq, S&P, FTSE, Germany, France, Japan and HK) look like:

Breaking bread -- lots of it

Last Supper helpings have grown

The Christian faith holds several acts of "super-sizing" to be miracles accomplished by Jesus Christ -- a handful of fish and loaves of bread expanded to feed thousands; a wedding feast running low on wine suddenly awash in the stuff. Now a new study of portion expansion puts Jesus once more at the center.

In a bid to uncover the roots of super-sized American fare, a pair of sibling scholars has turned to an unusual source: 52 artists' renderings of the New Testament's Last Supper.

"I think people assume that increased serving sizes, or 'portion distortion,' is a recent phenomenon," said Brian Wansink, director of the Cornell University Food and Brand Lab and author of "Mindless Eating: Why We Eat More Than We Think." "But this research indicates that it's a general trend for at least the last millennium."

Atsa lotsa motza.

City of London Blue Bloods Blue in Face

FSA dawn raids shock City

Three prominent financial institutions - Deutsche Bank, BNP Paribas and Moore Capital - were last night embroiled in the UK's biggest insider dealing case after 16 dawn raids led to the arrests of six people.

The calibre of institutions involved in yesterday's raids has shaken the Square Mile. The FSA said they were its "largest ever operation against insider dealing" and followed an probe launched in 2007. People familiar with the investigation said formal charges were likely within two days.

Britain Raids a Leading Hedge Fund

The London office of one of the world’s largest hedge funds, Moore Capital Management, was raided by British regulators and the police on Tuesday in the latest episode of a crackdown on insider trading.

Moore Capital, which manages about $14 billion, is as close to an establishment hedge fund as there is. Founded by Louis M. Bacon, a billionaire who splits his time between London and New York, the company started as a so-called macro investor that placed big directional bets on markets and has grown to become a large and diverse fund management company.

One man described as a junior trader for Moore Capital was arrested in the raid, and computers and documents were taken from the company’s offices in Mayfair, the exclusive London enclave that is home to many of the city’s largest and best known hedge funds.

They coincide with a surge in prominent insider trading cases brought in the United States, most notably the unraveling of a suspected insider trading ring that revolved around the Galleon Group of hedge funds and involved top executives at I.B.M. and McKinsey & Company, the consulting firm.

Insider Trading Today!: Tuesday’s Raids by the Numbers

Attention insider traders. Be afraid. Be very afraid.

Long seen as a porridge gumming regulator, the Financial Services Authority wants a bit more respect.

Guambat is plum-mouthed tickled.

Now if only the SEC could gee itself up to get a bit of respect.
//

Getting a bit long in the ha

Japan growth revised downward, with deflation deeper

The Japanese government revised fourth-quarter gross domestic product growth down Thursday, due to slightly weaker corporate capital expenditures and private inventories, and also tweaked down a gauge measuring prices to show record-deep deflation.

Well, they ain't seen nuthin' yet if the following story is any guide to the future for Japan's depopulation.

Even as population shrinks, Japan remains wary of immigration

today the country faces a demographic crisis

The population is aging and shrinking -- a formula for economic calamity and social stagnation. Over time, there will be too few workers to care for the millions of elderly citizens, grow food on farms or fill the manufacturing jobs that drive this export-led economy.

For two decades, Japan's stubbornly low birth rate has barely budged, despite many government incentives for couples to have more children. The result could be a working-age population cut nearly in half by midcentury.

a 2001 U.N. report found that just to maintain its population of about 125 million, Japan would have to permit average annual net migration of 381,000 people for 50 years -- more than 17 million immigrants in that span. And to keep its working--age population at 1995 levels, the country would need 609,000 migrants annually, also for 50 years, or more than 33 million immigrants in all.

That's not going to happen; Japan may be changing, but at nowhere near the rate necessary to save itself. The country, which is likely to be overtaken this year by China as the world's second-largest economy, seems to have made its choice.

The Democratic Party of Japan, which won last summer's elections, has plenty to say about population decline, but the word "immigration" appears nowhere in its manifesto.

There is an absolute blockbuster of a blogged/photo/essay of this subject at Spike Japan. Guambat cannot insist enough that you go have a look at that one. The blogger says a lot things, with pictures worth thousands of words more, one of the more pithy comments being,

It might just be, however, that despite recent evidence to the contrary, Japan has embarked on a vicious demographic spiral, in which a variety of complex feedback mechanisms set to work: aging results in declining international competitiveness, which results in greater economic hardship at home, which results in a suppressed birthrate; aging results in ballooning fiscal deficits, which in the absence of debt issuance must result in higher taxes or cuts to government spending, which cause economic pain, driving down the birthrate; aging, as the elderly dissave, results in a decline in the pool of domestic savings on which government borrowing is an implied claim, reducing room for fiscal maneuver and resulting in less ability to withstand exogenous shocks; aging further entrenches conservative attitudes to everything from pension reform to immigration, resulting in greater government outlays and smaller government receipts; aging leads the electorate to fear for the future of the pension system, resulting in more saving by the economically active, depressing consumption, which drives manufacturers offshore and raises unemployment, which is strongly correlated with the birthrate. Time will tell.

Oh, and as for the title to this post? The word "ha" is Japanese for the English word "tooth". Guambat got that from this webpage: English Japanese Words.

You go to that page and scroll down to "Parts of the Face and Head".

And don't do anything else until you see what they have to say for the word "tongue".

Really; no tongue.

Keystone Cops or Keystone Robbers?

As previously mentioned in other posts today, the Lehman's coroner's report will fill the blogger troughs for a long time to come. But the choice pieces are coming out first.

ZeroHedge, as you'd expect, is in quick with some gooduns. You'll have to read the post(s) because it's way too intricate to paraphrase, and perhaps way too slanderous. Hardly ever knew financial news could be so salacious.

He paints a picture of either a comedy of errors on Lehman's part, or a comedy of errors on their counter-party and regulators part: Guambat is unsure. Indeed, he is unsure if it is comedy at all. Considering the fallout.

If ZeroHedge might be summarized by a few quickie comment grabs, Guambat, on first reading, would choose these:

Little did we know just how far the stench went, and that worthless assets (and we do mean worthless) are very likely the norm.

This also means that should anyone ever delve into the collateral that banks hand off to each other in exchange for the tens of trillions in daily liquidity to gun the SPYs higher, they will find very little of actual value.

somehow the Syndicate Encouraging Corruption, aka SEC, has found this materially criminal misrepresentation to be, well, immaterial, and demand recompense from exactly zero Lehman executives.

how about this observation, which should promptly force Mr. Fuld to buy a one-way ticket out of the US

How much more do we need to uncover before there is a riot next to SEC's offices if, after all this, it still does nothing?

Remember: Lehman Brothers was not seen to be any old white shoe fantasy factory. It was one of the Big 5, none of whom any longer exist in their prior form. Lehman's was in the Pantheon. It got full value for its protection money paid to Congress. It could do no wrong. But did very, very much.

The difference between them and the rest? Don't know, but you can usually tell a swine by the company it keeps.

This story will only be so interesting and satisfying if we get true, comprehensive and everlasting regulatory reform out of this Administration.

And if those Corkers in the Republican Party, and those Sell-outs in the Democratic Party fail to deliver, well, be sure to tell your Grandkids. They'll need to be smarter than us.

Equal and opposite reaction to depressed imports

Backhaul.

One of the reasons given for the unspeakably high freight rates people on Guam have to pay is that there is no backhaul for the ships carrying freight here. The explanation given is that the one-way trade has to pay the two-way transit.

That may be what is also happening on US West Coast ports at the moment.

Guambat's reader may recall a few posts back at the end of 2009 about the dearth of imports to the US, and the signal that sent up that the consumer was becoming distressed. US consumers were trimming their requirements for trade from Asia.

Now, according to Guambat's reading between the lines of the following WSJ article, the backhaul effect may be restraining US exports to Asia.

Export Revival Threatened By Shipping Bottlenecks

The U.S. finally is enjoying some strength in exports, thanks to economic recovery in Asia and a generally weak dollar. But just as U.S. goods find demand abroad, there's a problem getting them there.

It's the opposite of what one might expect. Carriers have a surplus of ships. And since the U.S. still imports more than it exports, freighters arrive in America looking for export cargo to take back, so they don't have to go home empty.

Yet American producers of everything from hazelnuts to cardboard are complaining they can't get their goods shipped in timely fashion.

The constraints arise from the unusual economics of transport businesses such as ports and container shipping. U.S. ports, thanks to the huge appetite Americans have developed for goods made abroad, are oriented more to the import than the export trade. So are the big foreign ship companies, which gear their schedules and their routes to American imports, not to exports.

The ship glut, instead of providing more vessels, perversely is helping make fewer available. That's because the glut, in combination with a fall in trade during the recession, cut shipping rates below the cost of operation for some routes. Carriers responded by idling many ships and reducing their trips to the U.S., to save money and try to force shipping rates higher.

When ships carrying imports call less frequently at U.S. ports, or even skip some ports they once went to, exporters have to wait longer or look harder to find a ride for the goods they want to ship abroad.

Australia, Brunei, Chile, New Zealand, Peru, Singapore and Vietnam

What do Australia, Brunei, Chile, New Zealand, Peru, Singapore and Vietnam, together with USA, have in common?

*****************

Answer: the TPP.

*****************

Never heard of it?


... President Obama, according to this report, wants the Trans-Pacific Partnership, the first major trade initiative under his administration, to be the engine for a "high-standard, broad-based, 21st century regional trade agreement," officials said.

Guam is closer to 5 of those countries than it is to Hawaii. Guambat will keep a sleepy eye on it for you.

Today's foreclosure news, via Google News aggregator

These three items appeared, one after the other, in Guambat's Google News page, spanning the full spread of the 50 States (but not Territories) of the US.

972 Foreclosure Filings in Hawaii in February

Dayton-area foreclosure filings down 30%

Hard for local housing prices to defy the downward pull of foreclosures (Florida)

It's interesting to compare the Hawaii and Dayton stories. The Hawaii story says,

The figure reported Thursday by foreclosure listing firm RealtyTrac represents an 81 percent increase over 537 filings in February 2009.

That story goes on to mention the other statistic mentioned in the report, but highlighted in this Pacific Business News story:

Hawaii foreclosures down 25%

The number of foreclosures in Hawaii fell 25 percent in February from the month before, though filings were up significantly year-over-year, evidence that residents are still struggling to make ends meet.

The Dayton story takes the Pacific News approach: accent the positive --

The number of foreclosure filings in the Dayton area dropped in February, but remained higher than a year ago.

There were 995 foreclosure filings in the Dayton Metropolitan Statistical Area in February, down 30 percent from 1,420 in January, but up more than 41 percent from the 702 in February 2009, according to RealtyTrac.

With spin like that, Guambat wonders how many of those Dayton properties have "ocean views".

By the bye, if you're wondering about the Florida story but too lazy to click the link, the gist of it is,

Speed up the foreclosure process? Be careful what you wish for.

As everyone who buys winter parkas in May knows, when a trickle of buyers meets a gusher of sellers prices take a pounding.

But the story is actually much more interesting than that, so go click and read. Looks like another round of "consolidation" in the real estate market.

Loved the Germany-Greece subliminal imagery

As the slippery Greece sovereign debt situation plays out, the reportage is getting right down to the man-on-the-street level.

The NYT story of this topic today begins with the anecdotal tale of a 28 year old hairdresser who is defending her ability to retire from her "hazardous" chemical job at age 50 on full government retirement.

The focal point of this particular perspective on Greece's troubles is on its retirement promises:

Greece’s patchwork system of early retirement has contributed to the out-of-control state spending that has led to Europe’s sovereign debt crisis.

But it illustrates the story with a nondescript picture of a black profile of a protester surrounded by a gray fog of tear gas. Not much apparent connection there.

There is much more impact in the Christian Science Monitor's picture depicting its story-du-jour on the subject, As Athens protests, Germany scoffs over Greece debt bailout, which carries the subheading,

Protesters took to the streets of Athens on Thursday over government austerity measures. But anger is also growing in Germany at being asked to finance the Greece debt bailout.

Its picture graphically illustrates the whole story.

It's of a bunch of Greek protesters torching an Audi.

Don't have to read the thousand words.

Providing a bit of color to Lehman collapse

The coroner's report on the Lehman collapse, introduced in the last post, will be blogger fodder for days, weeks and years to come. The MarketBeat blog leads with this snippet, too:

The business decisions that brought Lehman to its crisis of confidence may have been in error but the decision not to disclose the effects of those judgments does give rise to colorable claims against the senior officers who oversaw and certified misleading financial statements.

Business decisions are matters of judgment, good or bad, and are protected from hindsight second-guessing, be they bad, by the Business Judgment Rule.

Disclosure obligations, however, do not get as much deferential treatment. If something is material, it must be disclosed.

The coroner is saying there are arguable (colorable) grounds for bringing a legal claim for nondisclosure, but not bad decisions.

And what does Buffett think of short sellers?

Not too sure, but we get a glimpse of what he thinks of CEOs who don't think much of short sellers, in this snippet excerpted by MarketBeat from the official coroner's report on the Lehman collapse.

Buffett did not like that Fuld complained about short sellers. Buffett thought that blaming short sellers was indicative of a failure to admit one’s own problems.

Trust Buffett to pith on Fuld's charade.

Defaulting on debt is good for economy -- seeing is believing

In another news item running along the theme noted in Deleveraging by default, the WSJ is reporting,

Household Net Worth Rises

Americans got richer for a third straight quarter at the end of 2009

For 2009 as a whole, net worth rose 5.4%. Household net worth is assets, such as home equity, minus liabilities, such as mortgage debt.

A large chunk of the increase in net worth came from a drop in household debt, as an increasing number of financially stretched consumers defaulted on mortgage and credit-card debts. While the defaults are painful for families and costly to banks and investors, economists say they are also speeding the financial rehabilitation necessary for a return to robust growth.

"It puts us closer to the point where the consumer can start making a stronger contribution to recovery," said Joseph Carson, director of global economic research at AllianceBernstein in New York.

So make sure you go out and do your part.

School districts in Missouri and Michigan are doing their part.

In the "I'll believe it when I see it State, School Crisis Rattles Missouri:

The Kansas City Missouri School Board voted Wednesday night to shutter nearly half of its schools in an effort to avoid going broke.

The plan comes as school districts around the country, battered by the recession and budget cutbacks, are closing facilities to save money. Detroit closed 29 schools before classes began this fall, leaving the district with 172 schools, according to the Associated Press.

In Breaking News from Wyandotte, Michigan,

It might be necessary to close yet another school for the district to balance its budget.

On the heels of closing McKinley Elementary School last year, Wyandotte Public Schools is considering shuttering Taft Elementary School to eliminate a projected $4 million deficit for the upcoming school year.

The stories from the Kansas City case all note that the school district there has been shrinking in student numbers for decades, while, apparently, trying to keep the same size system, underwritten in part by a huge busing/segregation case settlement years ago. If so, that is just bad management, and, maybe in that case, this could end up being a good opportunity to clean up the overhead. (PS: Guambat just noticed this WSJ article saying essentially just that: District Tackles Woes Money Didn't Fix.)

But the wider strictures on school systems shows this is not solely a mismanagement of school systems. It is a product of the mismanagement of the economy by reckless credit and bank deregulation.

Meanwhile, out towards Guambat's neck of the Pacific, in Hawaii (which is 5 hours flying time closer to the Mainland, with Guam another 7 hours from there), is planning to defer three month's worth of payments to health plans for its public health insurance program, according to the Pacific Business News, in its Feb. 18th edition. If this economy bounces, it's a dead cat nevertheless.

Yield not to temptation

Guambat never even took an introductory class in physics, so as best as he can understand it, according to the theory of relativity, so long as we're all going hell to beat leather, it looks to each of us as if we are all standing still.

And to investment managers, that's a nightmare. No matter how fast they can make their money grow, it ain't good enough unless it beats the other guy.

Their focus is relative growth, to prove that the nominal growth they get from doing what all the others are doing is worthless, even if those others are behaving prudently or wisely.

Absolute growth or return is unworthy so long as better relative growth or return is achievable. It sort of throws out any notion of all the other theories of portfolio management in favour of blinded one-upmanship.

And the way they measure their relative performance is usually by means of standard deviations. And, as Nassim Taleb reminded us over and over and over again, standard deviations do not account very well for the non-standard black swan, which is itself a fairly standard event.


This, of course, is old hat. It was all the talk around the tables a couple of years ago when the stock and credit markets fell into a deep hole, marked if not caused by the subprime bust and extended credit implosion. But that's all forgotten now that everyone has been bailed out by the governments around the world, right?

The overwhelming common denominator in that credit collapse was the extent to which market participants pushed aside notions of absolute returns, ignoring what is reasonable, in a mad reach for relatively higher yields, ignoring what is foolhardy.

And as Bloomberg, Barry Ritholtz and FT Alphaville have brought to our attention, the credit markets have not learned anything much from that experience.

Bloomberg:

Investors in search of better returns poured $7.8 billion into high-yield municipal bond funds last year, pushing assets to a two-year high.

Below-investment grade munis are typically issued by companies raising debt through a municipality for a project with a public interest such as hospitals, nursing homes, housing developments and sports stadiums, said Eric Jacobson, director of fixed-income research for Morningstar Inc. [In other words, these projects don't have a lot of money backing them or expected to flow from them.]

High-yield municipal bonds rated BB+ or lower by Standard & Poor’s or Ba1 by Moody’s Investors Service, one level below investment-grade debt, have returned about 31 percent in the last 12 months compared with 11 percent for investment-grade municipal securities, according to the indexes from S&P/Investortools.

High-yield municipal bonds due in 8 years to 12 years were yielding an average 6.63 percent last month, almost double the 3.42 percent on similar maturity bonds in the broader tax-exempt market, according to Barclays Capital indexes. The average dividend yield on a stock in the Standard & Poor’s 500 Index was 1.98 percent on March 9 and the average interest on a taxable money market fund was 0.02 percent as of March 2.

U.S. state and local government tax revenue fell 6.7 percent as of September from a year earlier, marking the fourth consecutive quarter of decline, according to a December Census Bureau report. That may drive defaults higher this year and next, according to Moody’s, which didn’t provide a number.

The risk of municipal-bond defaults in the future is “higher than it’s been in quite some time,” said Deutsche Bank’s Pollack, because of the unprecedented stress on state and local budgets. From 1970 to 2009, the average five-year default rate was 3.43 percent for speculative-grade debt, Moody’s said. Harrisburg, the capital of Pennsylvania, has considered filing for reorganization under Chapter 9 of the U.S. bankruptcy code as it faces $68 million in debt.

About $2.4 billion of Florida’s so-called dirt bonds, or debt to finance real-estate developments, used reserves or failed to make interest payments in November, up from $1.7 billion in May, according to Interactive Data Corp. That’s the largest amount on record and “reflects an increasing trend,” said Edward Krauss, an analyst for the Bedford, Massachusetts- based research firm, in an e-mail.

Taxing Authority

State and local governments can raise taxes and cut services to continue to pay the interest and principal on their debts, said Scott Cottier, who oversees the $6.4 billion Oppenheimer Rochester National Municipals fund of New York-based OppenheimerFunds Inc. It had a 44 percent total return in the past 12 months, the most among high-yield municipal funds, according to Morningstar.

“The fear of defaults is over-baked in the muni market,” Cottier said.

Here, Guambat would like you to refresh your coffee or drink, lie back and think of California, and reflect on a couple of posts from the last few months:

Deleveraging by default and
Oregon tosses out the first snow ball??

Barry Ritholtz:

One of the factors that caused the great credit crisis to spread far and wide was the “reach for yield.” This is one of the most expensive ways a fixed income investor can obtain a higher potential return on their bond investments.

Note that I used the term “higher,” not “better,” and the word “potential,” not “actual.”As we have seen, high yielding junk paper often goes bust, making the yield grab an exercise in foolish futility.

Rather than accept ultra low yields as a consequence of Federal Reserve action in 2001, bond buyers poured into various mortgage backed securities. Even though they were paying 250 to 350 basis points more than Treasuries, they were rated the same: AAA.

This time, they are eschewing the fraudulent AAA ratings from Moody’s and S&P, and instead are buying naked junk. The bet is that the cities will be bailed out, and their grab for higher yield will be safely rewarded.

FT Alphaville:

while [the Bloomberg piece] does quote bullish opinion on state and local governments’ ability to keep paying interest and principal on their debts… we note that much of that opinion comes from high-yield fund managers.

Oh dear.

Random acts of mindless sectarian slaughter

The Houses of Abraham are still at it, and Guambat shudders again and shutters his burrow to it all.

Detained Herdsmen Tell of Roles in Nigeria Killings

On Monday and Tuesday, 332 bodies were buried in a mass grave in the village of Dogo Na Hawa, the Nigerian Red Cross said Wednesday. Human rights groups and the state government say that as many as 500 people may have been killed in the early hours of Sunday morning, in three different villages.

Sunday’s killings were an especially vicious expression of long-running hostilities between Christians and Muslims in this divided nation. Jos and the region around it are on the fault line where the volatile and poor Muslim north and Christian south meet. In the past decade, some 3,000 people have been killed in interethnic, interreligious violence in this fraught zone. The pattern is familiar and was seen as recently as January: uneasy coexistence suddenly explodes into killing, amplified for days by retaliation.

The operation had been planned at least several days before by a local group called Thank Allah, said one of Mr. Adamu’s fellow detainees, Ibrahim Harouna, who was shackled on the floor next to him. The men spoke in Hausa through an interpreter.

“They killed a lot of our Fulanis in January,” Mr. Adamu said, referring to his ethnic group. “So I knew that this time, we would take revenge.”

His victims were sleeping when he arrived, he said, and he set their house on fire. Sure enough, they ran out.

“I killed three people,” Mr. Adamu said calmly.

Calmly.

Ha ! Thought so...

In Guambat's last post, he speculated that the increase in the numbers of US millionaires may have "something to do with the thinning ranks of billionaires".

That hunch seems to have been confirmed by Forbes:

The World's Billionaires

The richest people in the world have gotten poorer, just like the rest of us. This year the world's billionaires have an average net worth of $3 billion, down 23% in 12 months. The world now has 793 billionaires, down from 1,125 a year ago.

After slipping in recent years, the U.S. is regaining its dominance as a repository of wealth. Americans account for 44% of the money and 45% of the list's slots, up seven and three percentage points from last year, respectively.

US Millionaires' Ranks Rose 16% in 2009, Study Says

Guambat didn't read that article in Businessweek, but figures it probably had something to do with the thinning ranks of billionaires over the period.

Napa Valley Terroirists Caught in Crush

Vineyard Defaults Surge as Bargain Wines Hurt Napa

Napa land values, the highest among U.S. wine regions, are based on wine appellation, or a property’s geographical boundary, and soil quality, according to Correia, the appraiser.

As many as 10 wineries and vineyards in Napa will change hands in distressed sales or foreclosures this year and next, up from none in 2008, according to Silicon Valley Bank.

[Guambat presumes this refers to the Silicon Valley in the SF Bay Peninsula, and not the plastic surgeon district in LA.]

“We have 250 vintner clients saying this downturn is the worst in 20 years,” Bill Stevens, manager of the bank’s wine division in St. Helena, California, said in an interview. “Anybody who was late to the party won’t have staying power.”

[This may have a ring of familiarity about it to those who were there 20 years ago. The wine flowed like blood.]

Land values in Napa, home to about 400 producers, have fallen 15 percent from the 2007 peak

Napa winery and vineyard loan defaults rose fourfold to 18 in the year through January, according to San Diego-based research firm MDA DataQuick.

The dollar value of U.S. retail wine sales dropped 3.3 percent to $29 billion in 2009 after rising every year and almost tripling from 1991 through 2008, according to Gomberg, Fredrikson & Associates in Woodside, California. Though consumption increased 1.9 percent to 323 million cases last year, people are buying less expensive labels, the industry consultant said in a March 5 report.

Sales of super-premium bottles priced more than $15 declined 10 percent last year, and those over $30, defined as ultra-premium, fell at least 15 percent, according to Rabobank Nederland NV

“No more is it about stocking wine cellars with 5,000 bottles of Screaming Eagle,” said Bacchus Capital’s Kaufman, referring to a Napa “cult cabernet” that can sell for $750 or more a bottle. “High-rollers are discovering that there are lots of drinkable $20 to $40 bottles of wine.”

[Guambat got a good case of the screaming eagles last time he saw a 20$ bottle of wine. Shoulda got a couple of cases while he was at it.]

Mortgage defaults will also hit Napa residential parcels owned by hobbyists, or those who intend to produce 100 to 300 cases a year, said Deborah Steinthal, principal of Scion Advisors. In October, the Napa-based consultants forecast that “hundreds of properties will go into foreclosure.”

That’s the scenario facing Sandra Sutherland, who bought a four-bedroom house and more than seven acres of chardonnay, merlot and pinot noir grapes for $2 million in 2005. She and her business partner haven’t made loan payments to Charlotte, North Carolina-based Bank of America Corp. since January 2009.

PPP

Public-Private Partnership??

Sort of. But more exactly, Pay to Play Procurement.

Jacksonville company's shady dealings spanned globe, authorities say

Last spring, two years after the FBI began its investigation into foreign bribery, the sting began. Bistrong and an undercover FBI agent who posed as an African defense ministry official met with a series of military/law enforcement supply executives, seeking to award a $15 million contract.

In each of the meetings last May, as many as four a day in fancy hotels in Miami and Washington, Bistrong and the FBI agent offered contracts and made the same request, according to court documents: They asked that a 20 percent "commission" be added to each order and that the extra money be kicked back to them.

people representing 16 companies from Florida to California and the United Kingdom agreed to the scheme

By 2001, prosecutors contend, Bistrong and a British manager of an Armor subsidiary were bribing two United Nations officials for inside information on a contract for body armor for U.N. peacekeeping forces. The charges say Armor was awarded the contract after Bistrong's U.N. contact obtained a list of other bids from a U.N. procurement officer and instructed Bistrong to submit a signed, blank pricing sheet.

The same process repeated in 2003, federal prosecutors said.

Together, the contracts were worth $6 million, with Armor clearing a $1 million profit. Prosecutors say Bistrong and Armor paid his U.N. contacts more than $200,000.

At the same time as the U.N. deal [see article], prosecutors contend Bistrong and an Armor sales consultant used a similar scheme to win a pepper spray contract with the National Police Services Agency of the Netherlands. Using a Dutch intermediary, they obtained confidential information about a bid from a Rotterdam police officer who was working on procurement for the national police agency.

The officer made sure the specifications allowed only a type of pepper spray made only by Armor, the charges say. Armor won the $2.4 million contract in 2002 with a net profit of $480,000. Bistrong and the Dutch intermediary agreed to issue a fake $15,000 invoice for "marketing services" in order to disguise the money paid to the intermediary and the officer, prosecutors said.

Federal indictments and documents also report:

- Bistrong and senior employees at Armor hid about $4.4 million in bribes from 2001 to 2006.

- In 2004, the U.S. Army gave Armor subsidiary Simula Inc. $266 million in sole-source contracts to build 5,900 sets of armor for trucks and heavy equipment needed in combat zones. But much of the equipment had missing or unusable pieces, like truck kits with two left doors or no nuts and bolts, according to a Defense Department inspector general report.

- BAE also paid $30 million to settle Justice Department claims that Armor knowingly sold defective Zylon bulletproof vests to federal agencies and police forces before it stopped making the vests in 2005.

And there's much, much more where that came from. Read the article.

PS: Guambat takes note that this is the second procurement-related post in a row. So very sorry. There's another site for those sorts of issues.


BUT WAIT, THERE'S MORE:

House bans some earmarks amid ethics concerns

Top Democrats on the House Appropriations Committee said the new rules prohibit lawmakers from steering money to for-profit companies through the earmarking process, as Democrats seek to tamp down concerns over ethical violations and wasteful spending.

The decision will affect billions of dollars in federal spending on everything from daycare providers to battlefield weapons, but will not affect the lion's share of earmarks projects, which go to non-profits or local governments.

"It's a positive step forward," said Steve Ellis, vice president of the watchdog group Taxpayers for Common Sense. "For-profit earmarks are Ground Zero for pay-to-play and the concerns about corruption."

Homeland Security fails to secure procurement records

The US Dept of Homeland Security's own Inspector General has determined that his agency failed to keep tabs on some $196 Million worth of procurements that were issued without competition. The IG, Richard Skinner, gives us the skinny in his report, DHS Contracts Awarded Through Other Than Full and Open Competition During Fiscal Year 2009:

This report addresses the strengths and weaknesses of the department's noncompetitive procurement processes.

In fiscal year 2009, the Department of Homeland Security obligated about $3.4 billion for procurements awarded through other than full and open competition. Based on our review of 39 contract files, with a reported value of more than $196 million, acquisition personnel did not always follow federal regulations when awarding noncompetitive contracts. Award files did not always contain sufficient evidence of market research or adequate acquisition planning. As a result, the department cannot ensure that it received the best possible value on these acquired goods and services.

Oops.

More on that at Blogged Down in Procurement

And the difference between this and a broker is what exactly ?

SEC accuses "America's Prophet" of investor fraud

The U.S. Securities and Exchange Commission sued Morton, 51, on Thursday on civil fraud charges, accusing him of fraudulently raising more than $6 million from more than 100 investors for Delphi Investment Group in 2006 and 2007.

"In soliciting these individuals, Morton claimed that he would use his psychic expertise to provide investment guidance to his investment team, and falsely touted his historical success in psychically predicting the various rises and falls of the market," the complaint filed in Manhattan federal court said.

Morton hosted "financial survival" workshops at the Mount Shasta Resort in California in September 2007, where he told prospectives investors he could make them "piles of money," according to the complaint.

How to hedge BigPharma risk

Buy BigAmbochaser*.

Slater & Gordon shares jump on Merck win

Shares in plaintiff law firm Slater and Gordon Ltd jumped over two per cent after it won an action against global pharmaceutical giant Merck & Co, Inc.

* Ok, this is a stretch, but in Aus, they refer to an ambulance crew as "ambos" (in the plural form), and in Usa, they refer to plaintiff's lawyers as ambulance chasers. In each case, of course, most affectionately. Well, maybe more affectionately in Aus and less than affectionally in Usa, but you get the idea.