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    Carol
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    Post  Carol Wed Jun 15, 2011 1:23 pm

    ECONOMY Foreclosure_sign2_200
    US Housing Crisis Is Now Worse Than Great Depression
    http://www.cnbc.com/id/43395857
    It's official: The housing crisis that began in 2006 and has recently entered a double dip is now worse than the Great Depression.Prices have fallen some 33 percent since the market began its collapse, greater than the 31 percent fall that began in the late 1920s and culminated in the early 1930s, according to Case-Shiller data.

    The news comes as the Federal Reserve considers whether the economy has regained enough strength to stand on its own and as unemployment remains at a still-elevated 9.1 percent, throwing into question whether the recovery is real.

    "The sharp fall in house prices in the first quarter provided further confirmation that this housing crash has been larger and faster than the one during the Great Depression," Paul Dales, senior economist at Capital Economics in Toronto, wrote in research for clients.
    According to Case-Shiller, which provides the most closely followed housing industry data, prices dropped 1.9 percent in the first quarter, a move that the firm interpreted as a clear double dip in prices.

    Moreover, Dales said prices likely have not completed their downturn.

    "The only comfort is that the latest monthly data show that towards the end of the first quarter prices started to fall at a more modest rate," he said. "Nonetheless, prices are likely to fall by a further 3 percent this year, resulting in a 5 percent drop over the year as a whole."

    Prices continue to tumble despite affordability, which by most conventional metrics is near historic highs.

    The rate for a 30-year conventional mortgage is around 4.5 percent, just above the historic low of 4.2 percent in October 2010. The ratio measuring mortgage costs to renting is 7 percent below its norm, while the price-to-income ratio is 23 percent below its average, Dale said.

    Yet other factors are constraining the market.

    After the fallout from the subprime debacle, in which millions lost their homes when they defaulted on loans they could not afford, banks changed underwriting standards.

    More than four in every five mortgages now require a down payment of 20 percent, and credit history standards have tightened. At the same time, foreclosures continue at a brisk pace, pushing more supply onto the market and pressuring prices downward.

    Then there is the issue of underwater homeowners—those who owe more than their house is worth—representing another 23 percent of homeowners who cannot leave or are in danger of mortgage default.

    Indeed, the foreclosure problem is unlikely to get any better with 4.5 million households either three payments late or in foreclosure proceedings. The historical average is 1 million, according to Dales' research.

    The only bright spot Dales found, aside from the slowing in price drop in March, was some isolated strength in states such as Nevada, Michigan, South Dakota, Alaska and Iowa.


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    Post  Carol Wed Jun 15, 2011 1:27 pm

    Women are better investors, and here’s why
    Commentary: Call it the Weiner principle: men self-destruct
    http://www.marketwatch.com/story/women-are-better-investors-and-heres-why-2011-06-14
    NEW YORK (MarketWatch) — Anthony Weiner has put us men in a pickle.

    Why is it that men so often self-destruct? In the political world, Weiner joins Eliot Spitzer, Bill Clinton, John Ensign, Arnold Schwarzenegger and John Edwards as hypocritic slimeballs who let their pants set their personal policy.

    But it’s not just politics. Todd Thomson, young, married, chief financial officer at Citigroup Inc. C -2.26% , was embroiled in a scandal a few years ago with money honey Maria Bartiromo of CNBC. Her career survived. His didn’t.

    We men just make bad decisions. We can't help it. We’re men.

    Women, on the other hand, do almost everything better. We’ve known this intuitively for a long time. If you didn’t, just ask your wife or your mother. But now there’s a raft of evidence that suggests women are better at everything — including investing.

    A new study by Barclays Capital and Ledbury Research found that women were more likely to make money in the market, mostly because they didn’t take as many risks. They bought and held. Women trade this way because they aren’t as confident — or perhaps as overconfident — as men, the study found.

    Click to Play
    Why women are better investors
    MarketWatch columnist David Weidner makes the case for why women, who often play it safe and play by the rules of the investing, make better market investors. (Photo: AP.)

    “Women were more likely than men to have a greater desire for self-control,” the study concluded.

    In other words, they trade less and earn more.

    “Women tend to have lower composure and a greater desire for financial self-control, which is associated with a desire to use self-control strategies. Women are also more likely to believe that these strategies are effective.”

    And you know what? They were.

    The study supported previous findings that women tend to make more. A 2005 study by Merrill Lynch found that 35% of women held an investment too long, compared with 47% of men. Moreover, an academic study in 2009 found women made 1% more annually. Read related story on female investors at WSJ.com .

    Chun Xia, a finance professor in Hong Kong and one of the researchers, wrote that women reported a greater desire for self-control in their approach to financial management. They are likely to get stressed out more easily, and their awareness partially accounts for their greater desire for financial discipline.

    However, the report said, it is men who actually have a greater need for discipline when it comes to investment management, as they tend to be overconfident in investing.

    This probably doesn’t come as a shock to anyone. A new body of evidence is emerging that shows women are better at just about everything — or, as Dan Abrams has titled his new book, “Man Down: Proof Beyond a Reasonable Doubt That Women Are Better Cops, Drivers, Gamblers, Spies, World Leaders, Beer Tasters, Hedge Fund Managers, and Just About Everything Else.”

    As Abrams notes, women are better soldiers because they complain about pain less. They’re less likely to be hit by lightning because they’re not stupid enough to stand outside in a storm. They remember words and faces better. They’re better spies because they’re better at getting people to talk candidly.

    Look at the evidence: Hillary Clinton has proved a more-than-capable secretary of state. Elizabeth Warren has been a leading champion against the banks. Sheila Bair, a chairman of the Federal Deposit Insurance Corp., has played hardball with the boys’ club.

    And what about Sarah Palin? There were 24,000 emails released this weekend and not one crotch shot.

    This is deflating news for us men, but there is hope. We still lead the field in self-destructing because of pride, overconfidence, hubris and ego.

    So, go ahead, ladies. Make the money. You’re better at it. We men will just make inappropriate comments, send you lewd photos and make asses of ourselves.

    That’s why we created Facebook and Twitter.

    It’s what we’re good at.


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    Post  Carol Wed Jun 15, 2011 1:29 pm

    Speaking to an audience that included Republican Congressman Paul Ryan, Fed Chairman Ben Bernanke called the status quo “unsustainable” while warning that failing to raise the debt ceiling could have disastrous consequences. A few weeks from the end of QE2, Bernanke gave no hint as to the path for monetary policy after June 30.

    “Perhaps the most important thing for people to understand about the federal budget is that maintaining the status quo is not an option,” warned Bernanke. The bearded academic laid his grain of salt for the ongoing deficit debate that is currently dividing Washington.

    Weighing in, he told policymakers that “the debt limit is the wrong tool” for the important job of “forc[ing] some necessary and difficult fiscal policy adjustments.”

    In what appeared to be a comment directed at the Republican Party, Bernanke said “failing to raise the debt ceiling in a timely way would be self-defeating if the objective is to chart a course toward a better fiscal situation for our nation.” Referencing the Hippocratic Oath, he asked policymakers to not do harm and “avoid unnecessary actions or threats that risk shaking the confidence of investors in the ability and willingness of the U.S. government to pay its bills.” (Read Dodd-Frank Failing On Volcker Rule, Derivatives, Credit Rating Agencies).

    A little more apocalyptic than usual, the Fed chairman urged both parties to leave behind their bickering and solve the problem at hand. “Creditors will not lend to a government whose debt, relative to national income, is rising without limit; so, one way or the other, fiscal adjustments sufficient to stabilize the federal budget must occur at some point,” he said. (Read Bernanke To Rep. Paul Ryan: QE2 Created 600,000 Jobs).

    Those adjustments could come from a “careful and deliberative process” or as “a rapid and much more painful response to a looming or actual fiscal crisis in an environment of rising interest rates, collapsing confidence and asset values, and a slowing economy.”

    The choice, Bernanke, said, “is ours to make,” but the central banker also made it clear that using the debt ceiling debate as an opportunity to draw a line in the sand on issues that have been a long time coming and require a long-term solution is misguided.

    Bernanke only used the word default once. Speaking of the possibility of prioritizing Treasury payments to meet principal and interest payments on debt outstanding, the Fed Chairman said the Treasury would soon find it very hard, if not impossible, to continue paying for Social Security, Medicare, and the military.

    Failing to raise the debt ceiling would effectively amount to a perfect storm, hitting the U.S. economy where it hurts, according to Bernanke. It would “cause severe disruptions in financial markets,” harm the reserve status of the U.S. dollar (along with the “special role of Treasury securities in global markets”), lead to credit downgrades, and “create fundamental doubts about the creditworthiness of the United States.”

    In other words, Bernanke told lawmakers to stop fighting and raise the budget deficit, while keeping the spending coming in the immediate term. In order to keep the dollar’s reserve currency status and allow it to continue borrowing at rates that only the U.S. can have (given its debt level), the policy should be aimed at solving problems in the short to long-term, finding “substantial savings in the 10-year budget window.” Bernanke, therefore, was just giving his support for those who want to raise the debt ceiling. (Read Bernanke: Don’t Blame The Fed For Currency Wars And (Commodity) Inflation). http://blogs.forbes.com/afontevecchia/2011/06/07/bernanke-dont-blame-the-fed-for-currency-wars-and-commodity-inflation/


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    Post  Carol Wed Jun 15, 2011 1:32 pm

    Why big banks' plan to break up in a crisis won't work.

    FORTUNE -- Have you ever watched something unfold, knowing that it hasn't got a prayer of succeeding?

    Then you understand how I feel about the provision in the Dodd-Frank financial reform legislation that would supposedly avoid future federal bailouts by requiring giant financial institutions to draw up so-called living wills.

    These "wills," which banks are currently discussing informally with regulators, are a weak, pathetic substitute for what Washington should have really done: that is, break up "systemically important financial institutions" into much smaller pieces. Or segregate their federally-insured-deposit parts from risky things like creating and trading derivatives. Instead, we have living wills. Translated into English, this means that giant institutions create contingency plans for regulators to break them up or liquidate them in a crisis without any cost to taxpayers. And without the Federal Reserve providing any financing to make the deals work.

    Living wills sure sound great. Unfortunately, they can't possibly work if we have anything resembling the 2008–09 panic, in which financial markets essentially closed down. It's not just me saying that—lots of players, including the Treasury's former chief restructuring officer, Jim Millstein, are saying it too. The problem is exacerbated because Dodd-Frank bars the Fed from helping stricken institutions the way it did during the height of the panic. The only financing allowed is from the Federal Deposit Insurance Corp., which isn't likely to want to take the heat for financing the purchase of stricken institutions' assets at bargain prices by rich, powerful outfits like Goldman Sachs (GS), J.P. Morgan (JPM), Blackstone (BX), KKR (KKR), or Carlyle.

    "There are few, if any, institutions with the balance sheet to support the purchase of one of these businesses in good times," Millstein says. "In a crisis, when funding in the credit and equity markets is unavailable, no one will be able to do it unless the FDIC supports the purchase with debt and equity financing [which he considers unlikely]. Therefore, there is no credible way to break them up and sell them during a crisis." Depressing, but true.

    The "systemically important institutions" -- they've not yet been named, but Citigroup (C), Bank of America (BAC), and GE Capital (GE) will clearly be among them -- will submit plans to the Fed and the FDIC, which have the power to seize them if they fail to submit a workable will in three attempts.

    Millstein and Sheila Bair, the about-to-depart head of the FDIC, are so pessimistic about any plan being workable in a crisis that they told me recently that the Fed and the FDIC should invoke their powers under Dodd-Frank to break up the systemically important firms now. But don't hold your breath. "I'd be happy to break them up now, but that's not realistic," Bair said, "but this is the next best thing." Even Rep. Barney Frank (D-Mass.) -- the Frank in Dodd-Frank -- has serious doubts. He told me that living wills are "probably not of use in a crisis, but they're a useful precrisis tool."

    You can only imagine the uproar if the Fed and FDIC tried to break up an institution for not filing what they consider a workable will. Wall Street would mount a campaign that would make the ferocious attacks against consumer protection chief Elizabeth Warren look like a love pat. It would take about two seconds for Washington to cave in.

    If the Fed and FDIC were really, really vigilant, and were really, really willing to take big heat from the Street, they would force some giant institutions to shrink sharply, raise lots more capital, decrease their risk profile, unload problematic businesses, or some combination of these.

    But my bet is that after rejecting some wills once or maybe twice, the Fed and FDIC will accept the plans and stick them in a file, allowing life to resume until the next crisis. At which point, today's restrictions and "no more bailout" vows notwithstanding, Washington will bail out big players again. And the cycle will resume. It was ever thus.


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    What is life?
    It is the flash of a firefly in the night, the breath of a buffalo in the wintertime. It is the little shadow which runs across the grass and loses itself in the sunset.

    With deepest respect ~ Aloha & Mahalo, Carol
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    Post  Carol Wed Jun 15, 2011 1:34 pm

    ECONOMY Chart_ws_index_dow1pm.09
    FEAR DRAGS STOCKS LOWER
    Following links at http://money.cnn.com/

    Latest News 6/15/11
    Greek debt crisis at a tipping point
    The pain of Greece's crisis
    Athens protests turn violent - CNN
    U.S. bond yields plunge
    Dollar and euro face summer of uncertainty
    Oil tumbles 4%
    Tech IPOs and Greece make noise
    Foreclosure City, USA
    10 most expensive housing markets
    Made with wind power, now branded
    Got a burning question about your finances? Ask us
    Do your credit reports contain these red flags?


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    Post  Carol Wed Jun 15, 2011 1:41 pm

    For more than 30 years Republicans have won elections by promising to cut middle-class taxes, or at least to stop middle-class tax increases. No domestic issue has been as reliable a vote-winner. But now Republicans are in a bind. The huge deficit makes tax-cut promises seem impractical.
    They also worry that cutting middle-class taxes will leave high earners paying an even larger share of income taxes than they already do, and that increasing their burden will harm both economic growth and the cause of limited government.

    That seems to leave two options for Republicans. There’s the approach favored by presidential candidate Tim Pawlenty, which is to pretend that economic growth and unspecified spending cuts will let us reduce taxes without making the deficit worse. Then there’s the flat tax and the so-called fair tax favored by other Republicans, which go the other route: Some versions would actually increase middle-class taxes. Neither type of proposal is at all likely to be enacted.
    There’s a better alternative, one that might serve the public interest in having a simpler, more efficient tax code. When Republicans began their tax-cutting streak in the 1980s, middle-class voters were upset about high and rising income-tax rates. Now, millions of them pay more in payroll taxes than in income taxes. But Republicans have had little to say about those taxes.

    Unfair to Families

    The payroll tax, now set at 15.3 percent of wages for most people, finances Social Security and Medicare. Although those programs’ troubles have been in the news a lot, one problem with them has received little attention: They’re unfair to families. As Robert Stein explained in a recent essay for National Affairs, parents contribute to the programs both by paying payroll taxes and by making financial sacrifices to raise the children who will pay tomorrow’s payroll taxes. But they only get credit for the first set of contributions.

    Stein’s solution is to offer parents tax relief, by expanding the tax credit from $1,500 per child to something closer to $5,000. A family with two kids would use the credit to wipe out $10,000 of tax liability (assuming they owed more than that in payroll and income taxes). It would be a huge tax cut for millions of middle-class families.

    Of course, cutting taxes in this way would mean a big revenue hit for the federal government, especially if combined with such pro-growth measures as cutting the corporate tax rate. There are two ways to make up the revenue. The first is to scale back tax breaks. The deduction for state and local tax payments, which is a subsidy from people in low-tax states to people in high-tax states, should go. Ideally, they would all go, except for the ones for charitable donations and savings. (In practice, the mortgage-interest deduction is probably unkillable. But its value should be reduced.)

    Top Tax Bracket

    The second way to make up revenue is by lowering the floor on the top tax bracket. The point of this wouldn’t be just to get more people paying the top rate. It would also mean that people who are already paying the top rate would pay it on more of their income. Widen the bracket sufficiently, and eliminate enough tax breaks, and there might even be enough money to bring that top rate down a bit.

    A tax reform that tries to raise as much revenue as the current system, and without relying on assumptions that the economy will take off, is by definition going to inflict some pain. Stein’s plan would mean a larger tax bill for people who are childless, affluent or live in high-tax states. In many cases, though, it would be a temporary hit, because people often move or become first-time parents.

    Strong Incentives

    The average tax rate would not have to rise. The top marginal rate, which supply-siders regard as the most important tax rate, wouldn’t rise either. The rich would pay more, in other words, but their incentive to work, save and invest would be as strong as ever.

    Expanding the child tax credit would take a lot of people off the tax rolls, and many Republicans have convinced themselves that people who stop paying taxes start voting for big government. But the child credit wouldn’t take people off the tax rolls forever, just while they have minors in their households. And if any group of voters is going to be mindful of the future, it’s parents. So conservatives shouldn’t worry.

    Democrats, too, should find something to like. They have made two central objections to tax cuts over the last generation: that they recklessly increase the deficit and that they unfairly shower rewards on the rich. Neither objection applies to this tax reform.

    Scaling Back Tax Breaks

    It could be implemented in a way that left revenue unchanged. And it would have three progressive elements: scaling back tax breaks that tend to get used more by the affluent, expanding a credit that is more important to middle-income than upper-income taxpayers, and increasing the amount of high earners’ pay that is subject to the top tax rate. The effect would be to redistribute the tax burden upward.

    There would still be plenty to argue about. Liberals would want to increase the tax rates to raise more money than the current code, and conservatives would want to cut spending and tax rates. Still, we would have a tax code that does more to satisfy both liberals and conservatives than the one we have now. And middle-class families would come out way ahead. Some young people who have been waiting for the financial stability to start a family, or expand one, might have the confidence to go ahead.

    So what’s not to like? If Republicans have tired of cutting taxes for middle-class families, maybe Democrats should adopt the idea.


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    What is life?
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    With deepest respect ~ Aloha & Mahalo, Carol
    Mercuriel
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    Post  Mercuriel Wed Jun 15, 2011 1:55 pm

    Yeah - Excellent Info Carol. I'd said a few Years back (2007 I think It was) that all that It'll take is about three Years or so and They'll call It a Depression - Not a Recession. The naming of It as being a severe Recession was so that We (The Masses) would not loose It and Panic...

    Pure and Simple - It was Damage Control - So now that They just about have It wrapped up and in the Bag (Or so They think) - Its OK to start calling It a Depression because really...

    What You gonna do ?

    The FEMA Camps are now Open and Waiting...

    Musical


    Last edited by Mercuriel on Wed Jun 15, 2011 2:54 pm; edited 1 time in total


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    Carol
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    Post  Carol Wed Jun 15, 2011 2:36 pm

    Exactly. Where are all those people are going to go who no longer have homes or jobs?


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    What is life?
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    With deepest respect ~ Aloha & Mahalo, Carol
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    Post  Mercuriel Wed Jun 15, 2011 3:08 pm

    I hear Ya Sista...

    My Bet is that the Powers will want 'em to rise up so the Cull can begin in earnest.

    These People - Hell, even Us - All of Us - Were sold a false Bill of Goods...

    Theres no safe refuge - No backup for the Masses. Simply Cannon fodder is all They are thought of as by the Powers and the only recourse that will be available soon if not right now already is - Rise up and take It back...

    That said - They're prepared for this and even hoping for It so They can begin the wholesale Slaughter of those They would then call Terrorists or Lone Wolves...

    It is sad and alas the only thing that I think will turn It around is for those of Us on the Path to finally become what We know We can be - That is, Avatars of Prime Creator - Living in the Now - Able to render the Dark Machinations Obsolete with only so much as a backwards glance...

    Onwards I say - Bring It...

    Musical


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    Post  Carol Wed Jun 15, 2011 4:12 pm

    I think I have a headache. Can we wait until at least tomorrow?


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    Post  investigator Wed Jun 15, 2011 6:49 pm

    They must have spent at least 11 trillion on quantitative easing by now, probably even more money. With that much money they could have just switched to 100% bank deposit FDIC gurantees, guranteed all the regular bank depositors at 100% (none of this 100-300k savings cap crap) and let all the bankers fail, and it would not have effected the real economy much, it would have all been over in 3-5 years. Hell we could have even paid off every mortgage in America, with the amount they spent so far, and they could have still bailed out the bankers with slightly less bonus money. Now it's just going to drag on for the next 2 decades instead of being over in 3-5 years. Maybe, everyones kids can actually get a middle class job in 2031, instead of fighting over Mcdonalds jobs with college MBAs.
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    Post  Carol Wed Jun 15, 2011 11:42 pm

    I always thought bailing out Wall Street instead of Main Street an utter disaster. If Main Street had been bailed out where everyone was given money to pay off their mortgages that money would have gone directly to Wall Street. Main Street would then take out home equity loans to pay off credit cards and cars. or perhaps purchase cars thus saving the auto industry and again putting money back into Wall Street.

    Instead the reverse happened where Wall Street doubles and triple dips. They get the bail out money, the foreclosed homes and they get to sell the foreclose homes. They also get all the interest from credit cards and Main Street gets the shaft yet again which includes being shafted from their elected officials. Wall Street gets more bail out money (which ends up as loans to foreign banks) and continue their criminal behavior which basically undermines the entire middle class thus destroying the US from within. Any politician who support the bailout is in truth a traitor to the citizens of this nation and in my personal opinion have no right or business to hold office ever.


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    With deepest respect ~ Aloha & Mahalo, Carol
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    Post  Carol Thu Jun 16, 2011 6:55 am

    [img]http://www.popsci.com/files/imagecache/article_image_large/articles/File:Sao%20Paulo%20Stock%20Exchange.jpeg[img]
    Financial Trading Algorithms Aren't Just Making Deals, They're Making War

    Theft of trading ideas has long been a proud tradition on trading floors across the world. There was a time when smart traders would hang out in the same restaurants, bars, and flophouses as their institutional counterparts trying to catch a hint about tomorrow’s dealings or to manipulate another trader with some skullduggery--and then try to take advantage of the trade. These days it’s common knowledge that computers do a lot of our financial dealing, but a somewhat frightening article in the London Review of Books describes how the algorithms have now taken up the trader’s practice of trying to fool each other.
    Most trading algorithms execute simple tasks. Say a large institution wants to purchase a large chunk of stock in a company: the program will seek out shares and buy them in many, many small quantities so as not to send the price soaring with a massive order--and to stop other traders from seeing what they’re up to and getting in on the deal. Called VWAPs, they’re fairly benign.

    But Donald MacKenzie, a professor of sociology at Edinburgh University, tells us that algorithms are now stalking the VWAPs, trying to surreptitiously figure out their intentions so they can get out in front of big trades, buying shares ahead of VWAPs and then selling them back to it at a gain.
    But there are craftier and decidedly less ethical programs out there seeking to manipulate the market outright. Called “spoofers,” they might buy a big chunk of shares of a certain ticker. Then the program issues a bunch of buy orders that are fractionally below that price--an indicator to anyone watching the buy order volume that the stock is in demand. This would spur other algorithms (or human traders) to purchase the stock on the prospect that demand will push up the price. The spoofer then dumps its shares and quickly cancels its buy orders when the price rises on the buying pressure it created. Sneaky.

    Basically, the algorithms are now trying to outfox other algorithms. That’s particularly troublesome given that computer programs are basically running financial markets these days. We all saw what happens when the algorithms get irrational during last year’s flash crash, when the entire U.S. market shed 6 percent of its value in five minutes due to algorithmic share dumping. While these programs are inherently stabilizing, it’s a bit frightening to think of what might happen if some super-algorithm really got the better of his computational counterparts.
    http://www.popsci.com/technology/article/2011-05/financial-trading-algorithms-arent-just-making-deals-theyre-making-war


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    Post  Carol Thu Jun 16, 2011 6:58 am

    ECONOMY Screen%20shot%202011-03-23%20at%2011.03.08%20AM
    Financial Traders Look to Boost Profits by Exploiting the Speed of Light for Long-Distance Trades
    Trading at the Speed of Light The large red dots represent major financial markets, while the blue represent optimal trading centers to take advantage of the speed of light to execute trades faster between any two given markets. Such trading could bring financial capital to out-of-the-way parts of the globe. Alexander Wissner-Gross (PDF)

    The speed of light dictates a lot of things in the realm of physics (like the upper limit of the speed of anything), and now it’s dictating how and where financial institutions do their trading. High-frequency trading that leverages small price differences in the price of a financial instrument trading on two geographically removed markets relies on executing trades extremely quickly, and latencies in fiber optic networks can create competitive advantages and disadvantages. Naturally, investment houses are looking into ways to leverage physics into higher profits.

    Like physics, finance also has a fundamental principle that is absolute: buy low, sell high. Dr. Alexander Wissner-Gross of Harvard first explored the best way to use fiber optic networks to do this in a 2010 paper, in which he examined locations that are geographically suited for best opportunities to buy low in one market and sell high in another.

    But there is a problem. The shortest distance between points is a straight line, and the ideal place from which to execute trades in both markets is exactly halfway in between. For, say, an NYC trading firm looking to exploit price differences between the New York Stock Exchange and exchanges in London or Frankfurt, that locale is in the middle of the Atlantic ocean--a tough place to build a new Wall Street trading floor (there’s not a Brooks Brothers for miles!).
    But there are other ways to exploit the latencies in existing fiber optic networks. Dr. Wissner-Gross is now working on finding places that are a good approximation of those mid-ocean points--say, Nova Scotia for trading between New York and London, or perhaps North Africa, or some mid-ocean island chain for trading between New York and Middle Eastern Markets.

    Trades already fly around the world at around 90 percent of the speed of light, but Dr. Wissner-Gross believes the first companies to exploit this trick of physics will have a clear-cut competitive advantage that pushes that number higher. More importantly, the next big financial trading hubs may be dictated not by where the buildings are tallest, but by where light-speed networks can execute transactions the fastest, making basic physics a new national resource.


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    It is the flash of a firefly in the night, the breath of a buffalo in the wintertime. It is the little shadow which runs across the grass and loses itself in the sunset.

    With deepest respect ~ Aloha & Mahalo, Carol
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    Post  Carol Thu Jun 16, 2011 8:13 am

    Citi says 360,000 accounts hacked in May cyber attack

    (Reuters) - Citigroup Inc said a cyber attack in May affected almost twice as many accounts as the bank's figures had initially suggested, as major U.S. lenders come under growing pressure from lawmakers to improve account security.

    A total of 360,083 North American Citigroup credit card accounts were affected by the breach, the third-largest U.S. bank by assets said in a statement released late on Wednesday.

    Of those affected, some 217,657 customers were reissued with new cards along with a notification letter, while the remaining accounts were either inactive or had already received new cards earlier, the bank added.

    Citigroup had earlier said that about 1 percent of its North American accounts were affected. The bank's annual report puts the total number of its customers at 21 million.

    "It is mainly due to the actual number of accounts being more than what's in the 2010 annual report as well as variances such as some of the accounts being closed," United States-based Citi spokesman Sean Kevelighan said in an emailed response.

    Customers had their names, account numbers and contact information accessed, but Citi said that "data critical to commit fraud was not compromised" and that other consumer banking online systems were not accessed.

    Citigroup also said it identified "the majority" of accounts compromised within seven days, adding that the information was accessed on the accounts by May 24 but that it only started notifying customers of the breach on June 3.

    "What Citi should have done upon finding out is to call for a press conference to announce the news, reassure customers that they take this in utmost seriousness, and to personally reach out the affected accounts," said Li-May Chew, associate research director at IDC Financial Insights.

    LUCRATIVE TARGETS

    The bank is the latest in a growing list of companies to face cyber attacks in recent months, with Sony, Google Inc and Lockheed Martin all having suffered under hackers this year.

    In response to the latest bout of attacks, many banks have stepped up their security effort, with two Australia-based banks -- ANZ and Westpac -- replacing their customers' "SecurID" electronic keys earlier this month.

    "Cyber hackers are no longer interested in just stealing money directly," said Edison Yu, industry manager at consultancy Frost and Sullivan.

    "They are more interested in stealing peripheral information such as contact details and ID numbers that can be sold on the black market later," Yu said, adding that the global black market for email addresses and national ID numbers is now worth about $5 billion, making it a lucrative area for hackers looking to steal contact information.

    Regulators in many countries have also been preparing new measures on data security, with the head of the Federal Deposit Insurance Corp in the United States saying last week she may "ask some banks to strengthen their authentication when a customer logs onto online accounts."

    The Hong Kong Monetary Authority also said it requires banks to have risk management systems to ensure the adequacy of their security systems.

    "Banks are expected to continue to review their security measures in place to enhance the controls, where appropriate, on an ongoing basis," said an HKMA spokeswoman.
    http://www.reuters.com/article/2011/06/16/us-citigroup-hacking-idUSTRE75F17620110616


    _________________
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    It is the flash of a firefly in the night, the breath of a buffalo in the wintertime. It is the little shadow which runs across the grass and loses itself in the sunset.

    With deepest respect ~ Aloha & Mahalo, Carol
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    Post  TRANCOSO Thu Jun 16, 2011 7:11 pm

    Economy For Dummies (Part 1)

    This is how it works here in Europe right now:

    1. 'State owned' Central Banks print money

    2. They borrow this money at the lowest imaginable intrest rate - sometimes none at all - to 'Financial Institutions', (banks etc.)

    3. The FI's borrow the money they were given for free, or next to nothing, to other ('third') parties, at an intrest rate of 3%-20%.

    Bizar concept, innit?!


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