Weekday NEWS to Comfort the Disturbed and Disturb the Comfortable.
Tuesday 05.15.2012
IMF to buy Gold worth $2.3 billion as credit risk increases
NEW YORK (Commodity Online): The International Monetary Fund (IMF) is planning to purchase more than $2 billion worth of gold on account of rising global risks. The IMF currently holds around 2800 tonnes of gold at various depositories.
"The Fund is facing increased credit risk in light of a surge in program lending in the context of the global crisis. While the Fund has a multi-layered framework for managing credit risks, including the strength of its lending policies and its preferred creditor status, there is a need to increase the Fund's reserves in order to help mitigate the elevated credit risks", Bloomberg quotes a report by an IMF staff while also adding that a $2.3 billion gold purchase is in the planning.
Greece Faces Big Debt Payment Tuesday: Now What?
By: Michelle Caruso-Cabrera - CNBC.com
As if the Greek situation wasn't messy enough, a missing paragraph from a key legal document is throwing a wrench into a debt deadline.
Greece has a 436 million euro principal repayment due Tuesday. So far, the country has not decided what to do.
Under normal Greek-debt contracts, if Greece doesn't pay, it would have only a seven-day grace period. But experts who have pored over all of this have found that one of the key paragraphs from the normally boiler-point language is missing.
'Accidental war' waiting to happen on EU periphery
BY ANDREW RETTMAN - EUObserver.com
YEREVAN - If or when a full-blown conflict erupts between Armenia and Azerbaijan, it will probably begin like this.
According to a senior source in the Armenian defence ministry, on 27 April Azerbaijani troops sneaked over the Armenian border in the north-east province of Tavush and took up positions on either side of a road connecting the villages of Movses and Aygepar.
Brace, brace. Dark times ahead as Greece heads for the exit European policymakers are about to commit another major blunder in their handling of the eurozone debt crisis, and this time it could well be fatal.
By Jeremy Warner - Telegraph.co.uk
Mistakenly, they have convinced themselves that it won't much matter if Greece leaves, and indeed that it might even help resolve the wider crisis to get rid of this persistent thorn in the flesh.
Bring it on, they mutter callously; it will be a lot worse for them than for us. On one level, this is just bravado. It's an attempt to put as nonchalant a face as possible on the now apparently inevitable. But they also seem to believe in their validity of their own analysis – that they have indeed used the past two years well, and are now fully prepared for a Greek exit.
Europe prepares for chaos
as Greece plans default and exit from the Eurozone
Last week was a truly hectic one for the EU, with violent anti-austerity demos and political deadlock again casting doubts over the future of the euro. In Spain, as many as hundreds of thousands marched in nationwide protest. They chanted slogans and waved banners demanding an end to cuts and painful austerity. In Italy, violent anti-austerity clashes erupted in the city of Naples, after yet another suicide apparently caused by an aggressive government taxation program. But above all that, is the political turmoil in Greece. There, a last-ditch effort to form a coalition has all but collapsed over differences on austerity and bailout terms. The country now looks likely to stage new elections. For more on what lies ahead for Greece, and the implications for the EU, RT talks to Panagiotis Sotiris, who is a journalist and lecturer on social and political philosophy at the University of the Aegean.
Brinkmanship rhetoric hides cost of Greek euro exit
BY HONOR MAHONY - EUObserver.com
BRUSSELS - Within the space of one week, EU politicians have begun talking in a matter-of-fact way about Greece's possible exit from the eurozone, but analysts say the event would involve upheaval far beyond what the casual statements imply.
German finance minister Wolfgang Schauble changed the terms of the debate on Greece last week by saying that he thought the eurozone would be able to withstand the country leaving the single currency.
Will the continent act to avert an economic cataclysm?
By Niall Ferguson - TheDailyBeast.com
With the sap rising and the governments falling, all the European powers are merrily acting in national character.
In the midst of a severe financial crisis, the French have just elected a champagne socialist on promises of a 75 percent top tax rate and a lower retirement age. The Greeks also had an election in which the established parties lost to a ragbag of splinter groups. The outcome of the election was that they need to have another election. (Cue Zorba the Greek theme music.) Meanwhile, the wailing gloom of the flamenco emanates from Spain, where youth unemployment is now around 50 percent.
Eurozone in 'very political' meeting on Greece and Spain
BY VALENTINA POP - EUObserver.com
BRUSSELS - Eurozone finance ministers are to hold a "very political" meeting on Monday (14 May) amid intensified speculation of a Greek exit from the single currency and worries over the deficit implications of the Spanish bank rescue.
While no decisions are expected from the meeting, which starts at 3pm Brussels time, ministers are likely to make statements on the necessity for Greece to form a government. "It will be a very political meeting," one eurozone official told journalists in Brussels ahead of the event.
Debt Contagion Is Real, and It Doesn't End With Spain
For good or ill, Europe has embarked on a program that will require multiple trillions of euros of freshly minted money in order to maintain the eurozone.
By John Mauldin - Minyanville.com
A common mistake that people make when trying to design something completely foolproof is to underestimate the ingenuity of complete fools. --Douglas Adams, The Hitchhiker's Guide to the Galaxy
For quite some time in this letter I have been making the case that for the eurozone to survive, the European Central Bank would have to print more money than any of us can now imagine. That the sentiment among European leaders was that they were prepared for such a move was clear – except for Germany, which is haunted by fears of a return to the days of the Weimar Republic and hyperinflation.
Europe chain reaction feared in Greek standoff Greek deadlock heightens fears of full European economic crisis
By Howard Schneider and Anthony Faiola - WashingtonPost.com
Political deadlock in Greece rattled world markets Monday, reviving fears that the fractious Mediterranean country could spurn an international bailout, abandon the common European currency and risk a fresh round of world economic turmoil.
European stock indexes fell, with Greece's market now at a 20-year low, while the euro currency continued a recent decline against the dollar. U.S. stocks also fell.
Greek bank-run threat splits analysts
By Mary Watkins in London - FT.com
One crucial uncertainty hanging over a Greek exit is whether it would lead to a deposit flight, with customers and companies rushing to withdraw money from banks in other eurozone countries.
Analysts are divided over just how serious the threat really is of bank runs in economies such as Italy and Spain.
Huw van Steenis, banking analyst at Morgan Stanley, said if Greece were to exit the euro, concerns would clearly spill over into other southern European countries. "The question would then be what policy measures could be put in place to stop potential capital flight and restore confidence.
Could a Greek Bank Run Go Global?
By LAURENCE J. KOTLIKOFF - HuffingtonPost.com
The biggest worry from Greece's potential departure from the euro is a global bank run. In recent years, Greece has experienced a major bank run. Indeed, in February, theEconomist reported that Greek banks have lost 27 percent of their deposits since 2009.
But there are still, apparently, 150 billion euro in bank deposits held by the Greek banks and, no doubt, substantial other relatively short-term liabilities.
Faith fades in eurozone firewall
By Robin Wigglesworth in London and Miles Johnson in Madrid - FT.com
Fears that the eurozone's firewall will prove insufficient to shield Spain and other embattled countries against the effects of a possible disorderly Greek exit from the currency union hit European financial markets on Monday.
Spanish and Italian 10-year borrowing costs shot up to their highest levels this year and European stock markets suffered their biggest one-day drop in three weeks. German 10-year bond yields fell to a record low, widening the premium Madrid pays to borrow compared to Berlin to a new euro-era high.
Why A Greek Exit From The Euro
Would Mean The End Of The Eurozone
By Michael Snyder - TheEconomicCollapseBlog.com
What was considered unthinkable a few months ago has now become probable. All over the globe there are headlines proclaiming that a Greek exit from the euro is now a real possibility. In fact, some of those headlines make it sound like it is practically inevitable. For example, Der Spiegel ran a front page story the other day with the following startling headline: "Acropolis, Adieu! Why Greece must leave the euro". Many are saying that the euro will be stronger without Greece. They are saying things such as "a chain is only as strong as its weakest link" and they are claiming that financial markets are now far more prepared for a "Grexit" than they would have been two years ago. But the truth is that it really is naive to think that a Greek exit from the euro can be "managed" and that business will go on as usual afterwards. If Greece leaves the euro it will set a very dangerous precedent. The moment Greece exits the euro, investors all over the globe will be asking the following question: "Who is next?" Portugal, Italy and Spain would all see bond yields soar and they would all likely experience runs on their banks. It would only be a matter of time before more eurozone members would leave. In the end, the whole monetary union experiment would crumble.
Euro finance minsters plead with Greece to stay the course
By Raf Casert - AP - WashingtonTimes.com
BRUSSELS (AP) — Leading European Union finance officials on Monday pleaded with Greecenot to renege on its bailout terms and to stay the course of its painful austerity program to prevent even worse economic hardship.
Greeks fed up with the painful austerity measures gave support to anti-bailout parties in last week's elections. Many euro finance ministers warned, however, that Athens must stick to the terms of the rescue package if it wants to remain in the 17-nation eurozone.
Cradle of Democracy, Grave of Democrats:
How Greece Could Sink Obama's Re-Election Do voters put too much emphasis on events outside of the president's control?
By Dominic Tierney - TheAtlantic.com
First, Antonis Samaras of the New Democracy Party attempted to form a governing majority in Greece's Parliament and he failed. Next, Alexis Tsipras, of the radical-left Syriza party, tried to pull the sword from the political stone, and he also failed. Now the head of the Socialists, Evangelos Venizelos, is struggling to create an administration in Athens. Samaras, Tsipras, and Venizelos are hardly household names in the United States, yet they may hold significant power over President Obama's fate.
The 2012 U.S. presidential election could be in many ways about the global economy. If Europe stabilizes, the global economy will be more likely to steady itself, which could lead U.S. job creation to tick upward, the stock market to advance, and the odds to favor Obama's reelection. But if Greece lurches off the cliff edge, taking Europe with it, the markets may tank, job creation could stall, and suddenly we're looking at a Mitt Romney presidency.
Recession returns to ratchet up euro misery If you thought today looked bad, tomorrow looks worse. Amid all its other woes, the eurozone is now in recession, or that's what most experts predict will emerge from tomorrow's official figures.
By Damian Reece - Telegraph.co.uk
GDP is contracting, a fact that will serve to highlight the eurozone's haves (Germany) and its have-nots (Greece, Portugal, Spain, Italy and Ireland).
The single currency is pulling apart economically. It is pulling apart financially – Italian and Spanish bond yields separated even further from Germany today – and it is pulling apart politically, a process that will only be encouraged by the realisation among voters that a single currency can engender both growth and grind.
Moody's downgrades Italian banks; outlooks remain negative Actions conclude the review announcements
of 15 February 2012 and other dates
Global Credit Research - ZeroHedge.com
Milan, May 14, 2012 -- Moody's Investors Service has today downgraded by one to four notches the long-term debt and deposit ratings for 26 Italian banks, including five banks that are part of larger groups. In almost all cases, the rating actions reflect concurrent downgrades of these banks' standalone credit assessments, rather than changes in Moody's assumptions about levels of third party support, including Government support.
Credit Default Swaps: Still Here, Still Able to Wreak Havoc
By John Grgurich, The Motley Fool - DailyFinance.com
JPMorgan Chase (JPM), the country's biggest bank, is reporting a $2 billion trading loss that occurred in the space of just six weeks. The loss reportedly involved the investments in "credit default swaps" -- yes, those same complicated investments that played such a large role in the financial crisis.
Here's what we know so far, and why credit default swaps still pose such a threat to the U.S. economy.
The tale of the London whale
The loss occurred in JPMorgan's chief investment office, or CIO, the unit in the bank assigned with hedging the bank's own investments.
Jim Rogers: "Volume Is Not Going To Come Back.
We've Had A Great 30 Years. That's Finished!"
Submitted by Tyler Durden - ZeroHedge.com
Jim Rogers is hedging his gold (and silver) positions reflecting that this is normal, following such a tremendous run, and that this is good for the precious metal in the long-run. In his discussion with Maria Bartiromo this afternoon, he notes India's anti-gold 'protectionism' (and its potential balance of payments issues) that are trying to force the hoarding into risky 'productive' assets (as others might say). The immutable commodity maven suggests JPMorgan (and its peers) could be behind the drops in the overall commodity complex as the uncertainty of their positions (and liquidation potential to raise cash as bank examiners begin their forensics) becomes more important. He holds the USD, which he hates; has a number of equity shorts; and is most fearful of banks - specifically admitting he is a serial seller of calls on JPMorgan. His advice, and perhaps Maria should look into it given their ratings recently, is to become a farmer; own farmland; and speculate on agriculture. On the dismal 'ethical' state of our leaders and management, the thoughtful Rogers opines, "You can read world history for decades. There are always people doing things wrong. We have not changed our human nature and we will continue to have scandals and problems" and in a follow-up to CNBC's standard 'money-on-the-sidelines' argument he crushes the money-honey's dreams: "Finance had a great 30 years. That's finished.
Dancing at the Edge of a Cliff
John P. Hussman, Ph.D. - HussmanFunds.com
In recent weeks, I've emphasized that our estimate of prospective market return/risk in stocks has slipped into the most negative 0.5% of historical data (reflecting a range of horizons from 2 weeks to 18 months). Last week that estimate actually deteriorated, but I am reluctant to make comments on such a small sample, as the only more negative estimate in post-Depression history was on September 16, 2000. Even in the conditions that match the worst 2% of our return/risk estimates (which is the part of the tail we have been in since late-February), the market has lost an average of 20-25% just in the following 6-month period. As much as I try to maintain equanimity - focusing on the average outcome of a particular set of market conditions rather than the specific instance at hand - it is very difficult to do so at present.
Dick Bove: No Reason to Break Up Big Banks
By: Bruno J. Navarro - CNBC.com
JPMorgan's much ballyhooed $2 billion loss is no reason to ramp up regulations, noted bank analyst Dick Bove said Monday.
"I don't think there's any reason to break up the big banks," he said on CNBC's "The Kudlow Report." "Particularly if a bank can earn $18 billion a year and $22 billion the next year, why in heaven's name would you say it can't be run?"
The Rochdale Securities analyst rejected the notion that JPMorgan Chase, which last week disclosed it had made a bad hedge, was in any sort of long-term financial trouble.
JPMorgan Chase Lost $2 Billion
But Dimon Lost His Golden Status
By Charlie Gasparino - TheDailyBeast.com
Jamie Dimon's role as Wall Street's chief spokesman against Washington oversight took an unexpected detour Thursday afternoon when the financial world discovered, he is human after all.
The bank he runs, JPMorgan Chase, announced a huge trading loss, which is shocking only because it's run by Dimon, hands down the Street's best CEO because he successfully steered JPMorgan Chase away from such risk taking during the financial crisis and has since emerged as the banking industry's chief spokesman against post financial crisis regulation.
JPMorgan prepares for D.C.'s worst
By ANNA PALMER - Politico.com
JPMorgan Chase & Co. can't bank on having friends as it prepares to face the glare of Washington scrutiny.
Lawmakers in the House and Senate are calling for hearings on the bank's $2 billion loss. And the company's Washington office has fielded more than two dozen phone calls from congressional offices asking questions about the trading debacle.
Meanwhile, major trade groups that represent the industry aren't rushing to its defense, declining to comment when contacted by POLITICO. No member of Congress has emerged as a vocal surrogate for the bank, while several powerful lawmakers have been publicly critical.
Tossing blame for JP Morgan trade? Don't forget the Fed. Sure, blame JP Morgan's traders. But don't forget what motivated them to take on extra risk -- the Federal Reserve's low interest rate policy has left banks scrambling to make up for lost income on loans.
By Cyrus Sanati - Fortune.com
FORTUNE -- Who is to blame for JP Morgan's growing multi-billion dollar trading loss? While it is easy to just fire and demonize the traders and managers who executed the trades, as JP Morgan did this morning, such a move seems woefully inadequate in this case. Meanwhile, pointing the figure at the hedge funds that made millions betting against JP Morgan may feel good, but it isn't right either. They were just attempting to make money and rebalance the dislocation in the market created by the bank's massive positions.
No, the roots of this blunder seem to stretch well beyond Wall Street, beginning in Washington with the Federal Reserve's low interest rate policy. Linking the Fed with this event might seem like a stretch, but consider how the low interest rate policy has zapped bank profits. It has forced them to take greater risk and, to quote JP Morgan CEO Jamie Dimon, to also do "stupid" things, all in an attempt to make a quick buck.
JP Morgan fiasco prompts White House push
for tighter Wall Street regulations Obama administration puts pressure on Romney and Republican members of Congress to end resistance to strict regulation
By Ewen MacAskill in Washington - Guardian.co.uk
The White House has stepped up pressure on Republican members of Congress to end their opposition to the tighter regulation of Wall Street in the wake of the JP Morgan Chase trading fiasco.
It was its first comment since JP Morgan announced a $2bn trading loss on Friday. The White House also took a swipe at Republican presidential candidate Mitt Romney, who opposes tighter regulation and favours repealing some of the existing regulations.
JPMorgan's trading debacle: why $2 billion is just the start The bank's bad bet could curtail profits for years to come.
By Stephen Gandel - Fortune.com
FORTUNE -- For years, JPMorgan Chase (JPM), perhaps the riskiest bank in the world, got a pass. Sure there were minor hiccups along the way. But basically investors had the attitude with the bank run by Jamie Dimon that they were going to be hands off. Sub-prime mortgage loans: You've proved you can handle them. Foreclosure problems: We're sure you've got your best people on it. A derivative portfolio roughly the size of the GDP of India: We trust that you have covered your bets.
In fact, despite its huge size and complexity and risk, investors have allowed Dimon and JPMorgan to skate by on one of the smallest capital cushions, which is how much equity you have to protect against losses, on Wall Street. When you sort JPMorgan's loans and investments by riskiness, a dubious calculation, but used by Wall Street nonetheless, the bank holds an equivalent of just 10% of that as capital. That compares to 13% at Citigroup (C) and 15% at Goldman Sachs (GS).
Warren Fires Back at Dimon: Oust Him from the NY Fed
By ERIC PIANIN, The Fiscal Times
Elizabeth Warren, the one-time congressional overseer of the Wall Street bailout, has a suggestion for how CEO Jamie Dimon can best respond to JPMorgan Chase's stunning $2 billion trading blunder – resign from the New York Federal Reserve Board as a "public acknowledgment that he is in a position of trust."
Warren, the leading Democratic candidate for a Senate seat in Massachusetts, said Monday on CBS "This Morning," "I'd like to see some real accountability here. I'd like to see Jamie Dimon, for example, resign from his position as a Class A director of the New York Federal Reserve Bank."
Biderman And Bianco
Bury Bernanke's Bond Bull Market Backbone
Submitted by Tyler Durden - ZeroHedge.com
Digging into the details of the Fed's balance sheet can sometimes be a thankless task but Charles Biderman and Jim Bianco have some fascinating insights into where the real money is being hidden. The stability of the Fed's balance sheet post-QE2, given we are borrowing-and-spending over $100bn per month is all down to Operation Twist and the Fed's creation of demand at the short-end (via telling banks that rates will be low forever and 'guaranteeing' positive carry returns on rolling overnight repo) and using this 'cash' to almost entirely fund longer-term borrowing. In a simple primer of the Fed's implicit risk-free carry trade, the two chaps note that the only downside is too much growth or inflation which would cause a massive unwind of these positions (leading only to further bailouts). Critically though, they explain the fact that Operation Twist (and its implicit off-balance-sheet funding of this risk-free carry trade) is nothing more than the Fed's version of the ECB's LTRO - as the banks are 'encouraged' to buy short-term government debt with risk-free-carry expectations - implying the Fed's balance sheet could in fact be considerably larger than it appears. Yet more ponzinomics explained in a simple way - that surely eventually will trickle down to the masses who will question the emperor's clothing.
Ally Financial mortgage unit files for bankruptcy
Ally's ResCap Files Bankruptcy, Plans Sale to Fortress (Update 3)
By Steven Church, Phil Milford and Dakin Campbell - Bloomberg.com
Residential Capital LLC, the unprofitable mortgage company whose parent Ally Financial Inc. (ALLY) is trying to repay a U.S. government bailout, filed for bankruptcy and plans to sell most of its assets to Fortress Investment Group LLC. (FIG)
ResCap listed assets of $15.7 billion and debt of $15.3 billion in a petition filed today in U.S. Bankruptcy Court in Manhattan. ResCap's Chapter 11 filing is the biggest so far this year, based on liabilities, according to data compiled by Bloomberg.
Another bank paying millions to settle excessive fees case
Philadelphia Business Journal by Jeff Blumenthal, Reporter
TD Bank has agreed to settle a $62 million class-action lawsuit accusing the bank of overcharging customers on checking account overdraft fees.
The settlement, which must be approved by a federal judge in Miami, would resolve claims by customers who sued over fees charged to debit cards attached to their checking accounts.
"We have reached a settlement subject to approval by the court," TD said in a statement. "We feel that it is in the bank's best interest to put this matter behind us."
Treasury Yields Fall to Seven-Month Low on Greek Concern
By Cordell Eddings and Susanne Walker - Bloomberg.com
Treasuries rose, driving the 10-year yield to a seven-month low, as Greece's leaders prepared for more talks on forming a government amid concern failure will force the nation from the euro area.
U.S. debt advanced for a second day, with seven-year note yields falling to a record low 1.1679 percent, after the party of German Chancellor Angela Merkel was defeated in an election in the nation's most-populous state. The difference between the two-year swap rate and the yield on similar-maturity U.S. debt widened to the most since January.
The 'Fiscal Cliff' Looms Over Taxes and Spending
By ERIC PIANIN, The Fiscal Times
Just how the politically divided Congress and the Obama administration will muddle through the next six months is impossible to say, but their failure to come to grips with a raft of thorny spending and tax issues would pose hardships for millions of Americans reliant on government aid and possibly set back the economic recovery.
At the close of 2012 and the dawning of 2013, many major fiscal events are set to occur simultaneously. It's what Federal Reserve Board Chairman Ben Bernanke has called "a fiscal cliff" of spending and tax changes of a high magnitude. These include expiration of the Bush era tax cuts, the payroll tax cut and other important tax provisions. They also include the activation of the first installment of the $1.2 trillion across the board cuts or 'sequester" of domestic and defense spending. And, once again, Congress may have to raise the debt ceiling.
Property Tax Revolution - North Dakota
On June 12, 2012, the voters of North Dakota will vote on Measure 2, a comprehensive state constitutional amendment that, if passed, will abolish the property tax once and for all in that state, such that property ownership, and not rental from the government, becomes their reality.
Is the Government Backing a New Housing Bubble?
By DAVID FRANCIS, The Fiscal Times
Right now, the U.S. Federal Housing Authority is offering historically low interest rates on home loans as part of an effort to kick-start the housing market. Under a plan introduced by President Barack Obama, an FHA-qualifying U.S. homebuyer can apply for a 30-year mortgage with a fixed interest rate of 3.75 percent and a 15-year fixed mortgage at 3 percent. FHA loans require as little as 3.5 percent of the home's value up front in the form of a down payment.
Compare this to a traditional mortgage offered by a private bank. Private banks require large down payments of buyers – traditionally 20 percent – to qualify for a low interest rate.
Banana Republic of California
By Wolf Richter - ZeroHedge.com
The horse-trading sessions in Greece brokered by President Karolos Papoulias will most likely lead to new elections, and the inevitable: Greece's exit from the Eurozone. The uncertain consequences for Greece and the rest of Europe will confound jittery financial markets. And while all eyes are fixed on Greece, a tiny economy on the worldwide scale, a much larger economy is heading deeper into fiscal disaster: California.
California has everything: stunning mountains and deserts, a breath-taking coast, delicious seasonal fruit and veggies, gourmet cheeses, a large variety of seafood, and grass-fed beef—well, and a mad cow, too.
California wants to tax rich to solve budget woes
By Tami Luhby @CNNMoney
NEW YORK (CNNMoney) -- Tax the rich! That's how California Governor Jerry Brown wants to solve the state's growing budget crisis that now nears $16 billion.
The governor laid out his revised spending plan Monday. It would slash $8.3 billion from almost every part of the state's government. But it would increase funding for K-12 education if voters approve his proposal to hike income taxes on the rich and sales taxes on everyone.
If You Live In California Things Just Got A Whole Lot Worse
By Michael Snyder - TheEconomicCollapseBlog.com
Why does the state of California seem to be so incredibly hopeless? These days California can't seem to do anything right, and if you live in California things just got a whole lot worse. Governor Brown has announced that the state budget deficit for this year is going to be much larger than projected, that more government services are going to be cut and that voters are going to vote on another round of tax increases in November. Meanwhile, unemployment is sitting at 11 percent and extended federal unemployment benefits for workers in the state are ending. Because California is one of the worst places in the nation to conduct business, there has been a steady flow of companies leaving the state. Those companies have taken a whole lot of good jobs with them. Due to the lack of jobs and a steady stream of impoverished immigrants coming in from Mexico and other countries, poverty in the state has exploded and crime is rapidly increasing. California may be the land of "endless sunshine", but for the California economy there are only dark clouds on the horizon. The state is coming apart at the seams and there is not much hope that things are going to turn around any time soon.
Declining Employee Loyalty: Red Flag for Business
By STAFF, Knowledge@Wharton
If loyalty is defined as being faithful to a cause, ideal, custom, institution or product, then there seems to be a certain amount of infidelity in the workplace these days.
Consider some recent studies: MetLife's 10th annual survey of employee benefits, trends and attitudes released in March puts employee loyalty at a seven-year low. One in three employees, the survey says, plans to leave his or her job by the end of the year. According to a 2011 Careerbuilder.com report, 76 percent of full-time workers, while not actively looking for a new job, would leave their current workplace if the right opportunity came along. Other studies show that each year, the average company loses anywhere from 20 percent to 50 percent of its employee base.
Ron Paul suspends presidential campaign –
but supporters stay loyal Republican candidate likely to use his 100 delegates at the national convention in Tampa as supporters deny Paul is out
By Tom McCarthy in New York - Guardian.co.uk
After building a political campaign that was long on passion and grassroots support, if ultimately short of votes, Texas congressman Paul announced today that he is suspending his hunt for the presidency.
The candidate urged supporters to continue their efforts to amass delegates at state conventions, however, as part of a strategy to gain a voice at the Republican National Convention – and influence over the direction of the party.
Paul won't campaign in any more states
By Cameron Joseph - TheHill.com
Ron Paul won't campaign in any more primaries, his campaign announced Monday afternoon.
A letter sent from Paul to supporters promised to continue the battle for delegates at state party conventions in order to try to influence the party's platform, but said the campaign will no longer try to win delegates in new states — an uphill battle now that Mitt Romney is the presumed nominee and most states have gone to a winner-take-all system of delegate apportionment.
Poll shows little taste for third-party candidates Democrats less keen on concept
By Stephen Dinan - The Washington Times
There's a substantial appetite among American voters for an option other than the two major parties in this year's elections — but there's little taste for any of the third-party or independent candidates currently competing, according to the latest poll by The Washington Times/JZ Analytics.
While voters said they'd like more options, the vast majority conceded they usually only look to the Republican and Democratic parties for their choices, and said there are structural barriers that prevent third-party candidates from getting in the race or winning the kind of attention it takes to make a splash.
North Dakota oil boom:
thousands pin their dreams on striking it rich Business is booming and salaries are high in this tiny patch of the US, but the exhausting toil is more than many bargain for
By Suzanne Goldenberg in North Dakota - Guardian.co.uk
It's a life measured out in 18-hour shifts and washed down with 5-hour Energy Drinks and Red Bull, a job on the rigs in North Dakota's oil boom: three weeks on, two weeks off, in exchange for $100,000 or more a year and the promise of being set up for life.
In an America where 18m are out of work, the chance of finding any job – let alone a well-paid job – exerts an irresistible force that is drawing thousands to North Dakota in a 21st century re-enactment of the Gold Rush.
State of the 'Unions': Hard Times, But Hanging On
By STAFF, Knowledge@Wharton
Labor unions have long been a potent force in American business and politics. But the last several decades have seen a steep decline in corporate union power as membership ranks have dwindled. Aside from a few industries where unions remain formidable, including airlines, where US Airways' efforts to merge with American Airlines were given a recent boost by support from American's unions, the dwindling of labor union power and influence is likely to continue.
"They have declined to the point of irrelevance in most workplaces," says Peter Cappelli, Wharton management professor and director of Wharton's Center for Human Resources. And rather than focusing on expansion, unions are simply trying to minimize the ground they are losing every year, he notes. "They are having a hard time hanging onto whatever [contract] arrangements they have."
Should You Purchase Long-Term-Care Insurance?
WSJ.com
Long-term-care insurance. It's a subject most people don't want to think about—but many people know they need to.
At first blush, policies that help pay the costs of extended nursing care make perfect sense. Bills add up quickly when you can no longer take care of yourself and your needs exceed what family and friends can provide. Nursing homes, assisted-living centers and home care all are expensive, and there is no telling for how long you may need the service. Buying a long-term-care insurance policy can be a way of making sure your future physical needs will be met. Policies designed in partnership with state governments also give individuals and their families a way to protect savings in the event of burdensome care costs that stretch on for years.
Apple Patent Describes a More Secure Face-Recognition System
By Christina Bonnington - Wired.com
A new Apple patent application concerning face-recognition technology suggests an interesting security update for iOS. And that could be just the beginning of what the technology might enable.
The patent, "3D Object Recognition," describes a novel way to generate 3-D models using 2-D images. It's a follow-up to a patent Apple already owns, originally filed by Swedish firm Polar Rose, which Apple purchased in late 2010.
In essence, the technology would use multiple photos, or even video, to create a robust 3-D representation of a user's face. With this 3-D representation locked in, it could then be compared, on the fly, to a 3-D representation built in real time from a 2-D image captured from a user's phone.
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