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Companies Cook the Books to Meet Tough Targets: Survey

"Hard-pressed company bosses across much of the world are under so much pressure to deliver on growth that many have resorted to cooking the books, Ernst & Young said in a survey Tuesday. One in five of almost 3,500 staff quizzed in 36 countries in Europe, the Middle East, Africa and India said they had seen financial manipulation in their companies in the last 12 months, the accounting and consultancy firm said. In addition 42 percent of board directors and top managers questioned in the fraud survey said they were aware of 'some type of irregular financial reporting.'" Continue reading →

Continue ReadingCompanies Cook the Books to Meet Tough Targets: Survey

This Is Your S&P; This Is Your S&P Without Tuesdays

"Since the mid-November lows, the S&P 500 has gained a remarkable 268 points on the back of faith, hope, and Bernanke/Kuroda charity. But perhaps what is more mind-numbing is that this efficient market has given us more than 50% of those gains on Tuesdays. With 17 up-days in a row, Tuesday is the Monday dip-buyers dream. Since 1/18, absent Tuesdays, the S&P 500 has gone nowhere. Maybe Bob Geldof needs to write a new song for the US investor 'I do like Tuesdays', or at least a slightly revised cover version of the Bangles' 'Manic Tuesday'. What would we do without Tuesdays?" Continue reading →

Continue ReadingThis Is Your S&P; This Is Your S&P Without Tuesdays

The Pension Rate-of-Return Fantasy

"In June of 2012, Calpers lowered the expected rate of return on its portfolio to 7.5% from 7.75%. Calpers had last dropped the rate in 2004, from 8.25%. But even the 7.5% return is fiction. Wall Street would laugh if the matter weren't so serious. And the trouble is not just in California. Public-pension funds in Illinois use an average of 8.18% expected returns. The 100 top U.S. public companies with defined benefit pension assets of $1.3 trillion have an average expected rate of return of 7.5%. Three of them are over 9%. (Since 2000, these assets have returned 5.6%.) Who wouldn't want 7.5%-8% returns these days? Ten-year U.S. Treasury bonds are paying 1.74%." Continue reading →

Continue ReadingThe Pension Rate-of-Return Fantasy

Moody’s: ‘Strategic Default’ Viewed as Less Taboo by Cities

"The number of defaults from U.S. municipal issuers rated by Moody’s Investors Service has more than tripled to 4.6 per year since 2007, showing willingness to pay can’t be taken for granted, the company said in a report. Five municipalities rated by Moody’s defaulted last year, including Stockton, California, which became the biggest U.S. city to seek Chapter 9 bankruptcy protection in June. Wenatchee, Washington, failed to honor a guarantee on an interest payment for a sports arena. The figure doesn’t include issuers such as Vadnais Heights, Minnesota, which 'selectively defaulted' on contingent liabilities, the report said." Continue reading →

Continue ReadingMoody’s: ‘Strategic Default’ Viewed as Less Taboo by Cities

Bank deposits of over €100,000 may be at permanent risk in Europe

"Deposits of over €100,000 are likely to be hit in the event of future European bank collapses, according to a proposal put forward by the Irish presidency of the European Council ahead of a key meeting of finance ministers next week. Discussions on the controversial bank resolution regime, which is likely to see savers with deposits over €100,000 'bailed in' as part of future bank wind-downs, are due to intensify this week in Brussels, ahead of Tuesday’s meeting, which will be chaired by Minister for Finance, Michael Noonan." Continue reading →

Continue ReadingBank deposits of over €100,000 may be at permanent risk in Europe

Australian Central Bank Cuts Key Rate to Record-Low 2.75%

"The Reserve Bank of Australia cut its benchmark interest rate to a record low, driving down a currency that has damaged manufacturing and boosted unemployment. Governor Glenn Stevens reduced the overnight cash-rate target by a quarter percentage point to 2.75 percent, saying in a statement that the Aussie’s record strength 'is unusual given the decline in export prices and interest rates.' He joins global counterparts in embracing record-low rates in an economy where inflation is contained, mining spending is predicted to crest, and credit growth remains subdued." Continue reading →

Continue ReadingAustralian Central Bank Cuts Key Rate to Record-Low 2.75%

California, New York and DC look to ban 3D-printed guns

"A handgun made almost entirely using a consumer-grade 3D printer fired a bullet over the weekend for the first time in the history of the infant technology. If some lawmakers have their way, it will also be the last. Defense Distributed of Texas announced on Sunday that researchers fired a bullet designed for a traditional .380-caliber firearm with a gun built all but exclusively using digital blueprints, some plastic and an $8,000 printer. The only item aside from the bullet not printed out was a single nail that served as the firing pin. As early s Tuesday, though, California State Senator Leland Yee was already looking to pass a bill that would outlaw other 3D weapons." Continue reading →

Continue ReadingCalifornia, New York and DC look to ban 3D-printed guns

Ron Paul On The Bubbles the Federal Reserve Is Creating

"Although many were up in arms when the Fed said it would buy $600 billion in government debt outright for the previous round, QE2, all seems quiet about the magnitude of QE3 because it doesn’t come with huge up-front total price tag. But by year’s end the Fed’s balance sheet could hit $4 trillion. With no recovery in sight, where’s all this money going? It is creating bubbles. Bubbles in the housing sector, the stock market, and government debt. The stock market has been hitting record highs for the past two months as investors seek to capitalize on the Fed’s easy money. As long as the Fed keeps the spigot open, nominal profits are there for the taking." Continue reading →

Continue ReadingRon Paul On The Bubbles the Federal Reserve Is Creating

Senate bill would offer college students the same interest rates as banks

"Sen. Elizabeth Warren (D-MA) introduced a bill on Wednesday that would give college students the same interest rates on their federal student loans as banks do when borrowing from the Federal Reserve. 'If the Federal Reserve can float trillions of dollars to large financial institutions at low interest rates to grow the economy, surely they can float the Department of Education the money to fund our students, keep us competitive, and grow our middle class,' Warren said. The Student Loan Fairness Act would call for the Fed to 'float the money' to the department for one year, giving Congress enough time to enact a long-term agreement on student loan rates." Continue reading →

Continue ReadingSenate bill would offer college students the same interest rates as banks