Market Collapse In Process? Billionaires Continue To Dump U.S. Stocks, Traders Are Betting Against U.S. Economy!!

Billionaires Dumping Stocks, Economist Knows Why

Despite the 6.5% stock market rally over the last three months, a handful of billionaires are quietly dumping their American stocks . . . and fast.
Warren Buffett, who has been a cheerleader for U.S. stocks for quite some time, is dumping shares at an alarming rate. He recently complained of “disappointing performance” in dyed-in-the-wool American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods.
In the latest filing for Buffett’s holding company Berkshire Hathaway, Buffett has been drastically reducing his exposure to stocks that depend on consumer purchasing habits. Berkshire sold roughly 19 million shares of Johnson & Johnson, and reduced his overall stake in “consumer product stocks” by 21%. Berkshire Hathaway also sold its entire stake in California-based computer parts supplier Intel.
With 70% of the U.S. economy dependent on consumer spending, Buffett’s apparent lack of faith in these companies’ future prospects is worrisome.
Unfortunately Buffett isn’t alone.
Fellow billionaire John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing out of U.S. stocks too. During the second quarter of the year, Paulson’s hedge fund, Paulson & Co., dumped 14 million shares of JPMorgan Chase. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee
….
No investors, let alone billionaires, will want to own stocks with falling profit margins and shrinking dividends. So if that’s why Buffett, Paulson, and Soros are dumping stocks, they have decided to cash out early and leave Main Street investors holding the bag.
…

Google Inc Executive Chairman Eric Schmidt is selling roughly 42 percent of his stake in the Internet search

Google Inc. chairman Eric Schmidt plans to sell up to $2.51 billion of his share in the company, according to a Securities and Exchange Commission filing late Friday.
http://articles.marketwatch.com/2013-02-08/markets/36990257_1_shares-of-google-stock-eric-schmidt-plans
Venezuela devalued its currency, the bolivar, the country’s Finance Minister Jorge Giordani said Friday. President Hugo Chavez ordered the move from Cuba, the minister said

Billionaires Dumping Stocks, Economist Knows Why

Despite the 6.5% stock market rally over the last three months, a handful of billionaires are quietly dumping their American stocks . . . and fast.
Warren Buffett, who has been a cheerleader for U.S. stocks for quite some time, is dumping shares at an alarming rate. He recently complained of “disappointing performance” in dyed-in-the-wool American companies like Johnson & Johnson, Procter & Gamble, and Kraft Foods.
In the latest filing for Buffett’s holding company Berkshire Hathaway, Buffett has been drastically reducing his exposure to stocks that depend on consumer purchasing habits. Berkshire sold roughly 19 million shares of Johnson & Johnson, and reduced his overall stake in “consumer product stocks” by 21%. Berkshire Hathaway also sold its entire stake in California-based computer parts supplier Intel.
With 70% of the U.S. economy dependent on consumer spending, Buffett’s apparent lack of faith in these companies’ future prospects is worrisome.
Unfortunately Buffett isn’t alone.
Fellow billionaire John Paulson, who made a fortune betting on the subprime mortgage meltdown, is clearing out of U.S. stocks too. During the second quarter of the year, Paulson’s hedge fund, Paulson & Co., dumped 14 million shares of JPMorgan Chase. The fund also dumped its entire position in discount retailer Family Dollar and consumer-goods maker Sara Lee
….
No investors, let alone billionaires, will want to own stocks with falling profit margins and shrinking dividends. So if that’s why Buffett, Paulson, and Soros are dumping stocks, they have decided to cash out early and leave Main Street investors holding the bag.
…

Google Inc Executive Chairman Eric Schmidt is selling roughly 42 percent of his stake in the Internet search

Google Inc. chairman Eric Schmidt plans to sell up to $2.51 billion of his share in the company, according to a Securities and Exchange Commission filing late Friday.
http://articles.marketwatch.com/2013-02-08/markets/36990257_1_shares-of-google-stock-eric-schmidt-plans
Venezuela devalued its currency, the bolivar, the country’s Finance Minister Jorge Giordani said Friday. President Hugo Chavez ordered the move from Cuba, the minister said

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Top states Americans are fleeing

Long-term shifts in the U.S. economy coupled with the recent recession means Americans are more likely to pack up and move for employment-related reasons. Although the total number of residential moves is down, new data shows a clear pattern of the states that people are fleeing the fastest.

Moving company United Van Lines released its 36th annual study of customer migration patterns, analyzing a total of 125,000 moves across the 48 continental states in 2012. The study provides an up-to-date, representative snapshot of overarching moving patterns in the U.S., and reveals a mass exodus from the Northeast.

At No. 1, New Jersey has the highest ratio of people moving out compared to those moving in. Of the 6,300 total moves tracked in the state last year, 62% were outbound.

“New Jersey has been suffering from deindustrialization for some time now, as manufacturing moved from the Northeast to the South and West,” says economist Michael Stoll, professor and chair of the Department of Public Policy at the University of California, Los Angeles. “And because it’s tied to New York, the high housing costs may also be pushing people out.”

In fact, most of the top-10 states people are leaving are located in the Northeast and Great Lakes regions, including Illinois (60%), New York (58%), Michigan (58%), Maine (56%), Connecticut (56%) and Wisconsin (55%). According to Stoll, this reflects a consistent trend of migration from the Frost Belt to the Sun Belt states based on a combination of causes.

The economy has been a major push factor for residents in the Frost Belt, particularly those in hard-hit areas like Michigan. “They had a terrific excess of people as a result of the collapse of the economy,” says Stoll. Detroit, the state’s largest city, has the highest metropolitan unemployment rate in the U.S. At 20%, it more than doubles the national average.

At the same time, Stoll says local employment trends combined with high costs of living causes many displaced workers to look for greener pastures. New York City, for example, consistently ranks as one of the most expensive cities in the nation. If you’ve lost your job, shelling out the median $4,000 monthly rent for a two-bedroom apartment in Manhattan is likely no longer feasible or attractive.

The Northeast and Midwest also feature a comparatively high concentration of residents over 65, says Stoll, who tend to retire to states that are warmer and less expensive. That’s why southern and western states are some of the most popular places to move to. According to the study, North Carolina, South Carolina, Florida and Arizona feature some of the highest ratios of people moving in.

Meanwhile, the most popular state for relocation is Washington, D.C. “It’s a high-cost area,” says Stoll, “but it features good economic opportunities. It has a maturing high-tech sector and many Federal government jobs, which are more stable in recessions.” Furthermore, D.C. attracts highly educated professionals, and Stoll says college-educated young people between the ages of 18 to 35 are the most likely to move.

One big surprise from the study is Oregon, which is the second most popular state with 61% inbound migration. Although it’s not the typical temperate climate of a retirement spot, Stoll believes hipster city Portland may be attracting both older individuals and young people with its mix of economic growth, cutting edge urban planning and scenic landscape.


No. 1: New Jersey
Percentage of outbound moves in 2012: 62.3%
Number of exits tracked: 3,925

No. 2: Illinois
Percentage of outbound moves in 2012: 59.5%
Number of exits tracked: 5,931 

No. 3: West Virginia
Percentage of outbound moves in 2012: 57.9%
Number of exits tracked: 418 

No. 4: New York
Percentage of outbound moves in 2012: 57.7%
Number of exits tracked: 5,441 

No. 5: New Mexico
Percentage of outbound moves in 2012: 57.6%
Number of exits tracked: 1,313

Libor scandal: 'This goes much, much higher than me,' says trader Tom Hayes at centre of probe

Tom Hayes, the trader at the centre of the Libor-rigging scandal, has warned that the conspiracy to manipulate key global borrowing rates could implicate senior bank executives.

Tom Hayes, a former UBS trader, was arrested by British police in December in connection with a UK criminal investigation into Libor manipulation, but has not been charged. Photo: EPA

 

 

In a text message to the Wall Street Journal, Tom Hayes, the former senior trader charged by the US Department of Justice in connection with interest rate-rigging said: “This goes much, much higher than me.”

Mr Hayes, a former UBS trader, was arrested by British police in December in connection with a UK criminal investigation into Libor manipulation, but has not been charged.

Jennifer Arcuri, described by the Wall Street Journal as a close friend of Mr Hayes, defended him saying he believed he was “innocent” and intended to implicate his seniors in the scandal. “He had no idea this was going to come back at him,” she told the newspaper.

She added that Libor-rigging “was a common industry practice”, saying: “It was like spanking children in the ‘70s – it wasn’t bad.”

RBS became the latest bank to be fined over its involvement in Libor-rigging paying £390m in penalties to the US and British authorities. The taxpayer-backed lender was the third major institution to be fined over Libor, following Barclays and UBS.

More than a dozen banks are being investigated as part of a global probe by regulators in countries, including the US, Britain, Canada, Japan and Switzerland. Barclays admission in June that it had attempted to manipulate borrowing rates led to the resignations of its chairman Marcus Agius, chief executive Bob Diamond, and its chief operating officer Jerry del Missier.
As well as the large fines, City analysts expect banks to face billions of pounds in potential payouts as a result of legal cases brought by customers that were financially hurt by the manipulation.
Most analysts expect this to cost the industry just over $20bn (£13bn), however some say the eventual cost will be measured in hundreds of billions of dollars and could force another round of taxpayer bailouts

 

Fairewinds: ***BREAKING NEWS!*** Federal investigation into San Onofre nuclear plant announced

Title: (1) ***BREAKING…
Source: Fairewinds Energy Education
Date: Feb. 8, 2013

***BREAKING NEWS!***
SEN. BOXER AND REP. MARKEY ANNOUNCE NUCLEAR REGULATORY COMMISSION (NRC) WILL INVESTIGATE SOUTHERN CALIFORNIA EDISON (SCE) TO SEE IF COMPANY “…FULLY COMPLIED WITH LEGAL OBLIGATIONS.”
STAY TUNED FOR ACTION…THIS BATTLE ISN’T OVER YET!
“Rep. Markey said: ‘The Nuclear Regulatory Commission today confirmed that it is investigating the issues raised by our letter. Our nuclear safety officials should now postpone any decision on the re-start of the reactors until this critical investigation is complete.’”
[Link: http://epw.senate.gov]

See also: AP: U.S. Senator wants probe after reading confidential rep

Obama to propose 1 percent pay hike for federal employees

Washington Post – by Joe Davidson
President Obama will propose a 1 percent pay raise for federal civilian employees in the administration’s fiscal 2014 budget proposal, the Washington Post has learned.
At the same time, the House plans to vote soon on legislation that would extend the current freeze on basic pay rates through the end of calendar 2013. The freeze was originally set for two years and scheduled to expire at the end of last year, but it was extended until a temporary budget measure expires next month.
When the measure expires, federal employees will receive a 0.5 percent  raise for the remainder of 2013, unless blocked by congressional action.
A 1 percent increase is less than the 1.8 percent raise that automatically would kick in for 2014 under a law that requires a pay increase pegged to wage growth in the private sector. Last year, wages in the private sector grew 1.8 percent.
Legislation sponsored by Rep. Ron DeSantis (R-Fla.) would block the 0.5 percent increase. He said the planned raise shows Obama’s “penchant for unrestrained spending … we simply cannot afford this unnecessary and unilateral action by the president. This bill rescinds the president’s action and makes clear that the federal workforce – including cabinet secretaries, members of Congress  and other salaried employees – will not receive an across-the-board pay increase this year.”
But another Republican, Rep. Frank Wolf (Va.), disagrees. In a letter sent Friday to his Republican colleagues, Wolf urged a “no” vote on the bill.
“Let’s be honest: This bill is nothing more than a political stunt that targets the hardworking, dedicated men and women of the civil service, who have already had their salaries frozen for more than two years,” Wolf wrote. ” Everyone knows they are an easy target. But we are kidding ourselves if we think we can balance the budget on the backs of federal employees. It’s a drop in the bucket towards deficit reduction and a hollow gesture absent meaningful mandatory spending reforms.  Worse, this is just busywork as our economy faces the sequestration meat ax.”

Tax Hikes Backfire, Greece’s Revenues Plummet

Despite big tax hikes as part of austerity measures demanded by international lenders, tax revenues fell precipitously in January, with the Greek Finance Ministry reporting a 16 percent decrease from a year earlier, and a loss of 775 million euros, or $1.05 billion in one month.
The government took in only 4.05 billion euros ($5.47 billion) in tax revenues in January, far short of its target of 4.36 billion euros ($5.89 billion), a $420 million shortfall in one month, and during an annual holiday sales period for shops who are bleeding customers and shutting down by the thousands.
If Greece fails to meet revenue targets it will trigger a correction clause at the end of each quarter of the year, setting off automatic spending cuts except for pensions and salaries. That could further harm already-depleted government services.
Finance Ministry officials attributed the decline in tax revenues to the drop in consumption, as revenues from Value Added Tax (VAT) shrank by 15 percent, while those from the special consumption taxes were also lower. Greeks hammered by big pay cuts, tax hikes and slashed pensions have cut back spending even on essential items, with supermarket sales falling 500 million euros, ($6763 million) in 2012.
The numbers could have been worse as the government gained revenues from doubled property taxes and big hikes in income taxes that have hit most Greeks except for tax cheats who continue to largely escape sacrifice or prosecution.
Direct tax revenues increased by about 9 to 10 percent in January compared with a year earlier. Given the country’s devastating recession, which has created a record 26.8 percent unemployment and is in its sixth year, the only options left for the government is to collect from tax evaders and improve tax collections, although tax hikes have led to many more Greeks trying to hide their income, statistics showed.
The Troika and other EU countries offered to help Greece collect taxes but little interest has been shown by the government. The new General Secretary for State Revenues, Haris Theoharis, plans to meet directors of the 36 biggest tax offices in the country to study ways of collecting expired debts, according to proposals by the country’s creditors and the European Commission’s Task Force for Greece.
Expired debts have topped 56 billion euros, ($75.8 billion) including a jump last year of 13 billion euros ($17.59 billion) more. The newspaper Kathimerini reported that the Financial Crimes Squad (SDOE) is in disarray, doing little else than checking anonymous allegations of non-payment of taxes and not doing active investigations of high-profile cases.
The government tried to offset the bad news with a report that, thanks to austerity, the country’s deficit had fallen from 9.4 percent in 2011 to 6.5 percent last year. The ceiling set by the Eurozone, the 17 countries that use the euro and of which Greece is a member, is 3 percent.