Schneiderman Files Civil Fraud Lawsuit Against Three Major Banks for Use of MERS « naked capitalism New York filed a lawsuit against various units of JP Morgan, Bank of America, Wells, MERSCORP and MERS over their use of MERS in foreclosures. This civil suit alleges that the use of MERS has “resulted in a wide
Read more »News Links 02/04/2012

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El-Erian on jobs: Headline bullish but structural issues remain
Bloomberg Television has another video with PIMCO head Mohamed El-Erian, this time on the jobs number. This one number has the potential to set the tone for the short-term because it was so far ahead of consensus estimates. El-Erian cautions about getting to far into the risk-on trade because of the number though as the US still has structural issues. I would add that it is a long way to November and this is just one number. Let's see how the picture develops
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Chart of the day: Labor force participation rate at 30-year low
The jobs data were the best we have seen in a long time and well above expectations. This and the first upward revisions to the annual revisions were a pleasant surprise. While a lot of people are in disbelief because of a present bearish bias, you have to take the numbers for what they are and they are bullish. I still feel that the US economy is at stall speed and expect a second recession by the end of 2013 but I am prepared to upgrade my assessment based on how things proceed.
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The Unlikely Bull Market
This is not the time to be fully invested but neither is it the time to be side lined. We are in a nervous market where great opportunities present themselves at regular intervals. We recommend holding 25-50% in cash or cash like instruments (depending on your risk profile) which can be deployed at short notice when those opportunities arise
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[PREMIUM] If you were looking for a reason to be bullish, this jobs report is it
The jobs report has just come out and the numbers are amazingly bullish. This article for subscribed members looks at what the report means.
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Friday’s Thoughts and Seven Investment Themes
First, the trajectory of monetary policy in the US, Europe, China and Japan is in a more accommodative direction. Second, the underlying economies are showing preliminary signs of stabilizing. Third, the combination of easing monetary conditions and economic stabilization has boost demand for higher risk assets. In addition to major equity markets, emerging markets off to a strong start. Funds that exited the emerging markets in Q4 11 return. This has helped fueled currency and asset (bonds and stocks) appreciation
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The Ultimate QE is the Fed’s Coming Purchase of Real Assets
I would bet on near-systemic collapse before the Fed starts either asset purchases or Congress resorts to fiscal activism. But eventually, the Fed is going to purchase more than just treasuries. They will purchase a lot of financial assets and probably some real assets as well
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Doug Casey on the Coming War with Iran
By Casey Research
(Interviewed by Louis James, Editor, International Speculator)
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Chart of the Day: Government Deficits as Far as the Eye Can See
The chart below from the blog Pragmatic Capitalism shows the U.S. Federal government deficit for each quarter since 1952. As you can see, almost the entire period is marked by deficits.
Here’s my take, using the same chart a year ago that Pragmatic Capitalism used above today:
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Obama Administration propaganda on prosecuting elite financial frauds
By William K. Black
The Obama administration’s record of prosecuting elite financial frauds is worse than the Bush administration’s record, which is a very large statement. Syracuse University’s TRAC issued a report on November 11, 2011 entitled “Criminal Prosecutions for Financial Institution Fraud Continue to Fall.”
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John Reed on Big Banks and Corporatism
Bill Moyers talks to former Citicorp and Citigroup head John Reed about what’s wrong in the banking sector. John Reed readily acknowledges his role in bringing down the Glass-Steagall Act (Hat tip Finance Addict).
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Economics in the Age of Deleveraging
By Steve Keen
as originally posted at Steve Keen’s Debtwatch
The “Global Financial Crisis”, which began in late 2007, marked a turning point in the nature of market economies. Their performance from at least the mid-1960s had been under-written by a faster growth of private debt than of GDP: this was the “Age of Leverage”. In late 2007, the growth rate of private debt fell, and since then we have been in the Age of Deleveraging.
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Short Note on ISM Manufacturing Survey
The Institute for Supply Management reports its January manufacturing survey on February 1. The Bloomberg consensus expects a small increase to 54.5 from 53.9. This would be the highest reading since last June. Yes, as the economy picked up some steam after a dismal first half, the manufacturing ISM trended lower.
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- barometer
- bloomberg
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- consensus
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- couple hours
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- institute for supply management
- ism manufacturing
- ism survey
- manager index
- milwaukee
- national survey
- private equity
- purchasing manager
- regional survey
- state survey
- steam
- Structured Finance
European Sovereign Supply and LTRO
This is a fairly busy week for European sovereign supply. Roughly 22 bln euros will be raised. This includes the 7.5 bln euros Italy raised yesterday by selling bonds and the 2.5 bln euros raised by Belgium in bills. Germany is seeking to raise 5 bln euros by selling 10 year bonds tomorrow and Portugal will sell bills. France and Spain plan on selling bonds on Thursday, Feb 2.
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News Links 02/01/2012
- A Crisis in Two Narratives – Raghuram Rajan – Project Syndicate
The advanced countries have a choice. They can act as if all is well, except that their consumers are in a funk, and that "animal spirits" must be revived through stimulus. Or they can treat the crisis as a wake-up call to fix what debt has papered over in the last few decades.

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Chart of the Day: S&P500 Up 4.36% in January
Interesting couple of charts on the S&P500. The top shows the narrowing upward channel in which the index has traded since the beginning of the year relative to the wider medium-term channel. The collapse in volatility was the direct result of the massive liquidity injections of the ECB’s LTRO program, in our opinion.
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The Fetish for Liquidity (and Reform of the Financial System)
By L. Randall Wray
This post first appeared at "Great Leap Forward”, my EconoMonitor blog.
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Dollar Heading Lower after Constructive Outcome of EU Summit

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News Links 01/31/2012
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NIALL FERGUSON: Okay, I Admit It—Paul Krugman Was Right
Professor Ferguson’s take on the United States has changed notably over the past year. He still thinks the U.S. budget deficit is unsustainable and that our entitlement programs will ultimately have to be cut. But he has changed his mind about the U.S.’s ability to sustain its huge debt load.

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Functional Finance and Exchange Rate Regimes: The Twin Deficits Debate

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