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To: sixty2nds who wrote (20612)2/23/2012 7:21:25 PM
From: frankw1900
of 24722
Hi there 62nds. This might inflame your sense of comedy. Article you posted had a video about Heartland Institute and Peter Gleick embedded:

"How about that!" I thought. "Who is this guy, anyway?" So I followed up.

I couldn't decide which of the many news stories to link to so help yourself; the contortions some of the "reporters are going through are fascinating in an embarrassing way:

But here's the kicker:

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To: frankw1900 who wrote (20615)2/23/2012 9:21:16 PM
From: DMaA
of 24722
The Powerline guys talked about him the other day:

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To: DMaA who wrote (20616)2/24/2012 12:53:16 AM
From: frankw1900
of 24722
I would not have posted about it except for the EPA stepping up the comedic values by deleting their list of grants to Gleick.

Makes me wonder how flaky some of that research might have been.

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To: frankw1900 who wrote (20615)2/24/2012 12:14:00 PM
From: sixty2nds
of 24722
Thanks Frank. I will catch up on them this weekend. I ran across this today on the stock market. I'm not so big on the fundies as a general rule but...

Jim Stack was right, and he’s still bullish
Commentary: Bull market has more room to run in 2012

By Howard Gold
NEW YORK (MarketWatch) — The last time I interviewed investment guru Jim Stack, he was a lonely bull in a bearish world.

It was last August, when stocks appeared to be in a death spiral. On Monday, Aug. 8, the Dow Jones Industrial Average fell nearly 635 points. After rallying 400 the next day, it lost almost 520 on Aug. 10, closing at 10,719.94.

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That was 16% below its March 29 peak and if it wasn’t quite a bear market it seemed well on its way to becoming one. Much of the rest of the world was already there.

Not so fast, said Stack, president of Stack Investment Management and InvesTech Research. He declared that no recession or bear market was on the horizon. Given Stack’s excellent long-term track record and early predictions of a housing bust and the 2009 bull market, it was worth paying attention.

Read Howard Gold’s previous column on about Stack’s prediction the bull would continue.

He also said he was remaining bullish as long as the S&P 500 index stayed above 1,100.

On Oct. 3, the S&P closed at 1,099.23. But it took off and closed Tuesday at 1,362.21. That’s almost a 24% gain from its lows, and just about back to its recent peak on April 29.

So, now that he’s been vindicated, what does he think?

I caught up with him recently at the World Money Show in Orlando and, yes, he still believes we’re in a bull market, though he wouldn’t be surprised to see a correction after stocks’ recent run.

“When you set aside the fear and look at the leading economic indicators and the technical environment, that’s a balance weighted in the investor’s favor,” he told me. “We’re just not seeing the usual warning flags.”

As he did last summer, Stack insists “the underlying economy is doing better than people think.” In fact, he said, “the economy is still expanding,” albeit slowly.

For instance, the four-week moving average of initial claims for unemployment is at its lowest point since 2008.

“There’s not a recession that’s begun with unemployment claims with new lows,” he said, adding that initial claims usually turn up four to six months before a recession begins.

Also, consumer confidence as measured by the University of Michigan and the Conference Board has recovered completely from last summer’s debt-ceiling stand-off, he said.

Technically sound

Stack also likes the market’s technical condition.

As of last Friday, we have yet to experience a single trading day in 2012 in which the S&P fell 1%. That’s the first time that’s happened since 1995, Stack said.

Also, the advance-decline line — which compares the number of advancing stocks with the number of declining stocks — has broken out to new highs ahead of the major indexes, he said.

“This shows an underlying strength… and is one reason why almost all major indexes are very close to matching or exceeding their highs hit in April of last year,” he wrote in the latest issue of InvesTech Research.

Page 1Page 2

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To: sixty2nds who wrote (20618)2/24/2012 12:24:12 PM
From: sixty2nds
of 24722
By Howard Gold

Continued from page 1
Page 1Page 2
And a proprietary indicator he watches shows a real dearth of leadership on the down side. That usually means good stock-market gains in the months ahead, he said.

But you’d be hard pressed to find investors who are licking their chops at that. In fact, says Stack, many retail investors are out of the market or traumatized.

A recent survey by Charles Schwab & Co. found that only a third of the investors polled were confident in their ability to make investment decisions. Blame two bear markets over the past 12 years plus 2010’s “flash crash” and the series of crises investors have lived through for that disillusionment.

But “2011 was no more volatile than 2010 and was actually much less volatile than the past two years,” he told me. “Volatility has been in investors’ emotions. What we’ve seen have been extremes of fear.”

Fear factorsFear of the unknown is most pervasive, especially about Europe, a possible confrontation between Israel and Iran, and the continuing debt crisis in the U.S.

“We don’t know what’s going to happen with Greece, we don’t know what will happen with Italy,” Stack told me. “We’ve been worried about banking crises in Europe for the last two to three years.”

Brandishing his statistics again, he said U.S. markets have continued to advance during eight of the 13 recessions in Europe over the last 50 years.


And what about a possible attack by Israel against Iran to keep the Islamic Republic from developing nuclear weapons? That would be a problem, he said, especially if Iran tried to close the Strait of Hormuz in retaliation.

It could drive crude prices to $150 a barrel and be “a considerable headwind, because it is pulling discretionary spending out of the consumer’s pocket,” he said. But, he added, “geopolitical events generally do not have a lasting impact on the U.S. economy.”

He thinks Saudi Arabia and other producing countries “will be opening up their spigots because they know the repercussions — the world going into a global recession.”

But there’s a silver lining: In Stack’s view, all that fear has helped keep valuations attractive. The S&P changes hands at about 14 times trailing-12-month operating earnings and 15 times reported earnings. Since 1960, stocks have traded at over 20 times earnings when long-term rates have been less than 3%, he said.

By that metric, “one can reasonably argue that the market is undervalued by 10%-30%.”

Stack doesn’t use target prices, but says “we could easily see a double-digit gain in 2012.” That’s pretty typical for presidential election years when incumbents are running for re-election — another reason he’s still bullish.

Read Howard’ Golds analysis of why the election could make 2012 a good year for stocks in

How long can it last?How long will the bull last? Stack won’t name a date, either, but said this bull market is “maturing,” not mature. That means we could be at least a year away from its finale. Since 1932, bull markets have lasted roughly 3 ½ years on average, and in two weeks we’ll celebrate this one’s third birthday.

Stack likes sectors such as industrials and materials, which do well midway through a bull market. He particularly likes energy stocks as hedges against a spike in oil prices under a new Persian Gulf crisis.

His favorites: domestic exploration and production companies like Marathon Oil MRO +0.92% , ConocoPhillips COP +1.56% and Occidental Petroleum OXY -0.97% , whose supply won’t be disrupted by events in the Gulf, he says. For ETF investors, he likes the Energy Select Sector SPDR XLE +0.51% .

These all have rallied along with the market and energy prices.

I think this market has made a huge move based largely on anticipation of a deal with Greece. Now, it may sell off a bit, perhaps into the mid-1,200s. The Iran situation is a huge wild card that nobody can predict.

But given Stack’s track record, I wouldn’t bet against him for the long run. So, I might use any correction to buy a little more stock or at least hold on for the rest of a bull market he says ain’t over yet.

Howard R. Gold is a columnist for MarketWatch and editor at large for Follow him on Twitter @howardrgold.

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To: frankw1900 who wrote (20609)2/24/2012 10:02:45 PM
From: frankw1900
of 24722
More from Chonavec. The radio discussion is worthwhile listen.

February 21, 2012

tags: Chinese banks, inflation, non-performing loans, NPL, PMI, stagflation

Yesterday I was on China Radio International (CRI) talking about the latest figures and trends for the Chinese economy: the drop in real estate, record bank profits, weak trade and PMI data, and persistent inflation. The overarching question was whether the perceived slowdown in China’s economy is real, and how worried we should be about it. You can listen to the discussion by clicking here.

Regarding the record annual profits being reported by Chinese banks, I don’t have too much to add to what I wrote on that subject last year (in my blog post on “Chinese Banks’ Illusory Earnings”), except to say that it would be comic, if it weren’t so tragic. As I said on the air yesterday, banks have two costs of doing business: the cost of funds (which they pay to depositors) and the cost of bad debts that aren’t repaid. Since Chinese banks enjoy a regulated spread between their deposit and lending rates, the more they lend (and they’ve been lending a LOT these past few years) the more money they make. But the more generously they lend, the greater the risk they won’t be paid back — a risk that should be realistically tabulated and deducted from the earnings spread.

That isn’t happening. The notion that Chinese banks have 1% non-performing loan (NPL) ratios is patently ridiculous, and the claim that provisions for 2.5 times that amount are somehow “generous” (or remotely adequate) are equally absurd. I don’t believe it, and neither do investors in Chinese bank stocks, based on their valuations. Any company can report “profits” if it doesn’t recognize half its costs of doing business. Any company can boost “revenues” by granted easy credit terms to customers who can’t pay it back.

Regarding inflation, the Wall Street Journal published an excellent editorial today that expresses my thoughts as well as I could. You can read it here. They do an excellent job describing the stresses facing China’s banks, and reconciling the apparent contradictions between a slowing economy and inflationary concerns:

It might seem odd to worry about inflation, capital outflows and tight liquidity at the same time, but that’s a consequence of China’s distorted financial system. Because allocation of capital remains politicized, a significant portion of the credit stimulus has gone into wasteful projects; since that money is not creating real growth or productivity gains, it chases too few goods at higher prices.

Meanwhile, those who need cash—including bankers and small and medium-sized businesses—can’t get it. Liquidity injections might help bankers with short-term funding. But absent broader reform, that cash will only follow earlier credit down the inflationary rabbit hole.

Usually economists consider slowing growth and inflation as polar opposites –you can have one or the other, but not both at the same time. Over-rapid growth spurs inflation, but slowing growth reduces price pressure. However, if you print (or in China’s case, import) money and spend it on projects with a zero or negative return, you will get an initial GDP boost (as long as you keep spending), but eventually you will get stagnant growth AND inflation: stagflation. The Journal gets it. Does anyone in China?

China is having rising prices and rising wages and slowing growth. This looks like a pathway to stagflation. When the government years ago decided to move away from the Soviet model, it didn't move far enough away, and thus did not allow Chinese and foreign entrepreneurs to create enough supply to fulfill both export and domestic markets. It only allowed supply to be fulfilled for export markets. Millions of people have moved from country to city and businesses have been impeded from creating efficient markets supplying their needs.The problem has never been demand either at the bottom or the top of society..

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To: frankw1900 who wrote (20620)2/25/2012 11:30:36 AM
From: sixty2nds
of 24722
Good morning Frank. I am as excited about investing in China as I am on Africa. vbg.
Anything international I own is an American company with international presence...INTC, F, etc.
I don't even like the region specific funds. I like to read about it though. I like to see the "experts" eyes glaze over when I ask them questions like the NPL issue.

Here's a link for you...PA judge sets Islamic Law I'm buying lead.

Penn Judge: Muslims Allowed to Attack People for Insulting Mohammad

By Mark Whittington | Yahoo! Contributor Network – 19 hrs ago

COMMENTARY | Jonathon Turley, a law professor at George Washington University, reports on a disturbing case in which a state judge in Pennsylvania threw out an assault case involving a Muslim attacking an atheist for insulting the Prophet Muhammad.

Judge Mark Martin, an Iraq war veteran and a convert to Islam, threw the case out in what appears to be an invocation of Sharia law.

The incident occurred at the Mechanicsburg, Pa., Halloween parade where Ernie Perce, an atheist activist, marched as a zombie Muhammad. Talaag Elbayomy, a Muslim, attacked Perce, and he was arrested by police.

Judge Martin threw the case out on the grounds that Elbayomy was obligated to attack Perce because of his culture and religion. Judge Martin stated that the First Amendment of the Constitution does not permit people to provoke other people. He also called Perce, the plaintiff in the case, a "doofus." In effect, Perce was the perpetrator of the assault, in Judge Martin's view, and Elbayomy the innocent. The Sharia law that the Muslim attacker followed trumped the First Amendment.

Words almost fail.

The Washington Post recently reported on an appeals court decision to maintain an injunction to stop the implementation of an amendment to the Oklahoma state constitution that bans the use of Sharia law in state courts. The excuse the court gave was that there was no documented case of Sharia law being invoked in an American court. Judge Martin would seem to have provided that example, which should provide fodder for the argument as the case goes through the federal courts.

The text of the First Amendment could not be clearer. "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof-" It does not say "unless somebody, especially a Muslim, is angered." Indeed Judge Martin specifically decided to respect the establishment of a religion, in this case Islam.

That Judge Martin should be removed from the bench and severely sanctioned goes almost without saying. He clearly had no business hearing the case in the first place, since he seems to carry an emotional bias. He also needs to retake a constitutional law course. Otherwise, a real can of worms has been opened up, permitting violence against people exercising free speech.

It should be noted that another atheist, dressed as a Zombie Pope, was marching beside the Zombie Muhammad. No outraged Catholics attacked him.

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To: sixty2nds who wrote (20621)2/27/2012 4:01:31 AM
From: frankw1900
of 24722
The judge is an idiot. Instead of just throwing it out for lack of evidence he had to give the guy a stupid lecture. He's an ethical relatavist. The thing might have legs. Got 64000 hits on a google search for Judge Mark Martin and 46000 for muslim "Judge Mark Martin".

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From: sixty2nds3/1/2012 9:14:14 AM
of 24722

No Greek CDS payout on swap, panel saysInvestors will have more opportunities to argue ‘credit event’ occurred

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By William L. Watts, MarketWatch

FRANKFURT (MarketWatch) — Greece’s restructuring of privately-held debt so far hasn’t met the threshold of a “credit event,” failing to trigger billions of dollars in payouts on derivative instruments known as credit-default swaps, a panel of bankers and investors ruled Thursday.

The meeting of the International Swaps and Derivatives Association’s Determinations Committee on Thursday came after an anonymous query was submitted to the trade group requesting a ruling on whether preferential treatment of Greek bonds held by the European Central Bank and some national central banks amounted to a “credit event.”

ISDA is a global trade group that is the arbiter of whether payouts on CDS contracts have been triggered.

The panel, which met by teleconference in London and New York, ruled unanimously that the move didn’t constitute such an event. They also ruled that the private debt swap initiated last week as part of the country’s second international bailout hadn’t met the threshold.

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Has Greece defaulted or not?Officials from the International Swaps and Derivatives Association have stated that Greece has not had a "credit event" and will not trigger credit default swap payments. Dow Jones's Jenny Paris and Katie Martin explain why this decision is not clear cut. Photo: AP

But the panel also noted that the situation in Greece is “still evolving” and that market participants can submit further questions to the body “as further facts come to light.”

A credit event would require market participants who issued credit-default swaps, or CDS, on Greek government debt to pay out to investors who had bought the derivatives as a hedge against nonpayment or a speculative bet. Read about Greek CDS exposure.

Investors hold net exposure of around $3.2 billion on CDS covering more than $200 billion of outstanding Greek debt, a figure that’s seen as easily manageable.

Still, markets are likely to keep an eye trained on the deliberations. Strategists at Lloyds TSB in London said a CDS trigger could still “bring contagion fears back to the fore.”

The market consensus had been that the panel wouldn’t vote to trigger CDS payouts in response to the query regarding the treatment of the ECB, said Gavan Nolan, director of credit research at data provider Markit.

The euro EURUSD -0.14% traded at $1.3312 versus the dollar, down 0.1% from Wednesday. European equities traded higher.

It was widely reported that the ECB moved last month to swap its holdings of Greek government bonds, receiving identically structured paper in return. The new bonds, however, weren’t subject to collective action clauses inserted retroactively by the Greek government into existing debt.

Those clauses would allow bondholders holding a majority of Greek debt to compel all private bondholders to participate in the debt swap currently under way as part of Greece’s second international bailout.

Under the swap, private bondholders will take a haircut of 53.5% on the value of Greek bonds, exchanging existing debt for new bonds that pay lower interest rates and carry longer maturities.

Ratings firm Standard & Poor’s has already declared that the CACs amount to a distressed debt exchange, pushing Greece into selective default.

Many analysts contend a credit event is likely to be declared if the CAC clauses are triggered. And there’s a high possibility of that occurring since around a quarter of Greek bonds appear to be held by hedge funds and other investors seen as unlikely to be keen to tender their shares in the swap.

“Uncertainty on the second package will remain until the March 12 deadline when private bondholders will have to decide whether or not to participate in the ‘voluntary’ debt exchange,” said Tobias Blattner, euro-area economist at Daiwa Capital Markets. “Only if the participation rate will be high enough, the package can go ahead as planned and the payout of CDS contracts might be avoided.”

William L. Watts is MarketWatch's European bureau chief, based in Frankfurt.

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To: sixty2nds who wrote (20623)3/1/2012 1:56:04 PM
From: Brian Sullivan
of 24722
It seems that a game of chicken is being played here. You can either "voluntarily" take a 53% haircut or refuse and wait to try to collect on your CDS, in which case you'll either get 100% or 0% depending upon the final vote of the ISDA committee..

At a Glance: Greek Debt Swaps Explained
Neelabh Chaturvedi and Katy Burne

An international trade association on Thursday ruled that no credit event has occurred yet as part of a Greek debt restructuring and therefore payouts of insurance contracts against Greece defaulting on its debt won’t be triggered.

The International Swaps and Derivatives Association’s Determination Committee ruling came in response to two questions prompted by the passage of laws in Greece that could force unwilling investors to accept a steep write-down on debt as part of a bond exchange. But the ruling does not preclude further questions from market participants nor is it an expression of the Committee’s view as to whether a “credit event”‘ could occur at a later date.

The ISDA committee noted that the situation with Greece is “still evolving.”

Most market participants had not expected ISDA to determine if a “credit event” had occurred until the actual debt exchange is completed.

This still leaves the door open for the payout of Greek credit default swaps if the Greek government were to actually push through provisions that force all private bondholders to take steep losses.

The Greek government’s intention of invoking so-called collective action clauses will become clear towards the end of next week, by when private bondholders have to indicate whether they want to participate in the deal or not.

At stake are payouts from sellers of a net $3.2 billion of CDS on Greece currently outstanding, and the stigma associated with lending credence to an instrument policy makers have long reviled.


As part of a second bailout package for cash-strapped Greece worth €130 billion, private-sector investors will have to take a 53.5% loss on their principal and will swap their old Greek bonds with new bonds that have longer maturities and lower coupons. Greece faces a €14.4 billion bond redemption on March 20 and needs to tie up external assistance because it doesn’t have enough funds to make the bond payments.

The deadline for banks to indicate their participation in the debt exchange is 2000 GMT on March 8. Results are likely soon after the expiration deadline. An exchange of Greek bonds issued under foreign laws will take place later.


Greece will complete the exchange of validly tendered designated securities if at least 90% of the aggregate principal amount currently outstanding of the overall debt has been validly tendered for exchange. If the participation rate is between 75% and 90%, Greece would consult with its European partners on whether to proceed with the deal. If it’s less than 75%, the exchange will be called off. That could derail the €130 billion bailout deal and Greece may be pitched into a disorderly default.


Collective-action clauses, or CACs, are provisions entering Greek law that bind all bondholders to take part in a debt exchange if a predetermined majority approves of the exchange.

Greece has so far resisted the use of CACs for the fear of triggering the payout of CDS contracts.

Greece could potentially take approvals from private investors holding only a third of Greek bonds outstanding for CACs to be invoked. If investors holding at least 50% of Greek bonds that are outstanding take part in the debt swap, and two-thirds of those investors agree to the amendments, CACs will be invoked.

That works out to roughly €59 billion of the €177 billion of local-law Greek bonds that are in private hands. Foreign-law Greek bonds already contain CACs.


Many analysts feel Greece will not get a high enough participation rate at the debt exchange and will have to invoke CACs to push the deal through. If CACs are activated, a debt exchange may no longer be seen as “voluntary” but “coercive,” triggering the payout of CDS contracts.

ISDA itself has in the past said that mere insertion of CACs wouldn’t generally be deemed a credit event but their use would.

Euro-zone governments have long feared that triggering CDS payouts could create contagion effects throughout the European banking system, similar to those caused by the 2008 global financial crisis. For that reason, officials took pains to come up with a debt restructuring plan for Greece that would be seen as voluntary.

But a failure of the CDS to offer protection against blatant adjustments to Greece’s bond contracts could do even more damage, rendering the entire CDS market worthless and, in the eyes of investors, subject to political manipulation. That in turn could drive investors to dump the bonds of Portugal, Ireland, Italy and Spain, believing that they no longer enjoy the protection of default insurance.


Most market participants feel that the impact of a payout of CDS contracts would be limited given the small net exposure of banks that have written these contracts.

A net $3.2 billion of CDS are outstanding on Greek debt once offsetting contracts have been taken into account, according to the latest Depository Trust & Clearing Corp. figures.

Some market participants feel that a CDS trigger may actually benefit peripheral euro zone government bonds by preserving the sanctity of CDS as a useful hedging instrument.


Standard & Poor’s has already lowered Greece’s debt rating to selective default. Other rating companies have also indicated they will cut Greece to selective default while the debt exchange is on. The rating will be upgraded shortly after the debt exchange is completed to a level debt agencies think is consistent with Greece’s debt dynamics.

The ECB, responding to the latest Greek rating downgrade, said it would no longer accept the country’s bonds as collateral for loans, but added the move was a temporary one that could be reversed once Athens’ new bailout goes into effect.

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