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From: LTK00711/17/2011 1:19:43 PM
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European Bonds Under Pressure

NOVEMBER 17, 2011, 12:11 P.M. ET


By EMESE BARTHA, TERENCE ROTH and NEELABH CHATURVEDIFRANKFURT—The euro-zone debt market brushed off renewed efforts by the European Central Bank to support Italian and Spanish government bonds after new warnings on Spanish debt sustainability.

Spain was forced to offer record euro-era yields at its government-bond auction Thursday, reflecting investors' demands for higher risk premiums as Europe struggles to contain its sovereign-debt crisis.

The auction results escalated concerns that large economies previously considered safe bets could see borrowing costs rising to levels that treasuries cannot sustain over time. Greece, Portugal and Ireland lost access to market funding and had to seek bailouts after being forced to pay yields of more than 7% on their 10-year bonds. Now Spain isn't far behind, having to pay an average yield of 6.975% to sell a total of €3.563 billion ($4.8 billion) in 10-year bonds.



More: French Borrowing Costs Signal Danger European Stocks Slide Overheard: Spain's Auction Woes The Source: Spain Should be Very, Very Worried

France also had to pay higher prices for debt at its own auction Thursday. Its treasury sold a series of medium-dated bonds, including €3.33 billion of bonds due in July 2016, for an average yield of 2.82% compared with 2.31% at the last auction.

Political crises in Greece and Italy and the threat that a new economic recession could deepen the debt crisis in other euro-zone countries have escalated concerns that the region's crisis management will deliver too little too late. A plan to construct a massive new government bailout fund, the European Financial Stability Facility, has been held up by disagreements on its functions and plans for a new bailout for Greece remain elusive. Citigroup analysts said in a note Thursday that the battle for issuers such as Italy and Spain to retain market access has reached a "critical stage."





Spanish and Italian debt yields keep moving higher, making it increasingly difficult for those countries to pay their debt, and mounting worries that the ECB will have to step in, WSJ's Matt Phillips reports on Markets Hub. Photo: AFP / Getty Images.






On another tense morning in the European bond market, France and Spain were able to raise funds they but they both had to offer yields above and beyond normal levels. Dow Jones's Terence Roth and Martin Essex discuss the latest events.



Questions have been raised over the firefighting capabilities of the euro area's rescue fund when Italian bonds were selling off in recent days. If Spanish yields spiral higher and the country finds it unsustainable to raise funds in the market, the EFSF in its current form won't be able to shore up both Italy and Spain. Italy alone will probably need to sell around €440 billion of bonds and bills in 2012, Italian debt officials said this week.

Rising government borrowing costs for the euro zone's bigger countries put increasing pressure on the ECB to commit to longer and more decisive support for sovereign-bond markets to prevent the debt crisis from spreading and escalating.



Debt, Doubt and the Euro ZoneSee country-by-country events in the crisis.







View Interactive







Key Players in Europe's Debt CrisisEurope's political and financial leaders







View Interactive







More photos and interactive graphics

The ECB for months has been purchasing Italian, Spanish and Portuguese bonds to support those markets in what it sees as a temporary stopgap. But the euro's central bank has resisted calls to commit to permanently becoming the region's lender of last resort, which it believes conflicts with its strict monetary mandate to guard against inflation and not encourage governments to relax fiscal reforms.

The ECB has been backed up by Germany and its central bank, the Bundesbank, with arguments that the ECB must be held back from monetizing debt and risking a surge in inflation like the one that plagued Germany's Weimar Republic in the 1920s.





WSJ's Sudeep Reddy reports President Obama has urged European leaders to take speedier action in resolving its debt crisis and backing the 17-nation Euro currency. Photo: REUTERS/Kevin Lamarque



German Chancellor Angela Merkel on Thursday reinforced her opposition to expanding the ECB's role in supporting sovereign-debt markets, saying that this wouldn't immediately solve the euro-zone crisis. Since starting its bond-buying program last year, the ECB has bought nearly €187 billion of government bonds.

Even with ECB support, Italy still has periodically crossed that critical threshold over the past week. And Spain showed at its Thursday auction that it was now fast coming up to that level for 10-year debt.

French 10-year yield spreads over yields on comparable German bonds, the market's benchmark, have hit euro-era highs of just shy of two percentage points.





Euro-zone peripheral bonds fell back after the European Central Bank stepped back into the market to provide support. But how long can the ECB continue doing this and will it continue working? And is it all too late for Greece?



German bonds remain the gold standard among what is considered to be the core euro-zone countries, analysts say. This leaves most all other issuers facing higher borrowing costs in future auctions unless there is a substantial policy response from the ECB or the International Monetary Fund. "There are probably no sweet spots on the calendar for the [euro-zone] ex Germany countries to sell bonds these days," Commerzbank economists said in a note.

In the secondary markets Thursday, the yield on the benchmark 10-year Spanish bond soared 0.35 percentage point to 6.7%, the highest level since the inception of the euro, according to Tradeweb data. The extra yield demanded by investors to hold Spanish bonds due in 10 years instead of safe-haven German bunds widened by 0.37 percentage point to 4.93 percentage points, also a record in the euro period.

One wild card is Spain's general elections on Sunday, which are expected to unseat the socialist government. But market watchers don't see that outcome making a difference.

"With the ECB reluctant to completely fill in the vacuum left by fleeing investors, pressure on Spanish bonds will likely persist after a new government is place," said Mark Chandler, global head of currency strategy at Brown Brothers Harriman.

French bonds also sold off Thursday, with the 10-year yield climbing by 0.09 percentage point to 3.77%. The 10-year French/German yield spread climbed to a euro-era high of 2 percentage points.

Write toNeelabh Chaturvedi at neelabh.chaturvedi@dowjones.com

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From: LTK00711/17/2011 2:43:39 PM
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SSRI chart

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To: Secret_Agent_Man who wrote (3110)11/21/2011 2:02:32 AM
From: LTK007
1 Recommendation   of 3244
 
Doctor Revolt Shakes Disability Program


By DAMIAN PALETTA (Edit:S.A., i don't really know your position here and as i am not a Medical Doctor, i am a outsider. But this seems to be Doctors anger of having more and more chains put on them to provide decent medical care to patients-- this is landslide of taking medicine out of the hands of medical professionals is shocking--in the 70s and into 80s Doctors RULED, now they be chained, more and more and more---this is bad, imHo outsider's opinion.Max )Earlier this year, senior managers at the Social Security Administration in Baltimore, frustrated by a growing backlog of applications for federal disability benefits, called meetings with 140 of the agency's doctors.







The message was blunt: The number of people seeking benefits had soared. Doctors had to work faster to move cases. Instead of earning $90 an hour, as they had previously, they would receive about $80 per case—a pay cut for many cases which can take 60 to 90 minutes to review—unless the doctors worked faster. Most notably, it no longer mattered if doctors strayed far from their areas of expertise when taking a case.

"The implication there was that you really didn't have to be that careful and study the whole thing," said Rodrigo Toro, a neurologist who analyzed cases for the Social Security Administration for more than 10 years. Some doctors, including Dr. Toro, quit following the changes. Others were fired. In all, 45 of the 140 left within months, the agency said.

The upheaval, described by current and former doctors and agency officials, is the latest strain on a cash-strapped program struggling to deal with a giant influx of applications.

In targeting the doctors, the Social Security Administration says it is seeking to overhaul a part of the disability-review process that can be both expensive and slow.



A System Under StrainSee how the percentage of residents ages 18 to 64 receiving disability benefits has changed in each state since 2001.







View Interactive







More photos and interactive graphics

But many doctors and former agency officials say the changes threaten the quality of decisions. Several doctors said medical opinions were now prone to inaccuracy since many specialists don't have the backgrounds to make decisions outside their areas of expertise. The new policy could make doctors more likely to award benefits to those who don't qualify and deny benefits to those who are entitled, these doctors said.

After the procedures were implemented in Baltimore, an eye doctor was assigned back-pain cases, several doctors said. A dermatologist reviewed the files of someone who had a stroke. A gastroenterologist reviewed the case of someone with partial deafness, the doctors said.

All of the medical consultants working in the program went to medical school or had other extensive training, preparing them for the wide range of cases that might cross their desks, according to interviews with more than 10 of the program's current and former doctors.

But many of the doctors haven't practiced outside their specialty in decades, if at all, making the complexities of disability cases even harder to analyze, several doctors said.

Doctors who specialize in nerve disorders "would be hard pressed to evaluate diabetes and heart disease and … leukemia," said James McPhillips, a doctor who left the program in April once he realized the changes that were coming.

"People who shouldn't be getting [disability] are getting it, and people who should be getting it aren't getting it," said Neil Novin, former chief of surgery at Baltimore's Harbor Hospital, who worked for Social Security part time for about 10 years. In August, Dr. Novin said, he was pressured by a supervisor to change his medical opinion and award benefits to someone he didn't believe had disabilities that would prevent the person from working.

"I will not sign my name, MD, on this," Dr. Novin recalled telling the official. He said he was cited for being "offensive and intimidating" and fired. Dr. Novin can't recall details of the case, he said, but it was outside his area of specialization.







Enlarge Image










Melissa Golden for The Wall Street JournalNeil Novin, recently fired by the Social Security Administration, says the agency is rushing disability decisions.




Two other doctors also said they were pressured to award benefits in cases where they were reluctant. Supervisors told them that certain ailments should be considered "severe," even if the doctors disagreed.

Social Security Administration spokesman Mark Hinkle would not comment specifically on Dr. Novin or other doctor's cases. But he said the changes in Baltimore were likely to speed up the process for analyzing benefit requests, and are "providing the agency with a more accurate and cost-effective business process."

Mr. Hinkle added: "The decisions are timelier—and all would agree that is a good thing—but this does not mean we are sacrificing quality for 'speed.' It's a balance."

When it introduced the new policies, agency officials began reviewing more of the medical consultants' work and found that some didn't fully understand SSA policy or properly explain their medical opinions. Mr. Hinkle said the agency stepped up training and other guidance, but "some did not improve and some resented our efforts."

Mr. Hinkle said the new system would put doctors in a better position to consider whether multiple health issues on a single case met the criteria for a disability. He added that specialists were available to review any case if a doctor requests it.

The new policies in Baltimore had already been adopted in other states several years ago and officials were happy with the results, supporters of the changes said.







Enlarge Image














Earlier Disability Payments Slow as Managers Chase Targets9/30/11 Puerto Rico Disability Claims Probed 9/12/11 Social Security Judge Retires Amid Probe7/18/11 Disability Claim Judge Has Trouble Saying No5/19/11 Insolvency Looms as States Drain U.S. Disability Fund3/22/11

But some doctors have complained to the Social Security inspector general that they have been pressured to change their medical opinions to conform to targets or goals set by SSA officials, and they feared they would be fired if they resisted, according to investigations conducted by the inspector general.

In February 2010, the inspector general, as part of a probe investigating complaints by a doctor, discovered a doctor in the Alabama disability determination office who approved between 80 and 100 decisions a day. Another Alabama doctor signed off on 30 cases an hour after performing only a "cursory review of each case." The investigation said several doctors complained of pressure from superiors to approve a higher number of applications to meet statistical goals.

The Social Security Administration, in a response to the investigation, said it planned to make certain changes, but defended the Alabama office, saying it "excels" in "performance standards on timeliness and accuracy rates."

The federal disability system is designed to help people who can no longer work. For many, it represents the social safety net of last resort. Successful applicants receive a monthly stipend and access to federal health-care programs, often for life.

Through a combination of high unemployment, an aging population and an uneven process for awarding benefits, the disability system is under strain and could run out of reserves within six to seven years, say budget experts. That would make it the first major federal entitlement program to go bust in recent history. Applications and appeals, meanwhile, are accumulating in a giant backlog, in part because of the deep and lasting economic slump.

It's a toxic combination. The agency is under political pressure to reduce the backlog. But its efforts to do so—such as revamping medical procedures—are, in some ways, compounding the system's woes, said several doctors.

The Social Security Disability Insurance program paid $124 billion in benefits in 2010, up from $55 billion in 2001. The backlog of pending appeals in September was 771,318, up from 705,367 in 2010 and 392,397 in 2001.

The disability application process has many layers, including hundreds of state-based field offices that accept applications and administrative law judges who weigh appeals.

In addition, the Social Security Administration spends millions of dollars each year on more than 2,000 medical consultants who scour the medical records of Americans who believe they have a disability so severe they can't work. Most doctors work for the state agencies that administer the program and are sometimes the only people with medical expertise to review claims. Others, like those in Baltimore, contract directly with the Social Security Administration.

Many medical consultants are retired or semi-retired doctors seeking additional income and working under contract, meaning they can be fired with little cause.

The Baltimore office is considered the flagship, according to several doctors and John Delpaine, who oversaw medical consultants there before retiring in December. In its procedures and structure, Mr. Delpaine said, the office sets the standards for offices throughout the U.S.

As an application backlog grew over the past decade, Social Security Administration officials worried that doctors were a cause. In some offices, different doctors would review separate medical issues of an individual applicant. A patient with a knee injury and cancer, for example, would be reviewed by an orthopedist and an oncologist. With 3.2 million people trying to enter the program this year, such duplication became problematic.

Earlier this year, SSA bosses began pressing doctors to move cases more rapidly, designing a "holistic" process requiring one doctor to review each case, according to a document outlining the overhaul and reviewed by The Wall Street Journal.

Those uncomfortable in a particular specialty could brush up by taking short refresher courses. Doctors in Baltimore who didn't have a background in blood disease, for example, could take a one-hour seminar.

The approach in Baltimore has drawn critics. William Bunn, 47 years old, a truck driver from Peoria, Ill., found his disability claim rejected, in part, on the recommendation of a retired pediatrician.

Mr. Bunn was diagnosed with small-fiber neuropathy in 2009, a type of nerve disorder that primarily affects older people. Mr. Bunn, who began suffering from pain and numbness in his legs, said he couldn't drive a truck with his condition and quit his job. His application was supported by two private doctors. But it was rejected after two reviews by the Illinois Bureau of Disability Determination Services, one of which was performed by the pediatrician.

His appeal took more than two years. During that time, the family of four had their two cars repossessed and had to rely on food stamps for groceries.

William Wombacher, Mr. Bunn's Peoria attorney, objected to the pediatrician's review when the case was heard by an administrative law judge. The judge, in a rare move, awarded benefits on the spot.

Mr. Bunn said the extended wait brought him "a lot of heartache and misery."

The SSA's Mr. Hinkle wouldn't comment on the case. But, he said, "Just because one doctor works on a case and makes the decision on that case does not mean that a specialist wasn't consulted."

The Social Security Administration has tried previously, with limited success, to improve its medical screening. In 2005, it proposed creating a Federal Expert Unit, which would spearhead a national network of specialists to better align expertise to cases.

"We want to ensure that each case is seen by the right medical eyes," then-SSA commissioner Jo Anne Barnhart told Congress in 2006. In her testimony, she noted that, at the time, 20% of disability applicants had musculoskeletal problems, but just 2.5% of medical consultants were orthopedists.

The expert unit was never created. SSA officials said they didn't realize how costly it would be to set up a network of specialists and needed more time to study the idea.

In the past few years, a number of senior SSA officials began pressing the Baltimore office to abandon its reliance on medical "specialists," said Mr. Delpaine, who oversaw the doctors there.

But he said he "kept them at bay." His 39-year tenure within the Social Security system impressed on him that specialists played a vital role. When he stepped down in December, the changes were almost immediate.

"They think that a doctor is a doctor is a doctor," he said. "I don't think they have an understanding or an appreciation of what a specialist's input can add."

Phil Gambino, an assistant deputy commissioner at the SSA, said the generalist approach has been used in other states for more than a decade. "Mr. Delpaine's assertion is wrong," he said, "and calls into question his credibility on the issue."

Mark Isaacs, former chief of psychological services at Spring Grove Hospital in Catonsville, Md., who is known as an elder statesman of the program, said "the whole atmosphere became charged with tension" after the changes earlier this year.

Mr. Isaacs, a 25-year veteran of the agency, watched as his colleagues, one by one, stopped coming to work. After Dr. Toro, the neurologist, quit his post in April, several others followed.

"Some were asked to go," Mr. Isaacs said. "Others went because they had a big argument over their medical opinion not being accepted. Others left because who the hell needs all that tension and anxiety?"

Arguments with managers escalated over the summer, with some doctors getting into heated public confrontations with Social Security officials for either ignoring their medical opinion or pressuring them to change it, several doctors said.

In late September, Mr. Isaacs received a critique from one manager questioning the quality of one of his reviews. He wouldn't give details of the case, but said the critique was "unreasonable." He resigned.

Mr. Hinkle of the SSA wouldn't comment on the allegations by doctors. He said the 45 people who left the agency this year departed for a number of reasons, including the new pay structure, health or family issues, or performance problems.

Write toDamian Paletta at damian.paletta@wsj.com

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To: LTK007 who wrote (3125)11/21/2011 9:18:58 AM
From: Secret_Agent_Man
   of 3244
 
The whole system is a crap shoot-

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To: LTK007 who wrote (3125)11/21/2011 10:01:36 AM
From: LTK007
   of 3244
 
i am now making stock post here--S.A. 220 millions shares were DUMPED in first 15 minutes on SPX and 260 first 30 minutes, about 100 million went out at the bell. Whew.Max

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From: LTK00711/21/2011 11:43:37 AM
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Barton Biggs has Slashed Equity exposure from 80% to 40%--via Bloomberg news. Max

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From: LTK00711/21/2011 3:47:34 PM
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U.S. Sued for $25 Billion Over AIG Takeover

By LIAM PLEVEN And SERENA NGThree years after the federal takeover of American International Group Inc., longtime former Chief Executive Maurice R. "Hank" Greenberg is launching a broad legal assault that paints the government's move as unconstitutional.

Starr International Co., a firm headed by Mr. Greenberg that was AIG's largest shareholder at the time of the 2008 government rescue, filed a lawsuit Monday in the U.S. Court of Federal Claims. The action accuses the U.S. government of using the giant insurer as a vehicle to ship cash to AIG's trading partners. The court has jurisdiction in cases involving claims against the federal government.




Bloomberg NewsMaurice "Hank" Greenberg, former chairman and chief executive officer of American International Group Inc.




The suit alleges that by getting a nearly 80% stake in AIG in exchange for providing tens of billions of dollars in aid, the government took valuable property from Starr and other AIG shareholders in violation of the Fifth Amendment, which says that private property can't be taken for "public use, without just compensation."

A Treasury spokesman had no immediate comment. An AIG representative declined to comment.

Starr seeks damages for itself and other shareholders of at least $25 billion. AIG is listed as a "nominal defendant" in the suit, which also seeks damages for the company.



Complaints Starr v. U.S. | Starr v. N.Y. FedFrom the Archives Opinion: Greenberg: Why Did We Nationalize AIG? 1/5/2011More Deal Journal: Treasury Official: AIG Takeover Was 'Necessary, Legal, and Constitutional'

"The Government's actions were ostensibly designed to protect the United States economy and rescue the country's financial system," the suit says. "Although this might be a laudable goal, as a matter of basic law, the ends could not and did not justify the unlawful means employed by the Government to achieve that goal."

AIG needed government aid in the days following the collapse of Lehman Brothers Holdings Inc. because it needed to post billions of dollars in collateral to counterparties under terms of insurance-like contracts it wrote tied to subprime mortgages.

Mr. Greenberg resigned from AIG in 2005 as the New York-based company came under pressure from authorities investigating an earlier accounting case. The value of the stake that Starr International held in AIG dropped steadily in the months before the federal takeover, and plummeted as the government stepped in—as did the value of Mr. Greenberg's personal stake in the firm. He repeatedly criticized the terms of the government rescue and the company's strategy of paying off the federal loan by divesting itself of some of its assets.

The U.S. government made up to $182.3 billion in taxpayer funds available to AIG during the financial crisis. Last year the Treasury Department increased its stake to in the company to 92.1% after converting preferred shares it held into common shares.

AIG has sold assets to repay large sums of the bailout, which at its peak used over $130 billion of the available funds. Treasury now owns 77% of AIG after selling some shares to investors in May and is trying to recoup more than $41 billion from selling its remaining stake over time.

To break even on its investment in AIG, the government has to sell its shares at around $28.73 apiece. Treasury sold the first batch of shares at $29 apiece, but in early trading Monday AIG shares were down 78 cents, or 3.6%, at $21.10.

Write toLiam Pleven at liam.pleven@wsj.com

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To: Slumdog who wrote (3115)11/21/2011 4:07:45 PM
From: LTK007
   of 3244
 
Significant: Barton Biggs is now saying he is going cut to 25% equities in his fund(down from 80%) due to the failure of the Super Committee to come to an agreement.
From my view, the republicans relentless refusal to end Bush Tax Cuts to the privileged, is absurd--and the intransigence of the Republicans is blatant favoritism to a society that now has the greatest divergence of wealth in its history.
i would, myself, never spend to having Bush gift to the rich and to the corporate, never agree without Bush tax breaks being rolled back.
If it is NOT done, then taxes to the NOT wealthy will go UP.
In other words, the republicans are all for entitlements to the affluent---the hypocrites.
Marc Faber 2 years ago GUARANTEED that he U.S. will go bankrupt, he said is has ZERO doubt this will happen---he did NOT date the actual time it happens, but we can say it is getting closer---2015?--who knows, except that it is going to happen. Max p.s. i am a member of no party whatsoever--but this case is blatantly on the head of the republicans. There is BS and BS Extremis ,this is BS Extremis.

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From: LTK00711/21/2011 4:40:02 PM
   of 3244
 
Red flags signal new bear market
11/21/2011
By Thomas H. Kee Jr.

The Market is breaking down technically and very important red flags are surfacing as a result. Those are pointed out here as are opportunities to profit from these moves.

The technical breakdown in the S&P 500 SPX -1.87% , for example, opens the door for retracements back to 1135 and possibly even 1080. 1192 was a critical level, and the failure of the market to hold this level, regardless of the headlines that caused the break, was serious and it needs to be respected.

This is a level we have been watching for some time, and it has until now acted as a support boundary for the market. Today's failure is therefore not only a break of recent trend but it also presents a bearish case for the days and weeks immediately ahead.

The inflection level is 1192, so unless the market reverses back above 1192 my analysis will turn bearish and stay that way until such time as 1135 is tested again








A similar breakdown has occurred in the Dow DJIA -2.11% , NADSDAQ COMP -1.92% and Russell RUT -2.44% . Each of these is offering similar red flags, with the NASDAQ being the weakest currently. One might argue that the NASDAQ has lead the way to this breakdown, because it has been weaker for some time.

1. Breakdowns are already occurring.

2. Red flags, sell and short signals have already surfaced.

3. Downside targets are close to summer lows.

4. Unless the market reverses above recently broken neutral support our analysis tells us to expect additional downside.

5. These are material breaks and they must be respected.

Profitable downside trading opportunities exist.

Consider these ETFs if recent broken neutral support levels hold (specific to each market):

1. ProShares UltraShort Dow30 DXD +0.23%

2. ProShares UltraShort S&P500 SDS +0.45%

3. ProShares UltraShort QQQ QID -0.39%

4. ProShares UltraShort Russell2000 TWM +0.07%

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To: Secret_Agent_Man who wrote (3126)11/21/2011 7:31:30 PM
From: Ron
   of 3244
 
The whole system is, indeed, a crap shoot. But the dice are loaded.

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