Krugman: What Draghi didn't do

Update: And this sounds like a “nein” from the Germans.

Actually, he hasn’t done anything, at least yet. But it’s now widely hoped that the ECB will start buying government bonds (although it’s not at all clear whether the Germans will allow this, particularly on a sufficient scale); this has caused a significant decline in Spanish interest rates from their peak.

Limiting interest rates on peripheral borrowing is, however, only part of what the euro needs. As I and others have been arguing for a long time, Europe also needs sufficiently high inflation over the next few years to make it possible for Spain etc. to regain competitiveness without devastating deflation. So have market expectations of inflation risen from their unworkably low levels of recent months? No:

This still looks unworkable.

http://krugman.blogs.nytimes.com/2012/07/28/what-draghi-didnt-do/

EES: NFA fines another Forex firm

As if the PFG situation (see previous articles here and here) wasn't enough, yesterday the NFA fined yet another Forex firm for:

... improperly canceling forex trades and removing profits from customer accounts, failing to timely report trade data and other required information to NFA, failing to observe high standards of commercial honor, failing to comply with NFA's Enhanced Supervisory Requirements and failing to keep accurate records.

http://seekingalpha.com/article/756731-nfa-fines-another-forex-firm

NFA issues $200,000 fine against New York forex firm Alpari US LLC

NFA issues $200,000 fine against New York forex firm Alpari US LLC

July 26, Chicago - National Futures Association (NFA) has ordered Alpari US LLC, a futures commission merchant and forex dealer Member located in New York City, to pay a $200,000 fine as a result of an NFA Complaint filed in June 2012 and a settlement offer submitted by Alpari and two of the firm's principals, Jermaine C. Harmon and Richard A. Lani.

The Decision, issued by NFA's Business Conduct Committee, found Alpari violated several NFA requirements, including improperly cancelling forex trades and removing profits from customer accounts, failing to timely report trade data and other required information to NFA, failing to observe high standards of commercial honor, failing to comply with NFA's Enhanced Supervisory Requirements and failing to keep accurate records. The Decision also found that Alpari - together with Harmon and Lani - failed to supervise.

In addition to the $200,000 fine, Alpari is required to refund within 30 days to customers losses they incurred as a result of the price adjustments that Alpari made to their accounts in connection with an October 2011 "market event." Alpari must also provide verification to NFA that these refunds were paid to and received by customers.

Alpari must also submit a written report to NFA within 180 days of the effective date of the Decision which documents the results of an independent review of Alpari's electronic trading platforms conducted by a qualified outside party and the steps Alpari has implemented to remedy deficiencies with the firm's internal controls.

Alpari, Harmon and Lani neither admitted nor denied the charges. The complete text of the Complaint and Decision are available onNFA's website.

http://www.nfa.futures.org/news/newsRel.asp?ArticleID=4087

U.S. big banks' glory days feared to be gone for good

* Low rates, more regulation depress profit outlook

* Banks show few fundamental signs of improvement in Q2

* Only choice for big banks may be to slim down

(Adds Sandy Weill comments)

By Jed Horowitz

NEW YORK, July 25 (Reuters) - The summer of 2012 may be remembered as the time when regulation, scandals and a protracted slow-growth economy finally caught up with big American banks.

Ever since the financial crisis, U.S. banks and their investors have held out hopes of a return to the good times, when lending profits steadily rose and commercial and investment banking flourished together.

http://in.reuters.com/article/2012/07/25/idINL2E8IP4F320120725

Economists Warn EU on 'Threshold of Catastrophe'

The euro crisis has returned with a vengeance this week, with Greece potentially facing bankruptcy, Spain teetering towards a bailout and even Germany at risk of losing its top credit rating. A group of prominent economists are calling for a radical restructuring of Europe and the euro zone to prevent a disaster of "incalculable proportions."

A panel of respected European economics experts are ringing the alarm bell this week over the euro crisis -- direly calling on all European leaders to move swiftly to deploy the most powerful tools available to halt the currency's downward spiral.
"We believe that as of July 2012, Europe is sleepwalking toward a disaster of incalculable proportions," the New York-based Institute for New Economic Thinking (INET) stated in a report warning leaders they need to move faster and more decisively to save the common currency. Otherwise it could very well disintegrate.

http://www.spiegel.de/international/europe/debt-crisis-economists-warn-of-euro-catastrophe-a-846327-druck.html

Is the fix in?

The Foreign Exchange Market

Or the Forex market in City-speak. It's hard to call this a dark corner. It's the biggest market in London, and in the world, in terms of the sheer volumes of money changing hands – $4trn (£2.6trn) daily. Not that this stops people from trying to manipulate it.

Central banks such as the Bank of England, the US Federal Reserves and lots of others are always at it, either trying to push their currencies higher (when they fear a forced devaluation and inflation) or lower (to make exports more competitive). Their efforts tend to meet with very limited success.

Speculators, particularly hedge funds, are very active and their role can also prove highly controversial.

Of more concern right now are the games being played by so called "high-frequency traders" who use black boxes to place blistering numbers of currency trades in nano seconds.

Lots of influential people question their activities and want the hammer brought down. They might have a point.

http://www.independent.co.uk/news/business/analysis-and-features/special-report-after-libor-where-will-the-next-scandal-be-7946899.html

Germany no longer considered Safe Haven

 'When your ship is sinking, there is no safe room on board. Likewise, when Europe is sinking, there is no safe country in which to stash your money. No, not even Germany.

Investors have been remarkably slow to grasp this simple truth...'

http://www.businessweek.com/articles/2012-07-24/germany-is-no-longer-a-safe-haven#r=read

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Euro crisis brings world to brink of depression

WASHINGTON (MarketWatch) — Europe is a tinderbox waiting for a spark.

The financial volatility in Europe may have created a situation that is now beyond the capacity of policy makers to control or curb.

When an accomplished fixer like Pascal Lamy, the head of the World Trade Organization and the longtime chief of staff for former European Commission President Jacques Delors, describes the situation in Europe as “difficult, very difficult, very difficult, very difficult,” you know it is time to run for cover.

http://www.marketwatch.com/Story/story/print?guid=EC6D6916-D59F-11E1-B099-002128049AD6

Moody's downgrades outlook for Germany, Luxembourg, and Netherlands from AAA

Moody's Investors Service has today revised to negative from stable the outlooks on the Aaa sovereign ratings of Germany, the Netherlands and Luxembourg. In addition, Moody's has also affirmed Finland's Aaa rating and stable outlook.


http://www.telegraph.co.uk/finance/financialcrisis/9422167/Moodys-put-negative-outlook-on-Germany-the-full-text.html

Banks charged for bid rigging, LIBOR fixing, and other fraud

Bid-rigging was the subject of U.S. v. Carollo, Goldberg and Grimm, a ten-year suit in which the U.S. Department of Justice obtained a judgment on May 11 against three GE Capital employees.  Billions of dollars were skimmed from cities all across America by colluding to rig the public bids on municipal bonds, a business worth $3.7 trillion.  Other banks involved in the bidding scheme included Bank of America, JPMorgan Chase, Wells Fargo and UBS.  These banks have already paid a total of $673 million in restitution after agreeing to cooperate in the government’s case.


http://www.marketoracle.co.uk/Article35713.html

"And remember, where you have a concentration of power in a few hands, all too frequently men with the mentality of gangsters get control. History has proven that." John Dalberg Lord Acton

This HSBC scandal is being overshadowed by LIBOR a bit in the States at least, and the usual diversions of the day to day, but it seems about to explode into the headlines of the insular major media.


http://www.marketoracle.co.uk/Article35718.html

Spain yields soar, more Europe market turmoil

Europe was plunged into fresh market turmoil as this week’s visit by Greece’s creditors rekindled concern the currency union will splinter and the first call for bailout aid by a Spanish region caused borrowing costs to surge.

Stocks and the euro fell before the arrival in Athens tomorrow of Greece’s troika of international creditors -- the European Commission, the European Central Bank and the International Monetary Fund. In Spain, Catalonia joined a list of the country’s regions that may tap aid from the central government in Madrid, spurring Spanish 10-year yields to surge above 7.5 percent for the first time.

http://www.bloomberg.com/news/2012-07-22/greece-back-at-center-of-euro-crisis-as-exit-talk-resurfaces.html

PFG trustee establishes website

As you aware, PFG filed for liquidation in a U.S. bankruptcy court in Chicago and the U.S. Trustee appointed Ira Bodenstein to act as trustee for PFG and its assets, including customer property. On July 13, the bankruptcy court authorized the trustee to continue to operate PFG's business for a limited time in order to (among other things) prepare and distribute final customer statements, and record transactions related to customer accounts. It likely will take several days for the trustee, working with the remaining PFG employees that he has been authorized by the bankruptcy court to employ, to complete that process. At this time, it is not clear when the trustee will be authorized to release any funds to customers.

In addition, the trustee has established a website www.PFGChapter7.com that contains information about the PFG case. The website was created to assist the trustee in providing information to customers and to receive comments or questions from customers.

https://www.nfa.futures.org/NFA-investor-information/PFG.HTML

How top executives lived in 1955

Editor's note: Every Sunday, Fortune publishes a story from our magazine archives. With the annual Fortune 500 list ready to be revealed tomorrow, turn this week to our inaugural Fortune 500 list, in July, 1955. General Motors topped the list that year, and writer Duncan Norton-Taylor took an inside look into the lives of America's top executives. What does the boss do with his spare hours--if any? How do vice presidents spend their money, and their time away from the office? Here, some glimpses into the private lives of executives in 1955 who earned more than $50,000.


http://features.blogs.fortune.cnn.com/2012/05/06/classic-top-500-executives/

21 Trillion or more hidden in tax havens

A global super-rich elite had at least $21 trillion (£13tn) hidden in secret tax havens by the end of 2010, according to a major study.

The figure is equivalent to the size of the US and Japanese economies combined.

The Price of Offshore Revisited was written by James Henry, a former chief economist at the consultancy McKinsey, for by the Tax Justice Network.

Tax expert and UK government adviser John Whiting said he was sceptical that the amount hidden was so large.

Mr Whiting, director of the Office of Tax Simplification, said: "There clearly are some significant amounts hidden away, but if it really is that size what is being done with it all?"

Mr Henry said his $21tn is actually a conservative figure and the true scale could be $32tn. A trillion is 1,000 billion.

http://www.bbc.co.uk/news/business-18944097