Smart vs. Dumb

The "smart money"

"American Economy Rebounding as Investor Favorite in Global Poll" (Bloomberg)

The U.S. receives its highest rating from international investors in more than two years on new optimism that the world’s largest economy will weather the financial crisis in Europe and avoid a recession in 2012, according to a Bloomberg poll.

...

The U.S. “may not be in the best shape ever, but compared to others it should outperform,” Alexis Laming, a poll respondent and associate director for Arab Bank (Switzerland) Ltd. in Geneva, says in an e-mail. It has “good growth potential for next year.”

Less than a quarter of investors say they expect the U.S. to relapse into recession within the next year, according to the poll. In September, half those surveyed forecast a U.S. economic contraction within that time frame.

Clueless idiots who have no idea what is going on in the economy

"Latest MerchantCircle Survey of Local Merchants Shows Decreasing Business Optimism as Hopes of a Near-Term Economic Recovery Have Faded" (Marketwire)

MerchantCircle, the largest social network of local business owners in the nation, today issued the results of its seventh Merchant Confidence Index, a survey of local business owners across the country sharing their confidence levels in the current economy, and their expectations of future revenue, marketing spend and hiring. The results of the 2011 Q4 survey of more than 2,500 local merchants indicate that business optimism has decreased over the past six months. The current MCI score is 59.4 out of 100, down 6 percent from the score of 63.2 in June 2011.

"Merchants are adjusting their expectations as their overall confidence in the economy recovery has waned," said Darren Waddell, EVP of product and marketing at Reply!, Inc., the parent company of MerchantCircle.com. "We are seeing merchants continue to tighten their belts and either maintain or reduce their marketing budgets, and also slow down hiring, as hopes of near-term economic improvement have declined."

(Editor's note: oops -- apologies for transposing those headers!)

Comments

[Truth vs lies]

Jon Corzine Dodges the Fraud Question

It's as if Jon Corzine's PR machine is in top spin mode. You'll recall Jon Corzine is the former head of Goldman Sachs and former CEO of MF Global that appeared in front of Congress yesterday to answer questions about an estimated $600 million to $1.2 billion in missing money from the segregated accounts of customers of MF Global.

Yesterday and today, I heard confusion about whether or not MF Global's diverting customer funds was allowable and the possibility that customers will eventually get the money back.

Let me be clear. The diverting of customer funds from segregated accounts is not legal or allowable, and even if the money is later "found" it is fraud.

Jon Corzine was a bond trader in his past life and he says he doesn't know where the money is and that he didn't understand the details of the operations of MF Global, which appear to be a mess due to negligence or intent.

Instead of unwinding the trades, it appears that MF Global illegally wired money from customer accounts to satisfy margin calls on MF Global's trades. If that illegal activity happened, Corzine as a bond trader aware of risk and as the head of MF Global, knew it or should have known it. This should be the focus of Congress' investigation. Wire fraud is a federal crime.

http://www.huffingtonpost.com/janet-tavakoli/jon-corzine-dodges-the-fr_b_1138625.html

[Depends on who the end payer is]

Taking Profit from the Mouths of Babes
How the combination of tax policy and Wall Street greed results in the systematic bilking of Medicaid and a generation of traumatized children.
By Jim Moriarty and Kevin Tumlinson

There's an old party game where someone asks, "What would you do for a million dollars?"

Answering this question can reveal a lot about you as a person. Would you steal for the money? Would you hurt someone? Would you hurt a child?

As empathetic, moral, and ethical human beings we hope there is a line we would refuse to cross. It's wrong to steal, we say. It's horrible to hurt someone for money. And it is absolutely unthinkable to hurt a child under any circumstances.

The problem is pretty simple. Wall Street hedge funds and private equity groups have discovered a veritable gold mine. They mine for gold by purchasing dental clinics, paying one of their employee dentists to pretend that he/she actually owns and controls the clinics, and then treating incoming patients with a laser-like focus on increased profits. The corporate control business model puts financial goals over legitimate dental needs, and the primary target is in Medicaid-paid dental services to children.

Converting these small dental practices into large corporate-run practices has opened a way for dentists to make tens or even hundreds of millions, but it has also opened the door to systematic corruption and abuse. To increase the number of procedures performed, dentists are performing procedures that are unnecessary and perhaps even unwise. Their victims are often lower-income families, who neither realize anything is wrong nor that they can fight back. This happens every day, to thousands of children, across America.

http://www.moriarty.com/abusivedentalclinics/Updates/Mouths_Of_Babes/

[Inside out]

Why Is Eric Cantor Blocking the Congressional Insider Trading Act?

In a strange and unexpected twist, the Republican leader in the House of Representatives is now blocking progress on a bill that would definitively outlaw insider trading by federal lawmakers.

The Republican sponsor of the bill in the House, Financial Services Chairman Spencer Bachus of Alabama, had scheduled a markup of the Stop Trading on Congressional Knowledge (STOCK) Act for next week. But on Wednesday, Majority Leader Eric Cantor of Virginia cancelled the markup session.

Cantor reportedly said he blocked the bill to give Congress more time to examine the issue. Critics of the move, however, fear that any delay could kill the bill entirely.

http://finance.yahoo.com/news/why-eric-cantor-blocking-congressional-184435883.html?l=1

[very dumb]

Goldman Sachs Group Inc. (GS) plans to issue four certificates of deposit linked to stocks as record low interest rates drive investor demand for the potentially higher-yielding CDs.

In other words in the event of a big rally in the market on the month Goldman will keep much if not most of the profit. In the event of a big crash, you will eat the loss.

Why would anyone buy such a product? There's no reason to do so, and if there's any sort of fiduciary responsibility associated with the seller I'd love to see their argument justifying how this isn't a raw violation of that responsibility.

Since this is listed as a "CD" I presume it falls under FDIC coverage if Goldman fails.

http://market-ticker.org/akcs-www?post=198914