Search This Blog


Search Tool

Nov 5, 2012

GATA | THE GATA DISPATCH -November 5, 2012-: QE3 is all talk, no action yet, Turk tells King World News

QE3 is all talk, no action yet, Turk tells King World News

9:35p ET Monday, November 5, 2012

GoldMoney founder and GATA consultant James Turk today tells King World News that the third installment of the Federal Reserve's program of "quantitative easing" has been all talk and no action so far. "If the Fed doesn't start pumping juice soon, the stock market could tank," Turk says. "It's not the economy that has kept stock prices up at these levels. It is Fed money printing." An excerpt from Turk's interview is posted at the King World News blog here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

GATA | THE GATA DISPATCH -November 5, 2012-: Battling emus and gold, India wants more people to buy shares

Battling emus and gold, India wants more people to buy shares

Where's Bernie Madoff when you need him? Why not just parole him to New Delhi?
* * *
By Himank Sharma and Arup Roychoudhury
Monday, November 5, 2012

A year ago, S. Kashinath, an illiterate laborer from India's southern Tamil Nadu state, lost 300,000 rupees ($5,600) in savings he invested in a pyramid scheme promising high returns from emu farming.
Now Kashinath, and around 23 million other low- to middle-income Indians, are being courted by a government scheme to boost investment in local stock markets.

The recently introduced Rajiv Gandhi Equity Savings Scheme (RGESS)-- named after a popular prime minister who was assassinated in 1991 -- offers Indian investors earning less than 1 million rupees ($18,600) a year a 50 percent tax break on stock investments of up to 50,000 rupees.

But Kashinath thinks the plan has as much chance of flying as the Australian birds he bought into.
"I can't even read or write. How do you expect me to buy stocks that I don't understand? My money is stuck, but once I get it back, I'll open a bank account to keep it safe," he told Reuters by telephone.

 The ambitious scheme, which aims to broaden share ownership, re-energize an unprofitable mutual fund industry, and bring some structure to a patchy investment landscape, faces formidable barriers -- not least India's love affair with gold.

India has one of the world's highest savings rates, at over 30 percent -- more than double the United States -- and the bulk of the nation's $800 billion in savings is parked in gold. India is the world's biggest gold buyer and holds $1 trillion worth of the precious metal, World Gold Council data shows -- more than the combined military spending by the United States, China, Russia, and Great Britain.

"Gold holds an emotional charm for most Indians. Those are some big shoes to fill for any sort of investment," said V. Ramesh, deputy CEO of the Association of Mutual Funds in India.

Indians also save cash and in bank savings or certificates of deposit, and increasingly invest in property.
Buying shares just doesn't figure for most. Fewer than 5 in every 100 Indians buy equities either directly or through mutual funds, regulatory data show, compared with Gallup's estimate of more than half of Americans -- many through their 401k pension plans. In China, an estimated 86 percent of average trading on domestic markets is carried out by retail investors.

The investment scheme is the brainchild of Thomas Mathew, a former finance ministry official, who reckons more than 23 million Indians -- out of a population of 1.2 billion -- could be eligible targets. If they all invest the maximum, there could be a potential inflow of 116 trillion rupees ($2.16 trillion) -- more than double the country's gold assets.

"We need to go forward with a lot of investor education and financial literacy to drive home the point that equity is not a dangerous animal," Mathew told Reuters. "We have to tap the psyche of people. The dinner-table conversations, the tea shop talk. That's how the education takes place."

But fund managers say it will be costly and difficult to tap into these millions of small and often skeptical investors, many of whom live in small towns and rural areas and don't trust big-city stock markets.
"One thing's very clear: The government's intention is to make mutual funds more acceptable as an investment option on a pan-India basis," said Kailash Kulkarni, CEO of L&T Mutual Fund, which this year bought Fidelity's fund business in India. "But there's obviously a cost that will go into this, especially when it comes to getting the manpower in these small towns, and the time that has to be invested."

While the scheme could help reduce gold imports and the damage they have on India's current account deficit, the government also hopes to reduce market dependence on volatile foreign flows. India first allowed foreign investors to buy local shares in 1992, and they now hold nearly a fifth of the total, according to Morgan Stanley data.

Critics say the scheme could draw ordinary citizens into reckless investing as they have little or no expertise in stock buying. The government is trying to reduce the risks by allowing investments only in the top 100 stocks and encouraging people to buy shares through mutual funds or exchange-traded funds.
India's stock markets are notoriously volatile. The benchmark BSE index has risen or fallen by a double-digit percentage rate in 18 of the last 20 years. It is up by more than a fifth so far this year. That instability has already driven out many retail investors. Outflows from equity mutual funds in India rose to a two-year high in September, as investors cashed out of a stock rally.

"The Indian stock market is a bottomless pit. Why would I risk my money on shares when I can get 8-9 percent on fixed deposits?" said Harshala Apte, a primary schoolteacher in Mumbai whose father lost more than half his net worth in a bear run on the stock markets in 2009.

Jitu Dhabaria, an investment adviser in Kolkata, also remains to be convinced. "I've become resigned to getting panic calls from my investors every time the market loses a penny," he said.
Still, fund managers say they will consider the new scheme, despite the additional costs.

"It's a collective failure on our part that in a country of 1.2 billion people our combined assets are what? Some 220 billion rupees ($4.19 billion)," said Nandkumar Surti, CEO at JPMorgan Asset Management India, referring to the industry's assets under management.

Longer-term, the new scheme may herald a shift in India from what one fund manager executive calls an opportunistic model of attracting investors to a structural one, emulating the 401k pension model in the United States. The U.S. system, introduced more than three decades ago, allows workers to pay part of their salary into funds.
"India has lacked that structural market, but clearly there's an intent from the government and from the regulator to change that," said Saurabh Nanavati, CEO of Religare Mutual Fund.

For now, India doesn't allow mutual funds to develop pension plans, instead using a state-managed provident fund that invests mainly in government bonds. Until such a plan is brought in, the government is likely to struggle to win people like Kashinath, who is still smarting from his emu bet.
"Can you help me get my money back? There's a new bank that's promising good returns, I'll probably put it there," he said.

* * *

Join GATA here:
Vancouver Resource Investment Conference
Sunday-Monday, January 20 and 21, 2013
Vancouver Convention Centre West
Vancouver, British Columbia, Canada

NYT Global Update -November 5, 2012-.: A Sprint Through Swing States in the Campaign's Last Hours

Global Update


A Sprint Through Swing States in the Campaign's Last Hours

The presidential candidates and their supporters are offering one last burst of activity in a handful of swing states that will determine the occupant of the Oval Office next year.
The Caucus

Campaign Diary: Candidates Spending Final Day in Swing States

A running diary of the last day of campaigning for President Obama and Mitt Romney before Election Day.

His Last Race, Win or Lose

President Obama's checklist of "lasts" grew longer as he raced through a bone-weary last weekend before Tuesday's election.

Slide Show: The Nehru-Gandhi Dynasty

The mystique of the Nehru-Gandhi political family may be jeopardized by rapid change.

Op-Ed Contributor

The Permanent Militarization of America

We've ignored Dwight D. Eisenhower's warnings about the military-industrial complex, to our peril.

Syrian Rebels Claim to Kill Dozens of Soldiers on Especially Violent Day

Conflicting accounts emerged on the death toll from a car bomb near the central city of Hama, with rebels reporting dozens of soldiers dead and the government saying just two civilians were killed.

Five Bomb Blasts Hit Bahrain Capital

The bombs exploded in the heart of the capital, Manama, on Monday, killing two people, officials said.

In Fractious Political Times, a Scion of India's Dynasty Stays Quiet

Rahul Gandhi, the heir apparent of an Indian political dynasty, has been reluctant to step into the spotlight.

Proposal to Bolster Online Privacy Rules for Children Draws Opposition

Media and technology companies object to portions of a federal effort to strengthen online privacy protections for children.

HSBC Earnings Weighed Down by U.S. Money Laundering Inquiry

The British bank HSBC has set aside an additional $800 million connected to a money laundering investigation in the United States and says it may face criminal charges in the United States.

Taubman to Leave Morgan Stanley

Morgan Stanley said on Monday that Paul J. Taubman, one of the co-heads of its core securities arm and a top deal maker, would retire at the end of the year, in an unexpected shake-up of the firm's senior management.

Booksellers Resisting Amazon's Disruption

The mammoth retailer finds that its efforts to upend the traditional publishing model have unintended consequences.

Chinese Messaging App Gains Ground Elsewhere

The smartphone application WeChat is trying to establish itself as the dominant global player in an expanding market.
Critic's Notebook

Cool Vibes in Engine of Internet

Don't expect much new technology in two reality shows focusing on the digital world that make their debut on Bravo this week.

At Breeders' Cup, Soul-Stirring Results

Two days of horse races, including Royal Delta's victory in the Ladies' Classic, added weight to the argument that the caliber of the Breeders' Cup is on par with the Kentucky Derby or the Belmont Stakes.

Former Stars Bring Back Fall Tennis To New York

The PowerShare Series is using retired stars like Andre Agassi and Pete Sampras to bring new tennis events to several United States cities, including some abandoned by top-level events.

Raikkonen Wins, While Vettel Astonishes

Kimi Raikkonen drove from fourth place on the grid to victory 55 laps later at the Abu Dhabi Grand Prix on Sunday, but the race was just as notable for the heroics of Sebastian Vettel and Fernando Alonso.

After the Violence, the Rest of Their Lives

A Northwestern-led study has spent almost two decades tracking more than 1,800 youths who have gone through the juvenile justice system, mostly because of gang violence.

Record Numbers of Young Americans Earn Bachelor's Degree

This year, for the first time, a third of the nation's 25- to 29-year-olds have earned at least a bachelor's degree, according to an analysis of newly available census data.

Politics 101, Without the Classroom

Occidental College students who are allowed to spend a semester working on a political campaign get hands-on experience that no classroom can match.
Op-Ed Columnist

The Republican Id

At Miami University in Ohio, Paul Ryan's mentor provides a window into the party's thinking.
Op-Ed Columnist

Sandy Versus Katrina

The federal response to two hurricanes shows that government can help in times of crisis.
Op-Ed Columnist

The Spirit of America

At the close of this presidential campaign it is worth recalling that America is an idea, and one that dies when hope and possibility disappear.

DealBook Afternoon Edition -November 5, 2012-: Taubman to Leave Morgan Stanley:

Monday, November 5, 2012
Taubman to Leave Morgan Stanley Morgan Stanley said on Monday that Paul J. Taubman, one of the co-heads of its core securities arm and a top deal maker, planned to retire at the end of the year, effectively being forced out after losing a heated race to become the sole head of that division.

Instead, his co-head, Colm Kelleher, will become the president of the unit in January and will report to Morgan Stanley's chairman and chief executive, James P. Gorman.
    White Collar Watch: A Triple Whammy for Barclays Peter J. Henning says that just months after settling a rate-rigging investigation, Barclays now finds itself caught in two more inquiries - one related to energy price manipulation and the other involving the Foreign Corrupt Practices Act.
    Wall Street Turns to Hurricane Relief Financial firms have promised various forms of aid, including donations, loans and waived fees, and many in the financial industry are volunteering in recovery efforts.
    Ousted Duke Energy Chief Named Head of Tennessee Utility William D. Johnson, the ousted chief executive of Duke Energy, was named the new head of the Tennessee Valley Authority, the government-created provider of wholesale power in Tennessee and parts of six other southern states.
    Netflix Adopts Poison Pill Netflix announced that its board had adopted a shareholder rights plan, or poison pill, just days after the activist investor Carl C. Icahn disclosed he had acquired a 9.98 percent stake.
    Stifel Financial to Buy KBW for $575 Million The Stifel Financial Corporation agreed on Monday to buy the investment banking firm KBW Inc., acquiring a 50-year-old concern known for its role as an adviser to the financial services industry.
    UBS Revamps Its Investment Bank Only days after the Swiss bank announced 10,000 job cuts as part of a major overhaul, it has begun to reorganize its investment banking unit, according to an internal memorandum reviewed by DealBook.
    HSBC Earnings Weighed Down by U.S. Money Laundering Inquiry The British bank HSBC has set aside an additional $800 million connected to a money laundering investigation in the United States and says it may face criminal charges in the United States.
    Buzz Tracker
    Rothschild Proposes Alternative to Bumi Asset Sale The mining company said on Monday that it had received a proposal from the British financier, less than a month after Indonesian shareholders in Bumi had offered to buy its coal mining assets for around $1.2 billion.
    Corporate Earnings Companies scheduled to release quarterly earnings on Tuesday include BMW, Cablevision, CVS Caremark, Dish Network, Nissan Motor, NYSE Euronext, Office Depot and News Corporation.
  • DealBook Video
    Business Day Live: A Daunting Search for Shelter
    Business Day Live: A Daunting Search for Shelter At Rockaway Beach, residents are increasingly cold and scared. | Storm-battered supply chains threaten holiday shopping. | Media gear up to avoid gaffes on election night.

Wall Street at Close Report | MarketWatch -November 5, 2012-: U.S. stocks end higher ahead of election

By Polya Lesova

NEW YORK (MarketWatch) -- U.S. stocks ended with modest gains on Monday, with investors reluctant to make major moves ahead of the U.S. presidential election. The Dow Jones Industrial Average DJIA +0.15% rose 19.28 points, or 0.2%, to 13,112.44. The S&P 500 index SPX +0.22% gained 3.06 points, or 0.2%, to 1,417.26 and the tech-heavy Nasdaq Composite COMP +0.59% advanced 17.53 points, or 0.6%, to 2,999.66.

GATA | THE GATA DISPATCH: November 5, 2012-: Scotiabank is likely the new manipulative short in silver, Steer writes

Scotiabank is likely the new manipulative short in silver, Steer writes

3p ET Monday, November 4, 2012
Dear Friend of GATA and Gold:
GATA board member Ed Steer writes at his daily newsletter for Casey Research that Scotiabank has been dodging his questions about the bank's involvement in the silver market, so he concludes that Scotiabank is likely the new "non-U.S. bank" joining JPMorganChase as a big manipulative short in silver. Steer's commentary about Scotiabank is posted toward the bottom of his Saturday letter here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

NYT Business Day-Your Money -November 5, 2012-.: The Personal Finances of Politicians, Government Loans and Grant Programs for Storm Victims and More on Your Money

The New York Times

November 5, 2012

Business Day Your Money

Your Money Topics
Investments | Loans | Planning | Retirement | Credit | Insurance
Robert Neubecker/The New York Times
Your Money
Being Elected Is No Shield Against Money Woes
Ordinary voters aren't the only ones to confront foreclosures, tax woes and child-support payment problems. Consider the situation of Representative Joe Walsh, Republican of Illinois.
Wealth Matters

Safeguarding Your Assets Against the Hazards of a Lawsuit

Professionals like doctors and lawyers and anyone else who might be sued should work with an adviser to keep creditors from cleaning them out if they lose in court.


You Should Try a Multi-Day Spending Cleanse

You Should Try a Multi-Day Spending Cleanse

Going several days in a row without spending money may help you shake some bad financial habits - or recognize ones that you didn't realize you had.

Low-Interest Government Loans to Help With Storm Home Damage

Loans from the S.B.A. can help fund repairs to your home that aren't covered by insurance.

A Grant Program for Some Storm-Weary Property Owners

The federal Hazard Mitigation Grant Program may be an option for property owners who want to relocate.

An Option for All That Halloween Candy

You can turn excess Halloween candy into care packages for troops overseas.


Interactive Graphic: Is It Better to Buy or Rent?

The answer to the question depends on many factors. Compare the costs of buying and renting equivalent homes.

The 1% More Savings Calculator

What would happen to your savings balances if you saved just one percent more a year?
Wealth Special Section

Financial Survival in a Time of Fiscal Peril

However Congress and the White House confront the impending "fiscal cliff," the months ahead are likely to be tumultuous. What should an investor do?


A blog about consumer tactics, helping readers sort out the choices in their financial lives.

A New Reality About What a Family Can Really Afford

Parents and children may need to realign their attitudes and expectations as they grapple with the economic turmoil that has troubled the country.

Borrowing to Build Your Own Home

Local banks are more comfortable making home construction loans because they know the local market, but qualifying for one can get complicated.
A fallen tree in Fairhaven, Mass. Home insurance policies typically have a provision that stipulates higher deductibles for damage caused by a hurricane.

Governors Promote Lower Deductibles for Homeowners

Homeowners who suffered wind and storm damage this week will get financial relief from rulings that insurers must treat Sandy as a tropical storm and not a hurricane.
Jason Locke swept water and mud out the door of his parents' house in Westport, Mass., on Tuesday.

For Flood Victims, Another Blow Is Possible

Many may find that their flood insurance has lapsed or that their homeowners' policy will not cover the damage.
Interactive Feature: The Sketchpad: Personal Finance on a Napkin
Carl Richards, a financial planner, has been explaining the basics of money through simple graphs and diagrams.