Zephyr Global Report, 2/20/2013


-Gold Slammed by Cartel Intervention on FED scripted FOMC minutes released and lousy USA PPI report

-Office Max/Depot announce $1.2 bln merger deal.

-Moody’s says China avoided hard landing; Sees 2013 GDP at upper end of 7.5-8.5% range.

-German Bund auction near fail.

-BOE Report Dovish, King Outvoted. No change.

-Boeing Engineers Approve New Contract, Technicians vote to authorize strike

-RBNZ Gov talks down Kiwi, threatens intervention.

-Kloppers out at BHP

-Detroit to be put into State Receivership

-Muto out as next BOJ Governor to replace Shirakawa

Market Commentary

-Lance Armstrong’s doped-up career won him a record $218 million |http://bloom.bg/Xlph6Z

Still not what an LBMA mm and gold short has on the books. Same MO though.

-Closing Summary

I did not exactly cover myself in trading glory today by going neutral in the pre-markets, but my program sold my longs as the day started and the markets did not rally into the FMOC. Someone clearly knew what was going to be in those minutes as the markets were down substantially ahead of them. This is why GS and JPM never have losing days trading and why HSBC seldom does either. I should have made more money on the short side today, but made a bad decision in the premarkets to go flat SPY/DIA before leaving the short to ride.

The FEDs number one job is to maintain its street credibility and the franchise for printing money and to remain covert, and private, and in charge of auditing itself. Given the scathing Nomura comment where they call the BOE’s MPC a joke for always predicting disinflation that never happens, one can see the FED can’t be put in the same position and enjoy its vaunted position of whipsawing markets every which way and that just by its rhetoric and it is willing to whipsaw markets with these staged comments and gold interventions and calculated ambivalence in their minutes just to maintain the upper hand on the markets. Given its balance sheet that game will be over at some point and the FED will have to like the BOE admit it is a craven money printing whore. Even if the FED were to stop QE, the Obama deficits just keep growing.

The headline whole sale inflation number is still 2.4 pc y/y if you consider the .2 pc rise last month which risibly does not contain gasoline/diesel costs which surged. The FED had its shills and minions in place with articles that said, ‘see the FED can print (although it only really started to do so 4 week ago) and no inflation is creeping into the wholesale pipeline.’ Farming costs are up about 20 % y/y , yet prices are down simply as the FED thinks its job is to squeeze commodity producers using its member firms naked shorting those markets and take the money from the producers pockets to put them in the banksters pockets under the guise the politicians don’t like the price of milk or break to rise or they lose office.  And the FED is trying to always obfuscate the fact that its monetary operations are the major source of inflation.

Traditionally days like this when we have lousy inflation data the FED and its member firms love to whack gold. Especially when the FMOC notes can be used to instill FUD in the markets, if the FED will continue with QE or not. In addition if you read the paper or know history today is the day of the Amritsar massacre in Indian where the English military opened fired and murdered 1000 East Indians and wounded thousand more, who protested their colonial occupation. The FED since its inception, has always been a 50 pc Satanic Jew and 50 % satanic Anglosaxon operation  and the East Indians are importing a lot of gold through the black market as their government runs these enormous trade imbalances and prints money to cover them.


Gross: Fed minutes:“Many” participnts concernd abt furthr asset purchases. 85bln/month appears 2 be @ risk later in 2013 if economy improves

CBOE Gold Miners ETF Volatility Index- VXGDX +10.7% to 31.08


I added to my physical silver position near the close. The FED and UST have had no luck in bribing or threatening Iran to stop its gold for oil program and physical demand is killing London and only being filled by the Gold the Kike Draghi is coordinating lending them from the European Central banks. Today Kike Draghi (he wants you to call him ‘Count’ but I won’t ) called upon his kinsman Lew the Jew to swing the big sledge hammer also wanting to take gold down ahead of the Italian elections this weekend.

They painted the death cross in gold ran the stops under 1600 and got black boxes to sell. You’ve got all these people selling gold they simply don’t have. I don’t believe the rumor that London was trying to float that a big fund was liquidating and being called nor the rumor it was John Paulson although he is clearly in the SEC /UST cross-hairs. The English are enormous liars and braggarts and have floated rumors like to aid their bear raids for as long as I have traded the gold markets.

Nothing fundamentally has changed to alter the gold bull market direction, in fact this brutal hammering that started with Draghi and his OMT/LTRO scam and run up of the ECB balance sheet to $ 3 trillion is more a mark of desperation than anything else. When will it end, no one really knows and probably one day we will come in and the LBMA will be in default or the CME. Look at how desperate they were to instruct Corzine to outright steal to cover money/gold they were short in London on the MFG take down. Small consolation he will be banned for life.

The FED, the BOE, and the ECB are criminal enterprises, run by the global Jewish-Anglosaxon mob in order to impoverish the working and middle classes and enrich the royal, political and banker class. Don’t forget that. These are cruel institutions of repression.

4:00 p.m. EST 02/20/13Major Stock Indexes
Last Change % Chg
DJIA 13924.54 -111.13 -0.79
Nasdaq 3164.41 -49.19 -1.53
S&P 500 1511.62 -19.32 -1.26
DJ Total Stock Market 15780.20 -214.95 -1.34
Russell 2000 916.81 -15.19 -1.63
Global Dow 2100.71 -16.18 -0.76
Japan: Nikkei Average* 11468.28 95.94 0.84
Stoxx Europe 600* 289.07 -0.94 -0.32
UK: FTSE 100* 6395.37 16.30 0.26
4:00 p.m. EST 02/20/13Treasurys
Price Chg Yield %
2-Year Note 1/32 0.270
10-Year Note 5/32 2.014
* at close
3:50 p.m. EST 02/20/13Futures
Last Change Settle
Crude Oil 94.77 -1.89 96.66
Gold 1563.5 -40.7 1578.0
E-mini Dow 13912 -95 14007
E-mini S&P 500 1510.75 -17.25 1528.00
4:00 p.m. EST 02/20/13Currencies
Last (mid) Prior Day †
Japanese Yen (USD/JPY) 93.54 93.57
Euro (EUR/USD) 1.3275 1.3389
† Late New York trading.

-U.S. Banks Bigger Than GDP as Accounting Rift Masks Risk


-Market watch

2:43 p.m. EST 02/20/13Major Stock Indexes
Last Change % Chg
DJIA 13999.96 -35.71 -0.25
Nasdaq 3189.37 -24.23 -0.75
S&P 500 1521.44 -9.50 -0.62
DJ Total Stock Market 15890.60 -104.55 -0.65
Russell 2000 925.85 -6.15 -0.66
Global Dow 2105.50 -11.39 -0.54
Japan: Nikkei Average* 11468.28 95.94 0.84
Stoxx Europe 600* 289.07 -0.94 -0.32
UK: FTSE 100* 6395.37 16.30 0.26
2:43 p.m. EST 02/20/13Treasurys
Price Chg Yield %
2-Year Note 1/32 0.270
10-Year Note 1/32 2.029
* at close
2:33 p.m. EST 02/20/13Futures
Last Change Settle
Crude Oil 94.77 -1.89 96.66
Gold 1569.7 -34.5 1604.2
E-mini Dow 13993 -14 14007
E-mini S&P 500 1521.00 -7.00 1528.00
2:43 p.m. EST 02/20/13Currencies
Last (mid) Prior Day †
Japanese Yen (USD/JPY) 93.92 93.57
Euro (EUR/USD) 1.3280 1.3389
† Late New York trading.

-Fed just sowed FUD into the market participants. Pretty dovish in general. And then there was Walmart….

-January 29-30, 2013

  • FOMC Minutes
A meeting of the Federal Open Market Committee was held in the offices of the Board of Governors of the Federal Reserve System in Washington, D.C., on Tuesday, January 29, 2013, at 2:00 p.m., and continued on Wednesday, January 30, 2013, at 9:00 a.m.PRESENT:
Ben Bernanke, Chairman
William C. Dudley, Vice Chairman
James Bullard
Elizabeth Duke
Charles L. Evans
Esther L. George
Jerome H. Powell
Sarah Bloom Raskin
Eric Rosengren
Jeremy C. Stein
Daniel K. Tarullo
Janet L. YellenChristine Cumming, Richard W. Fisher, Narayana Kocherlakota, Sandra Pianalto, and Charles I. Plosser, Alternate Members of the Federal Open Market CommitteeJeffrey M. Lacker, Dennis P. Lockhart, and John C. Williams, Presidents of the Federal Reserve Banks of Richmond, Atlanta, and San Francisco, respectivelyWilliam B. English, Secretary and Economist
Deborah J. Danker, Deputy Secretary
Matthew M. Luecke, Assistant Secretary
David W. Skidmore, Assistant Secretary
Michelle A. Smith, Assistant Secretary
Scott G. Alvarez, General Counsel
Thomas C. Baxter, Deputy General Counsel
Steven B. Kamin, Economist
David W. Wilcox, EconomistThomas A. Connors, Troy Davig, Michael P. Leahy, James J. McAndrews, Stephen A. Meyer, David Reifschneider, Daniel G. Sullivan, Christopher J. Waller, and William Wascher, Associate EconomistsSimon Potter, Manager, System Open Market AccountNellie Liang,1 Director, Office of Financial Stability Policy and Research, Board of GovernorsJon W. Faust, Special Advisor to the Board, Office of Board Members, Board of GovernorsJames A. Clouse and William Nelson, Deputy Directors, Division of Monetary Affairs, Board of Governors; Mark E. Van Der Weide, Deputy Director, Division of Banking Supervision and Regulation, Board of GovernorsLinda Robertson, Assistant to the Board, Office of Board Members, Board of GovernorsJoyce K. Zickler, Senior Adviser, Division of Monetary Affairs, Board of GovernorsEric M. Engen, Thomas Laubach, and David E. Lebow, Associate Directors, Division of Research and Statistics, Board of Governors

Beth Anne Wilson, Deputy Associate Director, Division of International Finance, Board of Governors

Karen M. Pence and Stacey Tevlin, Assistant Directors, Division of Research and Statistics, Board of Governors

Jeremy B. Rudd, Adviser, Division of Research and Statistics, Board of Governors

David H. Small, Project Manager, Division of Monetary Affairs, Board of Governors

Andrew Figura, Group Manager, Division of Research and Statistics, Board of Governors

John C. Driscoll and Jennifer E. Roush, Senior Economists, Division of Monetary Affairs, Board of Governors; Ruth Judson, Senior Economist, Division of International Finance, Board of Governors

Jonathan D. Rose, Economist, Division of Monetary Affairs, Board of Governors

Sarah G. Green, First Vice President, Federal Reserve Bank of Richmond

David Altig, Jeff Fuhrer, Loretta J. Mester, Glenn D. Rudebusch, and Mark S. Sniderman, Executive Vice Presidents, Federal Reserve Banks of Atlanta, Boston, Philadelphia, San Francisco, and Cleveland, respectively

Ron Feldman and Lorie K. Logan, Senior Vice Presidents, Federal Reserve Banks of Minneapolis and New York, respectively

Evan F. Koenig and Steven M. Friedman, Vice Presidents, Federal Reserve Banks of Dallas and New York, respectively

Matthew D. Raskin, Markets Officer, Federal Reserve Bank of New York

Robert L. Hetzel, Senior Economist, Federal Reserve Bank of Richmond

Annual Organizational Matters2
In the agenda for this meeting, it was reported that advices of the election of the following members and alternate members of the Federal Open Market Committee for a term beginning January 29, 2013, had been received and that these individuals had executed their oaths of office.

The elected members and alternate members were as follows:

William C. Dudley, President of the Federal Reserve Bank of New York, with Christine Cumming, First Vice President of the Federal Reserve Bank of New York, as alternate.

Eric Rosengren, President of the Federal Reserve Bank of Boston, with Charles I. Plosser, President of the Federal Reserve Bank of Philadelphia, as alternate.

Charles L. Evans, President of the Federal Reserve Bank of Chicago, with Sandra Pianalto, President of the Federal Reserve Bank of Cleveland, as alternate.

James Bullard, President of the Federal Reserve Bank of St. Louis, with Richard W. Fisher, President of the Federal Reserve Bank of Dallas, as alternate.

Esther L. George, President of the Federal Reserve Bank of Kansas City, with Narayana Kocherlakota, President of the Federal Reserve Bank of Minneapolis, as alternate.

By unanimous vote, the following officers of the Federal Open Market Committee were selected to serve until the selection of their successors at the first regularly scheduled meeting of the Committee in 2014:

Ben Bernanke Chairman
William C. Dudley Vice Chairman
William B. English Secretary and Economist
Deborah J. Danker Deputy Secretary
Matthew M. Luecke Assistant Secretary
David W. Skidmore Assistant Secretary
Michelle A. Smith Assistant Secretary
Scott G. Alvarez General Counsel
Thomas C. Baxter Deputy General Counsel
Richard M. Ashton Assistant General Counsel
Steven B. Kamin Economist
David W. Wilcox Economist
Thomas A. Connors
Troy Davig
Michael P. Leahy
James J. McAndrews
Stephen A. Meyer
David Reifschneider
Daniel G. Sullivan
Geoffrey Tootell
Christopher J. Waller
William Wascher Associate Economists


By unanimous vote, the Federal Reserve Bank of New York was selected to execute transactions for the System Open Market Account.

By unanimous vote, Simon Potter was selected to serve at the pleasure of the Committee as Manager, System Open Market Account, on the understanding that his selection was subject to being satisfactory to the Federal Reserve Bank of New York.

Secretary’s note: Advice subsequently was received that the selection of Mr. Potter as Manager was satisfactory to the Federal Reserve Bank of New York.

By unanimous vote, the Authorization for Domestic Open Market Operations was approved with two amendments. The first broadened the actions that the Open Market Desk may take, at the Chairman’s instruction during an intermeeting period, to include transactions to address temporary disruptions of an operational or highly unusual nature in U.S. dollar funding markets. For example, if secured funding rates were to increase to high levels in the wake of a natural disaster, the risk of a broader, more systemic disruption to the functioning of asset markets could result. In this case, the prospect that repurchase operations could potentially alleviate some of the market strains might warrant immediate action. Consistent with Committee practice, the Chairman, if feasible, would consult with the Committee before making any such instruction. The second amendment harmonized the language referring to the Committee’s longer-run objectives with that in the Committee’s Statement on Longer-Run Goals and Monetary Policy Strategy. The Guidelines for the Conduct of System Open Market Operations in Federal-Agency Issues remained suspended.

(Amended effective on January 29, 2013)

1. The Federal Open Market Committee authorizes and directs the Federal Reserve Bank of New York, to the extent necessary to carry out the most recent domestic policy directive adopted at a meeting of the Committee:

A. To buy or sell U.S. government securities, including securities of the Federal Financing Bank, and securities that are direct obligations of, or fully guaranteed as to principal and interest by, any agency of the United States in the open market, from or to securities dealers and foreign and international accounts maintained at the Federal Reserve Bank of New York, on a cash, regular, or deferred delivery basis, for the System Open Market Account at market prices, and, for such Account, to exchange maturing U.S. government and federal agency securities with the Treasury or the individual agencies or to allow them to mature without replacement; and

B. To buy or sell in the open market U.S. government securities, and securities that are direct obligations of, or fully guaranteed as to principal and interest by, any agency of the United States, for the System Open Market Account under agreements to resell or repurchase such securities or obligations (including such transactions as are commonly referred to as repo and reverse repo transactions) in 65 business days or less, at rates that, unless otherwise expressly authorized by the Committee, shall be determined by competitive bidding, after applying reasonable limitations on the volume of agreements with individual counterparties.

2. The Federal Open Market Committee authorizes the Federal Reserve Bank of New York to undertake transactions of the type described in paragraphs 1.A and 1.B from time to time for the purpose of testing operational readiness. The aggregate par value of such transactions of the type described in paragraph 1.A shall not exceed $5 billion per calendar year. The outstanding amount of such transactions of the type described in paragraph 1.B shall not exceed $5 billion at any given time. These transactions shall be conducted with prior notice to the Committee.

3. In order to ensure the effective conduct of open market operations, the Federal Open Market Committee authorizes the Federal Reserve Bank of New York to use agents in agency MBS-related transactions.

4. In order to ensure the effective conduct of open market operations, the Federal Open Market Committee authorizes the Federal Reserve Bank of New York to lend on an overnight basis U.S. government securities and securities that are direct obligations of any agency of the United States, held in the System Open Market Account, to dealers at rates that shall be determined by competitive bidding. The Federal Reserve Bank of New York shall set a minimum lending fee consistent with the objectives of the program and apply reasonable limitations on the total amount of a specific issue that may be auctioned and on the amount of securities that each dealer may borrow. The Federal Reserve Bank of New York may reject bids that could facilitate a dealer’s ability to control a single issue as determined solely by the Federal Reserve Bank of New York. The Federal Reserve Bank of New York may lend securities on longer than an overnight basis to accommodate weekend, holiday, and similar trading conventions.

5. In order to ensure the effective conduct of open market operations, while assisting in the provision of short-term investments or other authorized services for foreign and international accounts maintained at the Federal Reserve Bank of New York and accounts maintained at the Federal Reserve Bank of New York as fiscal agent of the United States pursuant to section 15 of the Federal Reserve Act, the Federal Open Market Committee authorizes and directs the Federal Reserve Bank of New York:

A. For the System Open Market Account, to sell U.S. government securities and securities that are direct obligations of, or fully guaranteed as to principal and interest by, any agency of the United States to such accounts on the bases set forth in paragraph 1.A under agreements providing for the resale by such accounts of those securities in 65 business days or less on terms comparable to those available on such transactions in the market;

B. For the New York Bank account, when appropriate, to undertake with dealers, subject to the conditions imposed on purchases and sales of securities in paragraph l.B, repurchase agreements in U.S. government securities and securities that are direct obligations of, or fully guaranteed as to principal and interest by, any agency of the United States, and to arrange corresponding sale and repurchase agreements between its own account and such foreign, international, and fiscal agency accounts maintained at the Bank; and

C. For the New York Bank account, when appropriate, to buy U.S. government securities and obligations that are direct obligations of, or fully guaranteed as to principal and interest by, any agency of the United States from such foreign and international accounts maintained at the Bank under agreements providing for the repurchase by such accounts of those securities on the same business day.

Transactions undertaken with such accounts under the provisions of this paragraph may provide for a service fee when appropriate.

6. In the execution of the Committee’s decision regarding policy during any intermeeting period, the Committee authorizes and directs the Federal Reserve Bank of New York, upon the instruction of the Chairman of the Committee, to (i) adjust somewhat in exceptional circumstances the degree of pressure on reserve positions and hence the intended federal funds rate and to take actions that result in material changes in the composition and size of the assets in the System Open Market Account other than those anticipated by the Committee at its most recent meeting or (ii) undertake transactions of the type described in paragraphs 1.A and 1.B in order to appropriately address temporary disruptions of an operational or highly unusual nature in U.S. dollar funding markets. Any such adjustment as described in clause (i) shall be made in the context of the Committee’s discussion and decision at its most recent meeting and the Committee’s long-run objectives to foster maximum employment and price stability, and shall be based on economic, financial, and monetary developments during the intermeeting period. Consistent with Committee practice, the Chairman, if feasible, will consult with the Committee before making any instruction under this paragraph.

The Committee voted unanimously to amend the Authorization for Foreign Currency Operations and the Procedural Instructions with Respect to Foreign Currency Operations, and to reaffirm the Foreign Currency Directive in the form shown below. The approval of these documents included approval of the System’s warehousing agreement with the U.S. Treasury. The Authorization for Foreign Currency Operations and the Procedural Instructions with Respect to Foreign Currency Operations were amended to include the authority to conduct small-value operations against the full range of foreign transactions that the Desk is authorized to conduct. This change was made to allow for prudent testing of operational readiness, and is similar in purpose to the amendment that the Committee approved in June 2012 to the Authorization for Domestic Open Market Operations.

(Amended effective on January 29, 2013)

1. The Federal Open Market Committee authorizes and directs the Federal Reserve Bank of New York, for the System Open Market Account, to the extent necessary to carry out the Committee’s foreign currency directive and express authorizations by the Committee pursuant thereto, and in conformity with such procedural instructions as the Committee may issue from time to time:

A. To purchase and sell the following foreign currencies in the form of cable transfers through spot or forward transactions on the open market at home and abroad, including transactions with the U.S. Treasury, with the U.S. Exchange Stabilization Fund established by section 10 of the Gold Reserve Act of 1934, with foreign monetary authorities, with the Bank for International Settlements, and with other international financial institutions:

Australian dollars
Brazilian reais
Canadian dollars
Danish kroner
Japanese yen
Korean won
Mexican pesos
New Zealand dollars
Norwegian kroner
Pounds sterling
Singapore dollars
Swedish kronor
Swiss francs

B. To hold balances of, and to have outstanding forward contracts to receive or to deliver, the foreign currencies listed in paragraph A above.

C. To draw foreign currencies and to permit foreign banks to draw dollars under the reciprocal currency arrangements listed in paragraph 2 below, provided that drawings by either party to any such arrangement shall be fully liquidated within 12 months after any amount outstanding at that time was first drawn, unless the Committee, because of exceptional circumstances, specifically authorizes a delay.

D. To maintain an overall open position in all foreign currencies not exceeding $25.0 billion. For this purpose, the overall open position in all foreign currencies is defined as the sum (disregarding signs) of net positions in individual currencies, excluding changes in dollar value due to foreign exchange rate movements and interest accruals. The net position in a single foreign currency is defined as holdings of balances in that currency, plus outstanding contracts for future receipt, minus outstanding contracts for future delivery of that currency, i.e., as the sum of these elements with due regard to sign.

2. The Federal Open Market Committee directs the Federal Reserve Bank of New York to maintain reciprocal currency arrangements (“swap” arrangements) for the System Open Market Account for periods up to a maximum of 12 months with the following foreign banks, which are among those designated by the Board of Governors of the Federal Reserve System under section 214.5 of Regulation N, Relations with Foreign Banks and Bankers, and with the approval of the Committee to renew such arrangements on maturity:

Foreign bank Amount of arrangement
(millions of dollars equivalent)
Bank of Canada 2,000
Bank of Mexico 3,000

Any changes in the terms of existing swap arrangements, and the proposed terms of any new arrangements that may be authorized, shall be referred for review and approval to the Committee.

3. All transactions in foreign currencies undertaken under paragraph 1.A above shall, unless otherwise expressly authorized by the Committee, be at prevailing market rates. For the purpose of providing an investment return on System holdings of foreign currencies or for the purpose of adjusting interest rates paid or received in connection with swap drawings, transactions with foreign central banks may be undertaken at non-market exchange rates.

4. It shall be the normal practice to arrange with foreign central banks for the coordination of foreign currency transactions. In making operating arrangements with foreign central banks on System holdings of foreign currencies, the Federal Reserve Bank of New York shall not commit itself to maintain any specific balance, unless authorized by the Federal Open Market Committee. Any agreements or understandings concerning the administration of the accounts maintained by the Federal Reserve Bank of New York with the foreign banks designated by the Board of Governors under section 214.5 of Regulation N shall be referred for review and approval to the Committee.

5. Foreign currency holdings shall be invested to ensure that adequate liquidity is maintained to meet anticipated needs and so that each currency portfolio shall generally have an average duration of no more than 18 months (calculated as Macaulay duration). Such investments may include buying or selling outright obligations of, or fully guaranteed as to principal and interest by, a foreign government or agency thereof; buying such securities under agreements for repurchase of such securities; selling such securities under agreements for the resale of such securities; and holding various time and other deposit accounts at foreign institutions. In addition, when appropriate in connection with arrangements to provide investment facilities for foreign currency holdings, U.S. government securities may be purchased from foreign central banks under agreements for repurchase of such securities within 30 calendar days.

6. All operations undertaken pursuant to the preceding paragraphs shall be reported promptly to the Foreign Currency Subcommittee and the Committee. The Foreign Currency Subcommittee consists of the Chairman and Vice Chairman of the Committee, the Vice Chairman of the Board of Governors, and such other member of the Board as the Chairman may designate (or in the absence of members of the Board serving on the Subcommittee, other Board members designated by the Chairman as alternates, and in the absence of the Vice Chairman of the Committee, the Vice Chairman’s alternate). Meetings of the Subcommittee shall be called at the request of any member, or at the request of the Manager, System Open Market Account (“Manager”), for the purposes of reviewing recent or contemplated operations and of consulting with the Manager on other matters relating to the Manager’s responsibilities. At the request of any member of the Subcommittee, questions arising from such reviews and consultations shall be referred for determination to the Federal Open Market Committee.

7. The Chairman is authorized:

A. With the approval of the Committee, to enter into any needed agreement or understanding with the Secretary of the Treasury about the division of responsibility for foreign currency operations between the System and the Treasury;

B. To keep the Secretary of the Treasury fully advised concerning System foreign currency operations, and to consult with the Secretary on policy matters relating to foreign currency operations;

C. From time to time, to transmit appropriate reports and information to the National Advisory Council on International Monetary and Financial Policies.

8. Staff officers of the Committee are authorized to transmit pertinent information on System foreign currency operations to appropriate officials of the Treasury Department.

9. All Federal Reserve Banks shall participate in the foreign currency operations for System Account in accordance with paragraph 3G(1) of the Board of Governors’ Statement of Procedure with Respect to Foreign Relationships of Federal Reserve Banks dated January 1, 1944.

10. The Federal Open Market Committee authorizes the Federal Reserve Bank of New York to undertake transactions of the type described in paragraphs 1, 2, and 5, and foreign exchange and investment transactions that it may be otherwise authorized to undertake from time to time for the purpose of testing operational readiness. The aggregate amount of such transactions shall not exceed $2.5 billion per calendar year. These transactions shall be conducted with prior notice to the Committee.

(Amended effective on January 29, 2013)

In conducting operations pursuant to the authorization and direction of the Federal Open Market Committee as set forth in the Authorization for Foreign Currency Operations and the Foreign Currency Directive, the Federal Reserve Bank of New York, through the Manager, System Open Market Account (“Manager”), shall be guided by the following procedural understandings with respect to consultations and clearances with the Committee, the Foreign Currency Subcommittee, and the Chairman of the Committee, unless otherwise directed by the Committee. All operations undertaken pursuant to such clearances shall be reported promptly to the Committee.

1. The Manager shall clear with the Subcommittee (or with the Chairman, if the Chairman believes that consultation with the Subcommittee is not feasible in the time available):

A. Any operation that would result in a change in the System’s overall open position in foreign currencies exceeding $300 million on any day or $600 million since the most recent regular meeting of the Committee.

B. Any operation that would result in a change on any day in the System’s net position in a single foreign currency exceeding $150 million, or $300 million when the operation is associated with re-payment of swap drawings.

C. Any operation that might generate a substantial volume of trading in a particular currency by the System, even though the change in the System’s net position in that currency might be less than the limits specified in 1.B.

D. Any swap drawing proposed by a foreign bank not exceeding the larger of (i) $200 million or (ii) 15 percent of the size of the swap arrangement.

2. The Manager shall clear with the Committee (or with the Subcommittee, if the Subcommittee believes that consultation with the full Committee is not feasible in the time available, or with the Chairman, if the Chairman believes that consultation with the Subcommittee is not feasible in the time available):

A. Any operation that would result in a change in the System’s overall open position in foreign currencies exceeding $1.5 billion since the most recent regular meeting of the Committee.

B. Any swap drawing proposed by a foreign bank exceeding the larger of (i) $200 million or (ii) 15 percent of the size of the swap arrangement.

3. The Manager shall also consult with the Subcommittee or the Chairman about proposed swap drawings by the System and about any operations that are not of a routine character.

4. The Federal Open Market Committee authorizes the Federal Reserve Bank of New York to undertake transactions of the type described in paragraphs 1, 2, and 5 of the Foreign Authorization and foreign exchange and investment transactions that it may be otherwise authorized to undertake from time to time for the purpose of testing operational readiness. The aggregate amount of such transactions shall not exceed $2.5 billion per calendar year. These transactions shall be conducted with prior notice to the Committee.

(Reaffirmed January 29, 2013)

1. System operations in foreign currencies shall generally be directed at countering disorderly market conditions, provided that market exchange rates for the U.S. dollar reflect actions and behavior consistent with IMF Article IV, Section 1.

2. To achieve this end the System shall:

A. Undertake spot and forward purchases and sales of foreign exchange.

B. Maintain reciprocal currency (“swap”) arrangements with selected foreign central banks.

C. Cooperate in other respects with central banks of other countries and with international monetary institutions.

3. Transactions may also be undertaken:

A. To adjust System balances in light of probable future needs for currencies.

B. To provide means for meeting System and Treasury commitments in particular currencies, and to facilitate operations of the Exchange Stabilization Fund.

C. For such other purposes as may be expressly authorized by the Committee.

4. System foreign currency operations shall be conducted:

A. In close and continuous consultation and cooperation with the United States Treasury;

B. In cooperation, as appropriate, with foreign monetary authorities; and

C. In a manner consistent with the obligations of the United States in the International Monetary Fund regarding exchange arrangements under IMF Article IV.

All participants but one supported making only minor wording changes to the Statement on Longer-Run Goals and Monetary Policy Strategy. Mr. Tarullo abstained because he did not think the statement had advanced the cause of achieving or communicating greater consensus in the policy views of the Committee.

(Amended effective on January 29, 2013)

“The Federal Open Market Committee (FOMC) is firmly committed to fulfilling its statutory mandate from the Congress of promoting maximum employment, stable prices, and moderate long-term interest rates. The Committee seeks to explain its monetary policy decisions to the public as clearly as possible. Such clarity facilitates well-informed decisionmaking by households and businesses, reduces economic and financial uncertainty, increases the effectiveness of monetary policy, and enhances transparency and accountability, which are essential in a democratic society.

Inflation, employment, and long-term interest rates fluctuate over time in response to economic and financial disturbances. Moreover, monetary policy actions tend to influence economic activity and prices with a lag. Therefore, the Committee’s policy decisions reflect its longer-run goals, its medium-term outlook, and its assessments of the balance of risks, including risks to the financial system that could impede the attainment of the Committee’s goals.

The inflation rate over the longer run is primarily determined by monetary policy, and hence the Committee has the ability to specify a longer-run goal for inflation. The Committee judges that inflation at the rate of 2 percent, as measured by the annual change in the price index for personal consumption expenditures, is most consistent over the longer run with the Federal Reserve’s statutory mandate. Communicating this inflation goal clearly to the public helps keep longer-term inflation expectations firmly anchored, thereby fostering price stability and moderate long-term interest rates and enhancing the Committee’s ability to promote maximum employment in the face of significant economic disturbances.

The maximum level of employment is largely determined by nonmonetary factors that affect the structure and dynamics of the labor market. These factors may change over time and may not be directly measurable. Consequently, it would not be appropriate to specify a fixed goal for employment; rather, the Committee’s policy decisions must be informed by assessments of the maximum level of employment, recognizing that such assessments are necessarily uncertain and subject to revision. The Committee considers a wide range of indicators in making these assessments. Information about Committee participants’ estimates of the longer-run normal rates of output growth and unemployment is published four times per year in the FOMC’s Summary of Economic Projections. For example, in the most recent projections, FOMC participants’ estimates of the longer-run normal rate of unemployment had a central tendency of 5.2 percent to 6.0 percent, unchanged from one year ago but substantially higher than the corresponding interval several years earlier.

In setting monetary policy, the Committee seeks to mitigate deviations of inflation from its longer-run goal and deviations of employment from the Committee’s assessments of its maximum level. These objectives are generally complementary. However, under circumstances in which the Committee judges that the objectives are not complementary, it follows a balanced approach in promoting them, taking into account the magnitude of the deviations and the potentially different time horizons over which employment and inflation are projected to return to levels judged consistent with its mandate.

The Committee intends to reaffirm these principles and to make adjustments as appropriate at its annual organizational meeting each January.”

By unanimous vote, the Policy on External Communications of Committee Participants and the Policy on External Communications of Federal Reserve System Staff were amended to clarify the precise beginning and end of the communication blackout period surrounding regular meetings of the Federal Open Market Committee (FOMC).

By unanimous vote, the Rules of Procedure were amended to change the quorum requirements to state that a meeting of the FOMC could not be convened without a representative of a Reserve Bank.

By unanimous vote, the Committee reaffirmed its Program for Security of FOMC Information.

Developments in Financial Markets and the Federal Reserve’s Balance Sheet
The Manager of the System Open Market Account (SOMA) reported on developments in domestic and foreign financial markets as well as the System open market operations during the period since the FOMC met on December 11-12, 2012. By unanimous vote, the Committee ratified the Open Market Desk’s domestic transactions over the intermeeting period. There were no intervention operations in foreign currencies for the System’s account over the intermeeting period.

Staff Review of the Economic Situation
The information reviewed at the January 29-30 meeting indicated that the expansion in overall economic activity slowed in the fourth quarter of last year, reflecting weather-related disruptions and other transitory factors, but private domestic final demand grew at a solid rate. Employment continued to increase at a moderate pace, and the unemployment rate, though still high, was lower at the end of the fourth quarter than in the preceding quarter. Consumer price inflation was subdued, and measures of longer-run inflation expectations remained stable.

Private nonfarm employment expanded in December at about the same rate as in the fourth quarter as a whole, while government employment decreased. The unemployment rate was 7.8 percent in December, below its average in the third quarter, while the labor force participation rate was the same as its third-quarter average. The rate of long-duration unemployment and the share of workers employed part time for economic reasons edged down in December, but both measures were still elevated. The rate of private-sector hiring, along with indicators of job openings and firms’ hiring plans, was generally muted but remained consistent with continued moderate increases in employment in the coming months.

Manufacturing production increased briskly in November and December after declining in October when activity was disrupted by Hurricane Sandy. As a result, factory output expanded only slightly in the fourth quarter as a whole, and the rate of manufacturing capacity utilization was only a little higher in December than in the third quarter. The production of motor vehicles and parts increased considerably in the fourth quarter, but factory output outside of the motor vehicle sector declined somewhat. Automakers’ schedules indicated that the pace of motor vehicle assemblies in the first quarter would be roughly the same as in the fourth quarter. Broader indicators of manufacturing production, such as the diffusion indexes of new orders from the national and regional manufacturing surveys, were at levels consistent with only modest increases in factory output in the near term.

Increases in real personal consumption expenditures picked up somewhat in the fourth quarter, boosted importantly by higher spending on motor vehicles. After being roughly flat in the third quarter, households’ real disposable income rose considerably, in part reflecting an acceleration of income payments in anticipation of increases in individual income tax rates after the turn of the year. In December and January, consumer sentiment was more downbeat than in the previous several months.

Conditions in the housing sector continued to improve, but construction activity remained at a relatively low level, restrained by tight underwriting standards for mortgage loans and the substantial inventory of foreclosed and distressed properties. Starts of both new single-family homes and multifamily units advanced in the fourth quarter, and permits also rose, which pointed to additional gains in construction in the coming months. Home prices increased further in November. In the fourth quarter, sales of both new and existing homes were higher than in the previous quarter.

Real business expenditures on equipment and software rose briskly in the fourth quarter after declining moderately in the preceding quarter. Although nominal new orders for nondefense capital goods excluding aircraft also increased markedly last quarter, the level of orders remained below shipments. Moreover, other recent forward-looking indicators, such as surveys of business conditions and capital spending plans, suggested that outlays for business equipment would rise only modestly in the coming months. Real business spending for nonresidential construction declined somewhat in the fourth quarter and remained at a relatively low level. A reduction in the accumulation of nonfarm business inventories subtracted a considerable amount from the change in real gross domestic product (GDP) in the fourth quarter.

Real federal government purchases decreased substantially in the fourth quarter, primarily because of a sharp decline in defense spending that followed a marked increase in the previous quarter. Real state and local government purchases decreased slightly in the fourth quarter.

The U.S. international trade deficit widened substantially in November, as imports rose more quickly than exports. The rise in imports was fairly broad-based, led by strong increases in consumer goods, while the increase in exports mainly reflected higher sales of capital goods and automotive products. Exports to Europe posted another significant decline in November. Based on data for October and November and an estimate of the trade data for December, the advance release of the national income and product accounts showed that real net exports of goods and services made a small negative arithmetic contribution to the change in U.S. real GDP in the fourth quarter, with exports declining more than imports.

Overall U.S. consumer prices increased more slowly in the fourth quarter than in the previous quarter. Consumer energy prices declined in November and December, and survey data indicated that retail gasoline prices fell further in the first few weeks of January. Consumer food prices continued to rise at a faster pace in November and December than in the third quarter, likely reflecting the ongoing effects of last summer’s drought. In the fourth quarter, the rise in consumer prices excluding food and energy slowed. Near-term inflation expectations from the Thomson Reuters/University of Michigan Surveys of Consumers rose a little in December and early January; longer-term inflation expectations were unchanged.

Available measures of labor compensation indicated that recent gains in nominal wages remained relatively slow. Increases in average hourly earnings for all employees picked up a little in the fourth quarter but continued to be fairly subdued.

Economic growth in the advanced foreign economies appeared to remain weak in the fourth quarter. In the euro area, industrial production and retail sales were below their third-quarter levels through November, and real GDP contracted in the United Kingdom. In Japan, indicators of production and exports remained weak; however, household consumption showed some improvement, and the new government introduced a large fiscal stimulus program and called for aggressive monetary easing to end deflation. In emerging market economies, real GDP growth is estimated to have picked up in China in the fourth quarter, consistent with other Chinese indicators that pointed to an improvement in activity. Production and exports rebounded at year-end in a number of other emerging Asian economies as well. Inflation generally remained well contained in both advanced foreign economies and emerging market economies.

Staff Review of the Financial Situation
U.S. financial market conditions improved on net between the December and January FOMC meetings, largely in response to the partial resolution of the issues associated with the so-called fiscal cliff, a positive start to the corporate earnings reporting season, and some favorable policy developments in Europe.

The expected path of the federal funds rate based on market quotes moved up on balance over the intermeeting period, likely reflecting a somewhat more positive assessment of the economic outlook. Results from the Desk’s survey of primary dealers conducted prior to the January meeting showed that dealers continued to view the third quarter of 2015 as the most likely time of the first increase in the target federal funds rate. In addition, the median dealer continued to see the first quarter of 2014 as the most likely time for the Committee’s asset purchases to conclude, although fewer dealers than in December expected those purchases to continue beyond 2014.

Treasury coupon yields increased over the intermeeting period, including a notable rise just after year-end when passage of the American Taxpayer Relief Act of 2012 apparently lessened concerns about the risk of substantially higher fiscal drag on growth in the near term. More-positive investor sentiment regarding the outlook for global economic growth, along with some optimism about a federal debt ceiling deal, may also have contributed to the increase in yields. Measures of inflation compensation derived from nominal and inflation-protected Treasury securities rose slightly over the intermeeting period.

Conditions in short-term dollar funding markets were generally little changed on balance; year-end funding pressures were modest overall and roughly in line with market expectations. The outstanding amount of unsecured commercial paper issued by European financial institutions increased noticeably.

Indicators of the condition of domestic financial institutions generally improved over the intermeeting period. A broad index of bank stock prices rose, and the median spread on credit default swaps of the largest banking organizations moved lower.

Broad U.S. equity price indexes increased on net over the intermeeting period, buoyed by many of the same factors that contributed to the rise in Treasury yields. In addition, the fourth-quarter earnings reporting season started off well, as earnings and revenue results were above analysts’ expectations for a higher-than-average number of firms. Option-implied volatility for the S&P 500 index over the near term dipped to its lowest level since early 2007. The option-implied price of insurance against downside risk on the index at longer horizons remained elevated.

Yields on speculative-grade corporate bonds decreased over the intermeeting period, and yields on investment-grade corporate bonds were up a bit. Risk spreads on speculative-grade bonds narrowed substantially, and spreads on investment-grade bonds decreased as well.

Net debt financing by nonfinancial firms increased in the fourth quarter. Outstanding volumes of corporate bonds, commercial and industrial loans, and nonfinancial commercial paper all expanded. The pace of gross public issuance of equity by nonfinancial firms remained solid in the fourth quarter, but it was subdued in January, likely because of seasonal factors.

Conditions in the commercial real estate sector continued to be strained amid elevated vacancy and delinquency rates. However, issuance of commercial mortgage-backed securities strengthened during the fourth quarter, and spreads on those securities narrowed over the intermeeting period.

Conforming home mortgage rates edged up, on net, after touching new lows during the intermeeting period. Yields on residential mortgage-backed securities (MBS) rose by more, leaving the spread between the primary mortgage rate and MBS yields narrower. Mortgage refinancing originations in December and January stayed near their highest levels since the housing market began to recover. The share of existing mortgages that were seriously delinquent edged down in October and November but remained high.

Consumer credit expanded briskly again in October and November. Nonrevolving credit continued to increase at a robust pace because of growth in student and auto loans, while revolving credit moved roughly sideways. Issuance of consumer asset-backed securities remained strong in the fourth quarter.

Growth of bank credit in the fourth quarter slowed to about half its pace compared with earlier in the year, as loan growth declined. According to the January Senior Loan Officer Opinion Survey on Bank Lending Practices, domestic banks continued to ease somewhat their lending standards and some loan terms, on balance; they also experienced an increase in demand, on net, in most major loan categories in the fourth quarter.

M2 and its largest component, liquid deposits, expanded robustly in December. Initial data suggested that the expiration of unlimited deposit insurance on noninterest-bearing transaction accounts at year-end had only a limited effect on bank deposits through early January. The monetary base expanded at a strong rate in December, reflecting growth in both currency and reserve balances.

Foreign financial conditions improved over the intermeeting period as markets responded favorably to the passage of fiscal policy legislation in the United States and to further progress in addressing euro-area strains. On net, global equity prices rose and euro-area peripheral spreads narrowed. As global risk sentiment improved, the dollar depreciated against the euro and most emerging market currencies. Against the yen, however, the dollar appreciated substantially. The yen’s depreciation appeared to occur in part in response to statements from Japan’s new prime minister, who urged the Bank of Japan to ease policy more aggressively. At its January meeting, the Bank of Japan restated its monetary policy framework, replacing its inflation goal of 1 percent with an inflation target of 2 percent, and announced it would commence a program of asset purchases in January 2014 with no predetermined limit on the maximum amount ultimately purchased. Yields on long-term Japanese sovereign bonds rose a few basis points on net over the intermeeting period, but yields on other foreign benchmark sovereign bonds increased more, reflecting both the improvement in global sentiment and reduced expectations for additional monetary accommodation, as the European Central Bank and the Bank of England kept their policy rates on hold and appeared to signal less likelihood of further easing.

Staff Economic Outlook
In the economic forecast prepared by the staff for the January meeting of the FOMC, the near-term projection for real GDP growth was revised up, in large part because the fiscal policy legislation enacted in early January was slightly less restrictive than the staff had assumed. The staff’s medium-term forecast for real GDP growth was essentially unchanged. With fiscal policy still anticipated to be tighter this year than last year, the staff expected that increases in real GDP would only moderately exceed the growth rate of potential output. In 2014 and 2015, real GDP was projected to accelerate gradually, supported by an eventual lessening of fiscal policy restraint, increases in consumer and business sentiment, further improvements in credit availability and financial conditions, and accommodative monetary policy. The expansion in economic activity was expected to slowly reduce the slack in labor and product markets over the projection period, and progress in reducing the unemployment rate was anticipated to be gradual.

The staff’s forecast for inflation was little changed from that prepared for the December FOMC meeting. The staff continued to project that inflation would be subdued through 2015. That forecast is based on the expectation that crude oil prices will trend down slowly from their current levels, the boost to retail food prices from last summer’s drought will be temporary and relatively small, longer-run inflation expectations will remain stable, and significant resource slack will persist over the forecast period.

Participants’ Views on Current Conditions and the Economic Outlook
In their discussion of the economic situation, meeting participants indicated that they viewed the information received during the intermeeting period as suggesting that, apart from some temporary factors that had led to a pause in overall output growth in recent months, the economy remained on a moderate growth path. In particular, participants saw the economic outlook as little changed or modestly improved relative to the December meeting. Most participants judged that there had been some reduction in downside risks facing the economy: Strains in global financial markets had eased somewhat, and U.S. fiscal policymakers had come to a partial resolution of the so-called fiscal cliff. Supported by a highly accommodative stance of monetary policy, the housing sector was strengthening, and the unemployment rate appeared likely to continue its gradual decline. Nearly all participants anticipated that inflation over the medium-term would run at or below the Committee’s 2 percent objective.

In their discussion of the household sector, participants noted various factors influencing consumer spending. Some participants stated that low interest rates appeared to be contributing to strong sales of autos or, more generally, of consumer durables. It was also noted that continued deleveraging by households was improving their financial positions, which would likely support increased spending. Holiday shopping reportedly was relatively solid, and, reflecting the improvement in the housing market, demand for home furnishings and construction materials was up. However, some participants were concerned that the recent increase in the payroll tax could have a significant negative effect on spending, particularly on the part of lower-income consumers.

Participants remarked on the ongoing recovery in the housing market, pointing variously to rising house prices, growth in residential construction and sales, and the lower inventory of homes for sale. A number of participants thought it likely that higher home values and low mortgage rates were helping support other sectors of the economy as well, and a couple saw the housing market as having the potential to cause overall growth to be stronger than expected this year. Nonetheless, it was noted that mortgage credit remained tight and the fraction of homeowners with mortgage balances exceeding the value of their homes remained high.

In general, participants indicated that, relative to the recent past, more business contacts reported an improvement in confidence and some cautious optimism about the economic outlook. Anecdotal reports suggested that uncertainty about the evolution of the economy and government policy continued to restrain firms’ hiring and capital spending decisions, but the passage of fiscal legislation in early January helped resolve some of the uncertainty about federal tax policy. Moreover, it was noted that businesses were in a good position to expand once they came to view the economic environment as more favorable. Survey data from one District indicated that more than half of the respondents expected to increase employment this year, with many citing expected sales growth as the reason. Reports from a number of industries across the country also suggested a more positive assessment of future prospects, particularly in the automotive, energy, and technology sectors. However, reports from the non-automotive manufacturing sector were less positive. In agriculture, record payouts from crop insurance following last year’s drought supported farm incomes, and land prices continued to rise. Reports on business conditions in the commercial real estate sector were more mixed but, on the whole, somewhat improved. The strength of exports reportedly varied, with indications of higher demand from Mexico but some relatively pessimistic readings from firms about business conditions in Europe. Participants generally welcomed an apparent pickup in economic growth in parts of Asia and saw reduced risk that the Chinese economy would slow abruptly, but it was noted that no economy was currently in a position to lead global growth higher.

The passage of legislation in early January resolved some of the uncertainties surrounding the federal fiscal outlook, but near-term uncertainties remained, including the prospect of automatic budget cuts. Participants generally agreed that fiscal negotiations could develop in a way that would result in significantly greater drag on economic growth than in their baseline outlook. One participant noted positive news about the fiscal position of the states; in some cases, revenues had risen sufficiently to enable increases in state government spending and employment.

In their comments on labor market developments, participants viewed the decline in the unemployment rate from the third quarter to the fourth and the continued moderate gains in payroll employment as consistent with a gradually improving job market. However, the unemployment rate remained well above estimates of its longer-run normal level, and other indicators, such as the share of long-term unemployed and the number of people working part time for economic reasons, suggested that the recovery in the labor market was far from complete. One participant reported that firms in his District continued to have difficulty finding workers with suitable skills, suggesting that labor market mismatch was a factor deterring job growth. A few others, however, pointed to evidence that weak aggregate demand was the primary factor restraining job growth, citing data and analyses in support of the view that there was still a substantial margin of slack in the labor market. For example, a couple of participants noted evidence suggesting that a shift in the relationship between the unemployment rate and the level of job vacancies in recent years was unlikely to persist as the economy recovered and unemployment benefits returned to customary levels. Similarly, one participant cited empirical analysis showing that employment growth was lower in the states where a greater share of small businesses identified lack of demand as their most important business problem. Several participants expressed concern that continuation of only slow job growth and persistently high long-duration unemployment could lead to permanent damage to the labor market.

Participants generally saw recent price developments as consistent with their projections that inflation would remain at or below the Committee’s 2 percent objective over the medium run. There was little evidence of wage or cost pressures outside of isolated sectors, and measures of inflation expectations remained stable. However, a few participants expressed concerns that the current highly accommodative stance of monetary policy posed upside risks to inflation in the medium or longer term.

Participants also touched on the implications for monetary policy of changes in estimates of the economy’s potential output. A number of participants thought that the growth of potential output had been reduced in recent years, possibly in part because restrictive financial conditions and weak economic activity in the aftermath of the financial crisis had reduced investment, business formation, and the pace of adoption of new technologies. Many of these participants worried that, should the economy continue to operate below potential for too long, reduced investment and underutilization of labor could further undermine the growth of potential output over time. A couple of participants noted that uncertainties concerning both the level of, and the source of shifts in, potential output made it difficult to base decisions about monetary policy on real-time measures of the output gap.

Participants noted that financial conditions appeared to have been supported by the recent fiscal agreement, a perceived reduction in the risk that the debt ceiling would not be raised in a timely manner, accommodative monetary policy, and actions taken by European authorities. With regard to Europe, participants continued to see downside risks to growth emanating from that region, given its unresolved imbalances and weak economic outlook. Several participants mentioned that domestic credit conditions appeared to have improved: Automobile loans were expanding rapidly and it was reported that competition to make commercial and industrial loans was robust. Although mortgage availability was still limited, a couple of participants indicated that they expected increased competition to bring about some lessening of the restraints on mortgage credit. In general, after having been depressed for some time, investor appetite for risk had increased. A few participants commented that the Committee’s accommodative policies were intended in part to promote a more balanced approach to risk-taking, but several others expressed concern about the potential for excessive risk-taking and adverse consequences for financial stability. Some participants mentioned the potential for a sharp increase in longer-term interest rates to adversely affect financial stability and indicated their interest in further work on this topic.

The Committee again discussed the possible benefits and costs of additional asset purchases. Most participants commented that the Committee’s asset purchases had been effective in easing financial conditions and helping stimulate economic activity, and many pointed, in particular, to the support that low longer-term interest rates had provided to housing or consumer durable purchases. In addition, the Committee’s highly accommodative policy was seen as helping keep inflation over the medium term closer to its longer-run goal of 2 percent than would otherwise have been the case. Policy was also aimed at improving the labor market outlook. In this regard, several participants stressed the economic and social costs of high unemployment, as well as the potential for negative effects on the economy’s longer-term path of a prolonged period of underutilization of resources. However, many participants also expressed some concerns about potential costs and risks arising from further asset purchases. Several participants discussed the possible complications that additional purchases could cause for the eventual withdrawal of policy accommodation, a few mentioned the prospect of inflationary risks, and some noted that further asset purchases could foster market behavior that could undermine financial stability. Several participants noted that a very large portfolio of long-duration assets would, under certain circumstances, expose the Federal Reserve to significant capital losses when these holdings were unwound, but others pointed to offsetting factors and one noted that losses would not impede the effective operation of monetary policy. A few also raised concerns about the potential effects of further asset purchases on the functioning of particular financial markets, although a couple of other participants noted that there had been little evidence to date of such effects. In light of this discussion, the staff was asked for additional analysis ahead of future meetings to support the Committee’s ongoing assessment of the asset purchase program.

Several participants emphasized that the Committee should be prepared to vary the pace of asset purchases, either in response to changes in the economic outlook or as its evaluation of the efficacy and costs of such purchases evolved. For example, one participant argued that purchases should vary incrementally from meeting to meeting in response to incoming information about the economy. A number of participants stated that an ongoing evaluation of the efficacy, costs, and risks of asset purchases might well lead the Committee to taper or end its purchases before it judged that a substantial improvement in the outlook for the labor market had occurred. Several others argued that the potential costs of reducing or ending asset purchases too soon were also significant, or that asset purchases should continue until a substantial improvement in the labor market outlook had occurred. A few participants noted examples of past instances in which policymakers had prematurely removed accommodation, with adverse effects on economic growth, employment, and price stability; they also stressed the importance of communicating the Committee’s commitment to maintaining a highly accommodative stance of policy as long as warranted by economic conditions. In this regard, a number of participants discussed the possibility of providing monetary accommodation by holding securities for a longer period than envisioned in the Committee’s exit principles, either as a supplement to, or a replacement for, asset purchases.

Participants also discussed the economic thresholds in the Committee’s forward guidance on the path of the federal funds rate. On the whole, participants judged that financial markets had adapted to the shift from date-based communication to guidance based on economic thresholds without difficulty, although a few participants stated that communications challenges remained. For example, one participant commented that some market participants appeared to have incorrectly interpreted the thresholds as triggers that, when reached, would necessarily lead to an immediate rise in the federal funds rate. A couple of participants noted that this policy tool would be more effective if the Committee were able to communicate a consensus expectation for the path of the federal funds rate after a threshold was crossed. One participant also indicated a preference for lowering the threshold for the unemployment rate as a means of providing additional accommodation.

Committee Policy Action
Committee members saw the information received over the intermeeting period as suggesting that growth in economic activity had paused in recent months, in large part because of weather-related disruptions and other transitory factors. Employment had continued to expand at a moderate pace, but the unemployment rate remained elevated. However, members generally expected that, with appropriately accommodative monetary policy, economic growth would proceed at a moderate pace and the unemployment rate would gradually decline toward levels they judged to be consistent with the Committee’s dual mandate. Although members saw strains in global financial markets as having eased somewhat, they continued to see an increase in such strains as well as slower global growth and a greater-than-expected fiscal tightening in the United States as downside risks to the economy. Members generally continued to anticipate that, with longer-term inflation expectations stable and slack in resource utilization remaining, inflation over the medium term would run at or below the Committee’s longer-run objective of 2 percent.

In their discussion of monetary policy for the period ahead, members saw the economic outlook as relatively little changed since the previous meeting. Accordingly, all but one member judged that maintaining the highly accommodative stance of monetary policy was warranted in order to foster a stronger economic recovery in a context of price stability. The Committee agreed that it would be appropriate to continue purchases of MBS at a pace of $40 billion per month and purchases of longer-term Treasury securities at a pace of $45 billion per month, as well as to maintain the Committee’s reinvestment policies. The Committee also retained its forward guidance about the federal funds rate, including the thresholds on the unemployment and inflation rates. Some members remarked favorably on the move away from providing calendar dates in the forward guidance and toward highlighting the economic conditionality of future monetary policy. One member dissented from the Committee’s policy decision, expressing concern that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.

In the statement to be released following the meeting, the Committee made relatively small modifications to the language of its December statement, including to acknowledge both the pause in economic growth during the fourth quarter and some easing of the strains in global financial markets. In light of the importance of ongoing U.S. fiscal concerns, members discussed whether to include a reference to unresolved fiscal issues, but decided to refrain. Similarly, one member raised a question about whether the statement language adequately captured the importance of the Committee’s assessment of the likely efficacy and costs in its asset purchase decisions, but the Committee decided to maintain the current language pending a review, planned for the March meeting, of its asset purchases.

At the conclusion of the discussion, the Committee voted to authorize and direct the Federal Reserve Bank of New York, until it was instructed otherwise, to execute transactions in the System Account in accordance with the following domestic policy directive:

“Consistent with its statutory mandate, the Federal Open Market Committee seeks monetary and financial conditions that will foster maximum employment and price stability. In particular, the Committee seeks conditions in reserve markets consistent with federal funds trading in a range from 0 to 1/4 percent. The Committee directs the Desk to undertake open market operations as necessary to maintain such conditions. The Desk is directed to continue purchasing longer-term Treasury securities at a pace of about $45 billion per month and to continue purchasing agency mortgage-backed securities at a pace of about $40 billion per month. The Committee also directs the Desk to engage in dollar roll and coupon swap transactions as necessary to facilitate settlement of the Federal Reserve’s agency MBS transactions. The Committee directs the Desk to maintain its policy of rolling over maturing Treasury securities into new issues and its policy of reinvesting principal payments on all agency debt and agency mortgage-backed securities in agency mortgage-backed securities. The System Open Market Account Manager and the Secretary will keep the Committee informed of ongoing developments regarding the System’s balance sheet that could affect the attainment over time of the Committee’s objectives of maximum employment and price stability.”

The vote encompassed approval of the statement below to be released at 2:15 p.m.:

“Information received since the Federal Open Market Committee met in December suggests that growth in economic activity paused in recent months, in large part because of weather-related disruptions and other transitory factors. Employment has continued to expand at a moderate pace but the unemployment rate remains elevated. Household spending and business fixed investment advanced, and the housing sector has shown further improvement. Inflation has been running somewhat below the Committee’s longer-run objective, apart from temporary variations that largely reflect fluctuations in energy prices. Longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic growth will proceed at a moderate pace and the unemployment rate will gradually decline toward levels the Committee judges consistent with its dual mandate. Although strains in global financial markets have eased somewhat, the Committee continues to see downside risks to the economic outlook. The Committee also anticipates that inflation over the medium term likely will run at or below its 2 percent objective.

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

The Committee will closely monitor incoming information on economic and financial developments in coming months. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until such improvement is achieved in a context of price stability. In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases.

To support continued progress toward maximum employment and price stability, the Committee expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens. In particular, the Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal, and longer-term inflation expectations continue to be well anchored. In determining how long to maintain a highly accommodative stance of monetary policy, the Committee will also consider other information, including additional measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial developments. When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent.”

Voting for this action: Ben Bernanke, William C. Dudley, James Bullard, Elizabeth Duke, Charles L. Evans, Jerome H. Powell, Sarah Bloom Raskin, Eric Rosengren, Jeremy C. Stein, Daniel K. Tarullo, and Janet L. Yellen.

Voting against this action: Esther L. George.

Ms. George dissented out of concern that the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in inflation expectations. In her view, the potential costs and risks posed by the Committee’s asset purchases outweighed their uncertain benefits. Although she noted that monetary policy needed to remain supportive of the economy, Ms. George believed that policy had become too accommodative and that possible unintended side effects of ongoing asset purchases, posing risks to financial stability and complicating future monetary policy, argued against continuing on the Committee’s current path.

Discussion of Communications Regarding Economic Projections
As a follow-up to the FOMC’s discussion in October about providing more information on the Committee’s collective judgment regarding the economic outlook and appropriate monetary policy, the staff presented several options for enhancing the Summary of Economic Projections (SEP). Most of the options involved displaying the information currently collected from participants in new ways by using different summary statistics or aggregations. In the ensuing discussion, participants expressed a range of views on the advantages and disadvantages of implementing changes to the SEP. For example, they generally judged that the addition of the median of participants’ projections could be useful to better illustrate the central outlook of the Committee. Many participants also expressed interest in exploring the potential for using the SEP to convey information about issues related to the Committee’s future asset purchases and the Federal Reserve’s balance sheet. However, the discussion highlighted the complexity involved in providing this information, in part because participants’ quantitative assessments of the likely evolution of the Federal Reserve’s asset holdings under appropriate policy may not adequately convey the nature of the conditionality and the broader cost-benefit considerations guiding the Committee’s actions in this area. At the end of the discussion, the Chairman asked the subcommittee on communications to explore potential approaches to providing more information about participants’ individual views of appropriate balance sheet policy and its conditionality.

It was agreed that the next meeting of the Committee would be held on Tuesday-Wednesday, March 19-20, 2013. The meeting adjourned at 1:45 p.m. on January 30, 2013.

Notation Vote
By notation vote completed on January 2, 2013, the Committee unanimously approved the minutes of the FOMC meeting held on December 11-12, 2012.




-Market Watch

12:55 p.m. EST 02/20/13Major Stock Indexes
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Stoxx Europe 600* 289.07 -0.94 -0.32
UK: FTSE 100* 6395.37 16.30 0.26
12:54 p.m. EST 02/20/13Treasurys
Price Chg Yield %
2-Year Note 0/32 0.278
10-Year Note 3/32 2.020
* at close
12:45 p.m. EST 02/20/13Futures
Last Change Settle
Crude Oil 94.49 -2.17 96.66
Gold 1580.0 -24.2 1604.2
E-mini Dow 14003 -4 14007
E-mini S&P 500 1523.00 -5.00 1528.00
12:55 p.m. EST 02/20/13Currencies
Last (mid) Prior Day †
Japanese Yen (USD/JPY) 93.58 93.57
Euro (EUR/USD) 1.3344 1.3389
† Late New York trading.

- Fed’s Lockhart: Fed should continue to purchase assets through 2013; benefits of program continue to outweigh risks; Unlikely labor market will improve markedly in the short term

-Okay I have to fine tune my programming for the FOMC release. I may not have any time until the close to summarize the markets action.

-Goldman Sachs @ssholes

Monti: If Italians vote for Berlusconi again, Italians are the problem, not him.

Futures regulator to consider lifetime ban for Corzine

Biggest Goldman @sshole

-House Speaker Boehner: President Obama has provided no ‘credible plan’ on a budget; Any replacement for sequester should be made through spending cuts only.

-Europe Closing

If you ever doubted what the ZGR said that Europeans are spoiled, lazy and highly protected from competition and foisting their United States of Rothschilds off on the USA taxpayers and milking the USA for their security and technology, you only had to read the Goodyear(Titan) CEO’s  comments about the French Unions saying they only worked 3 hours a day and that was the French way. Only Prince Charles’ cruel slavery of the USA to provide everything for free to Europe  makes their wanton lifestyles possible. Outside of Germany, work is optional in Europe. Sure of course the Swiss and Austrians work but they are tiny countries. If you can find a corner without cameras you can break a window in Austria or Switzerland, and it will take about 15 minutes before someone emerges to fix it. I admit genetically there is something in me that cant’ stand things poorly done or out of order which used to be typical of all Americans but not anymore. Nothing has changed in the 30 plus years since I worked there. Americans would riot in the streets if they know how much of our deficit went to support Europe. At least Bofinger was frank with the German people. Of course the Obama game of subsidizing Europe and Israel, can’t go on forever, no matter how many markets he thinks he can rig and what he will gift the Europeans with in the upcoming trade deal. Recall Obama can’t fast track trade agreements as that expired due to Bush/Cheney/Clinton abuse.

Lafarge slashed head counts and goose profits but their revenue gain and cement sales were not all that great yet the stock was rallied 4 % plus. ACA had a massive loss, exceeding analysts estimates, ex the ones that were tipped off yesterday and revised their estimates lower and the Boy in Europe still managed to pump that 2 + pc. At least France Telcom sold off, by 2 %+. The DAX was down nearly .5 pc near the close so I took some profits , but then it looked like Regling came into paint the close and losses narrowed, so I sold it short again. I was watching German financial TV last night and  one German came on and said, ‘nobody really likes stocks, but they beat bunds’. He got the hook pretty quick. The Germans had a near fail in their long bund auction today as investors get nervous about the Italian elections this weekend. Although polling is illegal , Reuters is doing it, apparently, and is predicting a hung parliament.

The EU has been having this closed door meeting on their forever crisis . They have the equivalent of C-Span in the EU parliament but no critical meeting are every open to the public. The Europeans essentially agreed to go easier on nations already in the Troika receivership, and agreed to set up a committee to ‘study’ an EU-wide bankers slush fund, which the City of London is very eager to see happen. Hard to imagine the German parliament would let that happen but after Smirkel is elected, it might. She guided the currency speculators to the proper range today of 1.30 to 1.40.

BOE Minutes came in  dovish with the QE vote showing the biggest split since June 2012. Gov. King and member Fisher and Miles voted for an additional £25B to £400B in asset purchases. Overall MPC did see the case more QE to help economy rebalance with a more targeted approach. MPC noted that QE remained effective tool to lower market interest rates but drawbacks to policy options remained. MPC reviewed case for rate cut and buying assets other than Gilts. Nomura called the MPC a laughing stock today. The Feds in the USA do a better job of rigging their inflation numbers and hammering gold in the face of blatent QE4, but I wonder how long before the FED’s whores don’t begin to call them banana republic, communist clowns?

Spain decided impose caps on autonomous regions bond yields to a premium of 100bps, which I guess means the Bank of Spain will have to coordinate that with the regional banks. Very bizarre. Some regions of Spain are far more credit worthy than others. It is like saying Michigans bonds can only be 100 BPs higher than North Dakota’s bonds or the UST market. No one would buy them. Spain is a banana republic.

Portugal Finmin Gaspar stated that he would talk about extra contingency measures of 0.5% GDP at next troika review and might revise lower GDP forecast by 1% with 2013 GDP seen at -2%,  as the Q4 economic drop would have impact on 2013 output. He added that it was reasonable to expect Brussels to give Portugal one extra year to meet budget targets.

IMF official Brekk commented that the economic slowdown in Russia was result of domestic factors and the country should undertake more ambitious fiscal adjustment. IMF saw 6% annual GDP growth with more decisive measures from Govermment.

The Greeks are set for a big national strike the first since 2013, just as this emergency Troika meeting is going on over their falling tax receipts.

Noyer shrugged off France’s big deficit.  EMU are leaders said to be considering delaying France’s 3% deficit target and the country might face excess deficit status labeling  and closer controls. Sarkozy is trying to mount a come back bid politically.

ECB’s Asmussen reiterated he sees stronger Q1 euro zone economy compared to prior disappointing Q4 in an effort to talk the market up.

The ESM is said to be preparing  for Portugal’s bond market return. Does that mean they have the algorithm worked out?

Poland Central Banker Zielinska-Glebocka commented that she was additional room to cut interest rates and supported another cut in March. She did note that rate moves after March were dependent on CPI and GDP forecasts. She did see Polish CPI slowing for a few more months.

I looked through the ACA report and I still don’t see significant degearing although they are finally booking some losses on their Italian portfolio ahead of the election. BNP reiterating its outperform and buy on their fellow banksters is really a joke. BNP and ACA are both shorts, imo.

Credit Markets

German 10y 1.65+0.031.70%

Italy 10yr 4.35-0.000.00%

 Spain 10yr 5.17-0.020.31%

 U.K. 10yr 2.20+0.02

 Key Bond Auctions

Germany can barely find any buyers for its 10 year bund.

 (DE) Germany sold €4.04B in 1.5% 2023 Bunds; Avg Yield 1.66% v 1.56% prior; Bid-to-cover: 1.2x v 1.7x prior 

(PT)) Portugal Debt Agency (IGCP) sold total €1.5B vs. €1.5B indicated in 3-month and 12-month Bills Sold €345M in 3-month Bills; Avg Yield: 0.737% v 0.667% prior; Bid-to-cover: 2.4x v 3.8x prior . Sold €1.155B in 12-month Bills; Avg Yield 1.277% v 1.609% prior; Bid-to-cover: 2.3x v 2.3x prior


Country: Index Last Change % Chg
Europe Dow 1728.13 -11.03 -0.63
Stoxx Europe 50 2632.13 -13.03 -0.49
Stoxx Europe 600 288.94 -1.07 -0.37
Euro Stoxx 50 2640.61 -21.76 -0.82
Euro Stoxx 266.92 -1.30 -0.48
Austria: ATX Index 2424.46 16.95 0.70
Belgium: Bel-20 2555.94 -0.73 -0.03
Denmark: OMX Copenhagen 20* 540.30 6.14 1.15
Estonia: OMX Tallinn* 759.27 -1.58 -0.21
Finland: OMX Helsinki* 6309.10 -9.83 -0.16
France: CAC 40* 3709.76 -26.06 -0.70
Germany: DAX* 7732.20 -20.25 -0.26
Greece: DJ Greece TSM* 785.25 1.55 0.20
Greece: FTSE/ATHEX 20* 349.33 0.46 0.13
Iceland: OMX Iceland All-Share* 784.10 3.00 0.38
Ireland: ISEQ Overall * 3681.45 -7.64 -0.21
Italy: FTSE MIB 16527.50 -136.92 -0.82
Latvia: OMX Riga* 399.10 -0.04 -0.01
Lithuania: OMX Vilnius* 374.10 0.49 0.13
Netherlands: AEX* 343.72 -3.91 -1.12
Norway: OSE All-Share* 523.99 1.41 0.27
Portugal: PSI 20 6161.12 0.11 0.00
Russia: DJ Russia Titans* 6476.49 -22.44 -0.35
Spain: IBEX 35* 8164.60 -60.70 -0.74
Sweden: OMX Stockholm* 375.55 2.01 0.54
Switzerland: Swiss Market* 7617.44 37.94 0.50
UK: FTSE 100* 6388.76 9.69 0.15
UK: FTSE 250* 13733.03 78.08 0.57
UK: FTSE AIM All-Share* 753.10 -1.05 -0.14

(EU) ECB allotted $0M (zero ) in 7-Day USD Liquidity Tender at fixed 0.65% vs. $1.0B

-USA Session Economic Release Summary

(DE) Germany Jan CPI Bavaria M/M: -0.6% v +0.9% prior; Y/Y: 1.7% v 2.2% prior
(BR) Brazil Dec Economic Activity index M/M: 0.3% v 0.4%e; Y/Y: 1.2% v 1.4%e
(US) MBA Mortgage Applications w/e Feb 15th: -1.7% v -6.4% prior
(US) ICSC/GS weekly chain store sales w/e Feb 16th w/w: +2.7%; y/y: 1.8%
(US) Jan Housing Starts: 890K v 920Ke; Building Permits: 925K v 920Ke
(US) Jan Producer Price Index M/M: 0.2% v 0.3%e; Y/Y: 1.4% v 1.5%e
(US) Jan PPI Ex Food & Energy M/M: 0.2% v 0.2%e; Y/Y: 1.8% v 1.7%e
(US) Redbook Retail Sales w/e Feb 17th: +3.1% y/y prior; Feb MTD: +1.5% m/m prior; Feb MTD: +2.8% y/y
(CA) Canada Jan Teranet/National Bank HPI M/M: -0.3% V -0.2%e; Y/Y: +2.7% v 2.9%; House Price Index: 153.00 v 153.45 prior
(EU) Euro Zone Feb Advanced Consumer Confidence: -23.6 v -23.2e

-1130 Europe Closes, thank goodness.

I got a bit of down draft on the DAX at the end to take some profits on my big short.

-No Kerry Meeting With Lavrov on Agenda Yet


-Merkel: “One has to say that euro rates between $1.30 to $1.40 are normal from an historical view.

-EU , Last Chance for Italy, Chatham house (Prince Charles Royal International Institute for World Affairs)


-ECB’s Likkanen says European banks headed for structural change

-1115 Europe ahead of its close

The ESM is doing a great job today.

Country: Index Last Change % Chg
Europe Dow 1726.40 -12.76 -0.73
Stoxx Europe 50 2636.88 -8.28 -0.31
Stoxx Europe 600 289.32 -0.69 -0.24
Euro Stoxx 50 2647.43 -14.94 -0.56
Euro Stoxx 267.38 -0.84 -0.31
Austria: ATX Index 2429.08 21.57 0.90
Belgium: Bel-20 2561.66 4.99 0.20
Denmark: OMX Copenhagen 20 540.30 6.14 1.15
Estonia: OMX Tallinn* 759.27 -1.58 -0.21
Finland: OMX Helsinki 6314.08 -4.85 -0.08
France: CAC 40 3716.95 -18.87 -0.51
Germany: DAX 7740.83 -11.62 -0.15
Greece: DJ Greece TSM* 785.25 1.55 0.20
Greece: FTSE/ATHEX 20* 349.33 0.46 0.13
Iceland: OMX Iceland All-Share* 784.10 3.00 0.38
Ireland: ISEQ Overall 3677.92 -11.17 -0.30
Italy: FTSE MIB 16574.37 -90.05 -0.54
Latvia: OMX Riga* 399.10 -0.04 -0.01
Lithuania: OMX Vilnius* 374.10 0.49 0.13
Netherlands: AEX 344.20 -3.43 -0.99
Norway: OSE All-Share 523.99 1.41 0.27
Portugal: PSI 20 6163.91 2.90 0.05
Russia: DJ Russia Titans* 6472.09 -26.84 -0.41
Spain: IBEX 35 8181.80 -43.50 -0.53
Sweden: OMX Stockholm 375.02 1.48 0.40
Switzerland: Swiss Market 7626.22 46.72 0.62
UK: FTSE 100 6396.41 17.34 0.27
UK: FTSE 250 13739.84 84.89 0.62
UK: FTSE AIM All-Share 753.48 -0.67 -0.09

-Italy looking at Hung Parliament-Reuters Analysis

-Market Watch

Death Cross in gold and rumored Commodity fund liquidation.

11:09 a.m. EST 02/20/13Major Stock Indexes
Last Change % Chg
DJIA 14018.91 -16.76 -0.12
Nasdaq 3201.43 -12.17 -0.38
S&P 500 1525.04 -5.90 -0.39
DJ Total Stock Market 15931.02 -64.13 -0.40
Russell 2000 928.97 -3.03 -0.33
Global Dow 2112.66 -4.23 -0.20
Japan: Nikkei Average* 11468.28 95.94 0.84
Stoxx Europe 600 289.36 -0.65 -0.22
UK: FTSE 100 6397.32 18.25 0.29
11:08 a.m. EST 02/20/13Treasurys
Price Chg Yield %
2-Year Note 1/32 0.270
10-Year Note 0/32 2.030
* at close
10:59 a.m. EST 02/20/13Futures
Last Change Settle
Crude Oil 95.64 -1.02 96.66
Gold 1579.0 -25.2 1604.2
E-mini Dow 14008 1 14007
E-mini S&P 500 1525.00 -3.00 1528.00
11:09 a.m. EST 02/20/13Currencies
Last (mid) Prior Day †
Japanese Yen (USD/JPY) 93.73 93.57
Euro (EUR/USD) 1.3363 1.3389
† Late New York trading.

-Apple supplier Foxconn places hiring freeze on its largest plant

Clearly the WOZ is worried about his stock. I’m not trading this stock, but thought I would pass it along.

-Sarkozy’s financial backers are organizing to bring him back. Personally I think he has been involved with too many scandals since leaving office to be politically viable, but no doubt he is looking at Berlusconi. No article in English yet.

-EU Banksters getting closer to get a slush fund

The European Union’s Irish Presidency on Wednesday successfully brokered on behalf of EU member states between the European Parliament and the European Commission to secure a “two-pack” deal on new rules to stabilize eurozone economies.The new ‘Two Pack’ rules will improve budgetary and economic coordination among eurozone countries.Agreement was reached after Irish Finance Minister Michael Noonan, chair of the ECOFIN Council, talked with the European Parliament and the European Commission officials, which allowed for the successful resolution of the last outstanding issues, the Commission said in a press release.The agreement will have to be approved by member states Ambassadors, as well as by Council and Parliament before becoming law.The ‘Two Pack’, which introduces new rules for the 17 eurozone countries, consists of two regulations: one with special measures for monitoring and assessing plans of countries with high, excessive government deficits; and another with special measures for countries experiencing severe financial difficulties, such as those emerging from an EU-IMF program.The agreement includes a commitment by the European Commission to set up a working group to study, amongst other issues, the feasibility of creating a debt redemption fund for eurozone countries with excessive sovereign debt.Commission President Barroso and Vice President Ohli Rehn said in a joint statement that once legislation proposed by the Commission on the two-pack is adopted, it intends to take steps in the short-term towards a deep and genuine EMU as outlined in the blueprint. RTT


-Jerry Yang Joins Lenovo Board as ‘Observer’, WSJ

Jerry is a favorite of Prince Charles. Now working for the Chinacoms directly.

-1056 Continued “chatter” that a sizable commodity fund is in trouble and is being forced to liquidate positions today.silver now down 3.10 percent. Shorts are hoping it is Paulson, who is in the spotlight by the SEC as well. Rothschilds looks like he has given the order to ‘ get’ John. He did not sell like Soros on demand.

-Prince Charles, Rothschilds, Rockefellers squeezing farmers off their land with weather engineering and having their mega-cartels like Carghill, Gallo, Adm, buy the farmland cheap. The English Crown is on the record as wanting to starve the masses to death. They had great ‘luck’ in Ireland by cornering the potato market and getting cheap land. Pray Prince Charles down from power and that his evil will be Judged by the Lord.

Number of U.S. farms fell to 6-year low in 2012 http://bloom.bg/ZpD3sd

-I programmed my trading for the rest of the day. The big event is the FMOC meeting minutes. I don’t expect much change from last month. The goal today is to limit short losses and expose the short book for the Italian election over the weekend. I will more than likely summarize the EU and USA close together. The Europeans are lazy so it won’t matter to them. The Germans can’t lift all the slugs in Europe and their socialist, anti-God loving world.

-”Systematically forecasting a disinflation that never materialises has long exposed the Bank to ridicule”

Nomura on the BOE

-Eurozone Consumer Confidence Feb  M/M -23.6 vs. Exp. -23.2, markit

-Post election screw job by the Obama -boys in the UK

Average price of a gallon of gasoline in the U.S. rises to $3.747, the highest level since mid-October

-1008 USA markets

Dow Jones Indexes
Last Change % Chg
DJIA 14033.47 -2.20 -0.02
DJ Transportation Average 5990.95 -29.72 -0.49
DJ Utility Average 476.79 -0.09 -0.02
DJ Composite Average 4818.41 -7.92 -0.16
DJ Total Stock Market 15963.85 -31.30 -0.20
DJ Broad Stock Market 3795.14 -7.41 -0.19
DJ Large-Cap Growth TSM 3687.28 -11.02 -0.30
DJ Large-Cap Value TSM 3282.88 -3.24 -0.10
DJ Mid-Cap Growth TSM 5969.69 -11.59 -0.19
DJ Mid-Cap Value TSM 5375.83 -20.15 -0.37
DJ Small-Cap Growth TSM 5273.20 -7.78 -0.15
DJ Small-Cap Value TSM 6805.96 -15.28 -0.22
DJ Micro-Cap TSM 8432.95 -12.36 -0.15
DJ Select REIT 223.65 0.71 0.32
DJ U.S. Select Dividend 438.38 -0.77 -0.18
DJ Internet 193.83 0.44 0.23
Barron’s 400 399.85 -1.39 -0.35
Nasdaq Stock Market
Last Change % Chg
Nasdaq 3206.53 -7.07 -0.22
Nasdaq 100 2775.39 -7.47 -0.27
Nasdaq Biotech 1531.80 7.13 0.47
Nasdaq Computer 1589.81 -7.90 -0.49
Nasdaq Industrials 2821.93 -0.76 -0.03
Nasdaq Insurance 5344.66 -9.05 -0.17
Nasdaq Banks 2029.07 -5.05 -0.25
Nasdaq Telecommunications 215.25 -0.78 -0.36
Standard & Poor’s
Last Change % Chg
S&P 500 1528.05 -2.89 -0.19
S&P 100 688.40 -0.86 -0.12
S&P 400 Mid-Cap 1121.02 -2.72 -0.24
S&P 600 Small-Cap 520.80 -1.14 -0.22
S&P 1500 SuperComp 354.31 -0.70 -0.20
New York Stock Exchange
Last Change % Chg
NYSE Composite 8980.84 -23.54 -0.26
NYSE Financial 5502.02 -14.52 -0.26
NYSE Health Care 8546.15 -10.79 -0.13
NYSE Energy 13254.51 -31.61 -0.24
NYSE Arca Biotech 1687.64 -1.24 -0.07
NYSE Arca Pharmaceutical 398.26 -0.03 -0.01
NYSE Arca Tech 100 1386.78 -1.88 -0.14
NYSE Arca Internet 364.67 0.31 0.09
NYSE Arca Sec. Broker/Dealer 109.76 -0.17 -0.15
NYSE MKT Composite 2402.75 6.06 0.25
Morgan Stanley High Tech 734.66 -0.82 -0.11
Other U.S. Indexes(
Last Change % Chg
Russell 1000 849.05 -1.17 -0.14
Russell 2000 931.13 -0.87 -0.09
Russell 3000 911.06 -1.30 -0.14
PHLX Gold/Silver 138.55 -3.44 -2.42
PHLX Housing Sector 186.94 -3.04 -1.60
PHLX Oil Service 252.68 -0.98 -0.39
PHLX Semiconductor 433.56 -0.08 -0.02
CBOE Volatility 12.44 0.13 1.06
FOX 50 1101.95 -1.43 -0.13
KBW Bank 55.26 -0.20 -0.36
Alerian MLP 435.76 1.00 0.23
9:57 a.m. EST 02/20/13Futures/Extended Trading(Roll over for charts)
Last Chg Settle
E-mini Dow 13995.00 -12.00 14007.00
E-mini S&P 500 1524.75 -3.25 1528.00
Last Change % Chg
Nasdaq-100 Pre Market Indicator* 2780.82 10.75 0.39
Nasdaq-100 After Hours Indicator* 2783.41 21.03 0.76
* at close
See Full Daily Closing Stock Indexes
10:02 am EST 02/20/13Most Active Stocks (Roll over for charts and headlines)
NYSE | Nasdaq | ArcaComposite
Issue Volume Price Chg % Chg
BankAm (BAC) 17,082,014 12.26 0.07 0.57
OfficeDepot (ODP) 15,096,755 5.48 0.46 9.16
NostrRltyFin (NRF) 9,104,122 8.63 -0.02 -0.23
OfficeMax (OMX) 4,381,251 13.79 0.79 6.08
MillennialMedia (MM) 4,358,730 9.00 -5.33 -37.19
10:02 am EST 02/20/13Gainers (Roll over for charts and headlines)
NYSE | Nasdaq | ArcaComposite
Issue Price Chg % Chg Volume
LaZ Boy (LZB) 17.78 2.32 15.01 424,263
DemandMedia (DMD) 8.96 1.12 14.29 529,998
OfficeDepot (ODP) 5.48 0.46 9.16 15,096,755
RadianGrp (RDN) 8.20 0.61 8.04 1,349,386
MGIC Inv (MTG) 2.83 0.20 7.68 1,729,123
10:02 am EST 02/20/13Decliners (Roll over for charts and headlines)
NYSE | Nasdaq | ArcaComposite
Issue Price Chg % Chg Volume
HarvstNatRes (HNR) 5.69 -3.47 -37.88 2,185,850
MillennialMedia (MM) 9.00 -5.33 -37.19 4,358,730
GrayTlvsn (GTN) 3.86 -0.52 -11.87 320,858
DrewInd (DW) 36.00 -2.67 -6.90 20,553
ForestarGp (FOR) 18.56 -1.30 -6.55 191,870
9:53 am EST 02/20/13(Roll over for charts and headlines)
NYSE | Nasdaq | NYSE MKT | Arca
ABB ADS 23.36
ACE 87.29
AZZ 45.49
AcadiaRlty 27.26
Accenture 75.48
ASAGold&PrecMetals 19.24
AngGldAsh ADS 25.75
AngloGldAshantiPfA 32.11
BarckGld 30.89
Buenavnt ADS 26.15

-Russians, the only decent people left on the planet?

Russia worried that orphan was ‘harmed by US lesbian couple’:http://bit.ly/XMFVZl

Letting mentally ill and sexually perverted, LGBT adopt children is a crime against the Lord and children.

Here is what the Hollywood, Queer crowd like Clive Davis are up to promoting their unhealthy, filthy and disgusting lifestyle to the American female mind.

@WashingtonBlade says #DaysofOurLives gets steamy with sexy gay shower #fantasy scene: http://goo.gl/b44v8  http://dlvr.it/2zBgGr .


9:31 a.m. EST 02/20/13Major Stock Indexes
Last Change % Chg
DJIA 14033.33 -2.34 -0.02
Nasdaq 3212.09 -1.50 -0.05
S&P 500 1529.82 -1.12 -0.07
DJ Total Stock Market 15983.29 -11.86 -0.07
Russell 2000* 932.00 8.85 0.96
Global Dow 2120.39 3.50 0.17
Japan: Nikkei Average* 11468.28 95.94 0.84
Stoxx Europe 600 289.81 -0.20 -0.07
UK: FTSE 100 6411.36 32.29 0.51
9:31 a.m. EST 02/20/13Treasurys
Price Chg Yield %
2-Year Note -0/32 0.286
10-Year Note -4/32 2.044
* at close
9:21 a.m. EST 02/20/13Futures
Last Change Settle
Crude Oil 96.84 0.18 96.66
Gold 1590.7 -13.5 1604.2
E-mini Dow 14006 -1 14007
E-mini S&P 500 1527.75 -0.25 1528.00
9:31 a.m. EST 02/20/13Currencies
Last (mid) Prior Day †
Japanese Yen (USD/JPY) 93.66 93.57
Euro (EUR/USD) 1.3384 1.3389
† Late New York trading.

-0930 USA opens

-Titan International Inc. Chairman Maurice Taylor has got French backs up with his comments that the country’s workers earn high wages and work short hours.In a letter to French Industry Minister Arnaud Montebourg declining to reconsider buying a tire plant in the country, he wrote that France can keep its “so-called workers.” Taylor, who ran for the Republican presidential nomination in 1996, laid out why his company walked away and won’t reexamine buying a plant that Goodyear Tire & Rubber Co., the largest U.S. tire- maker, is closing in France.“I have visited the factory several times,” Taylor wrote. “The French workforce gets paid high wages but works only three hours. They get one hour for breaks and lunch, talk for three and work for three. I told the French union workers this to their faces. They told me that’s the French way!” BBN

You thought the ZGR exaggerated how lazy Europeans are, think again!! I saw this in French last night, but waited for a wire article in English.

-The biggest U.S. banks including JPMorgan Chase & Co. and Citigroup Inc. are lending the smallest portion of their deposits in five years as cash floods in from savers and a slow economy damps demand from borrowers.The average loan-to-deposit ratio for the top eight commercial banks fell to 84 percent in the fourth quarter from 87 percent a year earlier and 101 percent in 2007, according to data compiled by Credit Suisse Group AG. Lending as a proportion of deposits dropped at five of the banks and was unchanged at two, the data show. BBN

-908 Gold had to be hammered by the Fed, as even by the cooked PPI numbers were have rip roaring inflation in the pipeline at the wholesale level. Jack Lew the market rigging Jew. Ha, the excluded the gasoline price surge from their data. What a crock. Fertilizer prices are up 25 pc y/y. Think you’re not going to pay for that?

EUR/USD 1.3389 0.0000 0.00%
GBP/USD 1.5309 -0.0118 -0.76%
USD/JPY 93.72 +0.15 +0.16%
USD/CHF 0.9226 0.0000 -0.01%
AUD/USD 1.0312 -0.0044 -0.42%
USD/CAD 1.0150 +0.0035 +0.35%
EUR/GBP 0.8746 +0.0067 +0.77%


Gold 1591.70 -12.50 -0.78%
Silver 29.028 -0.394 -1.34%
Copper 3.639 -0.011 -0.30%
Crude Oil 97.23 +0.13 +0.13%
Natural Gas 3.304 +0.032 +0.96%
US Cotton No.2 85.03 +0.91 +1.08%
US Coffee C 140.43 +2.73 +1.98%

-Polymetal International PLC , a Russian gold and silver producer, said Wednesday its wholly owned subsidiary JSC Polymetal has entered into a binding memorandum of understanding with Vitalex Investments Ltd. and Arrowline Investments Ltd. to buy ZAO Maminskaya Gornorudnaya kompania, which holds an exploration and mining licence for the Maminskoye gold mining field valid until 2023, for an enterprise value of $95.5 million.. MW

-Toll Brothers Inc. the Horsham, Pa., home builder, swung to a fiscal-first-quarter profit from a year-earlier loss on 32% higher revenue. For the quarter ended Jan. 31, Toll earned $4.4 million, or 3 cents a share, compared with a loss of $2.8 million, or 2 cents, in the year-earlier quarter. Shares outstanding rose 6.9% from a year earlier to 177.8 million. Revenue reached $424.6 million from $322 million. The backlog at Jan. 31 was $1.86 billion, up 66%, and 2,796 units, up 57%. MW

-I went long the DIA/SPY on the drop to go flat for the day.

-Officemax and Office Depot announce their share swap structure and merger.

-U.S. housing starts fall 8.5% in January .USA Housing starts fall to 890,000 rate from 973,000 prior. Building permits rise 1.8% to 925,000 rate.

-USA wholesale prices rose a seasonally adjusted 0.2% in January, marking the first increase after three straight drops, mainly because of a spike in vegetable prices. Excluding the volatile categories of food and energy, so-called core producer prices also rose 0.2%, the Labor Department said Wednesday. Economists surveyed by MarketWatch had predicted a 0.4% increase in the overall producer price index and a 0.2% rise in core PPI. Food costs jumped 0.7% last month, led by a 39% advance in vegetable prices. Higher food prices accounted for more than three-quarters of the increase in PPI. Energy prices fell a seasonally adjusted 0.4%, though the data failed to capture the recent surge in gasoline costs. Those increases are expected to show up in the February report. Over the past 12 months wholesale prices have risen an unadjusted 1.4%. The core rate has risen 1.8% in that span, down from 2.0% in December. That’s the lowest level since the first month of 2011.  mw

-Europe Session,  Economic Release Summary


(DE) Germany Jan Final Consumer Price Index -0.5% v -0.5%e; Y/Y: 1.7% v 1.7%e
(DE) Germany Jan Final CPI EU Harmonized -0.7% v -0.7%e; Y/Y: 1.9% v 1.9%e
(DE) Germany Jan Producer Prices M/M; 0.8% v 0.3%e; Y/Y: 1.7% v 1.2%e
(DE) Germany Jan CPI Hesse M/M: -0.5% v 0.9% prior; Y/Y: 1.7 v 2.2% prior

(DE) Germany Jan CPI Saxony M/M: -0.5% v +1.0% prior; Y/Y: 1.8% v 2.2% prior

(DE) Germany Jan CPI North Rhine Westphalia M/M: -0.5 v +0.9% prior; Y/Y: 1.7% v 2.1% prior
(DE) Germany Jan CPI Brandenburg M/M: -0.6 v +1.0% prior; Y/Y: 1.4% v 1.9% prior
(DE) Germany Jan CPI North Baden Wuerttemberg M/M: -0.6 v +1.0% prior; Y/Y: 1.3% v 1.9% prior

(FR) France Feb Business Confidence: 90 v 87e; Production Outlook: -36 v -34e ; Own-Company Production Outlook: +4 v -14 prior
(FR) France Jan Consumer Price Index M/M: -0.5% v -0.2%e; Y/Y: 1.2% v 1.4%e; CPI Ex Tobacco Index: 124.36 v 124.6e
(FR) France Jan CPI EU Harmonized M/M: -0.6% v -0.3%e; Y/Y: 1.4% v 1.6%e ;

(DK) Denmark Feb Consumer Confidence: -2.0 v -3.0e

(EU) ECB: €5.8B borrowed in overnight loan facility vs. €3.5B prior; €164.5B parked in deposit facility vs. €143,5B prior

(SE) Sweden Q4 Total Number of Employees Y/Y: 1.1% v 0.9% prior

 (IT) Italy Dec Industrial Orders M/M: -1.8% v -0.2%e; Y/Y: -15.3% v -9.5%e
(IT) Italy Dec Industrial Sales M/M: +0.8% v -0.2% prior; Y/Y: -6.3% v -5.4% prior

(UK) BOE voted 9-0 to leave interest rates unchanged at 0.50%
(UK) BOE voted 6-3 to maintain Asset Purchase Target unchanged at £375B; Gov King outvoted
(UK) Jan Jobless Claims Change: -12.5K v -5.5Ke; Claimant Count Rate: 4.7% v 4.8%e; Employment Change 3M/3M: +154K v +117Ke
(UK) Dec Average Weekly Earnings 3M/Y: 1.4% v 1.4%e; Weekly Earnings exBonus 3M/Y: 1.3% v 1.3%e. (UK) Dec ILO Unemployment Rate: 7.8% v 7.7%e 

(CH) Swiss Feb Credit Suisse ZEW Expectations Survey: +10.0 v -6.9 prior


(TH) Thailand Central left the Benchmark Interest Rate unchanged at 2.75%; as expected

(MA) Malaysia Q4 GDP Y/Y: 6.4% v 5.5%e . (MA) Malaysia Jan CPI Y/Y: 1.31.2%e
(MA) Malaysia Q4 Current Account: $22.8B v $9.5B prior

(JP) Japan Jan Convenience Store Sales Y/Y: -0.9% v -2.0% prior

(ZA) South Africa Jan CPI (all items) M/M: 0.3% v 0.6%e; Y/Y: 5.4% v 5.7%e

-844 Europe

Country: Index Last Change % Chg
Europe Dow 1738.79 -0.37 -0.02
Stoxx Europe 50 2639.94 -5.22 -0.20
Stoxx Europe 600 289.74 -0.27 -0.09
Euro Stoxx 50 2655.09 -7.28 -0.27
Euro Stoxx 268.06 -0.16 -0.06
Austria: ATX Index 2417.21 9.70 0.40
Belgium: Bel-20 2567.46 10.79 0.42
Denmark: OMX Copenhagen 20 538.35 4.18 0.78
Estonia: OMX Tallinn 758.92 -1.94 -0.25
Finland: OMX Helsinki 6323.64 4.70 0.07
France: CAC 40 3727.26 -8.56 -0.23
Germany: DAX 7761.53 9.08 0.12
Greece: DJ Greece TSM 786.07 2.37 0.30
Greece: FTSE/ATHEX 20 349.94 1.07 0.31
Iceland: OMX Iceland All-Share 782.14 1.05 0.13
Ireland: ISEQ Overall 3681.81 -7.28 -0.20
Italy: FTSE MIB 16630.24 -34.18 -0.21
Latvia: OMX Riga 399.65 0.51 0.13
Lithuania: OMX Vilnius 373.98 0.38 0.10
Netherlands: AEX 345.83 -1.80 -0.52
Norway: OSE All-Share 521.99 -0.59 -0.11
Portugal: PSI 20 6158.27 -2.74 -0.04
Russia: DJ Russia Titans 6477.44 -21.49 -0.33
Spain: IBEX 35 8189.90 -35.40 -0.43
Sweden: OMX Stockholm 374.95 1.41 0.38
Switzerland: Swiss Market 7618.31 38.81 0.51
UK: FTSE 100 6402.40 23.33 0.37
UK: FTSE 250 13760.04 105.09 0.77
UK: FTSE AIM All-Share 754.45 0.30 0.04

-The FBI’s False Flag Terrorism Against the American People

Kike FBI director


-301 Europe Opening

Stoxx Europe 600 index down 0.2% to 289.34

German DAX 30 index flat at 7,748.45

French CAC 40 index down 0.1% to 3,730.85

FTSE 100 index flat at 6,735.90


German 10y 1.63+0.01, -0.47%

Italy 10yr 4.34-0.01, 0.23%

 Spain 10yr 5.18-0.01, 0.12%


Gold 1606.20 +2.00 +0.12%
Silver 29.480 +0.058 +0.20%
Copper 3.654 +0.005 +0.13%
Crude Oil 97.07 -0.03 -0.03%
Natural Gas 3.276 +0.003 +0.09%
US Cotton No.2 84.31 +0.02 +0.02%
US Coffee C 137.70 -2.10 -1.50%
EUR/USD 1.3415 +0.0026 +0.19%
GBP/USD 1.5438 +0.0011 +0.07%
USD/JPY 93.27 -0.30 -0.32%
USD/CHF 0.9200 -0.0026 -0.29%
AUD/USD 1.0358 +0.0002 +0.02%
USD/CAD 1.0116 +0.0001 +0.01%
EUR/GBP 0.8690 +0.0010 +0.11%

- 259 Asia

The Shanghai Composite rallied into the close as did the Hang Seng, up .60 % and .49 % respectively.

Country: Index Last Change % Chg
Asia Dow 3052.21 31.27 1.04
DJ Asia-Pacific TSM 1376.96 13.80 1.01
Australia: All Ordinaries* 5114.40 13.40 0.26
Australia: S&P/ASX* 5098.70 16.80 0.33
China: DJ CBN China 600* 22432.73 201.67 0.91
China: DJ Shanghai* 306.73 2.35 0.77
China: Shanghai Composite* 2397.18 14.26 0.60
China: Shenzhen Composite* 969.38 17.67 1.86
China: Shanghai 50* 1978.30 -2.77 -0.14
Hong Kong: Hang Seng 23257.28 113.37 0.49
India: BSE Sensex 19640.16 4.44 0.02
India: S&P CNX Nifty 5945.40 5.70 0.10
Indonesia: JSX Index 4624.35 22.29 0.48
Indonesia: JSX BISNIS 27 397.66 0.66 0.17
Indonesia: JSX Islamic 622.62 2.26 0.36
Indonesia: JSX LQ-45 788.77 2.10 0.27
Indonesia: PEFINDO-25 487.16 4.06 0.84
Indonesia: SRI-KEHATI 249.74 0.66 0.26
Japan: DJ Japan TSM* 606.20 6.15 1.02
Japan: Nikkei Average* 11468.28 95.94 0.84
Japan: TOPIX Index* 973.70 10.09 1.05
Malaysia: DJ Malaysia TSM 3003.76 -4.37 -0.15
Malaysia: FTSE Bursa Malaysia KLCI 1611.19 -3.88 -0.24
New Zealand: NZX 50* 4214.24 -29.97 -0.71
S. Korea: KOSPI* 2024.64 38.81 1.95
S. Korea: KOSPI 50* 1764.80 42.14 2.45
S. Korea: KOSPI 100* 2035.12 46.15 2.32
S. Korea: KOSPI 200 Composite* 268.07 5.91 2.25
Singapore: FTSE Straits Times 3306.55 10.78 0.33
Taiwan: TAIEX* 8029.10 68.22 0.86
Thailand: SET 1545.30 13.23 0.86


-Banque De France  Noyer: Says France Won’t Meet Deficit Goal. But that doesn’t matter for it’s credibility. WSJ


-War Criminal Refuses to apologize for mass murder on the Indian subcontinent

Prime Minister David Cameron talks to the Chief Minister of Indian state of Punjab, Parkash Singh Badal (L) during his visit to the holiest of Sikh shrines, the Golden Temple in Amritsar, India

-After major austerity protests  Bulgarian PM announces that the whole government is resigning. Reuters


-Rajoy is going to discuss reforms from the kick back scandal and discuss the state of the nation.

-Duma Ethics Committee Chair Vladimir Pekhtin has resigned his seat in parliament over $2m of alleged undeclared beachside property in Miami. BBC Wire

-Greece prepares for its first general strike of 2013 – days before more bailout discussions

-Boeing Co. engineers approved a new four-year contract that will help the planemaker reduce its pension liability, even as technical workers rejected the offer and gave their union the authority to call a strike at any time.The plan was approved by 6,483 engineers, or 54 percent of votes, the Society of Professional Engineering Employees in Aerospace said today. The union was granted strike authorization by 6,727 engineers, or 56 percent of votes in that tally, though it is a moot approval since the contract passed. Of the technical workers, 3,203 or 53 percent voted against the contract and 3,903 or 64 percent gave strike authorization. BBN


Flat openling, lousy ACA results

Futures Index Value % Change Open High Low Time
Americas Futures
DJIA INDEX FUTURE Mar13 14,005.00 -0.01% 14,009.00 14,014.00 14,004.00 02:11:51
S&P 500 FUTURE Mar13 1,527.70 -0.02% 1,528.50 1,529.40 1,527.60 02:11:52
NASDAQ 100 FUTURE Mar13 2,783.75 +0.10% 2,783.50 2,786.00 2,783.25 02:08:23
Europe, Middle East & Africa Futures
EURO STOXX 50 Mar13 2,666.00 +0.08% 2,664.00 2,669.00 2,664.00 02:06:36
FTSE 100 IDX FUT Mar13 6,360.00 -0.04% 6,353.50 6,365.00 6,351.00 02:06:32
DAX INDEX FUTURE Mar13 7,760.00 +0.03% 7,753.00 7,765.00 7,752.50 02:06:4

-France Telecom SA, the former French phone monopoly fighting discounters at home, said 1.84 billion euros ($2.5 billion) in impairment costs, including in Poland, Egypt and Romania, dragged down its net income for 2012.Full-year net income fell to 820 million euros on the impairment of goodwill and assets, compared with 3.9 billion euros a year earlier, as sales fell to 43.5 billion euros, the Paris-based carrier said today in a statement.The company confirmed operating cash flow will be more than 7 billion euros this year. In its home market, Iliad SA’s Free and Vivendi SA’s SFR unit have slashed prices to win customers while France Telecom has bet on speedier mobile-phone packages to charge more. Such a strategy has so far proved more fruitful for U.S. carriers than in Europe.Operating cash flow was 8 billion euros in 2012, the company said, reaching its target. To conserve cash, France Telecom reduced its shareholder payout in October to a dividend of at least 80 cents for 2012 and for 2013, to help maintain its debt profile.

-Credit Agricole SA, France’s third- largest bank by market value, reported a record fourth-quarter loss after writing down goodwill at its Italian and investment- banking businesses.The net loss widened 30 percent from a year earlier to 3.98 billion euros ($5.3 billion), the bank, based outside Paris, said in a statement today.

-0115 Asia

Japan’s  Nikkei Average ended 0.8% higher at 11,468.28 despite the Y/D declining on some comments PM Abe made to 93.2. Abe said Wednesday there is less need for the government and the private sector to jointly set up a fund to invest in foreign bonds, as the yen’s strength has been corrected.Speaking at a parliamentary session, Mr. Abe said “such a need has considerably declined,” adding that “the need will likely diminish, as bold monetary easing (by the Bank of Japan) has got off the ground.Finance Minister Taro Aso said at the same parliamentary session the fall of the yen is “a result of policy steps designed to escape deflation, and not of currency intervention.”Mr. Aso also cited currency intervention undertaken by the previous government as “ineffective,” while stressing that the current government has succeeded in bringing the yen lower without intervention Japan’s January trade deficit was at  record high ,despite a first rise in exports in 8 months , amid steep costs for energy imports; PM Abe to consider nuclear energy policy in response.The Japanese press reported that there are four unnamed finalist for BOJ governor and Muto is not on the list. Senior BOJ policy maker Morimoto  on Wednesday urged the government to put its battered fiscal house in order, warning that central bank monetary easing won’t produce the desired effects if worries over public finances push up borrowing costs. He also said sustained wage growth vital to 2% target reflation rate. The major Japanese corporations have spoken in advance and said , no to increased wages, so they are out odds with an important policy tool of Abe’s administration for reflating the Japanese economy. The Nikkei reported Abe will seek better relationships with the USA and improved bilateral trade. Abe will be accompanied by his top currency official when he visits the U.S. to meet with the Obama regime , as Japan tries to limit international friction over a weakening yen. Vice Finance Minister Takehiko Nakao is part of a delegation arriving in Washington tomorrow to discuss the Yen. U.S. Treasury Undersecretary Lael Brainard has welcomed Japan’s efforts to “reinvigorate growth,” while saying that nations need to avoid “loose talk about currencies.”Abe is also said to broach arming Japan with nukes. Korea echoed that request as well. Specific trade items will not be on the agenda.

The Shanghai Composite is down slightly near flat and the Hang Seng is up .2. Shanghai markets were held back by talks of further property curbs after the NPC. The Shanghai daily speculated the government may raise borrowing costs for 2nd home buyers  as a first step. S&P raised their outlook on China property sector; expects 5% price gains in 2013, keeping  further government policy action in housing at bay, and Moody’s says China avoided hard landing; sees 2013 GDP at upper end of 7.5-8.5% range. China’s FDI declined -7.3 pc y/y but  China Commerce Ministry (MOFCOM) spokesperson Shen said China’s  FDI would  stable in FY13. China officially denied hacking the USA.

Chung Mong-joon, a senior ruling Saenuri Party lawmaker, said Tuesday the U.S. nuclear umbrella falls short of reliable protection, calling for South Korea to acquire nuclear weapons.Chung’s call triggered criticism by two U.S. nuclear experts — Robert Galluci, President  William Clinton’s special envoy on the North’s nuclear program and Gary Samore, President Barack Obama’s arms control coordinator. U.S. nuclear weapons in South Korea were voluntarily withdrawn in 1991 shortly before the inter-Korean Declaration on the Denuclearization of the Korean Peninsula in 1992. He explained that the advantage of bringing them back is that Seoul will not be in violation of the Non-Proliferation Treaty (NPT) since the nuclear weapons would be from Washington. “We would simply be restoring the pre-1992 condition,” he added. In more mundane matters Korean real estate analysts say Korean real estate prices are set to rise after years of price stagnation.South Korea Ministry of Knowledge Economy said  January’s  industrial electricity sales rose 4.6% y/y to 22.6B kwh. The Kospi is up 1.76 %.

Australia put on .33 pc despite  weak conference board leading indicators and the Westpac leading index rising only .2 pc m/m. BHP was down  1+% as 2012 sales fell over 10%; CEO Kloppers resigned.  Fortescue Metals also down over 3% on revenue decline due to H1 iron ore price volatility, but remains upbeat for China prospects.

RBNZ Gov. Wheeler echoed overnight comments from Finance Minister English regarding “overvalued” NZD and said RBNZ was  prepared to intervene, which knocked the Kiwi for a loop. The NZX finished down .71 pc.

 Session Economic Release Summary

(AU) AUSTRALIA Q4 WAGE COST INDEX Q/Q: 0.8% V 0.8%E; Y/Y: 3.4% V 3.4%E
(AU) AUSTRALIA JAN DEWR INTERNET SKILLED VACANCIES M/M: -0.7% V -2.8% PRIOR (10th consecutive decline)
(NZ) NEW ZEALAND Q4 PRODUCER PRICES INPUTS Q/Q: -0.3% V -1.0% PRIOR (2nd quarter of decline); OUTPUTS Q/Q: -0.1% V -0.9% PRIOR


Country: Index Last Change % Chg
Asia Dow 3049.25 28.31 0.94
DJ Asia-Pacific TSM 1376.83 13.67 1.00
Australia: All Ordinaries* 5115.00 14.00 0.27
Australia: S&P/ASX* 5098.70 16.80 0.33
China: DJ CBN China 600 22348.54 117.48 0.53
China: DJ Shanghai 305.61 1.23 0.40
China: Shanghai Composite 2381.42 -1.49 -0.06
China: Shenzhen Composite 962.45 10.74 1.13
China: Shanghai 50 1958.79 -22.29 -1.13
Hong Kong: Hang Seng 23190.36 46.45 0.20
India: BSE Sensex 19658.33 22.61 0.12
India: S&P CNX Nifty 5948.25 8.55 0.14
Indonesia: JSX Index 4623.96 21.89 0.48
Indonesia: JSX BISNIS 27 397.27 0.27 0.07
Indonesia: JSX Islamic 622.31 1.95 0.31
Indonesia: JSX LQ-45 788.81 2.14 0.27
Indonesia: PEFINDO-25 484.55 1.45 0.30
Indonesia: SRI-KEHATI 249.51 0.43 0.17
Japan: DJ Japan TSM* 606.33 6.28 1.05
Japan: Nikkei Average 11463.07 90.73 0.80
Japan: TOPIX Index 973.70 10.09 1.05
Malaysia: DJ Malaysia TSM 3003.80 -4.33 -0.14
Malaysia: FTSE Bursa Malaysia KLCI 1611.02 -4.05 -0.25
New Zealand: NZX 50* 4214.24 -29.97 -0.71
S. Korea: KOSPI 2020.80 34.97 1.76
S. Korea: KOSPI 50 1760.77 38.11 2.21
S. Korea: KOSPI 100 2030.64 41.67 2.10
S. Korea: KOSPI 200 Composite 267.51 5.35 2.04
Singapore: FTSE Straits Times 3304.75 8.98 0.27
Taiwan: TAIEX* 8029.10 68.22 0.86
Thailand: SET 1540.12 8.05 0.53
EUR/USD 1.3416 +0.0028 +0.21%
GBP/USD 1.5438 +0.0011 +0.07%
USD/JPY 93.21 -0.35 -0.38%
USD/CHF 0.9207 -0.0019 -0.21%
AUD/USD 1.0365 +0.0009 +0.09%
USD/CAD 1.0114 -0.0001 -0.01%
EUR/GBP 0.8690 +0.0010 +0.12%
Gold 1606.80 +2.60 +0.16%
Silver 29.523 +0.101 +0.34%
Copper 3.660 +0.005 +0.15%
Crude Oil 97.17 +0.07 +0.07%
Natural Gas 3.283 +0.011 +0.32%
US Cotton No.2 84.15 -0.14 -0.17%
US Coffee C 137.70 -2.10 -1.50%


Japan 10yr 0.75+0.00, -0.56

U.S. 10yr 2.03-0.00, 0.10%


Price Change %Change
AUT CDS 5-YR 45.50 UNCH 0%
BEL CDS 5-YR 74.885 0.385 0.52%
CHN CDS 5-YR 173.57 19.34 12.54%
DEN CDS 5Y 30.275 -0.605 -1.96%
DUBAI CDS 5Y 218.475 UNCH 0%
EGY CDS 5Y 548.19 UNCH 0%
FIN CDS 5YR 30.00 -0.47 -1.54%
FRANCE CDS 5YR 82.74 -0.635 -0.76%
GER CDS 5YR 41.74 -0.26 -0.62%
GRE CDS 5YR 4086.70 -3.50 -0.09%
HUN CDS 5YR 291.42 -1.58 -0.54%
INA CDS 5-YR 138.33 -0.505 -0.36%
IRE CDS 5Y 167.385 0.04 0.02%
ITA CDS 5YR 239.42 0.175 0.07%
JPN CDS 5YR 71.295 -0.205 -0.29%
KOR CDS 5YR 65.00 UNCH 0%
NED CDS 5YR 53.60 -0.40 -0.74%
PAN CDS 5-YR 96.45 -0.88 -0.90%
POR CDS 5-YR 385.69 0.08 0.02%
SVK CDS 5YR 90.32 UNCH 0%
ESP CDS 5YR 257.325 0.275 0.11%
SWE CDS 5-YR 20.35 -0.175 -0.85%
SUI CDS 5Y 40.00 UNCH 0%
UK CDS 5Y 52.63 0.13 0.25%
US CDS 5Y 39.02 -0.73 -1.84%


BHP: Reports H1 Net A$5.7B (ex items) v A$5.7Be; Rev A$32.2B v A$37.5B y/y; Announce retirement of CEO Kloppers effective May 10th, Andrew Mackenzie to become new CEO; -1.1%
BP: Receives US approval to reduce potential spill fine by $3.4B – financial press; +0.8% afterhours
TEX: Reports Q4 $0.19 v $0.39e, R$1.70B v $1.84Be; -5.5% afterhours
HLF: Reports Q4 $1.05 v $1.02e, R$1.10B v $1.05Be; raises guidance; -1.0% afterhours
LOPE: Reports Q4 $0.46 v $0.42e, R$141.3M v $136Me; +5.2% afterhours
LZB: Reports Q3 $0.32 v $0.24e, R$349M v $338Me; +11.3% afterhours
DELL: Reports Q4 $0.40 v $0.39e, R$14.3B v $14.1Be; +0.3% afterhours

-Secretary of State John Kerry will visit Europe and the Middle East next week for his first foreign trip since taking over the reins earlier the month.

-China  denied allegations that its government and military are behind cyber attacks against websites in the United States. CD

-China’s foreign direct investment inflows fell 7.3 percent in January from a year earlier, extending 2012′s series of consecutive year-on-year declines that highlights still sluggish global economic conditions.The Commerce Ministry said on Wednesday that China drew $9.27 billion in foreign direct investment in January, down from December’s $11.7 billion. Investment inflows from key Asian economies and the U.S. were down in the latest period.The FDI data followed stronger-than-expected trade figures in January, which pointed to a solid recovery in domestic and external demand that signals the world’s second-largest economy is gaining momentum after growth in 2012 eased to a 13-year low – albeit at a 7.8 percent clip that is the envy of the world’s major economies. Reuters

-Jewess, Nancy Pelosi

Nancy Pelosi: Obama Can Execute Americans in Secret

John Glaser, February 19, 2013

apparatchik noun

1. A member of a Communist apparat.
2. An unquestioningly loyal subordinate, especially of a political leader or organization

House Minority Leader Nancy Pelosi (D-CA) thinks we’d be asking too much of Obama if we demanded the President publicly acknowledge when he targets a US citizen for assassination. If President Obama wants to drop a bomb on an American with a drone in total secrecy, he should be able to do so.

In an interview with the Huffington Post, Pelosi was asked whether “the administration should acknowledge when it targets a US citizen in a drone strike.”

“It depends on the situation,” she said. “Maybe it depends on the timing, because that’s right — it’s all about timing, imminence. What is it that could be in jeopardy if people know that happened at this time? I just don’t know.”

That’s right. She doesn’t know. Nor does anybody else because all of it is secret. The Obama administration, like every administration before it, keeps secret that which is legally and morally questionable, while justifying it with practiced tropes about “protecting sources and methods.”

Pelosi is erring on the side of deference. If Obama declares he will strip Americans of the Constitutional rights and that it needs to be secret because divulging such information could “harm national security,” she grants him that prerogative because she is not an independent voice in the branch of government meant to serve as a check on the President’s power. Instead, she is an apparatchik; she’s a Party mouthpiece faced with the task of capitulating to the Party leadership.

This is more of a distinction than you might think, because not all members of Congress are like this. Ron Wyden (D-OR) has been insisting that, “Every American has the right to know when their government believes it’s allowed to kill them.”

In direct response to Pelosi’s statements during an interview with The Washington Examiner, Sen. Mike Lee (R-Utah) said, “Anytime the government willfully executes a citizen, regardless of the circumstances, it is a very serious issue. As the body that oversees executive branch actions, at the very least, Congress should have a full accounting – even if it must sometimes be in a classified setting – of the specific considerations that went into the decision.”

Pelosi also “disputed the assertion that Democrats are less critical of the drone program than they would have been if George W. Bush were still president,”Huffington Post reports. This, despite the recent study that shows liberals are more likely to approve of the targeted killing program as long as a Democrats finger is on the trigger.

This month’s leak of a Justice Department white paper describing the administration’s legal rationale for executing Americans has put extra emphasis on Obama’s drone war, with many critical commentators pointing out how he has appointed himself Judge, Jury, and Executioner in the war on terror. This is a status quo Pelosi seems eager to uphold.

In January, US District Judge Colleen McMahon reluctantly granted the Obama administration’s request to throw out a case brought against it by The New York Times that would have forced more disclosures about the drone war.

The since oft-quoted statement she made in her decision was the following: “I can find no way around the thicket of laws and precedents that effectively allow the executive branch of our government to proclaim as perfectly lawful certain actions that seem on their face incompatible with our Constitution and laws while keeping the reasons for their conclusion a secret.”

But, as Marcy Wheeler has pointed out, McMahon also discussed original intent of the Constitution’s framers, citing Madison:

As they gathered to draft a Constitution for their newly liberated country, the Founders – fresh from a war of independence from the rule of a King they styled a tyrant – were fearful of concentrating power in the hands of any single person or institution, and most particularly in the executive. That concern was described by James Madison in Federalist No. 47 (1788):

The accumulation of all powers, legislative, executive, and judiciary, in the same hands, whether of one, a few, or many, and whether hereditary, selfappointed, or elective, may justly be pronounced the very definition of tyranny…

The magistrate in whom the whole executive power resides cannot of himself…administer justice in person, though he has the appointment of those who do administer it.

No dice, says Nancy. I will not perform my duty to check the President’s usurpations, says Nancy. Obama can do what he wants, and I’ll be an obedient little apparatchik.


-Geopolitical Headliners

Updated February 20, 2013 – 12:00 AM EST
Syrian Rebels Threaten to Attack Lebanon
31 Killed in Missile Strike on Syria’s Aleppo, Including 14 Children
Humanitarian Aid Not Reaching Rebel-Held Syrian North
Afghan Civilian Deaths on the Rise
UN: Drones Killed More Afghan Civilians in 2012
Afghan Govt Workers Deaths Increased Tenfold in 2012
Netanyahu to Bloc With Livni, Religious Parties
Likud Members Blast Deal to Include Livni in Govt
‘Sharon Was About to Leave Two-Thirds of the West Bank’
Without Evidence, Cyber-Attacks Pinned on China
Iran Pushes Nuclear-Free Mideast Plans
Impatience Grows Among Iraq’s Sunni Protesters
Army Plows Ahead With Troubled War-Zone Program
Did John Brennan’s End Run Lead to the Benghazi Consulate Attack? by Russ Wellen
NDAA: Pre-Emptive Prosecution Coming to a Town Near You by Charlotte Silver
The Lonely Soldier and the Moral Scars of War  by James Jeffrey
Does the War Party Have a Peace Caucus?  by W. James Antle III
Hubris Isn’t the Half of It by David Swanson
The Arrogance of Universal Democracy  by Leon Hadar


-For unto us a Child is born, unto us a Son is given; and the government will be upon His shoulder. And His name will be called Wonderful, Counselor, Mighty God, Everlasting Father, Prince of Peace.

Isaiah 9:6.


The main event will be the FOMC meeting note release. Secondary will be the Italian industrial orders, then the English cooked unemployment numbers. Another slow economic news day.

Time Cur. Imp. Event Actual Forecast Previous
02:00   EUR     German CPI (YoY) 1.7% 1.7%
02:00   EUR     German CPI (MoM) -0.5% -0.5%
02:00   EUR     German PPI (MoM) 0.3% -0.3%
02:00   EUR     German PPI (YoY) 1.2% 1.5%
02:45   EUR     French Business Survey 87 86
02:45   EUR     French CPI (MoM) -0.2% 0.3%
03:00   ZAR     South African CPI (MoM) 0.60% 0.20%
04:00   EUR     Italian Industrial New Orders (MoM) 0.4% -0.5%
04:00   EUR     Italian Industrial Sales (MoM) -0.20%
04:30   GBP     Average Earnings Index +Bonus 1.4% 1.5%
04:30   GBP     Claimant Count Change -5.0K -12.1K
04:30   GBP     MPC Meeting Minutes
04:30   GBP     Unemployment Rate 7.7% 7.7%
05:00   CHF     ZEW Expectations 1.0 -6.9
05:30   EUR     German 10-Year Bund Auction 1.560%
06:30   BRL     Brazil IBC-Br Economic Activity 0.40% 0.40%
07:00   USD     MBA Mortgage Applications (WoW) -6.4%
08:30   USD     Building Permits 0.915M 0.909M
08:30   USD     Core PPI (MoM) 0.2% 0.1%
08:30   USD     Core PPI (YoY) 1.6% 2.0%
08:30   USD     Housing Starts 0.925M 0.954M
08:30   USD     PPI (MoM) 0.4% -0.3%
08:30   USD     PPI (YoY) 1.4% 1.3%
08:55   USD     Redbook (MoM) 1.10%
10:00   EUR     Consumer Confidence -23.1 -23.9
Tentative   USD     MBA Delinquency Rates (QoQ) 7.40%
10:30   BRL     Brazilian Foreign Exchange Flows -0.07B
11:30   USD     4-Week Bill Auction 0.080%
14:00   USD     FOMC Meeting Minutes
16:30   USD     API Weekly Crude Stock 2.35M -2.31M
16:30   USD     API Weekly Gasoline Stock -1.18M -0.81M


-Smaller role for federal government in mortgage financing gains supporthttp://bloom.bg/YzQaT1

-Lafarge Will Reach 2015 Cost Reduction Goal One Year Earlier


-As 787s Pile up , Boeing’s Cash is stretched


-APPL Hit by Hackers


-French Workers Who Talk for 3 Hours Don’t Cut It, Titan Says


-King Defeated in QE Vote as BOE Broadens Policy Debate: Economy


-Office Depot, OfficeMax to Merge to Compete With Staples


-JPMorgan Leads U.S. Banks Lending Least Deposits in 5 Years


-:)!Bulgarian Prime Minister Borissov announces plans to resign today over austrerity programs http://bloom.bg/ZfxxEO

-Boeing Engineers Approve Deal as Strike by Others Planned


-BHP Names Copper Head Mackenzie to Succeed Kloppers as CEO


-Possible Berlusconi comeback is nightmare for Merkel


-SAC’s Cohen May Face SEC Suit as Deposition Hurts Case


-Paulson Leads Funds to Bermuda Tax Dodge Aiding Billionaires


-China Housing Slaves Helping Property Rebound: Mortgages


-Detroit May Get State Manager as Fiscal Emergency Shown


-Obama puts fresh pressure on Republicans to avert spending cuts


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