Tag: finance

Submitted by Michael Krieger of Liberty Blitzkrieg blog,

I knew that the legal market was in bad shape last summer when I came across the story that top law firm Weil, Gotshal & Manges announced its first mass layoffs in 82 years, but I had no idea it was this bad.

As most of you will be aware, U.S. News & World Report publishes a widely anticipated ranking of undergraduate as well as graduate schools. I recall how closely my peers scrutinized these rankings back when I was a high school senior and, apparently, a similar obsession continues to this day.

In fact, law schools are so consumed with performing well in these rankings that they are going to outrageous lengths to make it look like their students are performing better financially after graduation than they actually are. One of the most ridiculous ways they achieve this is by paying the salaries of their graduates upon graduation. This way, students can take on employment at non-profits and government agencies, positions they would never otherwise consider in light of their mountains of student debt. In return, their alma maters can pretend their graduates got real jobs. It is the academic equivalent of GM automobile channel stuffing.

This isn’t just a minor trend of one-offs being exaggerated by the media either. For example, George Washington University paid the starting salaries of 22% of its graduates in 2012, while the University of Virginia paid for 15%.

These programs even have a name that reminds me of a financial derivative packed full of worthless securities. These programs are being called “bridge to practice” schemes and according to The Economist “in a recent survey by the National Association for Law Placement (NALP), 45 of the 94 schools that responded now run such programs.”

Now more from The Economist:

EACH YEAR when U.S. News, an American publisher, releases its league table of law schools, potential students seize on it and the universities decry it for oversimplifying a personal and unquantifiable decision. But the schools can ill afford to ignore it, since not just applicants but donors and even credit-rating agencies pay close attention to the scores.

 

Among the ranking’s most important components is the share of graduates who find jobs. The 2014 table, announced on March 11th, shows that the University of Virginia (UVA) and George Washington University (GW) do especially well on this. Although UVA’s law students are only in ninth place for their scores in standard admission tests, 97.5% of the class of 2012 had a job on graduating—the best mark in the country. At GW the discrepancy was even more striking: its 85% graduate-employment rate ranked ninth, whereas its admission-test scores were 21st.

 

However, the two schools’ performance is not as stellar as it seems. A close look at the online employment database of the American Bar Association reveals that GW and UVA are among the leaders in a striking trend: law schools paying the salaries of their alumni when they go to work in legal firms, non-profits or the government. GW paid the starting salaries of a whopping 22% of its 2012 graduates; at 15%, UVA was not far behind.

 

With demand for newly minted lawyers down by around 30%, the schemes spare the alumni from having an awkward gap on their CV, and give them valuable work experience and contacts.

 

But so long as graduates put on these schemes are lumped in with those who found genuine paid work at law firms, the schools will in effect be buying themselves precious U.S. News ranking spots for a few million dollars a year. And applicants to law school who are considering taking on a six-figure debt will get a misleading picture of the job market.

Seems like law schools have learned a thing or two from the U.S. government and the Federal Reserve about smoke and mirrors.

The scam economy rolls forward.

Full article here.

via Zero Hedge http://ift.tt/1iwx0tb Tyler Durden

via Zero Hedge http://ift.tt/1hsH4km williambanzai7

General Motors is in trouble. On the heels of a 1.3 million car recall over fault ignition switches (that allegedly caused 12 deaths and could have been fixed with a $1 part), the bailed-out car maker has announced it will take a $300 million charge in Q1 to cover costs associated with this and 3 new recalls covering an additional 1.5 million cars. As Reuters reports, unsold vehicles will be placed on a stop-delivery until development of a solution has been completed. Why is this such a problem? Because GM's channel-stuffed dealer inventory is already at all-time record highs as the entire industry projected the sales to continue ad infinitum and inventory-to-sales surged to near-record highs.

 

Via WSJ,

General Motors Co. said it would take a $300 million first-quarter charge to cover costs associated with its faulty ignition switch recall and three new recalls announced Monday covering about 1.5 million different vehicles.

 

The auto maker recalled 1.18 million sport-utility vehicles with model years dating back as far as 2008 over seat air bag issues. The air bags may not deploy because of a wiring problem. Separately, the auto maker also is recalling 63,900 of a Cadillac model and 303,000 vans.

 

The announcement comes as GM begins the process of offering repairs to 1.3 million vehicle owners in the U.S. who are affected by a faulty ignition switch recall GM announced in February. The auto maker is in the midst of answering lawmakers and federal authorities over why it took GM nearly a decade to initiate that recall. The switches have been linked to 12 deaths.

 

…

 

On Friday, the Detroit automaker was hit with what appeared to be the first lawsuit related to the ignition-switch recall, as customers claimed their vehicles lost value because of the ignition switch problems. The proposed class action was filed in a Texas federal court.

And all this as inventories surge to record highs…

This was an increase from the 780,140 in January and is the largest ever channel stuffing print yet recorded by the post-bankruptcy GM in history.

Good luck liquidating all that pent up inventory without major incentives and margin crushing price reductions for the everyone in the distribution chain.

via Zero Hedge http://ift.tt/1ojkDCl Tyler Durden

So much for de-escalating:

• RUSSIAN PRESIDENT VLADIMIR PUTIN SIGNS ORDER ON RECOGNITION OF CRIMEA AS SOVEREIGN STATE – RIA

Surely to precede Putin’s own executive order recognizing Crimea as the latest member of the Russian Federation. And as for those “crippling” sanctions, via the FT, here is the locals reall think and why the Russian stock market is soaring as we reported earlier.

Moscow investment banker on US sanctions: “It’s as innocuous as we’d hoped”

— Courtney Weaver (@courtneymoscow) March 17, 2014

One also wonders: how long until Russia freezes all assets of McDonalds restaurants operating in Russia.

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Day after day, the West’s mainstream media promotes Russian President Vladimir Putin as a tyrannical despotic hitler-esque figure so we though it might be interesting to see what the Russian people hear from Russian TV. It is perhaps no surprise that Putin revels in near-record-high approval ratings when one hears Dmitry Kiselev – anchor of News of the Week – explain that “Obama’s hair is getting greyer and greyer… as he fears direct action against Russia (and its nuclear retaliation)… as it is the only country that can turn the US into radioactive dust.”

 

 

The White House response (via Jay Carney):

“People say crazy things all the time,”

via Zero Hedge http://ift.tt/1p4lUvF Tyler Durden

Just a few short hours after Obama issued an executive order declaring sanctions against a select group of Russians and Ukrainians, here comes the EU, whose unelected leaders have just slammed not only those Crimeans and pro-Russian Ukrainians who dared to organize and execute the Crimean referendum vote in which the population overwhelmingly voted to support becoming part of Russia, but in keeping with the US, also launched a salvo making it quite clear that neither Russian politicians nor various Russian military commanders are welcome to park their assets, or buy houses in the EU as of this moment. Needless to say, one person, Germany’s chancellor Angela Merkel, is already dreading what the Russian response to this latest escalation will be, and grudgingly stated that “RUSSIA FORCED EU’S HAND WITH CRIMEA BALLOT.” Perhaps, and perhaps Russia will be “forced” to if not freeze German gas exports as a result of this diplomatic move, then just happen to pull an Amazon Prime, and hike prices by a few dozen percent. We will find out shortly.

Here is the full list:

The Crimeans/pro-Russian Ukrainians:

Sergey Valeryevich Aksyonov; d.o.b. 26.11.1972

Aksyonov was elected “Prime Minister of Crimea” in the Crimean Verkhovna Rada on 27 February 2014 in the presence of pro-Russian gunmen. His “election” was decreed unconstitutional by Oleksandr Turchynov on 1 March. He actively lobbied for the “referendum” of 16 March 2014.

Vladimir Andreevich Konstantinov; d.o.b. 19.03.1967

As speaker of the Supreme Council of the Autonomous Republic of Crimea, Konstantinov played a relevant role in the decisions taken by the Verkhovna Rada concerning the “referendum” against territorial integrity of Ukraine and called on voters to cast votes in favour of Crimean Independence.

Rustam Ilmirovich Temirgaliev; d.o.b. 15.08.1976

As Deputy Chairman of the Council of Ministers of Crimea, Temirgaliev played a relevant role in the decisions taken by the Verkhovna Rada concerning the “referendum” against territorial integrity of Ukraine. He lobbied actively for integration of Crimea into the Russian Federation.

Deniz Valentinovich Berezovskiy; d.o.b. 15.07.1974

Berezovskiy was appointed commander of the Ukrainian Navy on 1 March 2014 and swore an oath to the Crimean armed force, thereby breaking his oath. The Prosecutor-General’s Office of Ukraine launched an investigation against him for high treason.

Aleksei Mikhailovich Chaliy; d.o.b. 13.06.1961

Chaliy became “Mayor of Sevastopol” by popular acclamation on 23 February 2014 and accepted this “vote”. He actively campaigned for Sevastopol to become a separate entity of the Russian Federation following a referendum on 16 March 2014.

Pyotr Anatoliyovych Zima

Zima was appointed as the new head of the Crimean Security Service (SBU) on 3 March 2014 by “Prime Minister” Aksyonov and accepted this appointment. He has given relevant information including a database to the Russian Intelligence Service (SBU). This included information on Euro- Maidan activists and human rights defenders of Crimea. He played a relevant role in preventing Ukraine’s authorities from controlling the territory of Crimea. On 11 March 2014 the formation of an independent Security Service of Crimea has been proclaimed by former SBU officers of Crimea

Yuriy Zherebtsov

Counsellor of the Speaker of the Verkhovna Rada of Crimea, one of the leading organizers of the 16 March 2014 “referendum” against Ukraine’s territorial integrity.

Sergey Pavlovych Tsekov; d.o.b. 28.03.1953

Vice Speaker of the Verkhovna Rada; Tsekov initiated together with Sergey Aksyonov the unlawful dismissal of the government of the Autonomous Republic of Crimea (ARC). He drew into this endeavour Vladimir Konstantinov, threatening him with his dismissal. He publicly recognized that the MPs from Crimea were the initiators of inviting Russian soldiers to take over Verkhovna Rada of Crimea. He was one of the first Crimean Leaders to ask in public for annexation of Crimea to Russia.

 

The Russian politicians and Putin aides:

Ozerov, Viktor Alekseevich; d.o.b. 5.1.1958 in Abakan, Khakassia

Chairman of the Security and Defense Committee of the Federation Council of the Russian Federation. On 1 March 2014 Ozerov, on behalf of the Security and Defense Committee of the Federation Council, publicly supported in the Federation Council the deployment of Russian forces in Ukraine.

Dzhabarov, Vladimir Michailovich; d.o.b. 29.9.1952

First Deputy-Chairman of the International Affairs Committee of the Federation Council of the Russian Federation. On 1 March 2014 Dzhabarov, on behalf of the International Affairs Committee of the Federation Council, publicly supported in the Federation Council the deployment of Russian forces in Ukraine.

Klishas, Andrei Aleksandrovich; d.o.b. 9.11.1972 in Sverdlovsk

Chairman of the Committee on Constitutional Law of the Federation Council of the Russian Federation. On 1 March 2014 Klishas publicly supported in the Federation Council the deployment of Russian forces in Ukraine. In public statements Klishas sought to justify a Russian military intervention in Ukraine by claiming that “the Ukrainian President supports the appeal of the Crimean authorities to the President of the Russian Federation on landing an all-encompassing assistance in defense of the citizens of Crimea”.

Ryzhkov, Nikolai Ivanovich; d.o.b. 28.9.1929 in Duleevka, Donetsk region, Ukrainian SSR

Member of the Committee for federal issues, regional politics and the North of the Federation Council of the Russian Federation. On 1 March 2014 Ryzhkov publicly supported in the Federation Council the deployment of Russian forces in Ukraine.

Bushmin, Evgeni Viktorovich; d.o.b. 4.10.1958 in Lopatino, Sergachiisky region, RSFSR

Deputy Speaker of the Federation Council of the Russian Federation. On 1 March 2014 Bushmin publicly supported in the Federation Council the deployment of Russian forces in Ukraine.

Totoonov, Aleksandr Borisovich; d.o.b. 3.3.1957 in Ordzhonikidze, North Ossetia

Member of the Committee on culture, science, and information of the Federation Council of the Russian Federation. On 1 March 2014 Totoonov publicly supported in the Federation Council the deployment of Russian forces in Ukraine.

Panteleev, Oleg Evgenevich; d.o.b. 21.7.1952 in Zhitnikovskoe, Kurgan region

First Deputy Chairman of the Committee on Parliamentary Issues. On 1 March 2014 Panteleev publicly supported in the Federation Council the deployment of Russian forces in Ukraine.

Mironov, Sergei Mikhailovich; d.o.b. 14.2.1953 in Pushkin, Leningrad region

Member of the Council of the State Duma; Leader of Fair Russia faction in the Duma of the Russian Federation. Initiator of the bill allowing Russian Federation to admit in its composition, under the pretext of protection of Russian citizens, territories of a foreign country without a consent of that country or of an international treaty.

Zheleznyak, Sergei Vladimirovich; d.o.b. 30.7.1970 in St Petersburg (former Leningrad)

Deputy Speaker of the State Duma of the Russian Federation. Actively supporting use of Russian Armed Forces in Ukraine and annexation of Crimea. He led personally the demonstration in support of the use of Russian Armed Forces in Ukraine.

Slutski, Leonid Eduardovich; d.o.b. 4.01.1968 in ??scow

Chairman of the Commonwealth of Independent States (CIS) Committee of the State Duma of the Russian Federation (member of the LDPR). Actively supporting use of Russian Armed Forces in Ukraine and annexation of Crimea.

 

And the Russian military leaders:

Vitko, Aleksandr Viktorovich; d.o.b. 13.9.1961 in Vitebsk (Belarusian SSR)

Commander of the Black Sea Fleet, Vice-Admiral. Responsible for commanding Russian forces that have occupied Ukrainian sovereign territory.

Sidorov, Anatoliy Alekseevich

Commander, Russia’s Western Military District, units of which are deployed in Crimea. Commander of Russia’s Western Military District, units of which are deployed in Crimea. He is responsible for part of the Russian military presence in Crimea which is undermining the sovereignty of the Ukraine and assisted the Crimean authorities in preventing public demonstrations against moves towards a referendum and incorporation into Russia.

Galkin, Aleksandr

Russia’s Southern Military District, forces of which are in Crimea; the Black Sea Fleet comes under Galkin’s command; much of the force movement into Crimea has come through the Southern Military District. Commander of Russia’s Southern Military District (“SMD”). SMD forces are deployed in Crimea. He is responsible for part of the Russian military presence in Crimea which is undermining the sovereignty of the Ukraine and assisted the Crimean authorities in preventing public demonstrations against moves towards a referendum and incorporation into Russia. Additionally the Black Sea Fleet falls within the District’s control.

 

* * *

And the full EU statement:

 

via Zero Hedge http://ift.tt/1fSQ2d1 Tyler Durden

Submitted by James H. Kunstler of Kunstler.com,

Those of you too caught up in Lady Gaga’s latest cutting edge art project — she arranged for another woman to vomit on her while seated at the keyboard to show, well, I guess to demonstrate that not even vomit cannot stop the power of pop music — may have missed the latest moves in our nation’s foreign policy quest to remain Hall Monitor of the World. It appears that the Crimean peninsula has voted rather persuasively to become part of adjoining Russia, a nation that they were functionally a province of longer than the USA has been the independent and exceptional beacon of liberty that we became. Now, all that’s left are some procedural formalities, and then our side has promised to do some very bad things to punish Russia for this dastardly outcome.

Have the Lady Gaga fans forgotten that our country set this whole fiasco in motion by promoting a tug-o-war between a proposed Russian free trade zone (the Customs Union) and the European Union (another trade zone) with Ukraine as the rope? Alas, the rope broke in the early going, leaving the Russians to try to splice it back together in some way that aligns with the ethnic composition of the territory and their treaty perquisites regarding port facilities on the Black Sea. This “crisis” has got Secretary of State Kerry pulling his hair out, perhaps in his own personal quest to achieve mature male hair equality with Russian Foreign Minister Sergey Lavrov. Mr. Kerry has more work to do before the world will stop calling him “a haircut in search of a brain.”

Notice that for ten years the Russians have not been jumping up and down as the USA hops from one Central Asian state to the next blowing things up and arranging affairs so that hundreds of thousands of people get killed — quite a few by our cunning model airplanes controlled by military video gamesters, who blow away “folks” on morning watch before repairing to the nearest Taco Bell for an order of Doritos Locos (and a chance to watch Lady Gaga get vomit-tagged on their iPhones). I wonder how the USA would feel if the Russian foreign ministry ginned up an operation to persuade Texas to secede from the Union (again).

What will be the next step of the menswear model in the oval office? Is he coordinating with the EU to make sure that Russia can’t sell its products to anyone, say, the EU, which really has nowhere else to buy a great deal of the methane gas it uses every winter to keep the pipes from freezing? Of course our country has made promises that it will export liquefied natural gas to Europe from the depleting shale plays of Texas, Louisiana, and Arkansas — but, wait a minute (or maybe five years) because we have to build new pipelines, gas export terminals, and a fleet of compressed gas tanker ships before that’ll work. But maybe Europe will have five exceptionally mild winters until then. Note to Mr. Obama: increase National Prayer Breakfasts to once-a-month.

Then there is the question of what Russia may offer to do to the USA in return. Perhaps nothing, because America is doing such a good job of imploding under its own fecklessness and inertia. If I were Mr. Putin — not saying I want to be, you understand, but in the spirit of conjecture — I would just kick back and tune in on the Web to watch this nation of overfed clowns and tattooed savages vomit over each other, since that is apparently now embroidered into the zeitgeist. Mr. Putin could also (in the spirit of the game of chess, which he is reputed to be good at) add some frisson to the situation by stealthily unloading quantities of Russian-held US Treasury paper, not to crash the market but just enough to turn the ten-year bond above the 3.00 percent line — a point at which the US government’s bankruptcy (that is, inability to service our debt) creeps above the horizon like a bad moon rising.

State Department chess players are gloating at the moment that the Russian ruble has lost ten percent of its value this year. No doubt a few functionaries in the Kremlin are going boo-hoo over this. But remember: they are a nation who lost about 8.6 million soldiers to overcome Hitler. Do you think a little austerity will persuade them to cede Ukraine to the Walt Disney Company? Has anyone in the pay of America’s Deep State asked themselves whether it really matters to us who runs Ukraine? Did it matter to us before and then after the Soviet regime collapsed? What was so terrible about Ukraine joining the Russian free trade zone that we felt compelled to go in and vomit all over it?

via Zero Hedge http://ift.tt/1mdFLM2 Tyler Durden

Rook to G8, check.

• RUSSIA MAY ASK UKRAINE TO PAY ITS $20B SHARE FOR EX-SOVIET DEBT

Pidgeon playing checkers response time.

This should come as no surprise as we warned of at least $3b in bonds that are due very soon…

the Ukraine owes $3 billion to Russia in bonds that have been issued under UK law. One of the stipulations of the bonds is that if the Ukraine's debt-to-GDP ratio should exceed 60%, the bonds will become immediately callable.

 

Once the Ukraine gets funding from the IMF,  this is of course going to happen right away – its debt-to-GDP ratio will then most definitely exceed 60%, so the first $3 billion of any aid the Ukraine receives in the form of loans will right away flow into Russia's coffers.

 

Of course there may be litigation first, but as Greek bondholders have found out, all those who held bonds issued under UK law were actually paid in full, while everybody else had to accept the 'PSI' and could basically go pound sand.

via Zero Hedge http://ift.tt/1gv2oDw Tyler Durden

As the US and EU press forward with sanctions – proclaiming them as the first step in punishing economic actions – the world’s stock markets could not be happier. European stocks are up over 1% – their best day in 6 weeks; Germany – notably hard-hit on the basis of its gas-dependence – is surging by the 2nd most this year as Italian stocks rally a ridiculous 2.4% (its 2nd best day in 7 months). Everyone loves a good short-squeeze on war escalation but we suspect the surge in Russian stocks – up 8.5% from Friday lows –  (and the Ruble) will be disappointing more than a few of the world’s great thinkers in Washington and Brussels.

European Stocks surge…

 

Led by a huge short squeeze as sanctions were announced (led by Italian stocks of course!!)

 

But – Russian stocks are roaring – up 8.6% from Friday’s lows… not exactly what the politicians were hoping for…

 

This is the biggest 2-day swing in 18 months for Russian stocks – imagine how much higher it will go when the US reallt gets going on sanctions.

 

Charts: Bloomberg

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