Forex and Me

UK bank stops funding cluster bombs

Royal Bank of Scotland (RBS) has given in to pressure by Amnesty International and decided to stop investing in companies that produce cluster bomb, media reports said.

Two British companies of Lockheed Martin and Alliant Techsy that are well-known producers of cluster bombs, have been enjoying investment by the RBS, British media reported.

A campaign was launched by the Amnesty and other NGOs, which saw over 10,000 people email the bank’s chief executive Stephen Hester to demand that it disinvest, the report said.

The bank had initially denied that either Lockheed Martin or Alliant Techsystems were involved in the actual production of the deadly munitions, which are banned under the Oslo convention, and said it was therefore not technically in breach of the convention.

But a spokesman said it had now agreed to end its investment in the two firms and pledged a commitment to work with other banks and the government to establish guidelines which would stop British banks from investing in such companies in the future.

?After discussions with various NGO groups we have identified some defence-sector clients whose activities could be considered to be outside the spirit of the convention?, said RBS director.

?As a result we will be suspending all further services to any client where we cannot be certain that they are in compliance with our policy. We will seek to work with both the UK government and NGO groups to create clarity on this issue and encourage other banks to do the same?, the RBS x=chief added.

Amnesty International’s arms programme director Oliver Sprague welcomed the announcement but said it was disappointing RBS had only made the move in the face of public furore.

MOL/HE

31 Aug 2011 at 2 PM

STORY LINK Foreign Exchange Rates : Currency Predictions - GBP, USD, EUR, AUD, NZD

POUND STERLING

No data releases in the UK today have led the Pound to drift downwards against the other majors. Tomorrow?s PMI Manufacturing sector survey will be closely watched ? last month?s counterpart figure disappointed, causing downward pressure on the Pound. NEAR-TERM OUTLOOK ? NEUTRAL TO NEGATIVE.

US DOLLAR ? The Pound Dollar exchange rate (GBP/USD) is 1.6328

Yesterday afternoon?s weak US Consumer Confidence survey and the release of the minutes of the August FOMC meeting last night have knocked the wind out of the sails of the US Dollar. The Dollar had been trending stronger since last Friday, but market participants were spooked by the FOMC minutes which revealed that US policy-makers are actively considering a further loosening of domestic monetary policy. NEAR-TERM OUTLOOK ? NEUTRAL TO POSITIVE.

EURO ? The Pound Euro exchange rate (GBP/EUR) is 1.1306

This morning?s German unemployment data showed that the number of workers without gainful employment in the Eurozone?s powerhouse economy continued to drop this month. This has helped prop up the Euro against the other majors and raises hopes for a positive German GDP growth figure tomorrow. NEAR-TERM OUTLOOK ? NEUTRAL TO POSITIVE.

AUSTRALIAN DOLLAR ? The Pound Australian Dollar exchange rate (GBP/AUD) is 1.5279

Global stocks have continued to push forward over the past 24 hours, causing the Australian Dollar to further strengthen on the currency markets. The GBP AUD rate is now over 10c lower than its 5-month high of the second week of this month, leaving the Aussie in danger of profit-taking by speculators. NEAR-TERM OUTLOOK ? NEUTRAL TO POSITIVE .

NEW ZEALAND DOLLAR ? The Pound New Zealand Dollar exchange rate (GBP/NZD) is 1.9120

The Kiwi has strengthened dramatically over the past two weeks as appetite for risk flooded back into global markets following the stock market wobble of the first half of this month. This saw the GBP NZD rate make a failed run at 1.9000 earlier today. The retracement which followed was partly driven by weak Japanese and South Korean manufacturing sector data released overnight, so it is possible that the forward move for GBP NZD may have legs. NEAR-TERM OUTLOOK ? NEUTRAL TO POSITIVE.

For other live currency exchange rates and a currency converter see the currency news website.

TAGS: American Dollar Forecasts Australian Dollar Forecasts Currency Predictions Euro Forecasts New Zealand Dollar Forecasts Pound Australian Dollar Forecasts Pound Dollar Forecasts Pound Euro Forecasts Pound New Zealand Dollar Forecasts Pound Sterling Forecasts

According to a Treasury Inspector General audit, Individuals Who Are Not Authorized to Work in the United States Were Paid $4.2 Billion in Refundable Credits

Redaction Legend:
1. Tax Return/Return Information
2(f). Risk circumvention of agency Regulations or Statutes

IMPACT ON TAXPAYERS

Many individuals who are not authorized to work in the United States, and thus not eligible to obtain a Social Security Number (SSN) for employment, earn income in the United States. The Internal Revenue Service (IRS) provides such individuals with an Individual Taxpayer Identification Number (ITIN) to facilitate their filing of tax returns. Although the law prohibits aliens residing without authorization in the United States from receiving most Federal public benefits, an increasing number of these individuals are filing tax returns claiming the Additional Child Tax Credit (ACTC), a refundable tax credit intended for working families. The payment of Federal funds through this tax benefit appears to provide an additional incentive for aliens to enter, reside, and work in the United States without authorization, which contradicts Federal law and policy to remove such incentives.

WHAT TIGTA FOUND

Claims for the ACTC by ITIN filers have increased from $924 million in Processing Year 2005 (the calendar year in which the tax return was processed) to $4.2 billion in Processing Year 2010. Clarification to the law is needed to address whether or not refundable tax credits such as the ACTC may be paid to those who are not authorized to work in the United States. *********************2(f)*********************************** Also, employees in the Accounts Management Taxpayer Assurance Program are not taking steps to notify taxpayers when it is obvious their SSNs and names have been compromised.

TIGTA also found that a feature on tax preparation software programs which automatically takes the taxpayer identification number and enters it as the identifying number for the taxpayer?s Wage and Tax Statements ******************2(f)*************************************.

WHAT TIGTA RECOMMENDED

TIGTA recommended that the IRS work with the Department of the Treasury to seek clarification on whether or not refundable tax credits may be paid to individuals who are not authorized to work in the United States. TIGTA also recommended the IRS require individuals filing with ITINs and claiming the ACTC to provide specific verifiable documentation to support that their dependents meet the qualifications for the credit, including residency, and that questionable Child Tax Credit (CTC) and ACTC claims on ITIN returns **********2(f)*******************************. The IRS should also notify taxpayers when their SSNs are compromised and ensure that software packages do not auto-populate an ITIN onto Wage and Tax Statements.

IRS management agreed to discuss with the Department of the Treasury the issue of ITIN filers? ACTC eligibility. The IRS did not agree to require additional documentation to support CTC and ACTC claims on ITIN returns ********************2(f)*********************************** The IRS is exploring options to alert taxpayers whose SSNs have been compromised and plans to address software that auto-populates an ITIN onto Wage and Tax Statements and take sanctions for noncompliance.

American Recovery and Reinvestment Act of 2009 Made Fraud Easier

The Washington Post commented on the fraud in Undocumented workers got billions from IRS in tax credits, audit finds

Sen. Orrin Hatch (R-Utah), ranking member of the Senate Finance Committee, On Friday announced plans to examine the refunds.

?The disconcerting findings in this report demand immediate attention and action from Congress and the Obama Administration,? Hatch said in a statement.. ?With our debt standing at over $14.5 trillion and counting, it?s outrageous that the IRS is handing out refundable tax credits…to those who aren?t even eligible to work in this country.?

Wage earners who do not have Social Security numbers and are not authorized to work in the United States can use what the IRS calls individual taxpayer identification numbers. Often these result in fraudulent claims on tax returns, auditors found.

Their data showed that 72 percent of returns filed with taxpayer identification numbers claimed the child tax credit.

Changes to tax law are partly to blame for the explosion in refunds for additional child tax credits in recent years, auditors found. Before 2001, filers needed to have three or more children to qualify ? and to owe more Social Security taxes than earned income credits.

But those requirements have been eliminated and the allowable refund for each child doubled. The American Recovery and Reinvestment Act of 2009 also made the refund easier to get, auditors found.

Fraud and government programs go hand-in-hand.

In my opinion we should kill this ridiculous program entirely. The next best alternative is to not grant any credits to anyone who does not have a social security number and is not a US citizen.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
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No jobs, no buyers of stock index futures

Buyers went on strike after a massive two-week rally that likely forced most of bears to run for cover…just before reversing. This morning’s dismal jobs numbers, or maybe lack of numbers, triggered a wave of liquidation ahead of an uncertain and long weekend.

Specifically, the U.S. economy added NO jobs last month to post the worst results in 11 months and the first time since 1945 that we’ve seen a flat-line. Although zero is better than a negative reading it was well below expectations and is certainly a thorn in the side of the bulls.

Yesterday’s failure at 1230 was a bit of a clue as to how today might go, but when we mentioned the S&P could pull back as low as 1170 we weren’t counting on in happening today. Although, looking back we should have guessed it…after all, holiday weekend, political chaos and a lack of confidence combined together will always trump fundamentals.

It is clear that the economy has hit a rough patch, and we highly doubt the recovery will be swift…but we also feel like many of the days issues have been given a bit too much credence. Nonetheless, emotional trade can prolong agony for long periods of time and history suggests we could get a full retest of the lows before things begin looking rosy on Wall Street again.

Our charts point toward 1170 being the “make or break” level and this leaves us relatively neutral and waiting for clearer waters next week. The way we see it, the bulls have a slight edge on Monday due to near-term technical support and possible optimism over the President’s job plan (although we feel any optimism regarding a too little, too late plan will be unfounded). Also, if Tuesday comes around and it turns out to have been a tame three days off, investors might have had enough time to cool their heads and get back into the saddle.

If you are trading the September S&P, look for near-term support near 1166, 1144 and then 1109. Resistance on the way up will be 1189 and 1206.

* Due to time constraints and our fiduciary duty to put clients first, the charts provided in this newsletter may not reflect the current session data. However, market analysis and commentary does.

**Seasonality is already factored into current prices, any references to such does not indicate future market action.

Please note: An e-mini S&P and e-mini NASDAQ chart are used because they better for charting purposes, but trade recommendations can be applied to either the full-sized S&P or the mini. Unless otherwise noted, profit and loss will be based on the mini version.

Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading

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In other markets…

8-26- Clients were advised to sell October corn 820 calls for about 9 cents.

9-1 - Clients were instructed to take a quick profit, fills were reported near 3’6 to lock in a profit of about $263.50 before commission and assuming an entry of 9 cents.

9-2 - Clients were advised to sell the November 30-year bond 151 calls for 27 ticks or better.

(Our clients receive short option trading ideas in other markets such as gold, crude oil, corn, soybeans, Euro, Yen, and more. Email us for more information)

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Lessons from the Pros

Subscribe to the Weekly Newsletter published by Online Trading Academy. Receive the full newsletter with charts!

Mike went over market data and outlook for Friday. Diana explained how Real Estate can easily be a major asset class to trade on the longer term. She says the bottom is near and now is the time to learn how to evaluate any and all kinds of properties.

Click on the image below to download the mp3 file:

Lessons from the Pros

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Mike talked about the end of the month and the upcoming quadruple witching day on Sept 17. Mike and Don discussed the differences and importance of seeing the Globex night Highs and Lows for strong reference number the following day. Using a Percent chart, they discussed the ?leader/laggard? effect.

Click on the image below to download the mp3 file:

Lessons from the Pros

Subscribe to the Weekly Newsletter published by Online Trading Academy. Receive the full newsletter with charts!

Mike talked about the end of the month and the upcoming quadruple witching day on Sept 17. Mike and Don discussed the differences and importance of seeing the Globex night Highs and Lows for strong reference number the following day. Using a Percent chart, they discussed the ?leader/laggard? effect.

Click on the image below to download the mp3 file:

CERNOBBIO, Italy, Sept 3 (Reuters) - The new framework the European Commission is working on to avoid taxpayers having to bail out banks again might be delayed due to market conditions, Competition Commissioner Joaquin Almunia said on Saturday.

The European Commission presented a blueprint last year to boost the powers of the bloc’s authorities to intervene in failing banks.

“We are prepared to adopt the decisions for the stable regime to control state aid in cases of bank restructuring at the end of this year, but given the situation of the markets I would be prudent,” Almunia said at a conference.

“I am ready to propose to my colleagues in the Commission to adopt the new regime but only if market conditions permit,” he said.

Almunia said he will be discussing the issue at a meeting of euro zone finance ministers in November.

Asked about the IMF’s estimate regarding a 200 billion euro capital shortfall at European banks, Almunia said a set of rigorous stress tests on the banks had only recently been carried out and only nine had shown they needed capital.

“We are very well placed to monitor the situation of the banking system in Europe and we are the best placed to assess what is the real situation of the sector,” he said.

(Reporting by Stephen Jewkes)

Lessons from the Pros

Subscribe to the Weekly Newsletter published by Online Trading Academy. Receive the full newsletter with charts!

Mike talked about the end of the month and the upcoming quadruple witching day on Sept 17. Mike and Don discussed the differences and importance of seeing the Globex night Highs and Lows for strong reference number the following day. Using a Percent chart, they discussed the ?leader/laggard? effect.

Click on the image below to download the mp3 file: