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US stock market daily report (March 12, 2013, Tuesday)

Contributed by Millennium Traders

As growing output from non-member countries, particularly North American shale oil eating into market share of Organization of Petroleum Exporting Countries, OPEC members said Tuesday that demand for OPEC oil in 2013 will be 100,000 barrels a day lower than previously forecast. A landmark study published in October 2013 by the International Energy Agency forecast that by 2020 - U.S. oil output could overtake Saudi Arabia, OPEC's biggest producer. Demand for OPEC oil is expected to drop to 29.7 million barrels a day in 2013, compared to 30.1 million barrels a day in 2012. Mainly due to production in the U.S. where output is forecast to hit its highest level since 1985, non-OPEC supply is expected to grow by 1 million barrels a day in total for 2013. OPEC highlighted the stumbling blocks that face the U.S. oil industry including the high rates of decline in production associated with the type of wells being drilled in the U.S. "The risks associated with the US supply forecast remain high and careful follow-up of current production data is required in order to re-evaluate the projections as the year progresses," OPEC said.

Over 600,000 taxpayers who used H&R Block (HRB) to process their returns will experience a delay of at least six weeks due to a screw up by preparers at the firm. IRS spokeswoman Michelle Eldridge said H&R Block improperly filed Form 8863, used to claim educational credits, leaving a mandatory field blank - a snafu that will impact nearly 10% of the 6.6 million tax returns containing Form 8863. Error by the Block employees will supposedly effect tax returns processed before February 22. What many taxpayers do not realize is that, H&R Block requires no accounting background to prepare taxes, anyone can apply for and be hired to do, tax returns. However, taxpayers beware - in the event a taxpayer faces an audit by the IRS for a tax return processed by H&R Block, they cannot represent you - its you against the IRS, front and center. An audit of a taxpayer could be very costly and extremely stressful without the assistance of a Certified Public Accountant. Taxpayers should ask the H&R Block office preparing their returns as to whether they could assist them in the event of an audit. Taxpayers need to aware of this up front since the Block will not willingly offer this information and will only provide it, when asked. Don' be surprised to hear the response - you would be snafu'd! H&R Block does not announce to the public that they are not CPA's and cannot assist a taxpayer, under an audit. Just a little information that could cost a taxpayer a bundle accompanied with the desire, to never return to, the Block again.

The HSBC (HBC) admission in December to money laundering violations covering $200 trillion worth of transactions involving Mexican and Columbian drug cartels, groups allegedly aligned with terrorist organizations, sanctioned nations and others, sharpens the problem that banks of a certain size can actually engage in criminal activity with essential immunity. The financial crash of 2008 demonstrated the enormous taxpayer expense when banks become gambling operations with an understanding that their winnings will be privatized, and losses socialized. A penalty greater than one month’s profits for HSBC would cause systemic repercussions to the financial system, per decision of the U.S. Department of Justice therefore, HSBC was “too big to jail". HSBC’s American operations are incorporated in Maryland. U.S. Attorney General Eric Holder affirmed the “too big to jail” policy on March 6, "I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy. And I think that is a function of the fact that some of these institutions have become too large." Senator Elizabeth Warren (D-Mass.) on March 7 questioned three high-ranking officials at a U.S. Senate banking committee hearing if they would advise DoJ that HSBC could not be penalized further owing to systemic threats. Senator Warren followed a theory that Public Citizen advanced in January when we sent letters to the Federal Deposit Insurance Corp and the Maryland Attorney General asking them to terminate HSBC’s insurance and forfeit the company’s charter respectively. The ultimate goal with the letters is to force our financial policy makers and others willing to confront reality to use their authority given them by the Dodd-Frank Wall Street reform law, to break up the banks - too big to jail. Comptroller of the Currency Thomas Curry said, “The only question that Justice asked us was about the charter revocation. Our position was that this was a criminal justice decision." Undersecretary for Terrorism and Financial Intelligence with the U.S. Treasury Department David Cohen, “We told Justice that we weren’t in a position to offer any meaningful assessment” of taking various courses of action. Member of the Federal Reserve’s board of governors Jerome Powell said, “There were conversations, but that question wasn’t asked or answered. The questions were about this or that statute.” Bi-partisan regulators and members of Congress fully recognize and concur that large banks too big to prosecute, must be broken up.

The next version of the Galaxy S line of Smartphones is expected to be unveiled by Samsung Electronics Thursday evening in New York City. The Korean electronics giant looks to maintain its newly won spot on top of a brutally competitive mobile-device market by unveiling the Galaxy S4 Smartphone. The release of the next Galaxy S series is expected to feature a 5-inch screen plus, quad-core processor. Giving an early jump against the next iPhone from archrival Apple Inc. (AAPL), Samsungs latest device is expected to launch in spring 2013. In the lucrative market, largely overshadowing many other device manufacturers that end up sharing smaller pieces of the Smartphone pie, Samsung and Apple are locked in a battle for Smartphone supremacy.