STOCK MARKET WATCH, Tuesday December 23

[ozymandius]

Source: DU

STOCK MARKET WATCH, Tuesday December 23, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 28
WHERE'S OSAMA BIN-LADEN? 2610 DAYS
DAYS SINCE ENRON COLLAPSE = 2907
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

---

U.S. FUTURES &
MARKETS INDICATORS>
NASDAQ FUTURES-----------------------------S&P FUTURES

---

AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.
$1 USD = EUR 1.06678
$1 USD = JPY 116.6200

In recognition of those prescient of the Dow's precipitous return of Bush values (9/29/08): JuneBourder and AnneD

AT THE CLOSING BELL ON December 21, 2008

Dow... 8,519.69 -59.42 (-0.70%)
Nasdaq... 1,532.35 -31.97 (-2.04%)
S&P 500... 871.63 -16.25 (-1.83%)
Gold future... 847.20 +9.80 (+1.16%)
30-Year Bond 2.60% +0.04 (+1.41%)
10-Yr Bond... 2.14% +0.01 (+0.47%)






GOLD,EURO, YEN, Loonie and Silver

---

PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

---

Read more: DU

[ozymandius]

1. Market WrapUp

The Coming Oil Train Wreck
First stop: Mexico?
BY TONY ALLISON

Only a true contrarian can worry about high oil prices, shortages and global economic shockwaves when the price of oil has fallen from $147 to under $40 per barrel in less than six months and gasoline is now less than $2 a gallon! I should be singing “Happy (driving) days are here again,” but I’m not. The facts speak otherwise, and the time for preparation and mitigation is growing short.

Aside from a few Paul Revere’s such as Matt Simmons, there is precious little media alarm or urgency over an issue that is historic in nature and monumental in scope. The stark IEA (International Energy Agency) report released this fall was mostly ignored in the media, other than to highlight that 2009 will feature “demand destruction.” Other headlines touted “Goodbye to the oil supercycle.” The message sent to the public; lower oil prices ahead, problem solved. Unfortunately, the critical message of 9.1% global oil depletion was ignored.

....

Be it late 2009, 2010 or even 2011, the price of energy is virtually a lock to head back to its old highs and likely well beyond. Deleveraging and psychological forces can rule the markets for any short term period. Looking ahead, the fundamentals will prevail, as they always do. As economies around the world are printing money for huge stimulus programs, oil companies are shuttering production. Combined with a 9.1% depletion rate, the imbalances are growing. A crossroads is coming, where demand will re-ignite at some point and supply will have difficulty catching up. We have a liquid fuel crisis. We are decades from electrifying the transportation system, and wind, solar and nuclear will not solve a liquid fuel shortage. At least in the US, the best opportunity appears to be rapid conversion to natural gas-powered transportation.

http://www.financialsense.com/Market/wrapup.htm

[GliderGuider]

28. This is precisely what will prevent a recovery from this depression

Each time the global economy tries to get up from the mat, increased demand for oil will cause another price spike that will knock it flat again. The combination of Peak Oil and the financial collapse is, IMO, the single greatest single risk to industrial civilization over the medium term.

It's good to see others finally figuring out that the "renewable energy economy" is a chimera. But we should be cautious about just burning natural gas to make the trip to Walmart. One look at England's precarious gas situation should be enough to convince anyone with two neurons that this is not a long-terms solution.

[Ghost Dog]

59. Actually, the most effective immediate meaures involve

conservation; ie. cut consumption, reduce waste, increase efficiency (insulate your house!, walk/cycle more!) ... increase car fuel taxes.

[tama]

65. But didn't you hear

what DUers responded to that idea - it would be political suicide for Obama - so never mind the cultural suicide of the who oil addicted civilization. Aren't people... something. :)

[ozymandius]

2. Today's Reports

08:30 Chain Deflator-Final Q3
Briefing.com 4.2%
Consensus 4.2%
Prior 4.2%

08:30 GDP-Final Q3
Briefing.com -0.5%
Consensus -0.5%
Prior -0.5%

10:00 Existing Home Sales Nov
Briefing.com 4.95M
Consensus 4.93M
Prior 4.98M

10:00 New Home Sales Nov
Briefing.com 415K
Consensus 420K
Prior 433K

10:00 Mich Sentiment-Rev. Dec
Briefing.com 58.8
Consensus 58.6
Prior 59.1

http://www.briefing.com/Investor/Public/Calendars/EconomicCalendar.htm

[UpInArms]

35. U.S. Q3 GDP down 0.5%, unrevised and as expected

01. U.S. Q3 pretax corporate profits down revised 1.2% vs 1.0% p
8:30 AM ET, Dec 23, 2008

02. U.S. Q3 core PCE up 2.4% vs 2.6% prev est.
8:30 AM ET, Dec 23, 2008

03. U.S. Q3 GDP down 0.5%, unrevised and as expected
8:30 AM ET, Dec 23, 2008

[UpInArms]

37. U.S. GDP unrevised at a 0.5% fall for third quarter - beware the bad news of the 4Q

http://www.marketwatch.com/news/story/US-Q3-GDP-down-05/story.aspx?guid=%7B282E197A%2DAE1C%2D47AE%2DB0EB%2D7C9F6C8C951F%7D

WASHINGTON (MarketWatch) -- The U.S. economy slowed sharply in the third quarter, declining at a 0.5% annual rate, unrevised from last month's estimate, the Commerce Department reported Tuesday.

It's the weakest quarterly growth rate since the first quarter of 2001. The economy grew 2.8% in the second quarter.

Economists now say that a recession began December 2007, based on data showing declining employment, incomes and industrial production. But it didn't really sink in until the July-September quarter.

For the current quarter, economists are predicting a sharp decline in the neighborhood of 6.0%. This would be the biggest drop since the early 1980s.

Gross domestic purchases -- the total value of goods and services bought by U.S. residents -- fell 1.5% in the third quarter, experiencing downward momentum after falling only 0.1% in the second quarter. Final sales of domestic product, including exports, fell 1.3%.

The third-quarter gross domestic product was in line with the forecasts of economists surveyed by MarketWatch. See Economic Calendar.

In the revision released Tuesday, stronger commercial building was offset by less investment in equipment and software. Read full survey.

Core consumer inflation, which excludes food and energy costs, was revised lower to a 2.4% annualized pace in the quarter from 2.6% estimated previously. Consumer prices rose 2.3% compared with the same quarter one year ago, essentially within the Federal Reserve's comfort zone for inflation.

...more...

[UpInArms]

75. U.S Nov new-home sales weakest in 17 years - UMich sentiment up on crack smokin'

33. UMichigan consumer sentiment rises to 60.1 in December
10:05 AM ET, Dec 23, 2008

34. Economists expected sentiment index reading of 58.5
10:05 AM ET, Dec 23, 2008

35. U.S. Nov. existing home sales fall 8.6% to 4.49 mln units
10:00 AM ET, Dec 23, 2008

36. U.S. Nov. new homes for sale down 35.3% from yr-ago
10:00 AM ET, Dec 23, 2008

37. U.S Nov new-home sales weakest in 17 years
10:00 AM ET, Dec 23, 2008

38. U.S. Nov new-home sales slightly above 400,000 pace expected
10:00 AM ET, Dec 23, 2008

39. U.S. Nov. new-home sales down 2.9% to 407,000 pace
10:00 AM ET, Dec 23, 2008

[UpInArms]

76. U.S Nov new-home sales weakest in 17 years

http://news.yahoo.com/s/afp/20081223/pl_afp/useconomypropertysales

WASHINGTON (AFP) – Sales of existing US homes slumped a further 8.6 percent in November amid weak consumer confidence and a deteriorating economy, an industry group said Tuesday.

The National Association of Realtors said sales of homes and apartments fell to a seasonally adjusted annual rate of 4.49 million units in November from a downwardly revised level of 4.91 million in October.

The was 10.6 percent below the pace in November 2007 and reflected the ongoing woes of the sector since a bubble burst around two years ago.

"The quickly deteriorating conditions in the job market, stock market, and consumer confidence in October and November have knocked down home sales to another level," said NAR chief economist Lawrence Yun.

"We hope the home sales impact from the stock market crash turns out to be short-lived, as was the case in 1987 and 2001."

The groups aid it hoped low interest rates would help revive the market. Last week, Freddie Mac reported the 30-year mortgage rate fell to 5.19 percent -- the lowest on record since the series began in 1971.

[ozymandius]

3. Oil below $40 on fears of weaker crude demand

VIENNA, Austria – Oil prices fell below $40 a barrel Tuesday, adding to a sharp drop overnight, on concerns that energy demand is evaporating in the face of a severe global economic slowdown.

Prices have fallen 73 percent since July on investor fears that massive job layoffs and plummeting consumer spending in the U.S. are weakening global oil consumption.

By noon in Europe, light, sweet crude for February delivery dipped 6 cents to $39.85 a barrel in electronic trading on the New York Mercantile Exchange.

....

Gasoline futures on the Nymex gained just over a penny to fetch 90 cents a gallon. Heating oil dropped 0.45 cent to $1.34 a gallon while natural gas for January delivery rose by close to 10 cents to $5.39 per 1,000 cubic feet.

http://news.yahoo.com/s/ap/oil_prices

[ozymandius]

17. OPEC Might Meet Again Before March, Venezuela Says

Dec. 23 (Bloomberg) -- The Organization of Petroleum Exporting Countries may hold an emergency meeting before its next scheduled meeting in March, Venezuelan Energy Minister Rafael Ramirez said.

Ramirez, who was attending a summit of gas-producing nations in Moscow, didn’t say exactly where or when such an oil meeting might take place.

Four days ago, OPEC President Chakib Khelil said OPEC may meet in Kuwait City on Jan. 19 to discuss further production cuts, adding that OPEC will continue to reduce supply as demand falls until an “equilibrium” is reached.

http://www.bloomberg.com/apps/news?pid=20601086&sid=aGlJsx.jylQQ&refer=news

[ozymandius]

4. Shoppers haggle for deals from desperate retailers

NEW YORK – If you're looking for an extra bargain before the holidays, you may only have to ask. With holiday sales shaping up to be the lowest in years, possibly the worst since the industry began annual comparisons in 1969, retailers say they're taking consumers' demands for good deals seriously. Some are extending return policies, while others are matching competitors' prices. Many are volunteering on-the-spot discounts and even letting customers haggle prices well down from what's marked in a desperate bid to make the cash register ring.

"You'd have to be a moron not to ask for a discount," said Stephen Hoch, a retailing expert at the Wharton School at the University of Pennsylvania.

More and more consumers are doing just that, treating a trip to the mall like a visit to the used car lot.

http://news.yahoo.com/s/ap/20081222/ap_on_bi_ge/desperate_retailers

[RetailSlave]

12. OH man, please don't ask me for a discount....

asking for a discount when you're at the cash register will probably just put some low-paid, completely lacking in authority part-timer on the spot. We really don't get to make those kinds of decisions, you know.

[ozymandius]

15. That's good to share here.

I have haggled before. But it was always on the sales floor. Plus, I haggled with a manager who had executive authority to re-write the price code before I proceeded to the checkout.

Thanks for pointing that out.

[RetailSlave]

22. My pleasure.

I have unusual expertise, but it's expertise, just the same!
Thanks for all you do Ozy!

[Hugin]

23. While we're on Social Etiquette.

It's considered uncouth to haggle with an Artist over one of their works. Especially, if the price is already below
$100.00. If you like it, buy it. If price is the only thing keeping you back, you don't really want the piece.

That's almost at-cost for them.

[Tansy_Gold]

77. Oh, thankyou thankyou THANKYOU Prag!!!!!!!!!!!!

I don't consider myself "An Artist" like some in my acquaintance, but my crafts are all one of a kind, hand made, dreamt and sweated and agonized over. When someone comes to my table or booth and says, "Hmm, $50 is more than I really want to pay. Will you take $40?" I want to smack them upside the head and say, "If I would have taken $40, you'd see $40 on the price tag."

Most artists underprice their work to begin with, because they want to sell it. If it's overpriced, it's because they really don't want to sell it!

I have a friend whose prices are so outrageous that people don't even look at his stuff once they've seen the price on a single piece. I think we've done half a dozen shows together over the past several years and I don't think he's sold anything at all. But he gets some satisfaction out of the price tags, I guess.

Not me. I want to sell!


More the fool




Tansy Gold

[DemReadingDU]

105. I'm curious, what do u create?

jewelry?

[Tansy_Gold]

108. among other things. . . . (apologies for big pictures)

[AnneD]

78. Thanks for bringing that up Prag......

I wish I had a nickel for every time someone haggled with hubby and tried to have him take 1/2 price. His price as a musician is 100 per hour. That is for his expertise, his tabla player, the equipment, lights, set up, and sound check an hour before.

His expertise-he has been playing since he was 4 years old, professionally since he was in his late teens. He has toured around the world and has appeared on several CD's so he doesn't need anymore exposure thank you. In his hands the sitar sounds like 5 sitars playing. Go ahead, try to find some one cheap-not everyone can make a pumpkin gourd and cheese cutting metal threads sound so good. No one every asked for their money back or were disappointed in his performance.

He breaks even with some change in his pocket. If he is really lucky-he'll pick up a new student. Thank God he has a day job. There are very few musicians that 'make it big' and all sacrifice to be full time. He has found a balance and loves to share his art. If he didn't have to eat, pay rent, or other mundane things-he would freely give his gift away for the love of it.

Pay the artist full price if you love the piece........and always buy the musician's CD if they have them.

[Robbien]

45. All headlines today are promoting sales have increased 2.6 percent. Of course that is misleading

This article lays out the real story behind all the misleading headlines.

U.S. Weekly Chain Store Sales -1%
http://www.diamonds.net/news/NewsItem.aspx?ArticleID=24640

Chain store retail sales in the United States fell 0.6 percent for the week ending December 20, 2008, according to the International Council of Shopping Centers (ICSC) and Goldman Sachs. The groups also found that some 80 percent of those shoppers planning to spend on gifts have now completed their shopping -- whereas for the week ending December 13 the completion rate was only 63 percent.

ICSC and Goldman Sachs, which partner on the weekly chain store summary, reported that one third of consumers were buying more gifts this year rather than gift cards, which helped push the week-to-week retail sales comparison up 2.6 percent. Michael P. Niemira, ICSC chief economist, said, “Even with this week-over-week pickup, ICSC Research expects monthly comparable-store sales will be down 1 percent or slightly more for December.”

Online retail sales for the November 1 through December 19 timeframe fell 1 percent to $24 billion, according to comScore yesterday. The drop in sales was the first for a holiday season since comScore began tracking retail in 2001. comScore predicts no year-to-year growth for online sales compared with Christmas season 2007.

[Festivito]

5. Debt: 12/19/2008 10,598,195,081,084.50 (DOWN 273,073,985.80) (Nearly zero.)

(An almost imperceptible change. Good morning.)

= Held by the Public + Intragovernmental(FICA)
= 6,360,410,841,483.38 + 4,237,784,239,601.18
DOWN 369,261,235.72 + UP 96,187,249.91
(NOTE: Excel 2007 cannot handle ten-trillion plus to the penny. It zeroes the penny.)

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

THINKING IN BILLIONS: 3 or 4 dollars per billion in a 300-Million person America.
If every American, man, woman and child puts in $3.33 each THAT'S 1B$.
A family of three: Mom, Dad, Child: THEIR SHARE IS TEN BUCKS in a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is a federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)
(I hate those end to end dollars to the moon and back, or years to spend $100/second. Just say'n)
If you read this and have a suggestion or comment, good or bad, I'd love to see it.

ANALYSIS:
There were 22 reports in the last 30 days.
The average for the last 22 reports is -2,460,383,733.79.
The average for the last 30 days would be -1,804,281,404.78.

There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 55 reports in 80 days of FY2009 averaging 10.43B$ per report, 7.17B$/day.

PROJECTION:
GWB** must relinquish the presidency in 32 days.
By that time the debt could be between 10.5 and 10.8T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
12/19/2008 10,598,195,081,084.50 GWB (UP 4,869,999,284,902.93 so far since Bush took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 573,470,184,172.10 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
12/01/2008 +038,288,359,563.07 ------------********** Mon
12/02/2008 +000,199,375,927.74 ------------********
12/03/2008 -000,525,799,120.43 ---
12/04/2008 -022,902,653,130.86 -
12/05/2008 -000,187,074,568.06 ---
12/08/2008 -000,759,942,653.72 --- Mon
12/09/2008 +000,031,558,514.41 ------------*******
12/10/2008 +000,087,731,393.17 ------------*******
12/11/2008 -019,940,834,952.80 -
12/12/2008 -000,182,958,692.63 ---
12/15/2008 +027,986,876,028.13 ------------********** Mon
12/16/2008 +000,172,636,444.49 ------------********
12/17/2008 -000,200,107,551.80 ---
12/18/2008 -057,877,925,051.10 -
12/19/2008 -000,369,261,235.72 ---

-36,180,019,086.11 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $933,563,277,825.43 in last 92 days.
That's 934B$ in 92 days.
More than any year ever, except last year, and it's 92% of that highest year ever only in 92 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 92 DAYS NOT 365.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3655650&mesg_id=3655662

[tclambert]

39. $273 million is "nearly zero?" That made me smile.

I know, I know. When you're talking ten trillion, a few hundred million is, well, 0.00273%. Still, winning that "nearly zero" in the lottery would be a big deal. And I certainly wouldn't mind having that "nearly zero" instead of the "more nearly zero" that I actually have.

Damn, I'm freakishly good with numbers, yet these numbers are so big they still boggle me.

[DemReadingDU]

42. NPR: To Make Sense, Put Numbers Into Context

Reminds of this NPR segment I heard yesterday morning

12/22/08 Monday NPR: Morning Edition
It's been a big numbers year for numbers in 2008. Take the $700 billion bailout for example. There are a lot of zeros and the numbers can easily turn into a blur. Economist Andrew Dilnot and journalist Michael Blastland try to make sense of numbers in their new book, The Numbers Game: The Commonsense Guide to Understanding Numbers in the News, in Politics, and in Life. They tell Renee Montagne that the secret is to put numbers into context.

http://www.npr.org/templates/story/story.php?storyId=98584956

[ozymandius]

6. More companies lining up for piece of bailout fund

WASHINGTON – A trio of reports due out Tuesday are expected to paint a bleak picture of the nation's housing market and the broader economy, as the deepening recession sends more companies lining up for a piece of the government's $700 billion bailout fund.

Wall Street expects the gross domestic product, the country's total output of goods and services, fell at an annual rate of 0.5 percent in the July-September quarter. That would match the estimate for GDP made a month ago, but economists believe that small drop will be followed by a much larger plunge in the current October-December quarter.

....

Barney Frank, chairman of the House Financial Services Committee, said Monday he is preparing legislation to require that some of the bailout money be spent for specific purposes, such as stemming foreclosures and reducing mortgage rates. Frank is pushing to get the second half of the $700 billion rescue fund released next month, before President-elect Barack Obama is inaugurated.

Frank's bill would impose tighter restrictions on the second $350 billion, such as requiring banks to report on their new lending every quarter and toughening limits on executive compensation. Many U.S. banks have received federal capital in an effort to stimulate lending.

http://news.yahoo.com/s/ap/20081223/ap_on_bi_ge/financial_meltdown

[dixiegrrrrl]

95. Before the ink is dry on the bill, Paulson will snatch up all the remaining money.

I am surprised he has not yet done so, by hook or crook.
Ok, by crook.

[ozymandius]

7. Housing crisis worsens as economy weakens

WASHINGTON (Reuters) – The desperate straits of many U.S. homeowners showed in new data released on Monday, suggesting efforts to help them are having limited success.

As the recession throws more people out of work, the rate of re-default on modified mortgages is rising and may worsen as the economy deteriorates, banking regulators said.

After much browbeating from Congress, banks and other mortgage lenders are beginning to do more, to modify home loans so that distressed borrowers can avoid foreclosure.

But the latest figures from regulators raise questions about how modifications are being done and how much they help, even as foreclosure rates hit record-setting levels.

http://news.yahoo.com/s/nm/20081223/ts_nm/us_financial_defaults

[Tansy_Gold]

10. Duh

Y'know, sometimes I wonder what the people at the top are using for brains? Do they not realize that if you give mortgages to people who have little realistic capacity for repaying those mortgages because they have little or no income, then revising those mortgages ALONE isn't going to help most of them?

The problem is the income source, not the mortgage. People are defaulting on mortgages they can't pay because they have insufficient income. Is this so hard to figure out? And as the unemployment rate rises, it stands to reason (as always, pun intended) that at least SOME of those increasingly unemployed people are among those with shaky, defaulted, or re-defaulted mortgages.

It's about as intelligent a treatment as seeing your toddler has cut his hand on a knife, so you put the antiseptic and the bandage on the knife handle.


Why don't we have a "duh" icon?


Tansy Gold (who is editng the typos made at a cold 5 a.m.)

[ozymandius]

13. I look at it two ways.

As you say, Tansy, there are those who never should have been awarded a pre-cert letter to begin with. Their income is insufficient. It always has been. And if the current economic trend is as persistent as prognosticators say it will be - then these poor souls will have insufficient income for the foreseeable future.

Then there are those who were caught with little bombs hidden in their mortgage documents - somewhere around page 425 - that says their fixed rate mortgage will become an ARM if the borrower overpays one month's payment, thus reducing the life of the loan without a prior agreement with the lender. That just plain sucks. People have been snared by that greedy line of script that so easily goes undetected in a mortgage agreement. Now they are at risk of losing their homes even if the fixed rate payment were manageable.

In scenario #2, I say modify the loan. Let the greedy lender eat those words. In scenario #1, sadly, these loans never should have been generated by greedy lenders/brokers in the first place. As you say - 'Duh' is the appropriate response there. There is no point in modifying something that is beyond repair. Euphemistically, this verbal trick is similar to the polite way language dresses up the bluntness of death where I grew up in the rural South. Here people say somebody either 'passed on' or 'passed away' as though they have just made a change of address. Rarely do they say, "He died." In similar terms - these mortgages need to be pronounced 'dead'. They were stillborn to begin with.

[Tansy_Gold]

26. Euphemisms aren't limited to the South, and defaulted mortgages

aren't limited to borrowers who shouldn't have had them. You're absolutely correct, Ozy, that the predatory terms in mortgages should be rewritten/excised, for those who have a reasonable expectation of paying under "normal" terms.

and obviously since the re-default rate isn't 100%, it means that at least some people are managing to find a way to keep the rewritten mortgages current. So it did work for some people and that's a good thing.

I guess ultimately my point is that again, anyone with half a brain can see that the 'solution' to this problem was doomed to failure because there was no real logic in it, and one has to therefore assume that at least SOME of the people who engineered the plan did so with the specific intent of maintaining the fraud, not fixing it.

No one with any authority is (publicly) announcing that they're looking at the causes of the problems and attempting to find solutions. All we get is screaming heads accusing borrowers of fraud. No one dares even whisper that the greedheads intended this to happen, and that they are STILL working to make it worse.

Because it's good for them.


But it's not good for




Tansy Gold

[specimenfred1984]

68. I say that all the time when listening to TV talking head whores

The root of the problem is fraud and crime, it'll never go away unless addressed and people are arrested. TVbots never go near the real root of the problem because they are complicit in spreading the propaganda of our corrupt culture.

[Demeter]

98. Most of the Brains Were Fired in Reagan's First Term

and any new brains that came along were RIFFed out on an annual basis. Or just terminally discouraged.

Contrary to rumor, I am not dead. Not even buried in snow (not yet, wait until Weds.) And the new computer has sat in its box for 9 days now..'cause I'm too frigging tired of work and nagging from the Kid about why haven't we done any Xmas shopping?

Going down for the third time...Demeter

[DemReadingDU]

106. Hi Demeter!

Thanks for checking in, Happy Holidays!

[snot]

109. Wish I cd rec. replies.

[InkAddict]

32. Gee, if you want to use that analogy, some folks in their 3rd

trimester of ownership, albeit having had up to a 20-year complicated term (complicated w/kids, old folks, and policies, were catagorically forced into a late-term abortion by industry-collapse eclampsia.

Maybe I'm not TOO upset not to be a grandma; no outcomes guaranteed in spite of the best of care and planning. Thirty years later, I shake my head thinking of the risks we took at our younger age, not once, but several times.

If a home is like a new-born, always needy but beautiful and full of potential, these folks lost a child, the HARDEST loss and worthy of abundant compassion. One may never again have the confidence to try again or the biologic clock may have expired.

TOO SAD!

[ozymandius]

34. It's horribly sad.

I doubt any borrower took out a massive loan thinking, "Gee, I can hardly wait to default on this thing." If you retrace the steps leading up to this disaster then you will most certainly come across the poor advice issued by grand figures that a majority of people admired at the time. I am thinking specifically of Greenscam and his thundering endorsement of ARMs and Bush's bally-hoo about home ownership by any means. These people, Greenie and Bushie, fed the hype that formed the foundations of their mythical aura. The Maestro Messtro has been strangely silent since reality caught up with his twenty years of drivel as Fed Chairman.

Good intentions and hope are the abstract casualties here. Directly and tangibly, this mess has permanently ruined lives.

[GliderGuider]

14. If there's no water in the river, it doesn't matter if you make the dam higher...nt

[Hugin]

19. Is it your day to channel Chauncey Gardiner?

http://en.wikipedia.org/wiki/Being_There

BTW, this is the SMW Movie of the Week.

[Dr.Phool]

24. It's always been one of my favorites.

[Hugin]

41. Do you suppose it's a coincidence the dying businessman's name is Rand?

Hmm... Deep, very deep.

[AnneD]

85. Mine too......

I am reduced to tears of laughter every time I see it. I loved Louise (the black cook that knew Chance and his simple mindedness) when she said," It's for sure a white man's world in America. I raised that boy since he was the size of a 'pissant' and I'll tell you he never learned to read nor write. No sir. Has no brains at all. Stuffed with rice pudding between the ears. Short-changed by the Lord and dumb as a jackass. Yes sir, all you got to be is white in America to get whatever you want. Gobbledegoop."

[GliderGuider]

56. Thanks, that's one of my favourite moves.

I aspire to be as connected to the universe as Chauncey was. Maybe in my next life...

[tama]

61. I think

the folly is even to start to imagine that what ever we do and no matter how we behave, we are not fully connected to the universe... even and especially when we are sleepwalking.

[GliderGuider]

63. I agree 100%

Forgetting that connection was what author Daniel Quinn called "The Great Forgetting". The sense of separation from nature that resulted from it gave rise to the common perception that the world consists of just two classes of things -- human beings and resources. To paraphrase Dr. Phil, "How's that working for us?"

Here's an amazing book on that topic: The Ascent of Humanity

[tama]

64. Yes

but "The Great Forgetting" is also fully connected to Universe... :)

[tama]

60. These days or OUR days

to channel Gardiner... I love that movie. :)

[Danascot]

58. "We ought to make the pie higher."

- G.W. Bush

[ozymandius]

8. Fed designates CIT Group as bank holding company

WASHINGTON – The Federal Reserve on Monday said it has approved CIT Group Inc. as a bank holding company, clearing a key hurdle for the firm to bolster its resources with loans and support from the government's financial rescue fund.

The Fed's decision means the New York City-based commercial financial services firm will have permanent access to the Fed's emergency loan window and also will be eligible for loans from the $700 billion rescue fund created by Congress on Oct. 3.

....

Bank holding companies can access both government programs, and should help CIT Group to replace borrowing it normally does in credit markets, which have essentially dried up since the financial crisis struck with force in September.

....

The Fed's approval for CIT Group to become a bank holding company follows similar authorizations changing the status of financial titans Goldman Sachs Group Inc., Morgan Stanley and American Express Co., so they could access the loan window and government rescue fund.

http://news.yahoo.com/s/ap/20081222/ap_on_bi_ge/fed_credit_crisis

[Hugin]

52. The stadium and Monday Night Football are saved.

:eyes:

[ozymandius]

9. European stocks higher on expected Dow rebound

LONDON – European stock markets rose modestly Tuesday in very light pre-Christmas trade ahead of an expected rebound on Wall Street, while Asian markets continued to fall in the wake of Toyota's second profits warning in just two months.

The FTSE 100 index of leading British shares was 40.63 points, or 1.0 percent, higher at 4,289.79 despite news that the British economy contracted by a bigger than anticipated 0.6 percent in the July-September quarter from the previous three month period. The figure updates the original extimate of 0.5 percent.

Meanwhile, Germany's DAX was 22.07 points, or 0.5 percent, higher at 4,661.09 and the CAC-40 in France was up 20.43 points, or 0.7 percent, at 3,171.79.

....

South Korea's Kospi retreated 35.3 points, or 3 percent ,to 1,144.31, Singapore's benchmark lost 1.2 percent and Australia's key index fell 0.7 percent. Japan's market was closed for a national holiday.

In China, Hong Kong's Hang Seng Index dropped 2.8 percent to 14,220.79 while Shanghai's main index plummeted 4.6 percent to 1,897.22 as both markets came under pressure after Beijing lowered a key interest rate late Monday.

Japan's market was closed for a public holiday.

http://news.yahoo.com/s/ap/20081223/ap_on_bi_ge/world_markets

[Dr.Phool]

21. They must be expecting people to buy GM stock for Xmas presents.

No thanks, I'll settle for a lump of coal.

[ozymandius]

25. Pizza makes a great stocking stuffer.

So do GM stock certificates. They make good padding for fragile items like glass baubles and fish.

[Dr.Phool]

29. I did wallpaper the upper half of my half-bathroom with LTV stock Certificates.

It was cheaper than wallpaper.

I took it down before I put the house on the market, because it may have been considered toxic. Probably worse than asbestos.

[ozymandius]

55. If you still have those certificates, you could be sitting on a gold mine.

Granted, it'd be a really tiny mine, impossible to place on a map. In value terms, the average person probably has metal of higher value in their teeth.

Were the certificates pretty?

LTV CORP
Last Trade: 0.001
Trade Time: Dec 22
Change: 0.00 (0.00%)
Prev Close: 0.001
Open: N/A
Bid: N/A
Ask: N/A
1y Target Est: N/A
Day's Range: N/A - N/A
52wk Range: N/A
Volume: 0
Avg Vol (3m): N/A
Market Cap: 104.68K
P/E (ttm): N/A
EPS (ttm): -12.223
Div & Yield: N/A (N/A)

[Dr.Phool]

57. I don't have them anymore, but they made a nice design.

When they came out of bankruptcy the first time, they issued every employee one share of the new stock. I think it was valued at about $13 then. When they were going under the second time, I collected a bunch from other people, when the postage to redeem them was more than their value.

The best thing about the employees holding a share, was when they started screwing the Steelworkers, and demanding more concessions, they'd get 1,000 disgruntled "Steelworker-Shareholders" at their shareholders meetings. The next year they held it in New Jersey, 500 miles away, and 1,000 angry employees showed up again.

[Roland99]

27. Not much longer and one can pick up GM stock at the Dollar Tree.

[ozymandius]

11. Madoff investor seeks relief from SEC: report (files claim against negligent SEC)

(Reuters) – An investor who lost nearly $2 million investing with Bernard Madoff has filed a claim against the U.S. Securities and Exchange Commission (SEC) alleging the agency was negligent in failing to detect an alleged decades-long fraud, the Wall Street Journal said.

Phyllis Molchatsky, a 61-year-old retiree from Valley Cottage, New York, is seeking $1.7 million in damages from the agency, the paper said.

http://news.yahoo.com/s/nm/20081223/bs_nm/us_madoff_investor_sec

[ozymandius]

30. Madoff Victims May Have to Return 6 Years of Profits, Principal

Dec. 23 (Bloomberg) -- Like some of Bernard Madoff’s clients, a Florida restaurant owner was lucky enough to withdraw part of his investment before the money manager allegedly confessed to a $50 billion Ponzi scheme. Now he’s worried he might be asked to give it back.

The 53-year-old investor, who asked not to be identified to protect his stake, took out about $600,000 this year from his $1.5 million account, using some of it to pay down a mortgage. He and other Madoff clients who withdrew funds as long as six years ago may be sued on behalf of other victims to return profits and even principal, securities and bankruptcy lawyers say.

....

A so-called clawback of paid-out funds in the Madoff liquidation could result in lawsuits against investors such as charities, hedge funds and individuals who redeemed profits and took out principal. Nonprofit institutions such as the Carl and Ruth Shapiro Family Foundation, a foundation controlled by Democratic U.S. Senator Frank Lautenberg of New Jersey, and Yeshiva University relied on funding from Madoff investments.

....

Under New York state law, which can be invoked for Madoff recoveries, a trustee can seek redemptions going back six years, said Tracy Klestadt, a New York bankruptcy lawyer.

In a similar case, U.S. Bankruptcy Judge Adlai Hardin in White Plains, New York, ordered investors of defunct hedge-fund manager Bayou Group LLC in October to disgorge profits they’d taken out. Investors were required to pay back any gains they’d redeemed involving “fictitious profits.” Before the fraud was discovered, Bayou paid out more than $135 million, according to court papers.

http://www.bloomberg.com/apps/news?pid=20601103&refer=us&sid=a3kFmYaaw5sY

[ozymandius]

16. Jobs axe hangs over investment banks in Asia

HONG KONG, Dec 23 (Reuters) - Investment bankers in Asia fear more job cuts in the next few weeks, having largely escaped the latest global layoffs that hit colleagues in other regions.

Layoffs in the industry could soon slice more than 1,000 jobs at Wall Street and European banks in Asia, industry sources say. Several hundred were wiped out here in the past month.

"It sounds like it's already starting to get bloody," said a Hong Kong hedge fund manager who works with investment banks.

Among the banks likely to be hit hard is Merrill Lynch, sources say. Its job reductions in Asia so far have been relatively small and the Wall Street bank is weeks away from being absorbed by the rescue of Bank of America Corp.

http://uk.reuters.com/article/marketsNewsUS/idUKHKG31437620081223

---

Bit by bit - we are seeing what effect Big Shitpile is wreaking inside Asian banks. They have been strangely guarded about how much of Big Shitpile they own until a couple of months ago.

Goldman Sachs, Citigroup and Morgan Stanley are also on the list for huge job losses in Asia.

[Tansy_Gold]

81. Goldman Sucks, Shitigroup, Morethan Stingy

Don't ask. I'm just in a really bizarre frame of mind

[Dr.Phool]

84. It's too early for that in your time zone.

But, then again, it's the holidays! :hi: :beer: :toast:

[ozymandius]

18. Frozen Ports in Long Beach, Singapore Mean Bleak 2010

Dec. 23 (Bloomberg) -- Chris Lytle, chief operating officer of the port of Long Beach, California, took in a panorama of the slumping world economy from his rooftop observation deck one day this month.

Shipping cranes stood still, truck traffic trickled and a cargo vessel sat idle, moored to a pier.

....

Port traffic has slowed from North America to Europe and Asia as a recession erodes consumer demand and the credit crisis chokes off loans to export-dependent companies. International trade is set to fall by more than 2 percent next year, the most since the World Bank began measuring it in 1971. Idle ports around the globe are showing how quickly a collapse in trade can spread, undermining growth in each country it reaches.

September and October are typically Long Beach’s busiest months as U.S. retailers take deliveries for holiday sales. This year, imports fell 15.8 percent from a year earlier in September, 9.5 percent in October and 13.6 percent in November.

....

The Baltic Dry Index, a measure of shipping costs for commodities, is down 93 percent from a record in May, a sign that traders expect export volumes to stay depressed.

http://www.bloomberg.com/apps/news?pid=20601109&sid=acrSIsXPr.38&refer=exclusive

[ozymandius]

20. Friedman Would Be Roiled as Chicago Disciples Rue Repudiation

Ozy: HA! HA!

Dec. 23 (Bloomberg) -- John Cochrane was steaming as word of U.S. Treasury Secretary Henry Paulson’s plan to buy $700 billion in troubled mortgage assets rippled across the University of Chicago in September.

Cochrane had been teaching at the bastion of free-market economics for 14 years and this struck at everything that he -- and the school -- stood for.

....

For half a century, Chicago’s hands-off principles have permeated financial thinking and shaped global markets, earning the university 10 Nobel Memorial Prizes in Economic Sciences starting in 1969, more than double the four each won by Columbia University, Harvard University, Princeton University and the University of California, Berkeley.

Chicago’s laissez-faire imprint underpins everything from U.S. President Ronald Reagan’s 1981 tax cuts and the fall of communism that decade to quantitative investment strategies.

In 1972, Friedman helped persuade U.S. Treasury Secretary George Shultz, former dean of Chicago’s business school, to approve the first financial futures contracts in foreign currencies.

Such derivatives grew more complex after Chicago economists created the mathematical formulas to price them, helping spawn a $683 trillion market that’s proved to be a root of today’s financial system breakdown.

http://www.bloomberg.com/apps/news?pid=20601109&sid=a3GVhIHGyWRM&refer=exclusive

---

While they're still at school, maybe these tenured snake oil salesmen can learn some new tricks.

[MilesColtrane]

31. More than hands-off, it's a war against the middle class.

And, all's fair in war, right?

If there was ever any doubt about the philosophy of the U of C disciples, I am reminded of Jimmy Malone's line to Eliot Ness from "The Untouchables":


"He pulls a knife, you pull a gun. He sends one of yours to the hospital, you send one of his to the morgue. That's the Chicago way..."

[InkAddict]

33. Per your sig, the Blues will pull us through n/t

Those others, they got lots of $$ but no rhythm.

Always searching for an appropriate theme song amid the dissonance.

[AnneD]

88. My fav line from The Untouchables.....

that I use time and again throughout my adult life......."Follow the money" . It reveals more than words and is the quickest way to cut to the chase.

[Demeter]

100. I Have Never Understood Why the Rich Would Start a Class War

They are outnumbered. They have nothing to gain from it. They will lose more than their wealth and power.

[Tansy_Gold]

101. But it defines them.

I try to explain this to the ISO every once in a while, but his eyes glaze over and then he just turns the tv on to ESPN or ESPN2 or ESPN classic or some such nonsense.

the class war is not logical; it is ideological/idiot-logical. In effect, they can't help themselves.

If they were using logic, of course they wouldn't persist in this madness, but because they are addicted to it, we must defend ourselves every so often. Sad, but true.



As is



Tansy Gold

[Dr.Phool]

103. Welcome back.

Did you get your new machine up and running?

[DemReadingDU]

107. But to them, money is everything

They really want all the money such that they would collapse the world in order to have the most money.

[truedelphi]

104. But don't cha know, in the good ol' days of the Chicago mob

And its loan sharks, the usual rate charge was a mere 150 %.

These days, the "Payday" advance places are sometimes charging as much as 900%.

Sadly that is where a lot of the military families have been going to try and make ends meet.

[Lucky Luciano]

46. Come on Ozy! The $683T number is a little misleading

It is only the notional of the contracts...not the value of the contracts...it is comprised mostly of swaps...and swaps usually start with a value of zero no matter what the notional is. I know you know that though...but others who come and see the $683T highlighted will think there is $683T in value associated with the contracts.

The fact that the mathematical quanty guys blew it with the valuations - The reason for that is I believe they valued a lot of mortgage derivatives based on prior mortgages and backtested over many years. The key point they ignored is that underwriting standards are cyclical - during a very bullish credit cycle that turns into a bubble, underwriting standards go to hell. Therefore, statistical models that suggest a certain mortgage contract should never fall below 99 cents on the dollar is wrong...because that is based on uniform underwriting standards! They have been anything but uniform over the last 50 years!

[ozymandius]

48. Thanks for the details.

Had I written the article then those details would have been better researched. Be that as it may - the $683T figure has been bandied about as the total sum of global derivatives value outstanding. So I see where the author came up with that sum. You, however, have more knowledge of this matter than many others in total appreciation of notional and associative value.

Where I have also read and heard how these eggheads blew it involves the massive algorithms not taking into account human behavior because that would be impossible to express mathematically. There are probabilities, mind you. But the mathematical expressions of public policy aligned with Chicago economic theory are the stuff of fantasy.

So do you say that human behavioral trends relating to real estate purchases have been miscalculated over the past fifty years?

[Hugin]

49. Translation: TPTB feel entitled to every cent of those derivatives.

And they'll move the moon and stars to get it. It's THEIRS by golly.

[Dr.Phool]

53. I'll be happy when they really get theirs.

As Josh Marshall noted the other day, "It's going to take a lot of money to make rich people rich again".

[amandabeech]

74. Thanks for posting this article. Its discussion of the role of the Chicago school

in Obama's economic policies is extremely interesting.

I hope that Austan Goolsbee, one of my unfavorites, and the rest of the crew manage to move beyond Milton Friedman now that his theory does not now seem to work as well as planned. Goolsbee's comments in the article suggest to me that he is not moving on quickly or willingly.

I wish that Obama had tapped Stiglitz and James Galbraith for his economic team to ensure that he would hear from those who do not seem to have worshiped at the Friedman alter.

[Tansy_Gold]

82. Ding ding ding ding ding! Golden Glob winner!

"I wish that Obama had tapped Stiglitz and James Galbraith for his economic team to ensure that he would hear from those who do not seem to have worshiped at the Friedman alter."

[amandabeech]

91. Thank you!

I'm a long-time lurker--I read this thread nearly every day.

I always appreciate your posts! They're always filled with reality and common sense.

[Tansy_Gold]

92. Not only that, but the FIRST EVER Golden Glob winner!

And thank you, too, for your compliment. I often feel completely overshadowed by all the great wisdom and expertise and knowledge and experience here, so the idea that anyone notices and/or pays attention to my little rants is enormously gratifying.


The gratified (but not enormous)



Tansy Gold

[amandabeech]

93. I am honored to be the first winner. All I ask is that you continue to post.

n/t

[snot]

110. YES. or just, like, even one single person who's proven right?

[UpInArms]

36. dollar watch

http://quotes.ino.com/chart/?s=NYBOT_DX&v=i

Last trade 80.975 Change -0.208 (-0.27%)

Forex Market Update: Currencies Market Quiet Ahead of Christmas Holiday (Update)

http://www.dailyfx.com/story/market_alerts/fundamental_alert/Forex_Market_Update__Currencies_Market_1230014986078.html

European FX volumes remained low in holiday thin trade, which restricted the FX majors to their familiar ranges. The EUR/USD traded underneath the 1.4000 level for a large part of the European morning. An early move higher ran out of steam at 1.4020, with weak Euro-Zone fundamentals still encouraging euro short positioning. The GBP/USD maintained a heavy tone the losses accelerated to 1.4773 after weak U.K. fundamentals encouraging selling pressure, which also resulted in a decent bid in the EUR/GBP just below 0.9400 and the cross rallied back in to 0.9480. Elsewhere, Japanese Yen continued to trade in ultra-narrow ranges after a Tokyo holiday saw limited direct flows, while the CHF was led by interest going through the dollar and the euro. The EUR/CHF remained heavy in the low 1.52's, while the USD/CHF traded back below 1.0900.

...more...

Japanese Yen Bolsters Its Anti-Carry Status After BoJ Rate Cut

http://www.dailyfx.com/story/currency/jpy_fundamentals/Japanese_Yen_Bolsters_Its_Anti_Carry_1229736610613.html

Risk aversion is the key to the Japanese yen’s path over the next few weeks and into the beginning of 2009. However, the ebb and flow in market sentiment will be far from straightforward. Heading into the end of the year, liquidity will put an unusual spin on volatility and the demand for a safe haven currency. Historically, the currency market (like most others) will thin out substantially as traders exit the market in observation of holidays or to close the books for the accounting year. We have already seen such effects on activity this past week. The pullback in the massive bear rally in the US dollar is likely just such a pullback from extremes that comes with position squaring.

Looking at the major themes that have driven investors predominately to risk aversion over the past months, the markets will likely turn back to the hunt for a safe haven when liquidity is no longer warping conditions. Heading up this general market shift will be the outlook for growth. Most of the industrialized world’s third quarter GDP numbers have crossed the wires; and they have easily put the global economy on the path to recession. Far more concerning though have been forecasts for activity through 2009. Projections by central banks and governments (typically conservative prognosticators) are pointing to the most severe recession in decades for many countries. The greater issue however remains health of investor and lender confidence. With central bank’s offering virtually unlimited levels of liquidity and ever-expanding guarantees on funds, banks see little reason to take the risk in extending loans to each other or consumers. This has led to a conundrum where the basic operation of the global credit market depends upon these vital infusions, but it is simultaneously holding the progress back. What’s more, as long as this stalemate exists, financials institutions and major economic sectors will come closer and closer to failure. Just this past week, Standard & Poor’s announced it was cutting the credit rating of 12 major banks. With interest rates at record lows, the credit squeeze depressing asset values and consumer spending fading, the banking sector may be facing another round of bankruptcy scares and/or credit crunch. Add to that the threat of the major industries teetering on the verge of collapse (the US auto rescue package won’t go far); and the reign of pessimism will have to break soon if the global economy is to ward off disaster.

Ironically enough, the Japanese yen may actually find a greater (or at least more concise) reaction to scheduled event risk than the influence of risk sentiment. With low levels of liquidity naturally drawing the capital to safe havens through the end of the year, the market’s remaining event risk traders will be able to respond to the busiest economic docket among the G10. In the week ahead, the Bank of Japan will release its monthly report and the minutes for its November rate decision. The minutes will be interesting as it will better reflect whether the BoJ’s rate cut to 0.10 percent last Friday was due to the countries own fundamentals or in response to the Fed’s move towards zero. From a trading perspective however, the monthly report will be far more market moving with the group’s assessment of growth and financial conditions. Without doubt, Friday’s session holds the greatest weight over the market. Readings on housing, employment, consumer income, spending, inflation and industrial production are all scheduled for release. In general, this will be a good update on overall economic activity – though expectations should be restrained.

...more...

[UpInArms]

50. Falling dollar spoils holiday cheer

http://www.reuters.com/article/businessNews/idUSTRE4BL0F220081222?feedType=RSS&feedName=businessNews?sp=true

LONDON (Reuters) - Currency markets are becoming a new source of concern for investors as worries over the tumbling dollar and sterling replace a relief that world stocks may have bottomed with a 20-percent rise since November.

The dollar .DXY lost more than 6 percent against a basket of major currencies so far this month, heading for its biggest monthly fall since 1985, after the Federal Reserve cut interest rates to near zero and pledged to take more easing measures.

A domino effect has hit sterling, which fell to record lows versus the euro near parity and on a trade-weighted basis as investors bet the Bank of England would follow the Fed into slashing the cost of borrowing toward zero.

Evidence of further deterioration in the United States and Britain -- the two major casualties of the credit crisis -- has unleashed a race to cut interest rates to zero.

"We know the next step for the Fed will be to print money. The side effect of monetary financing in the U.S. is a flood of dollar supply and that will... add to the weakness of the dollar more than people expect," said Wim Boonstra, chief economist at Rabobank.

"You will see a global scheme of monetary financing. If countries turn to monetary financing to try not to have a stronger currency... If that scenario materializes we will enter very dangerous territory."

...more...

[UpInArms]

38. Flawed managed accounts fail Madoff investors

http://www.reuters.com/article/bondsNews/idUSLN38233920081223?sp=true

ZURICH, Dec 19 (Reuters) - Managed accounts -- seen as a way to give investors clarity on fund strategy and protection from fraud -- may have failed on both counts in the Madoff debacle and lessons will have to be learned, industry insiders said.

Investors will sometimes choose to access a fund or a fund manager via a managed account, which in theory allows them to replicate the underlying strategy while maintaining a measure of control by appointing their own custodian. The assets will generally be segregated from those of other investors.

Private investors said even those Madoff investors who sought safety through managed accounts have lost out because these accounts were instead run through Madoff's own trading house, Bernard L. Madoff Investment Securities LLC.

Firms controlled by Madoff were therefore responsible for providing clients with trading histories and net asset values which could turn out to be fabrications, they added.

Jerome de Lavenere Lussan, managing partner of investment management consultancy Laven Partners, said investors had left themselves open to risk.

<snip>

Earlier this week Bloomberg reported that those holding managed accounts with Madoff included Swiss private bank Union Bancaire Privee, which has said client losses may be up to $1 billion. Clients at several other private banks are reported to have lost money via managed accounts.

...more...

[Hugin]

47. They've got their scapegoat in Madoff...

Soon this whole thing will be his (and his alone) fault.

While the Trillions worth of other scams go relatively unnoticed and unreported.

I must say... They're masters at smokescreens. It's easy, as they also own the pulpit.

Problem solved they got their man. Now, back to sleep with the lot of you.

[DemReadingDU]

40. Wall Street: Profiles in Panic

Profiles in Panic
With Wall Street hemorrhaging jobs and assets, even many of the wealthiest players are retrenching. Others, like the Lehman Brothers bankers who borrowed against their millions in stock, have lost everything. Hedge-fund managers try to sell their luxury homes, while trophy wives are hocking their jewelry. The pain is being felt on St. Barth’s and at Sotheby’s, on benefit-gala committees and at the East Hampton Airport, as the world of the Big Rich collapses, its culture in shock and its values in question.
by Michael Shnayerson January 2009


A snapshot: East Hampton, late summer, a lawn party at a house on the ocean overlooking the dunes. The host is a prince of private equity known for dressing well. One of his guests is Steven Cohen, the publicity-shy billionaire whose SAC Capital, with $16 billion under management, is perhaps the most revered of the 10,000 or so hedge funds spawned by this giddily rich time. Nearby is Daniel Loeb, of Third Point, one of the better-known “activist” hedge funds, who hopes to move soon into a 10,700-square-foot, $45 million penthouse at 15 Central Park West, a Manhattan monument to the new gilded age. Gliding easily between them is art dealer Larry Gagosian, so successful at selling Bacons and Serras to Wall Street’s new titans—including to Cohen—that he now travels in his own private jet and has his own helicopter to take him to it.

But here’s the odd thing: despite the beauty of the ocean view, nearly all the guests have their backs to it. Cohen is deep in conversation with a colleague who seems to be pitching him a deal. Loeb hovers close to his wife, a former yoga teacher. Gagosian is near his stunning young girlfriend. No one notices the clouds that are, quite literally, on the horizon. Snap.

Six weeks later, the photograph is cracked and sepia-toned, curling at the edges, a historic print. In just that short time, the storm has hit and nothing looks the same.

It may be premature to say our gilded age has ended. Third Point dropped 10 percent in October, bringing it down 27 percent for the year, but Daniel Loeb is still moving into his extravagant new apartment. Steven Cohen’s SAC was down 11 percent in October and 18 percent for the year to date, but that still leaves him plenty of money to add a second ice-skating rink to his Greenwich, Connecticut, estate. And Larry Gagosian is still selling plenty of art.

What’s definitely gone—along with Lehman Brothers and Bear Stearns—is leverage, at least to the dizzying degree it was recently used by Wall Street’s investment banks, hedge funds, and private-equity firms to parlay each dollar of their assets into $10, $20, even $30 or more of credit to make gargantuan deals and profits. The credit crunch has made such leverage as quaint as the market in Dutch tulips. Without it, Wall Street salaries have already started drifting gently back to earth like so many limp balloons.

Gone, too, are jobs—lots and lots of them. Along with a sizable portion of Lehman’s 26,000 worldwide, and Bear Stearns’s 14,000, Wall Street firms across the board—even Goldman Sachs—are cutting back, and that pain radiates out to the limousine drivers and caterers and lawyers and personal trainers and restaurant owners and real-estate brokers who rely on Wall Street clients, not to mention to the many nonprofits and charities that have grown accustomed to Wall Street money. The latest estimate of jobs New York will lose, both on and off Wall Street, is 160,000. Governor David Paterson says the state’s budget deficit has already reached $12.5 billion. In New York City, where Wall Street accounts for more than a quarter of the tax revenues, Mayor Michael Bloomberg thinks the financial-sector crisis will leave a $2 billion hole in the next fiscal year’s budget.

long article, 12 pages...
http://www.vanityfair.com/magazine/2009/01/wall_street200901?printable=true¤tPage=all



Charting the Road to Ruin
The U.S. is officially in a recession, and many people are asking themselves, How did this happen? The signs were there, as this collection of Vanity Fair articles from the past few years illustrates.
http://www.vanityfair.com/magazine/archive/recession

[Hugin]

44. Good article.

Even if it reduces the true protagonists of the story (The thousands of now unemployed workers in this saga) to
mere statistics.

[dixiegrrrrl]

96. I really want to see "Profiles in Panic " in film.

looped..
in color
and sound..
slowly repeated.
Maybe a new scenario every day.

The satisfaction of viewing may be brief, but I will try to make it linger.


signed...bitter poor retiree

[UpInArms]

43. Watch that printing press

http://www.marketwatch.com/news/story/Watch-printing-press/story.aspx?guid=%7BD8EA856F%2DFF68%2D4414%2D9175%2D5E17F14B1298%7D

PORT WASHINGTON, N.Y. (MarketWatch) -- As 2008 draws to a close, one of our chief concerns is deflation. A year from now, the nation's No. 1 problem might well be inflation.

Last week's statement by the Federal Reserve indicated that, when it comes to interest-rate cuts, the central bank has gone about as far as it can go.

The Fed acknowledged that the actual federal funds rate was well below its target because it has injected massive amounts of liquidity into the economy. So it made this rate its new target, and said that it would concentrate instead on pumping gobs of money into the system. Read previous column.

Not that the central bank has been exactly resting on its oars.

On the contrary, according to the Federal Reserve Bank of St. Louis, the monetary base (the raw material for the money supply) has risen at a seasonally adjusted annual rate of 86% over the past year. Bad enough, but over the past three months this has skyrocketed to an annual rate of almost 1,000%!

Adjusted reserves have ballooned from $100 billion to $700 billion since mid-September, while the Fed's balance sheet has more than doubled over this period of time, from about $900 billion to a thumping $2.2 trillion.

These funds are beginning to show up in the Fed's two measures of the money supply. M2 has risen 8% over the past year, while MZM, the St. Louis Fed's measure of liquid money, is up more than 10% during the same period.

This is with the banks still reluctant to lend. Once they loosen their purse strings, the money supply will soar.

When this happens, don't be surprised if the Fed stops reporting these numbers. This is what it did several years ago, when it stopped reporting M3, which apparently was rising too fast for the Fed's comfort.

...more...

[ozymandius]

51. 10:07 bouncy numbers and blather

Dow 8,559.43 Up 39.66 (0.47%)
Nasdaq 1,543.15 Up 10.80 (0.70%)
S&P 500 875.49 Up 3.86 (0.44%)
10-Yr Bond 2.183% Up 0.042
NYSE Volume 587,777,562.5
Nasdaq Volume 178,294,406.25

10:00 am : November new home sales totaled 407,000, which is less than the consensus estimate of 415,000 new home sales. New home sales in the prior month were revised lower to 419,000. The actual month-over-month change reflected a 2.9% decrease.

Toll Brothers (TOL 20.96, +0.42), Pulte Homes (PHM 10.65, +0.11), and DR Horton (DHI 7.17, +0.12) continue to trade with strength.

November existing home sales totaled 4.49 million, which is less than the consensus estimate of 4.93 million homes, and down from the downwardly revised 4.91 million existing home sales registered in the month before.

Separately, the final December consumer sentiment survey came in at 60.1, which is above the 58.8 reading that was widely expected. The final reading is up modestly from the 59.1 registered in November.DJ30 +51.61 NASDAQ +14.15 SP500 +5.58 NASDAQ Adv/Vol/Dec 1450/159 mln/873 NYSE Adv/Vol/Dec 1829/124 mln/920

[DemReadingDU]

54. Linda Bilmes: “The $10 Trillion Hangover: Paying the Price for Eight Years of Bush”

12/22/08 Linda Bilmes: “The $10 Trillion Hangover: Paying the Price for Eight Years of Bush”

In a new article in Harper’s Magazine, Linda Bilmes and Joseph Stiglitz estimate that the cost of undoing the Bush administration’s economic choices, from the wars in Iraq and Afghanistan to the collapse of the financial system, soaring debt, and new commitments to interest payments and Medicare, all add up to over $10 trillion.

AMY GOODMAN: As we enter the final weeks of the Bush administration, we turn to a new report that calculates the economic costs of the past eight years. Linda Bilmes and Nobel economist Joseph Stiglitz have a piece in the January 2009 edition of Harper’s Magazine called “The $10 Trillion Hangover: Paying the Price for Eight Years of Bush.”

They estimate that the cost of undoing the Bush administration’s economic choices, from the wars in Iraq and Afghanistan to the collapse of the financial system, soaring debt and new commitments to interest payments and Medicare, all add up to over $10 trillion.

Stiglitz and Bilmes write, “As bad as things are, though, this is just the beginning.” They add, “The Obama Administration, facing the most serious economic crisis in at least a generation, will need to mount an expansionary fiscal policy. The problem is how much the country’s debt mountain will crimp our ability to pay for the type of change we just voted for."

Linda Bilmes is lecturer in public finance at Harvard’s Kennedy School of Government and co-author with Joe Stiglitz of The Three Trillion Dollar War. She joins us from Boston.

Welcome to Democracy Now!, Professor Bilmes. OK, explain the $10 trillion hangover.

more...
http://www.democracynow.org/2008/12/22/linda_bilmes_the_10_trillion_hangover

[Dr.Phool]

62. Head of Fund Invested in Madoff Said to Commit Suicide

NY Times blog via TPM

http://dealbook.blogs.nytimes.com/2008/12/23/head-of-fund-invested-in-madoff-said-to-commit-suicide/

Rene-Thierry Magon de la Villehuchet, a founder of the hedge fund Access International Advisors, was found dead early Tuesday in his office in Manhattan, the French business daily La Tribune reported on its Web site, after losing as much as $1.4 billion that had been invested with Bernard L. Madoff, the money manager accused of running a $50 billion Ponzi scheme. Mr. de la Villehuchet, 65, committed suicide, La Tribune said, citing a someone close to Mr. de la Villehuchet.

Mr. de la Villehuchet had been trying to recover the money that Access International raised in Europe and invested through Mr. Madoff’s business, La Tribune reported.

Paramedics responded to a call at a Manhattan address matching that of Access International, people briefed on the situation told DealBook. They found a victim, whom they pronounced dead, but have not yet identified the man.

Luxalpha, a $1.4 billion Luxembourg-based fund sold across Europe, invested in Bernard L. Madoff Investment Securities. Access International last week called Mr. Madoff’s arrest “a shocking development” in a note to investors. Investors in the fund included a unit of Rothschild and several clients of the Swiss bank UBS.

UBS had been the custodian and administrator of the fund until this year when Access International took over. No one answered the phone at Access International’s New York office.

[tama]

66. Coward n/t

[Hugin]

67. What gets me about these stories is that when all is said and done...

They'll end up being no worse off than, say... I am.

Is it so miserable being me that they'd prefer suicide? :/


I should really work on my lifestyle.

[ozymandius]

69. I often wonder the same thing.

Do these people ever bargain with the scenario: if I write a check at the grocery store today then it probably will not clear before payday. Do they ever worry about having money for rent/mortgage? Do they ever have to bargain on expenses - or as economists say - weigh the opportunity cost by asking, "If I see a movie this week then I have to eliminate eating a meal at a restaurant?"

All things being relative, I suppose being a hedge fund manager could be worse than living with the scenarios described above.

[tama]

79. Or rather

those hypnotized by the gaze of Sauron's eye (at the top of the Pyramid fraud aka Ponzi scheme) at the one dollar bill should find a better metric to make value judgements - or even better, make the quantum leap from quantitative values to qualitative values.

Peace to his soul, hope there will be some day.

[dixiegrrrrl]

97. That is a breath taking question.

stopped me in my tracks.

[AnneD]

89. It is not our lifestyle that causes these people to go over the brink......

it is narcissism at the core. It is all about them PERIOD. They come up with these schemes because they are greedy selfish, me,me,me,.....They use the money to control their world and they can't imagine a world they can't control.

Your viewing assignment....What Dreams May Come. A sad but uplifting movie. If that's what heaven is like-stand out of my way!!!!!!

[Hugin]

99. That could very well be the case AnneD...

My Christmas Present to the SMW and it's readers.

A taste of "What Dreams May Come." http://www.youtube.com/watch?v=1pHCtLzmras

[AnneD]

112. Thanks for the treat........

to get on a philosophical tangent here, I have always been curious about the undiscovered country. Being a Nurse-I have been around death and extreme sorrow. I have seen the bizarre and the unexplainable. I tried to shut my mouth and keep my eyes wide open. Of all I have seen, this film hit many cords with me-even the alternate endings that were not chosen. Most people die like they live-it really is amazing. Then there are the lucky ones that make amends at the end. Hard to do but worth while for them. My Life with Michael Keaton and Nicole Kidman is another good delve into the subject.

[ozymandius]

70. numbers and outdated blather update

2:36
Dow 8,450.55 Down 69.22 (0.81%)
Nasdaq 1,517.53 Down 14.82 (0.97%)
S&P 500 865.61 Down 6.02 (0.69%)
10-Yr Bond 2.152% Up 0.011
NYSE Volume 2,889,542,000
Nasdaq Volume 896,472,437.5

2:00 pm : Stocks are making a pronounced upward turn after trading in a relatively narrow range during the last hour.

Energy has made its way back into the green, reversing its decline as oil pares its losses. Energy was up down as much as 1.4%, but is now up 0.7%. Oil futures were donw as much as 5.3%, but is now down 1.0% to $39.50 per barrel.DJ30 -24.53 NASDAQ -7.40 SP500 -1.60 NASDAQ Dec/Adv/Vol 1748/986/807 mln NYSE Dec/Adv/Vol 1780/1271/538 mln

[ozymandius]

73. I wonder if the blather writers see the same numbers I do.

2:48
Dow 8,407.54 Down 112.23 (1.32%)
Nasdaq 1,513.62 Down 18.73 (1.22%)
S&P 500 862.02 Down 9.61 (1.10%)
10-Yr Bond 2.155% Up 0.014
NYSE Volume 3,014,559,250
Nasdaq Volume 933,129,375

2:35 pm : Stocks are slowly drifting back toward the unchanged mark but pervasive weakness continues to restrain the move.

Only a handful of trading sessions remain before 2008 draws to a close. Many investors will be happy to put the year behind them.

Year-to-date, the S&P 500 has fallen more than 40%. The Dow has dropped 36% this year. The Nasdaq is down more than 42% year-to-date.

Financials remain the worst performing economic sector. Financials have lost nearly 60% of their worth this fiscal year.DJ30 -33.45 NASDAQ -8.78 SP500 -2.21 NASDAQ Dec/Adv/Vol 1760/1024/883 mln NYSE Dec/Adv/Vol 1742/1312/593 mln

[Dr.Phool]

80. What was that song? "Got 2 good eyes, and still can't see".

I think it was by Steve Miller.

Nope- Just hit me. One of my old favorites. "Casey Jones", by the Grateful Dead.

Drivin' that train, high on cocaine.

[specimenfred1984]

71. Ever watch those perky "What's My House Worth" Shows on Cable?

Everybody's house is worth A MILLION DOLLARS! I guess reality is starting to set in for the delusionals:

http://biz.yahoo.com/ap/081223/home_sales.html

---Existing home sales sink by 8.6 percent in November, as prices plunge a record 13.2 percent---

[ozymandius]

72. Thankfully, I do not have cable.

When I see a cable tee-vee show like that, I am reminded what a wasteland much of it is. Though shows like Trading Spaces is flexible in its title. It could bend to accommodate people living in tents, tar paper shacks, cardboard boxes, etc.

[specimenfred1984]

86. 1 show featured Detroit homes going for 70G, that seemed real

A dying city and the people that hang on to nothing but hope, misguided as it may be. Perhaps there's a much more broad statement about the entire U.S. in there somewhere.

[Dr.Phool]

83. My wife watches that stupid shit.

She even TIVO's it. I wander past the TV and see some of these places, and my house is better. And I paid about 10% of what they did. And none of the people buying these places seems to be wealthy. Maybe if I picked up a side job delivering pizza's, I could afford one.

Lately, she's watching some crap called "Intervention". I think she's really trying to figure out a way to get me into the dryer.:evilgrin: :beer:

[specimenfred1984]

87. I watch cable for the NBA then cancel it in the Spring

Cable always lies about their charges, they add fees, invent odd surcharges and basically just scam customers -- a lot like banks.

[AnneD]

90. I gave up cable.....

in the 80's when we had our first RE/S&L bust. Couldn't justify it then and learned to live without it, and never missed it. It was the first thing axed from the budget. So was the daily newspaper, movies, and dining out.

In a buyer's market THE HOME IS WORTH WHAT THE BUYER IS WILLING TO PAY not what the seller thinks it is worth.

[DemReadingDU]

94. We like to watch Cspan, and MSNBC, some local news

that's about it.

I could do without tv, but I have to have my Internets!

[AnneD]

111. Same here.....

I put my cable money into the internet access. A snippet of some of these things is all I need.

[ozymandius]

102. Here's the final word on today's follies.

It's odd what the blather writers regard as 'thinly traded'. I guess they were becoming accustomed to the 8 billion to 10 billion share days.

Dow 8,419.49 Down 100.28 (1.18%)
Nasdaq 1,521.54 Down 10.81 (0.71%)
S&P 500 863.16 Down 8.47 (0.97%)
10-Yr Bond 2.163% Up 0.022
NYSE Volume 4,167,545,750
Nasdaq Volume 1,333,376,375

4:15 pm : A lack of leadership prompted participants to send the stock market lower in another thinly traded session.

Trading volume remains light ahead of the Dec. 25 holiday. Less than 1 billion shares were exchanged on the NYSE this session. That is the least volume in a full trading day since August.

Stocks actually opened with broad-based gains, advancing as much as 1.0%. Those gains quickly turned into losses, though, as sellers entered the ring, focusing much of their effort on the financial sector.

Financials were up as much as 1.2%, but finished the session 1.9% lower as the worst performing economic sector. The sector's weakness was largely attributable to diversified financial players, which will still be facing formidable obstacles in 2009. Bank of America (BAC 12.76, -0.77) and JPMorgan Chase (JPM 29.14, -0.68) traded as laggards, and also weighed on the Dow.

Goldman Sachs (GS 75.34, -1.66) and Morgan Stanley (MS 14.44, -0.14) also finished lower. Analysts at JPMorgan lowered their earnings estimates for Goldman, but raised their estimates for Morgan Stanley.

Concern continues to surround automakers. Standard & Poor's lowered the unsecured debt rating of General Motors (GM 3.01, -0.51) to C from CC, even though the government plans to provide GM with financing. Meanwhile, Moody's lowered Ford's (F 2.19, -0.40) credit rating to Caa3.

Economic data did little to entice buyers into the market. The latest batch of home sales remained weak. November new home sales declined 2.9% to an annualized rate of 407,000 units, which is the lowest level in 17 years. The consensus forecast called for new home sales of 415,000.

November existing home sales declined 8.6% to an annualized rate of 4.49 million units, which is worse than the already-depressed levels seen in recent months. The consensus called for 4.93 million sales.

Final third quarter GDP data came without major surprise. The economy contracted at an annualized rate of 0.5%, which is unchanged from the prior reading. The personal consumption component was down 3.8%, while the core personal consumption component was up 2.4%. Economists expected the consumption levels to remain unchanged from the prior reading at -3.7% and +2.6%, respectively.

European exchanges closed with mixed results. Britain's FTSE finished 0.2% higher as its investors overcame news that the economy officially slipped 0.6% during the third quarter. British banks were key in the advance. Banks and financial companies in Germany helped limit weakness in the DAX, which fell 0.2%. France's CAC lagged, closing 0.7% lower.

The MSCI Asia-Pacific Index closed 2.8% lower in the wake of yesterday's loss warning from Toyota Motor (TM 60.36, -0.52). The fact China cut its benchmark rate by a less-than-expected 27 basis points to 5.31% also weighed on sentiment. The Hang Seng shed 2.8% as developers and banks showed weakness. Japan's markets were closed for holiday observance. DJ30 -100.82 NASDAQ -10.81 NQ100 -0.5% R2K -1.4% SP400 -0.9% SP500 -8.48 NASDAQ Adv/Vol/Dec 984/1.31 bln/1835 NYSE Adv/Vol/Dec 1205/984 mln/1886