STOCK MARKET WATCH, Monday January 12

[ozymandius]

Source: du

STOCK MARKET WATCH, Monday January 12, 2009

DAYS REMAINING UNTIL BUSH IS GONE = 7.5

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 who predicted the Dow's precipitous return on Bush values (9/29/08): JuneBourder and AnneD

AT THE CLOSING BELL ON January 9, 2009

Dow... 8,599.18 -143.28 (-1.67%)
Nasdaq... 1,571.59 -45.42 (-2.81%)
S&P 500... 890.35 -19.38 (-2.13%)
Gold future... 854.60 +0.10 (+0.01%)
30-Year Bond 3.06% +0.01 (+0.33%)
10-Yr Bond... 2.41% -0.04 (-1.55%)

---

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

Market Conditions During Trading Hours

GOLD,EURO, YEN, Loonie and Silver

---

Handy Links

Economic Calendar    Marketwatch Data    Bloomberg Economic News    LayoffDaily    The Big Picture    Yahoo! Finance    Google Finance    Financial Sense    Calculated Risk    Naked Capitalism    Credit Writedowns    Brad DeLong    Bonddad    Atrios    LegitGov

---

Read more: du

[ozymandius]

1. Market WrapUp by Tim Wood

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

[Hugin]

6. That baby could use a good burpin'...

Luckily, Not-Soon-Enough-President Obama is a good parent.

[Tansy_Gold]

22. I just hope................

.........it farts in booooosh's face before he hands it over.



I'm sorry, but that's what I saw when I saw the cartoon.



Tansy Gold

[DemReadingDU]

27. lol

:rofl:

[Demeter]

29. Not Sufficient

What that baby needs is a massive, messy wet #2 that squirts out the leg holes...and up and out the back.

Reliving the details, now that Baby is 25....

[DemReadingDU]

38. a Blowout

that's what the 7-year old grandson describes his new baby sister's messes

[ozymandius]

2. no goobermental reports today n/t

[ozymandius]

3. Oil falls below $40 as investors eye US earnings

SINGAPORE – Oil prices fell below $40 a barrel Monday in Asia as investors looked to key U.S. corporate results this week for indications of the health of the world's largest economy and demand for crude.

Light, sweet crude for February delivery was down 98 cents to $39.85 a barrel by midafternoon in Singapore in electronic trading on the New York Mercantile Exchange. The contract on Friday fell 87 cents to settle at $40.83.

Steel producer Alcoa, chip maker Intel and biotech company Genentech are expected to report fourth quarter results this week, giving investors a gauge of how deep the current recession may be.

....

In other Nymex trading, gasoline futures rose 0.46 cent to $1.11 a gallon. Heating oil dropped 0.48 cents to $1.49 a gallon while natural gas for February delivery jumped 4.9 cents to $5.61 per 1,000 cubic feet.

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

[ozymandius]

4. Economy fear hits global stocks

LONDON (Reuters) – Equities kicked off the week on a down note and the euro fell on Monday with recurrent worries about the global economy pushing investors away from riskier assets and also driving oil below $40 a barrel.

Friday's December U.S. payrolls report, which showed more than half a million jobs lost and the highest unemployment rate since 1993, aggravated anxiety about U.S. consumer demand.

....

MSCI's all-country world index (.MIWD00000PUS) was down about 0.7 percent, taking the benchmark into negative territory for the year-to-date and the fourth negative daily performance in a row.

The pan-European FTSEurofirst 300 (.FTEU3) index of top European shares was down 0.5 percent after losing the same on Friday.

http://news.yahoo.com/s/nm/20090112/bs_nm/us_markets_global_3

[ozymandius]

5. Smallest state leads US into deep recession

Jobs are painfully lacking in Rhode Island, where unemployment stood at 9.3 percent in November, just behind the national leader Michigan. To the dismay of state leaders, this tiny state has persistently been a leader in joblessness as the recession deepens.

Rhode Island has been hurt by the same ills hammering the rest of the nation: falling housing prices, mortgage defaults and the credit crisis. But a combination of unique factors has deepened the pain. Long dependent on the shrinking manufacturing sector, Rhode Island never found a replacement as nearby states courted biotech and computing firms.

....

http://news.yahoo.com/s/ap/20090112/ap_on_re_us/meltdown_rhode_island

[Hugin]

9. "nearby states courted biotech and computing firms."*

*- and Financial firms.

Those 'nearby States' will be feeling the pain soon enough. Odd omission, don't you think?

[ozymandius]

12. Yes.

I do not know an industry that is not in hunker-down mode.

[Roland99]

30. I am considering a cross-country move to find a job now.

I've a dear friend who works for a job-fair firm in Las Vegas and today they will start shopping my resume around. The move is partly out of a want/need for a change but mostly just to find a job.

[AnneD]

70. I received this e-mail from Skinner regarding a jobs forum.......

"We had a job forum a few years back, and it was never used so we shut it down.

I don't know, maybe in the current economic environment it might get some attention. But I'm a little skeptical."

I think the situation has deteriorated enough that it is needed. If we keep it kicked up like SWT, I think it has potential.

[Ghost Dog]

95. Maybe, to add a little spice, include an international aspect

to the putative jobs forum (opportunities, benefits, living conditions, culture etc...) ex-pat-wise, of course?

[CatholicEdHead]

80. I am also looking around nationally

right now I have a good prospect in Oklahoma, I will see how that goes, they seem to be really interested.

Good luck in your search Roland!

[Roland99]

96. And to you, as well!

[fasttense]

34. Those tiny little unemployment numbers.

7, 8, 9, maybe 10 percent. Can they be real? Look around you, how many unemployed people do you know? Is there anyone who doesn't have a friend or relative who is unemployed? Out of the ten people I know well enough to talk about my financing with, five are unemployed. Yet, I'm supposed to believe it is only under 10%.

Something is wrong with the picture they are trying to paint with the unemployment numbers.

[DemReadingDU]

40. Of course unemployment is higher

It's all how the numbers are reported. There was some discussion in last Friday's SMW
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=3681304


No one wants to admit our country is worse off, than it really is.
:(


But until the true unemployment statistics are revealed, and the banks reveal their toxic wastes, this country cannot get on a path to recovery.

It's like you think you have a cold, but it's really pneumonia. The illness needs to be determined in order to prescribe the proper medicine.


Edit to add: Video Sunday ABC round table
Tom Friedman says it needs to begin with the banks. All banks should be declared insolvent, and must prove otherwise that they are healthy.
With 13:45 minutes remaining, start watching (or 2 minutes into the video)
http://abcnews.go.com/Video/playerIndex?id=6621672

[Birthmark]

74. What's wrong witht the picture is probably...

...that the U-3 Unemployment rate isn't inclusive enough to explain our daily lives.

You might find the Labor Force Participation Rate to be a better match for what you see around you. Currently, the LFPR is 65.7 (seasonally adjusted).

[Hannah Bell]

119. Here's the graph.

http://data.bls.gov/PDQ/servlet/SurveyOutputServlet

It's been lower: as low as 59% in 1948.

The background problem is that, despite a historically high % of folks in the workforce, they're having more trouble maintaining moderately secure lives - because in total, they take home a smaller fraction of income than they used to.

[Tunkamerica]

126. I don't know anyone who's unemployed.

Underemployed, yes. Two family members were unemployed a couple of years ago but found lower paying jobs that they're trying to ride out till retirement.

[ozymandius]

7. World Bank bars deals with unit of India's Wipro

NEW DELHI (AP) — A business unit of Wipro Ltd. has been blacklisted by the World Bank until 2011, the lender said Monday, embroiling another top Indian outsourcing company in controversy after the founder of rival Satyam Computers admitted to doctoring his company's accounts for years.

The World Bank said Wipro's information technology services unit had been barred from getting direct business with the bank since June 2007, but was naming Wipro now to "make public the names of all companies that have been debarred from receiving direct contracts from the Bank Group under its corporate procurement program."

Wipro Technologies was blacklisted for four years for "providing improper benefits to bank staff," a World Bank statement said. It gave no other details.

http://www.google.com/hostednews/ap/article/ALeqM5gxM_i64-mq39MIDJPZgH_hc0PQwgD95LGIE01

[Robbien]

81. So the three biggest Indian outsourcing IP firms are banned for fraudulent practices

Those three account for about 99.999% of the Fortune 500 companies' outsourced IP services.

So what does that say for global business when the firms handling all their IP services are considered to be complete scam artists?

[ozymandius]

8. Ford May Be Forced to Seek U.S. Aid as Economy Imperils Sales

Jan. 12 (Bloomberg) -- Ford Motor Co., the second-largest U.S. automaker, may have to abandon its plan to forgo federal loans as the weakening economy threatens to drive domestic sales 10 percent lower than the company’s forecast.

Ford expects U.S. light-vehicle sales will reach 12.2 million units this year, almost 2 million more than the annualized sales rate over the last 3 months. Chrysler LLC predicts sales may reach 11 million, while General Motors Corp. projected a range yesterday of 10 million to 11 million.

“The market will not reach 12.2 million units this year, no way, no how,” said John Wolkonowicz, an IHS Global Insight analyst. The Lexington, Massachusetts-based consulting firm trimmed its 2009 sales estimate last week to between 10 million and 10.5 million.

Sales at that level would trigger the need for as much as $13 billion in loans, Ford told Congress last month. That would undercut the company’s attempt to win customers by portraying itself as Detroit’s healthiest automaker, after GM and Chrysler both sought federal financial aid.

http://www.bloomberg.com/apps/news?pid=20601087&sid=adXLe7n0Z808&refer=home

[ozymandius]

14. U.S. Drivers Hold On to Autos, Shun Showrooms on Job-Loss Risk

Jan. 10 (Bloomberg) -- Drivers rattled by the worst U.S. labor market since World War II are hanging on to old autos longer instead of buying new models, threatening to crimp sales again in 2009 after demand plummeted to a 16-year low.

Used vehicles being traded in at dealerships averaged 6.3 years of age after the Wall Street meltdown in late 2008, about 6 months older than before the crisis, according to forecaster J.D. Power & Associates in Troy, Michigan.

....

U.S. industrywide sales plunged 18 percent last year to 13.2 million, heralding a possible 2009 slide for automakers including GM, Chrysler and Ford Motor Co. GM reiterated Jan. 5 it expects a U.S. market of 10.5 million to 12 million units.

....

Kimberly Rodriguez, co-leader of the global automotive practice for consulting firm Grant Thornton, said the U.S. market may shrink 10 percent to 15 percent more in 2009.

As many as 20 GM, Ford and Chrysler assembly plants “are at risk of further downtime or outright closure,” said Rodriguez, who is based in Southfield, Michigan.

http://www.bloomberg.com/apps/news?pid=20601109&sid=asi8tS5TV0eQ&refer=exclusive

[AnneD]

72. Lesson learned in the 80's crash.....

I bought my first and only new car in the 80's 2 years into the payments-I was laid off. I held on to it as long as I could but I just didn't know what to do. It got repoed and they sold it. Fortunately/unfortunately I didn't owe much and someone got a real bargain. Mom said that if I had asked her she would have helped me pay it off :banghead:

Now, my trusted honda 'get out of debt car' is on it's last legs and we need to get another. Now hummmmmmm. Do I want to go in to debt for $16K or do I want to take $2000 out of the savings, shop around for a good used car and own it outright :think: tough decision.

Part of surviving financially is to manage risk. In a depression, you don't want to be caught owing, and you'll be amazed at the deals you can get with cash.

[Festivito]

10. Debt: 01/08/2009 10,608,325,323,172.57 (DOWN 27,446,773,050.17) (Down public.)

(Reduction of the public debt by an amount worth a week or two of average borrowing. Can't put my finger on it, but the lack of borrowing and then borrowing all at once just seems strange to me.)

= Held by the Public + Intragovernmental(FICA)
= 6,290,895,264,113.46 + 4,317,430,059,059.11
DOWN 27,599,431,464.26 + UP 152,658,414.09

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 to 31 days.
The average for the last 22 reports is -2,072,956,368.88.
The average for the last 30 days would be -1,520,168,003.85.
The average for the last 31 days would be -1,471,130,326.30.
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$/day.
There were 68 reports in 100 days of FY2009 averaging 8.58B$ per report, 5.84B$/day.

PROJECTION:
GWB** must relinquish the presidency in 12 days.
By that time the debt could be between 10.6 and 10.7T$.
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)
01/08/2009 10,608,325,323,172.50 GWB (UP 4,880,129,526,990.93 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: 583,600,426,260.10 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
12/17/2008 -000,200,107,551.80 ---
12/18/2008 -057,877,925,051.10 -
12/19/2008 -000,369,261,235.72 ---
12/22/2008 -000,588,542,244.94 --- Mon
12/23/2008 +000,074,940,615.00 ------------*******
12/24/2008 -000,121,597,338.38 ---
12/26/2008 -036,328,594,643.92 -
12/29/2008 -000,737,189,520.41 --- Mon
12/30/2008 +000,055,730,362.68 ------------*******
12/31/2008 +046,553,280,763.13 ------------**********
01/02/2009 -049,252,670,832.20 -
01/05/2009 -000,912,747,082.07 --- Mon
01/06/2009 -000,344,326,906.71 ---
01/07/2009 -000,314,429,077.84 ---
01/08/2009 -027,599,431,464.26 -

-127,962,871,208.54 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $943,693,519,913.50 in last 112 days.
That's 944B$ in 112 days.
More than any year ever, except last year, and it's 93% of that highest year ever only in 112 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 112 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=3681304&mesg_id=3681315

[Festivito]

128. Debt: 01/09/2009 10,609,758,567,607.17 (UP 1,433,244,434.60) (Little change.)

(Very little movement lately.)

= Held by the Public + Intragovernmental(FICA)
= 6,290,327,140,825.48 + 4,319,431,426,781.69
DOWN 568,123,287.98 + UP 2,001,367,722.58

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 to 31 days.
The average for the last 22 reports is -2,107,302,718.00.
The average for the last 30 days would be -1,545,355,326.53.
The average for the last 31 days would be -1,495,505,154.71.
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$/day.
There were 69 reports in 101 days of FY2009 averaging 8.48B$ per report, 5.79B$/day.

PROJECTION:
GWB** must relinquish the presidency in 11 days.
By that time the debt could be between 10.6 and 10.7T$.
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)
01/09/2009 10,609,758,567,607.10 GWB (UP 4,881,562,771,425.53 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: 585,033,670,694.70 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
12/18/2008 -057,877,925,051.10 -
12/19/2008 -000,369,261,235.72 ---
12/22/2008 -000,588,542,244.94 --- Mon
12/23/2008 +000,074,940,615.00 ------------*******
12/24/2008 -000,121,597,338.38 ---
12/26/2008 -036,328,594,643.92 -
12/29/2008 -000,737,189,520.41 --- Mon
12/30/2008 +000,055,730,362.68 ------------*******
12/31/2008 +046,553,280,763.13 ------------**********
01/02/2009 -049,252,670,832.20 -
01/05/2009 -000,912,747,082.07 --- Mon
01/06/2009 -000,344,326,906.71 ---
01/07/2009 -000,314,429,077.84 ---
01/08/2009 -027,599,431,464.26 -
01/09/2009 -000,568,123,287.98 ---

-128,330,886,944.72 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $945,126,764,348.10 in last 113 days.
That's 945B$ in 113 days.
More than any year ever, except last year, and it's 93% of that highest year ever only in 113 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 113 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=3685935&mesg_id=3685954

[ozymandius]

11. Economic downturn pounds commercial real estate market

...

Contractors, investors and developers are bracing for what could be the worst real estate crunch since the early 1990s, when the industry built a small city's worth of speculative office buildings that later went begging for tenants. Commercial property sales plunged 73% last year, according to Real Capital Analytics. Vacancy rates are rising, and hundreds of large properties are in default. The American Institute of Architects' billing index, a leading indicator of construction six months ahead, is at a record low. Unemployment in the construction industry is 15.3%, well above the average 7.2% jobless rate.

The 1990s crisis was sparked by federal tax breaks that encouraged overinvestment and overbuilding. This time around, the real estate frenzy was fueled by cheap credit, which allowed investors and developers to bid up prices of existing properties. But the economic fallout could be similar: rising bankruptcies and unemployment and slower economic growth at a time when the economy is already reeling from a historic housing depression.

...

The Roundtable is part of an industrywide coalition that's pushing the Federal Reserve and Treasury Department to create a special lending program to resuscitate the commercial mortgage-backed securities market. The industry says such a move would provide liquidity and restore confidence to a sector of the credit market that has essentially frozen. The Treasury Department and Fed have not issued a formal decision, but Treasury noted in November that a similar program aimed at auto, credit card and student loan lenders could be extended to include commercial mortgage-backed securities.

http://www.usatoday.com/money/economy/2009-01-11-commercial-real-estate_N.htm

[AnneD]

73. Again....in Houston

we had a glut of extra office space during our RE/S&L crisis of the 80's. I swear this is the same script. It took forever to absorb that extra real estate-but the economy turned around quickly after it did. We still have a few years to go. But the only reason we finally sort of recovered was that Greenscum inflated the DOTCOM bubble. I don't think that bodes well this time around.

[Robbien]

84. Hedge fund rents collapse

Rents for offices in Mayfair and St James’s “plunged almost 30 per cent” last year, as they were “hammered” by the problems of their hedge fund tenants, reported the Independent. Commercial property agent NB Real Estate has released research showing that rents in west London offices “tumbled” from £120 per square foot at the end of 2007 to £85 at the end of 2008. The Hedge Fund “Implode-O-Meter”, which tracks problems and failures at hedge funds, shows that 108 funds at 66 companies have collapsed since the end of 2006.

http://www.thefirstpost.co.uk/business,1841,hedge-fund-rents-collapse,69670


Bailouts for commercial real estate is idiotic. Commercial real estate is so over built that many articles estimate it will take over a decade to absorb excess capacity. That doesn't even take into account how over-valued the space is. Hedge funders really messed up the rent scale.

[ozymandius]

13. Trichet Propelled Toward Zero Rate by Deepening Slump

Jan. 12 (Bloomberg) -- The sliding European economy is propelling European Central Bank President Jean-Claude Trichet toward the zero-interest-rate world he sought to avoid.

A month after saying he didn’t want to be “trapped” with borrowing costs too low, Trichet may be caught with them too high, as the euro-region’s economy sinks faster than the ECB foresaw in December. As the bank’s governing council prepares to meet Jan. 15, caution from Trichet might prove costly, saddling Europe with a longer recession and weaker recovery than the U.S. faces.

....

Accelerating job cuts and declining investment may shrink the economy of the 16 nations that share the euro by 2.5 percent this year, according to Bank of America and Deutsche Bank AG. That’s five times the rate of contraction the ECB staff projected last month.

The slide puts pressure on the ECB to follow the U.S. Federal Reserve, the Bank of Japan and the Bank of England by dropping its key interest rate to unprecedented levels. Trichet, 66, has resisted such a course, suggesting in a Dec. 15 meeting with journalists in Frankfurt that more cuts might not do much to free up credit, while fanning future inflation.

http://www.bloomberg.com/apps/news?pid=20601068&sid=a2EY8oJn1m_s&refer=economy

[ozymandius]

15. Citi May Book $10 Billion Gain on Morgan Stanley Deal

Jan. 12 (Bloomberg) -- Citigroup Inc. may book a gain of as much as $10 billion by selling control of its brokerage to Morgan Stanley, helping to replenish capital depleted by the biggest losses in the bank’s history, a person familiar with the talks said.

The pretax gain would come from writing up the value of Citigroup’s Smith Barney unit to a new price set by the deal, said the person, who declined to be identified because the talks are confidential. The gain of $5 billion to $6 billion after taxes would flow into Citigroup’s capital, a loan-loss cushion so eroded that the New York-based bank had to get $45 billion of rescue funds last year from the U.S. government.

....

The worst banking crisis since the Great Depression forced Citigroup Chief Executive Officer Vikram Pandit, 51, to abandon his pledge not to sell Smith Barney. For the past decade, the unit has been at the center of the bank’s plan to provide bond- underwriting, savings accounts and investment advice under a single umbrella. Former U.S. Treasury Secretary Robert Rubin, 70, who joined the company in 1999 and had opposed calls to break it up, said Friday he plans to quit the board.

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

[ozymandius]

16. The layman's finance crisis glossary

Found this gem at The Big Picture

The current financial crisis has thrown terminology from the business pages onto the front page of newspapers, with jargon now abounding everywhere from the watercooler to the back of a taxi.

Here is a guide to many of the business terms currently cropping up regularly, as well as some of the more exotic words coined to describe some of the social effects of the credit crunch.

http://news.bbc.co.uk/2/hi/uk_news/magazine/7642138.stm

[54anickel]

35. It's missing "AynRandsian" or maybe "Greenspinsian". They've got Keynesian in there

defined as some sort of "faith" (the belief that....). Shee-it, at least he was a "real" economist and it actually did work. Oh, and "trickle-downsian" aka "napkinomics" ought to be there too! And maybe "Greedsian". The old stand-bys of oligarchy and plutocracy appear to be missing as well.

Of course what I hear around the watering hole the most is "themdamnedsonofabitchesthatstolemymoney".

Why can't I get this tune out of my head these days?

http://www.youtube.com/watch?v=G3almK5CA7A

Lots of folks back East, they say, is leavin' home every day,
Beatin' the hot old dusty way to the California line.
'Cross the desert sands they roll, gettin' out of that old dust bowl,
They think they're goin' to a sugar bowl, but here's what they find --
Now, the police at the port of entry say,
"You're number fourteen thousand for today."
CHORUS:
Oh, if you ain't got the do re mi, folks, you ain't got the do re mi,
Why, you better go back to beautiful Texas, Oklahoma, Kansas, Georgia, Tennessee.
California is a garden of Eden, a paradise to live in or see;
But believe it or not, you won't find it so hot
If you ain't got the do re mi.

You want to buy you a home or a farm, that can't deal nobody harm,
Or take your vacation by the mountains or sea.
Don't swap your old cow for a car, you better stay right where you are,
Better take this little tip from me.
'Cause I look through the want ads every day
But the headlines on the papers always say:

If you ain't got the do re mi, boys, you ain't got the do re mi,
Why, you better go back to beautiful Texas, Oklahoma, Kansas, Georgia, Tennessee.
California is a garden of Eden, a paradise to live in or see;
But believe it or not, you won't find it so hot
If you ain't got the do re mi.

[Ghost Dog]

97. Nice. Does this one help?

http://www.youtube.com/watch?v=2NzuPYl_5_0

(Yul Anderson version)

There must be some kind of way out of here
Said the joker to the thief
There's too much confusion
I can't get no relief

Businessmen they drink my wine
Plow men dig my earth
None will level on the line
Nobody of it is worth

Hey hey

No reason to get excited
The thief he kindly spoke
There are many here among us
Who feel that life is but a joke but uh

But you and I we've been through that
And this is not our fate
So let us not talk falsely now
The hour's getting late

Hey

Hey

All along the watchtower
Princes kept the view
While all the women came and went
Bare-foot servants too, but huh

Outside in the cold distance
A wild cat did growl
Two riders were approachin'
And the wind began to howl

Hey

Oh

All along the watchtower
Hear you sing around the watch
Gotta beware gotta beware I will

Yeah

[54anickel]

104. Nice!!! n/t

[Ghost Dog]

116. Mmmm. I thought so too.

(Was watching Malkovitch's "The Dancer Upstairs" (but in Spanish: "Pasos de Baile") the other night). Includes that music.

And also this: http://www.youtube.com/watch?v=wZa3XsHA6UU (Nina Simone singing Sandy Denny's "Who Knows Where The Time Goes").

[ozymandius]

17. This really doesn’t look good.

Words don’t really do justice to the brutality of recent downturn in Korean and Taiwanese exports.

-see chart-

These look a lot like charts of financial variables after a bubble bursts, not charts of the level of exports. That isn’t good.

Looking just as the monthly data risks being misleading. There is a lot of seasonality in Taiwan’s exports. They usually dip in February. It is a short month, it often corresponds with the Chinese new year and the data isn’t seasonally adjusted. A small dip in December after the end of the Western holiday season also isn’t unusual. But such a big dip in December is most unusual. Plotting the rolling 3m sum eliminates the big February dip. The current downturn is real.

....

What of China? Well, the official data isn’t out — but if the data leaked to Dow Jones is accurate, China is following a similar trajectory but with one difference: its imports are down more than its exports. In December, year over year exports were down close to 3% and year over year imports were down 21%.

http://blogs.cfr.org/setser/2009/01/11/this-really-doesnt-look-good/

[Robbien]

83. It is possible that the protesters hijacking the airlines had alot to do with that

In all the articles during the Taiwan protest they said that exports were being hurt by the fact that they couldn't get the goods out of the country. They also said that some of the business may be lost for good as customers were seeking alternative sources. Korean goods also used Taiwan airports as a hub for delivery of their goods.

[Danascot]

98. Is China’s Recession Worse Than Advertised?

An estimated 600,000 migrant workers have left China’s southern Guangdong Province due to unemployment in 2008, the China Daily said.

Most of these people are migrant workers who left their farms for higher paying jobs in factories. Now, Guangdong Province Vice Governor Huang Yunlong says that the financial crisis has brought Guangdong “the most difficult year after the 1998 Asian financial crisis,” as he was quoted in China Daily.

Notably, Guangdong has been at the forefront of China’s economic reform. Since 1978, its annual GDP has surged by an average of 13.4%, which is 3.5 percentage points higher than the nation’s average. The province now has more than 996,900 registered companies.

But just as the province became the crown jewel of economic reform, it could quickly turn into a hotbed of labor riots. If so, the unrest could accelerate the trend of manufacturers moving to lower cost providers such as Thailand, Vietnam and Cambodia - further undermining China’s ability to rebound.

http://www.contrarianprofits.com/articles/is-china%E2%80%99s-recession-worse-than-advertised/11067

[ozymandius]

18. Wave of Bankruptcy Filings Expected From Retailers in Wake of Holidays

U.S. retailers are expected to begin a wave of post-holiday bankruptcy filings, altering the landscape at malls and on main streets across the country.

Retailers are particularly vulnerable in the current downturn after a decade of buoyant consumer spending, which encouraged them to overexpand and overborrow. Now, the banks and private investors who financed the boom are pulling back.

Several of the industry's biggest lenders, including General Electric Co.'s GE Capital, CIT Group Inc. and Wachovia Corp., are tightening lending terms and reducing exposure to retailers.

Their tougher terms are making it harder for retailers to find capital to reorganize under bankruptcy-court protection, as they were able to do in the past, meaning there are likely to be more liquidations.

http://online.wsj.com/article/SB123171955382272193.html

[Demeter]

19. Good Morning, Ozy! Boys and Girls

Things were hopping at Weekend Economists, as we dug in the detritus of the Bush Bubble Economy.

I think the most inflammatory revelation was that bank dividends had been made with borrowed money. So, not even banks have been making profits. They just pretended they did. And lived like they did. Is it any wonder then that they are needing to go bankrupt?

Nobody posted any bank closings...perhaps the FDIC took an extended holiday?

Gory details at:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x415035

[ozymandius]

20. Good morning!

:donut: :donut: :donut:

Thank you for this news here and thank you for the weekend thread. I just ran across a headline stating that the next round of bank earnings will be frightful when the veneer is peeled back. I'll see if I can find it in the next few minutes.

[Ghost Dog]

39. Here ya go: U.S. bank earnings may be "frightful"

Sun Jan 11, 2009 1:22pm EST NEW YORK (Reuters) - Government efforts to prop up U.S. banks and savings institutions have only partly cushioned the blow from what may have been the industry's worst three-month period since 1990.

...

Rising credit losses, poor economic conditions including a surge in unemployment, tighter lending margins and the cost of luring deposits are likely to dampen results at most of the nation's biggest lenders for the just-ended quarter.

Dismal bottom-line results, however, will quickly fade into the rear-view mirror as investors focus on how much lenders plan to boost reserves for soured loans, take new steps to preserve capital, or eliminate more jobs.

...

Last week, the American Bankers Association trade group said consumer credit delinquencies are at a 28-year high, and are likely to head even higher.

Problems for banks are not concentrated only in housing.

A weakened economy, with unemployment at a nearly 16-year high, should cause loan losses to bleed beyond housing and further into credit card, commercial, construction and industrial loans.

Analysts expect another round of dividend cuts and capital raising, even after the disbursement of much of the first half of the government $700 billion Troubled Asset Relief Program.

...

Oppenheimer & Co analyst Meredith Whitney wrote on January 6 that banks receiving TARP money will report "meaningfully lower" capital levels as of December 31 than they had after they got the infusions.

She said banks will need more capital in the face of up to $40 billion of further writedowns as asset prices fall, and credit ratings are lowered on mortgage-related securities.

...

Analysts including RBC Capital Markets' Gerard Cassidy expect hundreds of additional lenders to fail in 2009, following 25 failures last year.

...

Many banks have dividend yields in the high single digits or above. Some analysts believe Bank of America, Dallas-based Comerica Inc and Atlanta's SunTrust Banks Inc may cut their payouts, despite having done so in the last four months. Marshall & Ilsley may also face a cut, analysts said.

...

On December 11, JPMorgan Chief Executive Jamie Dimon said on CNBC television that November and the first part of December had been "terrible" for the bank. JPMorgan got some government backing when it took over Washington Mutual on September 25.

"No one could have predicted how severe the downturn in the economy would be," Townsend said. "It seems to me that Jamie Dimon has been particularly upfront in his public comments to suggest the WaMu experience could be worse."

/... http://www.reuters.com/article/newsOne/idUSTRE50A26F20090111?sp=true

:eyes:

[Dr.Phool]

43. Excellent WE. A lot of good information to digest.

Thanks again for posting it.

[Demeter]

21. Oceans Of Unsold Cars

http://globaleconomicanalysis.blogspot.com/2008/12/fiscal-insanity-virus-strikes-canada.html

Europe's biggest car terminal is bursting at the seams as unsold cars pile up, mirroring the dramatic situation in the automobile industry.

More than 90,000 vehicles are clogging the shipping terminal in the north German port of Bremerhaven, waiting to find new owners. Detthold Aden, head of the BLG Logistics Group, which administers the facility said they can't move the cars, work on them or deliver them until they find buyers.

Japanese family cars compete for the few remaining spaces available with Korean sports utility vehicles, German sports cars, delivery vans and even combined harvesters and bulldozers.

When cars roll off ships like the Danube Highway or Morning Champion, they come to a halt after just a few meters because there is no room for them on land.

BLG has been forced to find extra space in the area of the port normally reserved for shipping containers. Other cars are temporarily stored on freight trains. Ships normally jam-packed with vehicles destined for the United States are now leaving almost empty because of the dramatic downturn on the US car market.

The terminal and its surrounding area have a maximum capacity of around 100,000 vehicles. This figure could be reached at the end of the year, Ader said. He added he is optimistic the car market will start to improve from the second quarter and "should be back to normal by the end of the year."

Every country wants to protect its auto industry. It's simply not going to happen.

If you are looking to buy a new car, I have a word of advice. Wait. Prices are going to crash.

[Tansy_Gold]

42. Damn. I shoulda taken a picture.

Out in the middle of nowhere in Arizona, out along the Agua Caliente Road that leads from Arlington to Hyder, there are some railroad tracks. The site of the 1995 wreck of the Amtrak Sunset Limited lies about a dozen miles south of where the dusty but well maintained road crosses the track.

I've been out there many times and I've seen one or maybe two trains actually moving on the tracks through there, but apparently it isn't used any more at all. Saturday there were freight cars lined up, hundreds of them, on either side of the crossing. And all of them were the shuttered car-carrier cars. Hundreds of them. Sitting idle in the middle of the desert.


Tansy Gold

[Ghost Dog]

47. Good catch.

So that's where unsold cars, as well as mothballed airplanes, are being stored.

Hmmm. I wonder if Algeria or Libya, say, have thought of offering a similar service in the Sahara desert over here...

[Tansy_Gold]

51. These were just the empty freight cars

No automobiles on them.

Just freight cars with no freight to carry. . . . .nor anywhere to carry it to.

it was kind of eerie, really.

[ozymandius]

55. Transports industries took a substantial hit during Q408.

Tansy, it comes as little surprise that rail companies would park these highly specialized carcasses in the desert. Fewer eyes are out there and much more cheap real estate for storage.

[Tansy_Gold]

58. "Cheap real estate"

The sad thing is that these railroad tracks could be so very valuable if they were used again.

Of course, all the steel and other components in the rail cars is just going to waste, too.. . . .

I probably won't be going out there again for another year, but next time I'll be sure to get some pictures. I wasn't in the driver's seat Saturday. . . .


TG

[Alcibiades]

59. It's also nice and dry

Saves wear and tear on the paint.

[Tansy_Gold]

64. Most of these cars are yellow

yellow fades. Actually, everything fades. yellow fades quickly.

If I knew how to tranfer a google earth place mark, I could show you how out in the middle of blazing nowhere this is.


TG

[Ghost Dog]

68. Mothballed stuff and other stuff piling up:

(Posted this the other day here: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x415116 )

From east to west, a chain collapses (Recycling industry falling apart)

Millions to lose their jobs as world's largest importer of waste hit by collapse in demand for packaging

...

Wu is one of 160,000 collectors in Beijing who make a living from the detritus of urban life - plastic sheeting, office printouts, bottles, radiators and scraps of cardboard. Recycling has become a global industry and China is the largest importer of the world's waste materials, taking in as much as a third of Britain's recyclables for example. Then came the slump, decimating the Chinese recycling industry and leaving Britain, the US and others grappling with growing volumes of recycled waste and nowhere to send it.

"It's a canary in the coalmine: it's the front and back end of industry," said Adam Minter, who runs the Shanghai Scrap blog and specialises in the metal trade. "Until about eight weeks ago, for example, the entire (US) west coast paper market was sent to China and most of it was sent south. It was processed and made into packaging for products that then shipped back to the US ... But when US consumer demand dropped off, that broke the cycle."

Across the scrap trade, prices have halved or worse in a matter of months. Each link in the chain is disintegrating, from factories to scrapyards to collectors such as Wu, 56, a former farmer who now plans to return to Hubei province.

Official media reported that four-fifths of China's recycling units had closed and that millions will eventually be left without employment.

/... http://www.guardian.co.uk/environment/2009/jan/09/recycling-global-recession-china

[kickysnana]

100. xPost Economy: Several hundred miles of idle boxcars at various spots around nation.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x53803

[Demeter]

89. I Wouldn't Take Pictures These Days

Who knows but what some officious little FIBBER or other spook would charge you with terrorism or something?

I'm scared of my own govt. It's not the land of the free nor the home of the brave anymore.

[Demeter]

23. The US Can't Unilaterally Inflate

http://ndknotepad.blogspot.com/2009/01/us-cant-unilaterally-inflate.html

Many people are either worried that all the excessive money creation and bailouts will create inflation, or hope that the Fed will create the necessary inflation to gradually reduce the burden debtors face.

There is little chance either will come to pass right now.

The US can't create or sustain moderate inflation without a little help from its friends. This insight falls more into the category of "accounting identity" than "brilliant reasoning".

The Story

There are many countries that peg their currencies to the dollar in some form, but China is by far the biggest, most important, and most notorious. But even Japan has a ceiling beyond which they won't let the JPY rise. These pegs are not difficult to defend because their currencies are pegged too cheap, rather than too rich. In fact, China absorbs massive amounts of USD in their interventions to enforce that peg. Should they ever need to fight the other way, they can sell off USD and buy CNY until the crisis has passed, and the permanent, underlying current account surplus takes care of the problem.

Japan and China do not have any lasting inflation problem either, though both caught an inflationary wave during the commodity bubble. They have certainly both experienced deflation in the recent past. The economies survived, with a little discomfort. There is very strong structural deflation in both economies, with extraordinarily deep capital, and in China's case at least, virtually limitless labor. Deflation appears to be returning and it probably doesn't present a severe threat to either economy.

Deflation does pose a dire threat to the US economy. With immense debt outstanding to GDP, far higher than anything seen before, the US economy may have approached the Chandrasekhar limit of debt. Debt-deflationary spirals are not fun. Even worse, we have very large, persistent trade deficits and a poor NIIP.

The US has also invested very little in tradeable sectors. When we had all the cheap funding in the world, we built houses in the Inland Empire and bought a lot of cars. Why did America choose to consume or invest in residential real estate, rather than a machine shop in Michigan? Many ascribe that to avarice or stupidity, but it's unfortunately more likely a result of American workers and capital being totally uncompetitive at current and envisioned pricing. As evidence, American exports did finally start to respond a bit when the dollar index sunk a long way, but they've begun to fall again now during the recession, while the dollar's rising again. American goods and services need to be cheaper in other countries to be desirable.

The dollar can't weaken against major competitors, though. China, Japan, and other pegging nations prevent it. China probably can't really break their peg without bankrupting the PBoC, which holds dollars as assets and yuan as liabilities. Much of the world, if revalued, could no longer rely on exports to America and Europe for growth, sinking into deeper -- more deflationary -- recessions of their own. They will probably not revalue any time soon.

China has also demonstrated the ability to sterilize, effectively or at least marginally so, extremely high levels of intervention. Enough for real exports and hot money when the global economy was fine, and certainly enough in our trade depressed world. I believe that through greater bond issuance and raised required reserves, they can effectively sterilize a really, really big pile of yuan. Japan has started running a trade deficit.

Why Inflation's Impossible

Now, let's imagine Bernanke has a magic wand that he can wave to set the US inflation rate to 12%, in order to increase wages and revenues and make debt and prices manageable.

A year passes. Everyone charges 12% more dollars for everything: labor, haircuts, cheeseburgers, and so on. That's okay, because everyone earns more too.

But every USD is still worth 6.83 CNY, and there was no inflation in China. That means the price of US labor, haircuts, and cheeseburgers is 12% higher in real terms in China. They can't buy as much. That also means the price of Chinese t-shirts is 10.8% seems lower than it was last year, because Americans are all earning more. I'll be more likely to buy things made in China.

China now exports much more to the US. With the proceeds from these exports and the intervention, they would buy more US assets, but less relatively expensive US goods and services. The trade balance worsens, the imbalances worsen, US workers and plants become even less competitive, China invests more in tradeables, US consumers go further into debt, and so forth. Less employment, less exports, more debt, stronger deflationary forces. Next year, things grow exponentially worse.

Unless the US miraculously becomes more efficient and productive, to avoid this scenario, the US must have a weakening real exchange rate (REER). Because currency pegs prevent revaluation, that means China and Japan must run higher inflation rates than the US. Twisting it around, in current conditions, the US cannot run a higher sustained inflation rate than China, Japan, and others.

The US must either:

1) Persuade China, Japan, and others to allow their currencies to appreciate dramatically so the US can abruptly default on some of its debt to them, and reduce their exports considerably;
2) Persuade China, Japan, and others to allow high domestic inflation. If the US wanted 12% inflation domestically, it might ask for 16% or 17% inflation in China, if not a bit more;
3) Do something crazy, like enact Smoot-Hawley Mark II and beat each other up at the WTO;
4) Suffer through deflation.

[Demeter]

24. A Question Worth Considering for the New Year...

http://jessescrossroadscafe.blogspot.com/2008/12/here-is-question-worth-considering.html


What is at the heart of the US financial crisis?

Is it that the US has been precipitously cut off from some foreign source of funding? Has there been an oil embargo, a supply shock imposed such as the one that triggered the financial crisis of the 1970's? Are the problems caused by some external change, some actor outside the system?

I think most will say the answer is 'no.' The problems are internal to the US, to its financial system.

So, how would you fix a system that has broken from an internal flaw in this way? Try more of the same, business as usual, apply fresh debt to a failed system based on a growing pyramid of debt without making any substantial changes?

The US financial system, the housing, equity and Treasury markets, are all Ponzi schemes, with the need for a constantly increasing source of fresh money to keep going. That funding is new debt, new dollars based on nothing produced, just the trust and confidence of the participants.

Would you fix the Madoff Ponzi scheme by giving Bernie more money, public money, to keep his payments flowing to his 'investors?'

I think most of us would say, no, no more money.

But what is the difference between that and what Paulson and Bernanke are doing today? Is there a graceful exit strategy? Have any serious reforms or changes been made or even proposed? Has there even been a frank disclosure and discussion of exactly what happened, and what is continuing to happen, beyond blaming the victims, or cynically hiding behind 'well that's how things are?'

No. The key participants in the Ponzi scheme are continuing to take their gains out, in dividends and bonuses, front running the final collapse and admission that "its all gone; we're bankrupt."

Think about it.

What would you do if it is a Ponzi scheme, teetering on the edge?

[MilesColtrane]

45. The heart of the problem?

Commercial banks were allowed to become investment banks.

And, God help us, no one in charge of things has made a peep about fixing this.

[AnneD]

76. The easiest, surest way to untangle a knot....

is to trace the strings back.

For the banks-your right Tansy. De-regulating and repackaging mortgages and selling the debt as an investment.

For the deficet-reducing taxes while engaging in a war. This was the first time that I ever recall that we waged war and cut taxes (esp the wealthiest). Worst unfunded mandate EVER.

Stratification of wealth. It shouldn't be call a death tax like the GOP call it. It should be renamed the Paris Hilton tax because that is who it benefits.

Doing away with the draft. Folks view thing differently if they have skin in the game. We would have a thriving anti war movement -even amoung the young GOP-if they could be drafted. It could be a 2 year period of service-either a peace corp-youth corp or military service.

[AnneD]

110. Shame on me.....

I didn't mention gutting our manufacturing based and racing to the bottom of the wage barrel. Duh-that is the origonal tangle.

[FarCenter]

69. The root cause is the trade imbalance

About $600 billion per year go abroad due to the trade imbalance.

These US dollars were being recycled back into USD denominated investments such as mortgage backed securities; bonds backed by credit card receivables, auto loans, and student loans; commercial paper; and other debt instruments synthesized by the international investment banks in New York and even more so in London.

The robust demand for mortgage backed securities was met by pooling mortgages of various qualities, and then creating bond tranches that had different priorities on the payment of interest and repayment of principal. These were further dressed up by credit default swaps that insured the payments.

This financial engineering, along with the growth of the mortgage broker, mortgage wholesaler, investment bank, investor chain, encouraged the loosening of underwriting standards for home mortgages.

The availability of mortgage money also encouraged expansion of homebuilding, especially in CA, AZ, NV and FL, and many of the new developments were on new land, far from jobs. Cities like Stockton in the Central Valley, Antelope Valley north of LA, Temecula between San Diego and the Inland Empire, etc.

When gas got to $4.50, no one would buy these houses, because it is uneconomic to commute from Stockton to the Bay Area, or from Antelope Valley to LA for work.

Housing prices began to drop. Owners were soon underwater on their mortgages. Speculators and marginal owners started mailing in the keys. The value of mortgage backed securities started to drop. The economies of CA, AZ, NV and FL, which were heavily dependent on residential building started to deteriorate. Special investment vehicles and hedge funds holding mortgage backed securities were in trouble. Insurace companies that wrote credit default swaps were in trouble.

And now the holders of US dollars do not want to buy mortgage backed securities; bonds backed by credit card receivables, auto loans, and student loans; commercial paper; and other debt instruments synthesized by the international investment banks in New York and even more so in London.

They only want to buy US Treasury bonds backed by the US Governments power to tax.

So the only way to repatriate trade deficit dollars is for the Federal government to sell bonds, and then give the money to the banks, so that the banks can provide credit to the borrowers.

In effect, the government deficit borrowing has to be increased by $600 billion/year just to support the trade deficit. It must be increased by more to accommodate the shift of assets previously acquired by foreign holders to US Treasuries from other asset classes.

[Ghost Dog]

46. This is why US elites will provoke domestic deflation and devaluation,

followed by something like martial law and a very big, very nasty international war.

[Demeter]

25. How Much Has Harvard Really Lost?

http://www.huffingtonpost.com/ed-epstein/how-much-has-harvard-real_b_152711.html

Harvard University's admission that it lost $8 billion from its $36 billion endowment fund, as staggering as it sounds, may grossly underestimate the true magnitude of the loss between from July 1 through Oct. 31 2008. According to a source close the Harvard Management Corporation (HMC), which runs the fund for Harvard, the loss is closer to $18 billion if the losses on the fund's illiquid investment are realistically appraised.

To be sure, the highly-talented-- and highly- incentivized- MBAs at HMC did exceedingly well for Harvard during the early years of the new millennium. From 2000 to 2008, they more than quadrupled the notional value of Harvard's wealth through a strategy that involved shifting the lion's share of Harvard's money from American stocks, bonds and cash to to highly esoteric investment which were not only illiquid but whose imputed value often could not be easily determined by outside parties. So, by the time the bubble burst in the fall of 2008, less than a fifth of Harvard's endowment fund was invested in exchange-listed stocks and bonds. Where was the rest of Harvard's money? Nearly 28% of Harvard Endowment fund was in what the fund manager's called "real assets," a category comprised of timber forest and arable land in remote areas, commercial real estate participators, and huge stockpiles of oil and other physical commodities. Such "real assets" plunged in value, if they could be sold, much more severely than the stock market averages. Oil, for example, one of the fund's largest investment, lost about t two-thirds of its value. Another huge chunk of the endowment was in private equity placements and hedge funds which imposed restrictions on withdrawals. In the case of so-called "gated" hedge funds, some of which suffered enormous losses, Harvard could only extract its investment by selling its participation at a steep discount to a "secondary" hedge fund. Another 11 percent of Harvard's money had been sunk in volatile emerging markets. Here the investments took a double hit: First, the local stock markets collapsed in most of these countries, with, for example, Russian stocks, losing 80%, of their value. Second, on top of these losses. the local currencies lost much of their value against the dollar, with the Brazilian Real, for example losing 40% of its value. Given the true cost of getting its money out of this financial exotica, my knowledgeable source finds the claim by Harvard's money managers that the fund only lost 22 percent not only "purely pollyannaish" but self-serving (they got increased bonuses for 2008). But while Harvard's money managers may chose to look through rose color glasses at the value of their portfolio , Harvard University, which relies on the interest from its endowment fund for one-third its budget, needs to be more realistic. As its President, Drew Faust, noted in letter to the Harvard faculty, "We need to be prepared to absorb unprecedented endowment losses and plan for a period of greater financial constrain,"

The collateral damage goes far beyond the ivy-covered walls of Harvard. Money managers at other non-profit institutions, no doubt inspired by the dazzling success of the Harvard Management Corporation in rapidly multiplying the notional value of its endowment fund adopted similar strategies, including plunging their funds into the murky get-rich-fast universe of illiquid investments. Consider, for example, the adventures of Calpers, the giant pension fund of the California Public Employees' Retirement System, I which heavily invested in the same sort of "real assets" as Harvard. Leveraging its own funds, It bought so much undeveloped real acreage, that by 2008 it became the largest private land owner in America, and as the real estate bubble expanded, it marked up the notional value of its portfolio accordingly. Then came the subprime debacle, and the real estate bubble imploded, leaving Calpers with unsalable land and, because of its borrowed funds, a 103% loss. Together with other losses in hedge fund and conventional investments, Calpers found that it had lost nearly 40% of the value of its entire pension fund. In Calpers's case, it had little choice other than to realistically report its enormous losses since it had pension obligations that now might require raising money from local governments in California. Other nonprofit funds with more leeway, such as Harvard, have yet to fully come to grips with the problematic value of their illiquid investments.

[Tansy_Gold]

26. Other headlines on DU

I have a tendency to leave SMW on my toggle screen while I'm working, so I often miss interesting other threads on LBN. For the benefit of others who may not catch them --

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3685843
"Motorola Laying Off Throngs"

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3685767
"Obama Plans to Keep Estate Tax"

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3685697
"Radical Cheap: $1,000 homes"



Tansy Gold, now off to her paying work or else. . . .

[Ghost Dog]

49. Don't miss "The GAME", a seminal Time for change thread

generated (and promoted to #1 Greatest) over the weekend: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4803877#4812230

Worth reading all (+ links).

[DemReadingDU]

50. one of the most thought provoking threads, ever

thanks for including this today

[Ghost Dog]

63. I followed up on

this link this morning, so now my head's spinning. Heading for this other one next.

Uh: This is about (a variety or varieties of) http://en.wikipedia.org/wiki/Synarchism

[Tandalayo_Scheisskopf]

52. We get to repost his stuff...

At World News Trust, and the traffic goes wild. I don't think that the Doctor knows that he is missing his calling as a writer. A damn good writer.

[Ghost Dog]

60. Ah. Have links?

[Tandalayo_Scheisskopf]

62. Just go to ...

http://worldnewstrust.com and search on "Dale Tavris". Plenty of stuff there.

[Demeter]

28. Have You Bought Into the Pay Double Standard?

http://www.nakedcapitalism.com/2008/12/have-you-bought-into-pay-double.html

... One meme I have noticed surfacing in the debate over the automaker bailout is that UAW employees are paid more than average workers.

Now in and of itself, that statement is meaningless. You need to have an idea of worker productivity to see whether that it out of whack (and for some odd reason, the bloated and highly paid management cohort almost never gets mentioned in these discussions, nor do the massive state level subsidies to the foreign transplants). Perhaps I missed it, but I do not recall seeing any longitudinal work on labor costs (that sort of analysis would help bring some badly needed facts to the table).

But why is framing the discussion around averages alone dangerous? Let's say we collectively want to bring car worker pay down to some sort of average. That has the effect of lowering the average. You will have groups that were formerly at the average that are now above it. And if you accept the implicit logic "above average pay is bad" (fill in the blank as to why), you have a race to the bottom due to pressure on the relatively better paid to take less which puts pressure on aggregate pay.

I imagine now that some of you are snorting that the automakers are an isolated example and I am generalizing beyond a single (albeit very large example). Well, this sort of logic is at work, with a vengeance, but in reverse among CEOs. And it certainly has proven remarkably effective.

While most commentators on CEO pay correctly focus on the role of options-based rewards in goosing pay from generous to stratospheric, the role of compensation consultants seldom gets the attention it merits.

One practice that I have seen get perilous little mention is where the pay targets are set. Based on their belief of what constitutes good modern practice (influenced in no small degree by the pay consultants) most boards set general target ranges for how they would like the CEO to be paid relative to peers. The comp consultant then helps define and survey the peer group's pay ranges, setting a benchmark for how the CEO in question is to be paid.

That all sounds fine, right? Well, except just as all the children at Lake Woebegone are above average, no board likes setting a target below peer group norms. I have heard of numerous examples of targets being set somewhere in the top half (66th percentile, top quarter, top 20%), hardly any at the mean, and none I know of below average (although GE's Jeff Immelt set his pay at a remarkably modest level, saying it was bad for morale and inappropriate for the CEO to be paid vastly more than other C-level executives). If readers know of any examples of companies (other than those with substantially owned by insiders) where the target for CEO pay is below the median of comparable companies, please let me know.

So with this mechanism in place, any CEO who has fallen below median pay who is targeted to be in a higher group will have his pay ratcheted up, independent of performance, merely to keep up with his peers, This increase raises the average and creates new laggards. The comp consultants have institutionalized a leapfrogging process that keeps them busy surveying competitor reward levels and keeps top-level pay rising relentlessly.

And there seems to be a creep in cultural values that accepts, nay endorses, the opposite process at work further down the food chain.

[Demeter]

32. Wage Deflation Underway

http://www.nakedcapitalism.com/2008/12/wage-deflation-underway.html


Price deflation isn't necessarily a bad thing if it is short-lived and does not lead to downward pressure on wages. But falling wages produces a nasty spiral. Not only do consumers have less to spend, but worse, even if they keep their jobs, they can be legitimately worried about even lower pay packages down the road.

Of course, wages may simply fall in correspondence with prices, purchasing power could be maintained. But with memories of gas and food price rises still fresh (and I am still seeing meaningful food price increases), workers have good reason to be concerned that their standard of living could fall. And that does not include the nasty factor that most consumers are carrying debt, both mortgage and personal which is unlikely to deflate in line with a reduction in earnings (although Bernanke is doing everything in his power to engineer that)

And even if that wage earner squeeze is illusory (ie, deflation is symmetrical enough that his standard of living is intact), he is exposed to commodity price increases. Fed policy is indifferent to the dollar; in fact, Bernanke would probably like to see it considerably lower, since the 1934 devaluation played a big role in putting the US back on the growth path (policy errors in 1937 put the recovery in reverse). But, say a 30% to 40% fall in the dollar means considerably higher energy and food prices, which hit the vulnerable particularly hard.

Fedex is cutting pay 5%. In the UK, tens of thousands of workers are having an extended Christmas holiday as employers shut down through Jan. 19 to conserve cash. Cerberus has offered its New Page (coated paper mills acquired from Mead WestVaco) union employees a four-year contract with no wage increases the entire time, benefit cuts, and reduction of overtime. That's tantamount to a pay cut.

The New York Times gives more examples of pay reductions, generally in the form of short workweeks or unpaid vacations. However, the Times candy-coats this development, presenting it as a "win-win" that saves jobs, as opposed to a further grinding down of workers who have had stagnant real wages since the mid-1970s. Admittedly, so far employees have reportedly gone along with these moves. But I must cynically note that everyone quoted in the article is either a manager, an expert (a consultant or academic) or if a worker, was presumably interviewed with management's knowledge. And let's face it, labor has no bargaining power in the US. Acquiescence is the only option.

From the New York Times:

A growing number of employers, hoping to avoid or limit layoffs, are introducing four-day workweeks, unpaid vacations and voluntary or enforced furloughs, along with wage freezes, pension cuts and flexible work schedules. These employers are still cutting labor costs, but hanging onto the labor.

And in some cases, workers are even buying in. Witness the unusual suggestion made in early December by the chairman of the faculty senate at Brandeis University, who proposed that the school’s 300 professors and instructors give up 1 percent of their pay.

“What we are doing is a symbolic gesture that has real consequences — it can save a few jobs,” said William Flesch, the senate chairman and an English professor.

He says more than 30 percent have volunteered for the pay cut, which could save at least $100,000 and prevent layoffs for at least several employees. “It’s not painless, but it is relatively painless and it could help some people,” he said....

At some companies, employees are supporting the indirect wage cuts — at least for now. The downturn hit so hard, with its toll felt so widely through hits on pensions and 401(k) retirement plans and with the future so murky, that employers and even some employees say it is better to accept minor cuts than risk more draconian steps.

The rolls of companies nipping at labor costs with measures less drastic than wholesale layoffs include Dell (extended unpaid holiday), Cisco (four-day year-end shutdown), Motorola (salary cuts), Nevada casinos (four-day workweek), Honda (voluntary unpaid vacation time) and The Seattle Times (plans to save $1 million with a week of unpaid furlough for 500 workers). There are also many midsize and small companies trying such tactics.

To be sure, these efforts are far less widespread than layoffs, and outright pay cuts still appear to be rare. Over all, the average hourly pay of rank-and-file workers — who make up about four-fifths of the work force — rose 3.7 percent from November 2007 to last month, according to the latest Labor Department data.

Watson Wyatt, a consulting firm that tracks compensation trends, published survey data last week that found that 23 percent of companies planned layoffs in the next year, down from 26 percent that said they planned to do so in October. Companies say they are considering other cost cuts, like mandatory holiday shutdowns, salary freezes or cuts, four-day workweeks and reductions of contributions to retirement and health care plans.

WAGE DEFLATION HAS BEEN GOING ON SINCE REAGAN, IN MY EXPERIENCE, AND IN SEVERAL INDUSTRIES.

[54anickel]

41. Been happening for decades, now it's a downhill, outta control race to the bottom. Global wage

equalization has begun. Gentlemen, kill your engines.

[54anickel]

31. The 60 Minutes piece on oil speculators from last night is up now. In case anyone missed it.

It focuses on the speculation in the oil markets (which SMWers were reporting years ago). There was wild speculation in most of the commodities, oil was just the most notable as it touches nearly everyone and everything in transportation costs alone. Sort of ticks a person off to watch this and ask "where the hell were you 4-5 years ago when we (and the OPEC dudes) were pointing at speculators?" Oh, but then I remember it was mostly anti-Boosh folks on the left and "Aa-raabs" doing the pointing. :eyes:

[Demeter]

33. And All the Financiers Speculating Were Publicly Denying Their Actions

"There's no speculation"

[54anickel]

36. ...

[Loge23]

37. Another wreck in the rear-view

Like the clueless driver who bounds along oblivious to the carnage they caused behind them, last nights 60 Min. piece was just another example of the sites and sounds of the collapse of our economy. Let's make money out of nothing.
Of course, one wonders where 60 Min. - along with the rest of erstwhile media - was when all of this oil speculation was happening.
It's perfectly acceptable it seems to plunder whatever one can get these days without recourse.
It's not just the riches gained by this thievery that is regrettable; it's the small businesses, workforce, and ancillary industries that were seriously damaged by these actions that bears the burden of these crimes.
Of course, nothing will happen here - no one will be accountable, no one will pay back, no one will serve any time. ALl of the billions in profit realized from this crime will stay in the pockets of the slime that benefited.
The rest of us will hope and beg that the price doesn't rise again.
What an insane mess this is.

[Danascot]

117. What 60 Minutes Missed on Oil Speculation

FYI, from The Big Picture:

Last night’s 60 Minutes had a story on Oil Speculation. Its not that they said anything that was factually wrong per se, its more that they told 10% of the story of the rise and fall of energy prices. The entire report was surprisingly thin, and avoided discussing all of the many other factors that had been impacting energy prices during the 7 year rise and subsequent collapse (60 Minutes video here).

Very often, major bull market moves begin on fundamentals, but shift towards the end of its life into a speculative frenzy. These always end in a price surge (i.e., a blowoff top), which is followed by a collapse. But note that it is in the end game where speculation dominates, not the first 7 or 8 innings. That was true as much for Housing in 2005-06 as it was for dot com stocks in 1999-2000.

Hot markets always attract hot money.

But merely claiming that the run up in Oil prices was due to unprecedented speculation misses the big picture of what actually occurred. And, it reflects a lack of understanding of how markets work, and the psychology of booms, bubbles and busts.

Here are a few factors that I believe the folks at 60 Minutes either misunderstood or overlooked completely during the run up from $20 to $100:

1. Oil is priced in US Dollars. Since 2001, the Dollar fell 40% (from 120 to 72); Oil rise nearly 5 fold over the same period. And Oil’s collapse occurred over a period when the dollar formed a short term bottom; it has certainly had its most significant rally in years (72 to 88).

2. Over the same period that Oil prices were rising, the US was fighting two major wars in the Middle East, Iraq and Afghanistan. These impact prices via psychology and risk of supply disruption — especially at a time when producers were running flat out.

3. Energy prices rose during a global economic expansion (fueled by low rates and cheap money); Oil fell during a period that marked the beginning of the US recession and the start of a global slowdown.

4. Since 2001, Commodities of all sorts rose significantly: Steel, aluminum, cement, cotton, soy, livestocks, foodstuffs, precious metals, etc. Were they all driven by speculation, or was something else going on?

5. Since the 1% Fed funds rate of 2002-03, inflation has had a dramatic impact on ALL prices — from medical costs to insurance to education to health care to transportation to housing to food and energy. That 60 Minutes failed to even mention inflation in a piece on Oil prices is a terrible oversight on their part.

more:

http://www.ritholtz.com/blog/2009/01/oil-speculation/

[ozymandius]

44. Stock futures slightly lower ahead of Alcoa report

NEW YORK – Stock futures pointed slightly lower Monday, as investors tread cautiously ahead of the unofficial start to earnings season with a report from Alcoa Inc.

Wall Street is expecting fourth-quarter and full-year numbers to be particularly bleak, especially after several companies warned last week that they are being hit hard by the recession.

Alcoa, which releases its fourth-quarter results after the market closes Monday, said last week it would cut 13,500 jobs, or 13 percent of its work force, and sharply reduce production as it struggles with falling demand due to the worsening recession overseas.

Analysts are expecting Alcoa to report a loss of 10 cents per share, according to a poll by Thomson Reuters.

....

There are no economic reports scheduled Monday, but investors will likely be anxious ahead of the Federal Reserve's beige book, its assessment of the economy by region. The report, which will be released Wednesday, provides details about the strengths and weaknesses in each part of the country.

http://news.yahoo.com/s/ap/20090112/ap_on_bi_st_ma_re/wall_street

[ozymandius]

48. PIEHOLE ALERT!

Bush schedules White House news conference Monday

WASHINGTON – President George W. Bush is set to take questions from reporters Monday at a previously unannounced news conference in the final days of his administration.

Bush leaves office at midday Jan. 20, when President-elect Barack Obama takes the oath and moves into the Executive Mansion, becoming the 44th president. The news conference was scheduled for 9:15 a.m. EST.

http://news.yahoo.com/s/ap/20090112/ap_on_go_pr_wh/bush_news_conference

[Dr.Phool]

53. One more week.

Just one more fucking week....One more week. Keep telling myself that. Do I have enough drugs to last. Just one more week.

[ozymandius]

54. It's the last Bush league piehole opening this season.

:woohoo: :woohoo:

[ozymandius]

56. The piehole openeth and closeth.

Bush renews call for 'two-state' Mideast solution

[ozymandius]

67. Bush defends presidency in final poo-flinging news conference

WASHINGTON – President George W. Bush said Monday in the final news conference of his presidency that he would ask Congress to release the remaining $350 billion in Wall Street bailout money if President-elect Barack Obama asks him to do so. But he said Obama hasn't so far.

Requesting the money before Bush leaves office next Tuesday would take the burden off Obama's shoulders of making his own appeal for more money from a program that is extraordinarily unpopular with many lawmakers and much of the public.

....

As for his own presidency, Bush defended his decisions on the Iraq war, the issue that will define his presidency like no other. There have been over 4,000 U.S. deaths since the invasion and toppling of Saddam Hussein in 2003.

http://news.yahoo.com/s/ap/20090112/ap_on_go_pr_wh/bush_news_conference

[ozymandius]

57. opening numbers and blather

9:38
Dow 8,585.32 Down 13.86 (0.16%)
Nasdaq 1,570.65 Down 0.94 (0.06%)
S&P 500 886.17 Down 4.18 (0.47%)
10-Yr Bond 2.422% Up 0.015
NYSE Volume 221,575,812.5
Nasdaq Volume 76,294,406.25

09:20 am : S&P futures vs fair value: -3.10. Nasdaq futures vs fair value: -1.30. Just minutes remain before the opening bell and stock futures continue pointing to a flat-to-modestly lower start. Atlanta Fed President Lockhart speaks later today (12:40 PM ET), but there is no official economic data to trade on. Headlines are rather dry as well. One item of note, though, Citigroup (C) and Morgan Stanley (MS) are reportedly nearing a deal to join their brokerage units. That has shares of C trading a bit lower in premarket action, but MS trading a bit higher. Earnings season officially kicks off after the close when Alcoa (AA) reports its latest results. Many expect the company to issue cautious statements given the weakness in the company's end markets. Cautious statements are expected from many companies this earnings season as economic conditions remain uncertain, making investors hesitant to buy on last week's dip.

[ozymandius]

66. Wall Street extends losses profit worry and Alcoa

NEW YORK (Reuters) – Stocks extended losses in early trade on Monday as investors worried that the start of the fourth-quarter earnings reporting season may indicate further worsening of the recession.

* Alcoa Inc (AA.N) was one of the top drags on the Dow after Deutsche Bank recommended a "sell" on the stock, sending shares down 6.3 percent to $10.13. The aluminum producer is scheduled to kick off the earnings season when it posts fourth-quarter results after the bell.

http://news.yahoo.com/s/nm/20090112/bs_nm/us_markets_stocks_5

updating...

[ozymandius]

61. Zandi: The "Lost Economic Decade"

"It's sad to say, but we really went nowhere for almost ten years, after you extract the boost provided by the housing and mortgage boom. It's almost a lost economic decade."
Mark Zandi, chief economist of Moody's Economy.com

From the WaPo: Economy Made Few Gains in Bush Years

President Bush has presided over the weakest eight-year span for the U.S. economy in decades, according to an analysis of key data ...

We will probably see a slew of articles over the next ten days on the various failures of the Bush administration. I think the two worst economic mistakes were the Bush fiscal policies (creating a huge structural budget deficit) and the administration's ideological opposition to regulation and oversight that allowed the housing and credit bubbles to form.

The WaPo article outlines other failures.

Posted from Calculated Risk. I'm sure we'll see a significant amount of data issuing forth about the Bush economic disaster. Technology has a way of speeding such analysis up, ya know.

[Demeter]

85. More LIke 25 Years--Reagan Went In 1980

and it's been downhill ever since.

[ozymandius]

65. Dollar Watch

I'm filling in for a traveling UpInArms...

Euro down against US dollar

BERLIN – The 16-nation euro slipped against the U.S. dollar Monday as traders shrugged off unemployment figures from Washington and looked ahead to this week's ECB decision on interest rates.

The euro bought $1.3406 in midday European trading, down from $1.3646 on Friday. The British pound fell to 1.4970 from $1.5180 on Friday.

Dollar, Yen Rise as Sentiment Sinks

NEW YORK -- The dollar and yen benefited on Monday from expectations for gloomy fourth-quarter earnings reports and U.S. economic data later this week, as traders turned away from riskier currencies.

Overnight, the dollar fell to its lowest level yet this year against the yen, at ¥89.60.

[pjt7]

71. Mary Schapiro

Obama's weak pick for the SEC head is getting sued.

http://www.nytimes.com/2009/01/12/business/12schapiro.html?ref=business

The Senate better not approve her, cause she ain't going to be busting the Madoof's. She never has & never will.

[radfringe]

75. should do a new POOL

closest to DOW at 11:59am on 1/20/09... (the last minute of bush-cheney)

[uppityperson]

77. I like that idea for a pool. Thanks all for cont to do this topic every day.

[ozymandius]

90. I love the idea.

Give me a day to consult my Ouija board and the Magic 8 Ball and I'll get back to you. What's the usual timeline on these things?

(You know the bookies in London are probably working on this already.)

[radfringe]

94. What's the usual timeline on these things?

I'd say people would have to have their "numbers" in the pool by 9 am on Monday 1/19

this will be before markets open on Monday - bush's last full day, and plenty of time for people to factor in a probable market bounce for Tuesday heading into the official inauguration.

set it up to open "bets" in tomorrow's opening Stock Market thread?

[ozymandius]

101. Bear in mind that Monday is MLK Day.

I believe that markets are closed. Friday then?

[radfringe]

127. Friday is fine

works for me

[Ghost Dog]

102. The bookies tend to be located in tax-free and relatively lawless Gibraltar

these days, Ozy.

I'll consult the entrails as regards this 7-day pool overnight, too. :thumbsup:

[ozymandius]

108. Thanks for updating me on the ways of the world, Ghost Dog.

:hi: Are these the British bookies we hear about when a U.S. election hangs in the balance?

[Ghost Dog]

120. Oh, probably. That comes under "Online Poker", doesn't it?

http://www.britishbookies.com/

:)

[Neshanic]

118. Good idea.

[antigop]

78. So the Satyam founders and CFO are in jail

http://financialweek.com/apps/pbcs.dll/article?AID=/20090111/REG/901119995/1036

The government installed a new board at fraud-hit Satyam Computer Services on Sunday following the arrest of the company's co-founders in the wake of India's biggest corporate scandal.

Police stepped up their investigation into the case, having charged Satyam Chairman Ramalinga Raju and his brother B. Rama Raju with criminal conspiracy and forgery on Friday after Mr. Raju said profits had been falsified for years and quit.

The brothers are being held in jail after they were taken into judicial custody until Jan. 23.

Chief Financial Officer Vadlamani Srinivas was also sent to the same jail on Sunday after he was taken into judicial custody until Jan. 23, his lawyer said.

Police raided the residences of the arrested executives in Hyderabad, the southern Indian city where Satyam is based, as part of the investigation, V.S.K. Kaumudi, Inspector General of Police told Reuters.

[nc4bo]

79. Well, that was swift. Why can't the U.S. do the same? nt

[AnneD]

82. 10 Sexy Careers You Never Thought Of

1. Administrative assistants
When you visit almost any workplace, a smiling administrative assistant greets you. Very often you don't know if you're in the right place, whom you need to speak with or even what you need to do. Administrative assistants know the answers and, because they're your first points of contact, they have to be well-groomed and kind to visitors. Knowledge, good looks, a nice personality and helpfulness? Yes, please. And since they frequently work closely with high-level executives who value their opinions, they often possess a hidden but large cache of power. Administrative assistants pretty much have the whole package.

2. Baristas
If you're one of those coffee drinkers who don't speak to anyone and whom nobody wants to speak to until you've had your morning cup, is any occupation more attractive than barista? Before the sun rises, baristas are hard at work and ready to serve you with a smile. They understand your special ordering language and don a uniform, even if it consists of only casual clothes with an apron and cap. And no cologne or perfume they buy will ever be more alluring than the aroma of coffee that blankets them even after they leave work.

3. Hairstylists
Getting your hair cut is an intimate affair: The stylist's hands are all over your head, and your face is fairly close to his or her torso at all times. In any other circumstance, you'd consider such proximity a violation of personal space. But stylists have an ability to make you feel comfortable enough to talk about your personal life, and when you find the perfect one, you don't want anyone else touching your hair. Throw in a scalp massage and you're putty in their hands.

4. Disc Jockey
Clubs are teeming with sexy people (or at least people trying to be sexy), which means you've got a room full of perfumes, colognes, too much makeup, bad hairstyles and stumbling drunks. It's enough to make you turn around and walk away. But once you catch a glimpse of the stylish guy or gal in the booth who's spinning records (or hitting buttons on a laptop) and making the crowd dance, you suddenly want to stay. DJs possess one of those quirky talents we all wish we had and they look cool doing it. Bonus points if you catch his or her eye and get a song played for you.

more.....

http://msn.careerbuilder.com/Article/MSN-1737-Job-Info-and-Trends-10-Sexy-Careers-You-Never-Thought-Of/?cbsid=5e3eb94c49b34a26b2c373209ed3ebef-285081045-x1-6&sc_extcmp=JS_1737_home1&cbRecursionCnt=2&SiteId=cbmsnhp41737&ArticleID=1737>1=23000


Hey Roland.....IT was Number5. I am SHOCKED... SHOCKED I tell you that Nurses didn't get an honourable mention. The way we are portrayed esp on the Spanish Channels-we all have big boobs, and wear short skirts and crotchless panties. See this would go well on a jobs forum.

[Demeter]

86. If You Want a Sexy Career, Go for the Gold--Escort Services!

At least you'd make a living wage. And that's not counting the hush money, bribes, and stool pigeon payments.

[ozymandius]

88. You mean like Rick Santorum? nt

[ozymandius]

87. There are some nurses I would never -ever- want to see wearing crotchless panties.

Most of them refer to the garment as crotchless manties. You get the picture, right? It takes all kinds to make a big city. Gods bless 'em.

By the way - I too received the message from the mods that the Jobs Forum is under consideration.

[AnneD]

115. I need some mental floss

to get that image out of my mind. I'll never think of crotchless in the same way ever again.

[Roland99]

92. Maybe I should try wearing short skirts...

;)

[AnneD]

111. Know what a Scot wears under his kilt

Lipstick

:spray:
Whootman

[Tandalayo_Scheisskopf]

124. Now Anne...

I recently spent a good bit of time, post-surgery, in a hospital and while I did see some attractive women doing their job with efficiency and professionalism, I did not see one who looked like the above description.

Now, admittedly, I was Morphined out of my squash, but there are certain reptile-brain-initiated responses that Morphine doesn't touch. I assure you, I would have noticed. ;-)

[AnneD]

129. You're average Nurse is pushing...

45. Few if any wear high heels.

[antigop]

91. Madoff allowed to remain free on bail

http://www.msnbc.msn.com/id/28620374/

A judge allowed disgraced money manager Bernard Madoff to remain free on bail Monday, rejecting an attempt by prosecutors to send him to jail for mailing more than $1 million in jewelry to family and friends over the holidays.

The decision is sure to outrage investors who have been clamoring for Madoff to be sent to jail for allegedly carrying out the largest financial fraud in history - a scheme authorities say he has described as a Ponzi scheme.

If bail had been revoked, Madoff would have been forced from the comfort of his $7 million penthouse where he has been under house arrest and await trial living in a jail cell with nothing but bunkbeds, a sink and toilet. excerpts from articles)

Satyam founders and CFO in jail. Madoff remains free on bail.

[antigop]

93. Many states' lottery sales are rising in recession

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/01/11/financial/f113048S38.DTL&type=printable

Even in these tough economic times, many people are feeling lucky.

More than half of all states with lotteries have reported rising sales over the past six months, and some researchers say financial insecurity might be driving people to risk more of their money than usual on $1 and $5 instant scratch-offs and other daily games in hopes of a big payoff.

"Someday somebody is going to win and I hope it is me," said Albert Atwood of Nashville, who spends $100 weekly playing the Pick 5 and Lotto Plus. "I imagine that I would be a heap better off if I saved this money, but everybody has dreams."

Driven by regulars like Atwood and a growing number of occasional players, 25 of 42 states with lotteries have experienced higher sales of scratch-off and daily lottery games since July, according to Scientific Games, a maker of scratch-offs.

[radfringe]

99. it's not a question of "feeling lucky"

it's HOPE born of DESPERATION and WORRY

[xyouth]

103. Gold takes a big dump today

Ny Spot at closing down 33.70 to $820.70 asking price. A drop of 3.95% today.

I guess I picked the wrong day to sop huffing glue!

http://www.kitco.com/market/

http://www.marketwatch.com/news/story/Gold-falls-one-month-low/story.aspx?guid=%7B82013132%2D31C3%2D45F6%2DA256%2D1204E2064810%7D&dist=hplatest

[ozymandius]

106. At least you still have intravenous drugs.

Greetings xyouth! And welcome to the Stock Market Watch.

:hi:

[xyouth]

107. Thanks Ozymandius

I'm here just about every day lurking in the corners. I'm the guy with the broke look on his face.:hi:

[Tansy_Gold]

113. The guy with the broke look on his face?

Hey, that could be just about any of us!

:hi:

[AnneD]

114. Well don't make yourself invisible.....

pull up a chair and join us at the water cooler.

[AnneD]

112. I went to my fav coin shop this weekend.....

I needed to ask some questions. It was crowded. When we finally had a moment-I asked my fav guy were people buying or selling. He said it was buying-he couldn't keep enough around. Their web page was being hit continually. Well why isn't the price going up? I asked. He said he has been in the biz for years and this was the damnedest market he had ever seen. The only thing he could figure is that it is being artificially kept low.

Now this guy is what you call an honest broker, and this is his man in the trenches opinion.

[Ghost Dog]

121. Ya don't say.

Some western jewellers are struggling, though: http://www.tehrantimes.com/index_View.asp?code=183506

[xyouth]

122. I think he is right.

I think the big gold handlers are playing the longs and shorts Just like the the manipulating blankers did in all the other markets.

[ozymandius]

105. End of the day

Dow 8,473.97 Down 125.21 (1.46%)
Nasdaq 1,538.79 Down 32.80 (2.09%)
S&P 500 870.26 Down 20.09 (2.26%)
10-Yr Bond 2.309% Down 0.098
NYSE Volume 5,256,090,500
Nasdaq Volume 1,814,895,875

4:25 pm : A bit of late support kept stocks from closing at their session lows. Still, losses were deep and broad-based, extending last week's declines.

The recent downturn comes as market participants prepare for an earnings season that begins this evening when Dow component Alcoa (AA 10.06, -0.75) announces its latest quarterly results.

Expectations for the company are low. Its shares were actually downgraded to Sell by analysts at Deutsche Bank.

Profit concerns have fueled recent selling efforts, underscoring a change in the broader market's sentiment.

During recent weeks investors would shake off disappointing data and bid stocks higher. That helped the stock market rebound more than 25% from its November low to its January.

The stock market has fallen nearly 4.5% over the last two sessions.

Losses have been the worst among financial stocks during that time. This session financials shed 5.7%, which was more than any other sector. Over the past two sessions financials have fallen almost 9% as investors dump the stocks amid fear of what may still be lurking on the balance sheets of banks and other financial outfits.

Citigroup (C 5.60, -1.15) is reportedly nearing a deal to sell a majority stake of its brokerage, Smith Barney, to Morgan Stanley (MS 18.79, -0.27) for $2.5 billion to $3.5 billion cash, according to Reuters. The extra cash could help Citi stem looming losses.

Financials were the worst performing sector in 2008, losing roughly 58%, and are currently the worst performing sector in 2009, currently down 13% year-to-date.

Materials (-3.6%) and energy (-3.1%) stocks also finished the session with sizeable losses. Their downturn comes amid continued concern regarding weakening demand in end markets.

As such, crude oil futures closed almost 8% lower at roughly $37.60 per barrel, which marks the lowest closing price since late December. Crude failed to break into positive territory even once during the session.

Nine of the 10 economic sectors finished with losses. The defensive-oriented utilities sector (+0.2%) was the only sector to post a gain.DJ30 -125.13 NASDAQ -32.80 NQ100 -1.8% R2K -2.6% SP400 -2.8% SP500 -20.09 NASDAQ Adv/Vol/Dec 645/1.79 bln/2086 NYSE Adv/Vol/Dec 731/1.31 bln/2362

[Dr.Phool]

109. No matter how bad things look, one thing brightens me up.

Fresh, sweet, locally-grown Plant City Strawberries are here!

:woohoo: :applause: :woohoo: :applause: :woohoo: :applause: :woohoo: :applause: :woohoo: :applause:

[Pale Blue Dot]

123. Hmmm... the Nikkei is down 4.4% in early Tuesday trading

http://www.bloomberg.com/markets/stocks/wei.html

Bad day ahead?

[CatholicEdHead]

125. Who knows

There are days Asia and Europe can drop and the US markets are flat or even rise sharply recently. Given the news the markets will probably drop, but no guarantee.