STOCK MARKET WATCH, Wednesday February 11

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday February 11, 2009

Bush Administration Officials Under Indictment = 0
Financial Sector Officials Under Indictment = 0
Financial Sector Officials In Prison = 1

AT THE CLOSING BELL ON February 10, 2009

Dow... 7,888.88 -381.99 (-4.84%)
Nasdaq... 1,524.73 -66.83 (-4.20%)
S&P 500... 827.16 -42.73 (-4.91%)
Gold future... 914.20 +21.40 (+2.34%)
30-Year Bond 3.53% -0.18 (-4.75%)
10-Yr Bond... 2.85% -0.18 (-5.95%)

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

Market Conditions During Trading Hours

GOLD, EURO, YEN, Loonie and Silver

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Read more: du

[ozymandius]

1. Market WrapUp

Retailers: Holding the Key Vote?
BY FRANK BARBERA, CMT

So the big announcement has been made, with the Obama Administration and Treasury Secretary Timothy Geitner unveiling a more then 1 Trillion dollar proposal for a comprehensive rescue of the nation’s ailing financial system. Geithner's proposal will entail making new capital infusions into struggling banks with the government forming a partnership with private capital to invest in troubled banks. In this vein, Geithner’s so-called ‘aggregator bank’ would be funded with between $250 to $500 billion in government funds with some of the money potentially coming from the pre-existing $700 billion Troubled Asset Relief Program (TARP). In addition to creating a ‘bad bank,’ the Treasury will issue fresh capital to ailing financial institutions, along with programs for distressed homeowners and new consumer lending programs with consumer business loans allocated between $20 and $100 billion dollars. As Geithner made his case, using the fractional reserve measure of 10-to-1, in theory $100 billion in new lending capital for banks could create 1 trillion in eventual new loans. Of course, it is anyone’s guess as to whether these proposals will be enough to turn the bearish tide which judging by the stock markets sharp sell off after the announcement, led lower by a sizeable decline in bank stocks, seems to be very much open to debate.

At a recent speech in Las Vegas, Nevada at the TD Ameritrade National Investment Conference, former Fed CEO Dr. William Poole spoke about a guarded view as to the longer-range effects of recent proposals. In his talk, former St. Louis Fed CEO Poole acknowledged the current problems and the need for action, but leaned toward the view that recent proposals could have serious ‘knock on’ negative inflationary outcomes when seen in the rear view mirror, two to three years down the road. For the Fed, draining out all of the excess liquidity that was created in recent months, without throwing the economy into yet another economic melt down will be at best, an ultra finely tuned procedure, while at worst, the funds may never be removed and could ignite serious inflation down the road.

.....

We are always on the look out for signs of potential change, and usually change occurs on the extreme margin. What might be a good leading indicator for us to watch closely just in case these government elixirs actually begin to work? Well, in surveying today’s wrecked financial landscape, the two areas that might be the best ‘recovery’ gauge could be two of the areas hit far worse then everything else, namely, the financials and the retailers. In the case of the financials, one over-riding concern comes from the idea of increased government ownership, with an attendant vastly higher quantity of government regulation dominating the entire industry. In the case of the financials, the epic nature of the current collapse virtually guarantees a kind of quasi-nationalized outcome where financial sector profitability will be reigned in and heavily regulated for years to come. For the financials, this one looks like a ten year ‘time out’ with big brother watching vigilantly over every move and the entire sector behaving like a government utility for some time to come. As a result, we focused our recent attention on the Retailers, which are also devastated as a result of their ultra sensitivity to consumer spending. Now before going any further, we are in no way making the case for an imminent return of strong consumer spending. As readers to my column are aware, I believe the current recession and housing down turn will probably be with us for some time, and indeed, I would not be surprised to see the S&P and the DJIA breaking down to new multi year lows in the days and weeks ahead.

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

[Demeter]

14. Employment, You Bozo! That's Your Indicator!!

And as for this "plan", we now have "Hoo-doo" economics, to "fix" the disaster of Reagan's "Voo-doo" economics.

When all other options have been tried and fail, we will go to "Re-do" economics, and bring back the New Deal. If there is anything left of thr people, the economy, and the government at that point.

[tclambert]

35. Another employment graph comparing recessions

Found it on another DU thread. They were criticizing, quite properly, a couple of defects in the very dramatic chart Nancy Pelosi's office released and that was subsequently used on Rachel Maddow's show.
Pelosi's chart only had the last 3 recessions, and didn't correct for increase in total workforce over time. This one is based on percentage changes for 10 recessions.



It's a little less dramatic, maybe a little more hopeful. Though one observer noted that the current recession is still on the downward slope, while even the harshest of the 10 historic ones was already on the upslope. In other words, when we check this again in a few months it may look considerably worse.

[Demeter]

53. I Was Going to Say, that Wasn't Comforting

and then you must consider the quality of the jobs that will exist at the end of the cycle--if there are any.

There's no excuse for avoiding the massive restructuring of finance, politics and society that must occur if we are to get off the rack and into a life worth living.

Shut down the insolvent banks and let the rich enjoy the pleasures of poverty.

[Hannah Bell]

90. why is "mild" = 1% growth in employment? what kind of recession is that?

[Birthmark]

91. What a useless chart!

The Minneapolis Fed constructs this chimera of "all-star" months...for what? All it "proves" is that in any given month there beginning of a recession, there was usually a worse month in history that was worse than the corresponding month of the current recession. It's a fairly clever piece of disinformation. Nothing more.

[ozymandius]

2. Today's Reports

08:30 Trade Balance Dec
Briefing.com -$36.0B
Consensus -$35.5B
Prior -$40.4B

10:30 Crude Inventories 02/06
Briefing.com NA
Consensus NA
Prior 7.2M

14:00 Monthly Budget Statement Jan
Briefing.com NA
Consensus -$78.0B
Prior $17.8B

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

[UpInArms]

39. U.S. Dec. trade deficit slips to $39.9 billion, 6-year low

06. U.S. 2008 trade deficit narrows 3.3% to $677 billion
8:31 AM ET, Feb 11, 2009

07. U.S. Dec. trade deficit slips to $39.9 billion, 6-year low
8:30 AM ET, Feb 11, 2009

08. U.S. Dec. exports fall 6% to $133.8 billion, 2-year low
8:30 AM ET, Feb 11, 2009

09. U.S. Dec. imports fall 5.5% to $173.7 billion, 3-year low
8:30 AM ET, Feb 11, 2009

10. U.S. Dec. real trade deficit rises 8.1%
8:30 AM ET, Feb 11, 2009

[UpInArms]

43. U.S. mortgage applications slump to 8-year low

http://www.reuters.com/article/bondsNews/idUSNYS00481220090211

NEW YORK, Feb 11 (Reuters) - Demand for U.S. mortgage applications tumbled nearly 25 percent last week, with requests for loans to buy homes sinking to an eight-year low, the Mortgage Bankers Association said on Wednesday, as potential buyers hold out for better terms and government help.

The Mortgage Bankers Association's seasonally adjusted home purchase applications index slid 9.8 percent in the week ended Feb. 6 to 235.9, its lowest level since the end of 2000.

Average 30-year mortgage rates slipped to 5.19 percent from 5.28 percent a week earlier, the trade group said.

The rate has fallen more than a full percentage point in three months, but is up about 3/8 point from early this year and seen heading lower.

"In addition to waiting for the rate, you have home prices continuing to come down, so why would I pay $200,000 today when I can pay maybe $180,000 in a couple months or even $150,000," Daniel Penrod, industry analyst for the California Credit Union League in Rancho Cucamonga, California, said on Tuesday. The government is "really pushing against some very strong forces."

U.S. Treasury chief Timothy Geithner on Tuesday proposed pumping $2 trillion into the banking system to sop up bad assets, restore credit and revive lending at lower mortgage rates.

Expectations that government steps could yank 30-year home loan rates near 4 percent, a proposed $15,000 home-buying tax credit and the outlook for still lower house prices has raised the incentive to wait.

...more...

this is a precursor to the home sales reports - and it doesn't look good

[UpInArms]

78. Petroleum Inventories Report: (Refineries are screwing US consumers)

07. U.S. crude inventories up 4.7 mln barrels last week: EIA
10:30 AM ET, Feb 11, 2009

08. U.S. gasoline inventories down 2.6 mln barrels last week
10:30 AM ET, Feb 11, 2009

09. U.S. distillate stocks down 1 mln barrels last week
10:30 AM ET, Feb 11, 2009

[Dr.Phool]

94. Yes they are. They're closing facilities.

And prices have been climbing here for weeks.

[DemReadingDU]

95. I noticed a jump about 20 cents this week, n/t

[UpInArms]

98. Yowser! U.S. Jan. budget deficit $84.0 bln vs $17.8 surplus yr-ago

37. U.S. Jan. budget deficit $84.0 bln vs $17.8 surplus yr-ago
2:00 PM ET, Feb 11, 2009

[ozymandius]

3. Oil rises to $38 as investors mull bailout, OPEC

SINGAPORE – Oil prices crept above $38 a barrel Wednesday in Asia as a new U.S. bank rescue plan failed to convince investors in crude and equities that the government can revive an ailing financial system.

Light, sweet crude for March delivery rose 47 cents to $38.02 a barrel by late afternoon in Singapore on the New York Mercantile Exchange. The contract fell $2.01 overnight to settle at $37.55.

Investors balked Tuesday at Treasury Secretary Timothy Geithner's plan to restore confidence to credit markets through more than $1 trillion in public and private support to the financial system, saying the package lacked key specifics.

.....

In other Nymex trading, gasoline futures rose 2.41 cents to $1.26 a gallon. Heating oil gained 1.28 cents to $1.31 a gallon, while natural gas for March delivery was steady at $4.54 per 1,000 cubic feet.

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

[UpInArms]

97. Oil tumbles $1.61, or 4.3%, to close at $35.94 a barrel

29. Oil tumbles $1.61, or 4.3%, to close at $35.94 a barrel
2:50 PM ET, Feb 11, 2009

[ozymandius]

4. World stocks fall on skepticism over US bank plan

HONG KONG – World stock markets dropped Wednesday, following a steep sell-off on Wall Street, as investors reacted with skepticism to the U.S. government's latest plan to rescue the ailing financial industry with as much as $2 trillion in funding.

Nearly ever major market in Asia retreated, further hurt by new figures showing China's exports plunged 17.5 percent in January — the sharpest drop in more than a decade. European shares fell in early trade as Credit Suisse reported a massive quarterly loss far worse than expectations.

As in the U.S., investors across Asian and Europe questioned whether the revamped bailout program, unveiled Tuesday by Treasury Secretary Timothy Geithner, would be enough to absorb the bad assets saddling bank balance sheets and free up the credit markets that govern lending to consumers and businesses.

.....

Garry Evans, a chief Asian equity strategist with HSBC in Hong Kong, called the plan "muddled." He said the government was skirting around what many investors have already concluded: that the U.S. may have to nationalize the banks for a period.

http://news.yahoo.com/s/ap/20090211/ap_on_bi_ge/world_markets

[Ghost Dog]

9. China exports, imports plunge, boding ill for growth

Wed Feb 11, 2009 2:32am EST BEIJING, Feb 11 (Reuters) - Chinese exports and imports fell unexpectedly sharply in January, underlining how badly the world's third-largest economy has been hit by the global financial crisis and the impact that is having on its neighbours.

Exports fell 17.5 percent from a year earlier, after a 2.8 percent decline in December, while imports plunged 43.1 percent, twice as much as December's 21.3 percent year-on-year drop, the General Administration of Customs said on Wednesday.

Both falls were the steepest since economists' records began in 1993. Imports and exports have now fallen for three months in a row from their year-earlier levels.

...

As a result of the weakness in imports, China notched up its second-biggest monthly trade surplus.

January's total of $39.1 billion was just shy of November's record of $40.1 billion and served as a reminder, ahead of this week's Group of Seven finance ministers' meeting in Rome, of the economic imbalances at the root of the global financial crisis.

Economists had expected a $28.7 billion surplus based on a 10.8 percent fall in exports and a 28.5 percent drop in imports from year-earlier levels.

...

The timing of the Lunar New Year holidays makes it hard to judge the severity of the underlying deterioration in trade as there were 17 working days this January compared with 22 in January 2008.

Some economists expect the February figures to show a rebound in part because the New Year holiday fell in January this year but in February last year.

But Zhang Shiyuan, an analyst with Southwest Securities in Beijing, said he expected exports to fall at a similar pace.

"We will not see good export and import figures in the first and second quarters, due to the slowing global economy," Zhang said. "Until now, I haven't seen any solid signals that the economy is recovering."

That will be sobering news to officials in Beijing, who are struggling to engineer a rebound in job creation after an estimated 20 million migrant workers lost their jobs because of the closure of thousands of export-oriented factories, especially in the country's manufacturing heartlands near Hong Kong.

To help exporters, Beijing has raised value added tax rebates on exports five times since the end of July, covering mostly labour-intensive products such as textiles, furniture and toys. China has also halted the yuan's appreciation against the dollar.

The trade figures offer a mixed picture of the impact of these initiatives. Bucking the overall trend, exports of clothing and accessories rose 5.7 percent from a year earlier; those of furniture fell a relatively modest 4.2 percent.

Yet shipments of machinery and electronics and high-tech products, which together make up over three-fourths of China's exports, fell by 20.9 percent and 28.0 percent, respectively.

...

Imports of machinery and high-tech goods fell by roughly 40 percent, boding ill for the countries that sell such components for Chinese factories to assemble.

Shipments from Japan fell by 43.5 percent from a year earlier; those from South Korea were down 46.4 percent and from Taiwan, 58 percent. Meanwhile, exports to the United States and European Union fell 9.8 percent and 17.4 percent, respectively.

/... http://www.reuters.com/article/marketsNews/idINPEK26377220090211?rpc=44&sp=true

[ozymandius]

48. Not surprising: imports/exports declined for the U.S. too.

Just a coincidence, I'm sure, the trade deficit (ex-petrol) has been falling since the real estate market peak in 2006.

The U.S. Census Bureau and the U.S. Bureau of
Economic Analysis, through the Department of
Commerce, announced today that total December exports
of $133.8 billion and imports of $173.7 billion resulted
in a goods and services deficit of $39.9 billion, down
from $41.6 billion in November, revised. December
exports were $8.5 billion less than November exports of
$142.3 billion. December imports were $10.2 billion less
than November imports of $183.9 billion.

In December, the goods deficit decreased $1.7 billion
from November to $51.6 billion, and the services surplus
decreased $0.1 billion to $11.6 billion. Exports of goods
decreased $8.3 billion to $88.7 billion, and imports of
goods decreased $10.0 billion to $140.3 billion. Exports
of services decreased $0.2 billion to $45.1 billion, and
imports of services decreased $0.1 billion to $33.4
billion.


full report here

[Ghost Dog]

77. Rare trade deficit predictable given crisis-Canada

Wed Feb 11, 2009 12:26pm EST OTTAWA, Feb 11 (Reuters) - The Canadian government said on Wednesday that the country's first trade deficit in almost 33 years was predictable, given the world economic crisis, but said it was worried by the sharp drop in exports.

Canada posted a trade deficit of C$460 million ($368 million) in December as exports -- particularly oil and gas -- fell at a far faster rate than imports.

"It's predictable when we're in a worldwide downturn ... and some of our major purchasers -- the United States, China -- are going through very difficult times and therefore they're buying less," Trade Minister Stockwell Day told reporters.

...

Exports to the United States -- which takes around 75 percent of all Canada's exports -- fell by 10 percent in December. Day said it was hard to predict whether Canada would now see a string of trade deficits.

"If the United States continues to stay in the doldrums and if China's economy continues to move downwards, that means there will be less demand for Canadian products," he said.

/.. http://www.reuters.com/article/marketsNews/idAFN1137824320090211?rpc=44

[ozymandius]

5. $3 trillion! — Senate, Fed, Treasury attack crisis

WASHINGTON – On a single day filled with staggering sums, the Obama administration, Federal Reserve and Senate attacked the deepening economic crisis Tuesday with actions that could throw as much as $3 trillion more in government and private funds into the fight against frozen credit markets and rising joblessness.

"It's gone deep. It's gotten worse," President Barack Obama said of the recession at a campaign-style appearance in Fort Myers, Fla., where unemployment has reached double digits. "The situation we face could not be more serious."

http://news.yahoo.com/s/ap/20090211/ap_on_go_pr_wh/economy_rdp

[Tansy_Gold]

10. We all said it was a Ponzi scheme

They'd keep suckering in new investors to pay off the old ones. As with any Ponzi scheme, it will collapse when there are no "new" investors, and the old ones pull out their capital.

We the taxpayers are the last available "new" investors. Can collapse be far behind?



Tansy Gold

[ozymandius]

12. Therein rests the vast misconception, as you say.

Even with fiat currency status - there is no limitless well of money. It's amazing what thirty years of military and currency hegemony can do to one's concept of fiscal discipline. We cannot print ourselves out of this crisis.

Collapse? I don't know if this was posted here yesterday. We came within three hours of collapse in September 2008. Ca you imagine what the world would look like now? Coups everywhere; Worthless currency; Societal dysfunction; Massive global economic depression. There is no safe place in the world anymore.

[Loge23]

16. ...and this fun little reading:

From yesterday's Financial Sense editorials:
Boomers, Your Crisis has Arrived
http://www.financialsense.com/editorials/quinn/2009/0210.html
(an excerpt)
Winter of Our Discontent

We enter 2009 and the Presidency of Barack Obama with citizens pessimistic about the future of our country. The public has lost faith in government, financial institutions, and religious institutions. Distrust of politicians, bankers, CEO’s, financial advisors, and moral leadership is well founded. The popular culture of over hyping public figures and then tearing them down has led to everyone and everything being discredited. The personal and public choices that will be required in the next few years will be harsh.
(end)

I'm usually very skeptical about predictive theories, but this one sure looks like the proverbial duck. The scenarios herein are similar to Noriel Roubini's warnings and yesterday's doomsday portrait. As I write, Harry Reid and Tim Geithner speak on TV.
Maybe I should just stop reading for awhile and just watch cartoons.

[Tansy_Gold]

66. Is the ironic implication therefore that Reid and Geithner are cartoons?

That's about right. Unfortunately, not very entertaining ones.

[Demeter]

17. So, Who Started the Run? Who Wanted to Collapse the US?

Hmmmm, starts with a B....put all the martial law preparations in place....knows lots of crooked but influential people....ties to CIA and Neocons...

or alternatively:

Overseas power center, totally pissed off at BushCo, and at US government for not Impeaching his sorry ass, decides to make a point to George and the Bushbots....

I'm thinking Russia and/or China, although there might be a larger coalition of smaller nations....

Feeling like a ping-pong ball yet? Fasten your seatbelts and pull the tinfoil firmly over your eyes, it's going to be a bumpy ride.


Here's the result of Olberman's quest into the question: It was triggered by the collapse of Lehmans!

http://www.youtube.com/watch?v=Lh9gAskZOQk

[midnight]

28. They "the republicans" knew they could not steal another election

so they stole the financial stability via an electronic run on the banks. It is a no wonder that financier Maddoff was found out about. You can't just withdraw 500,000,000,000 from the system without these kind of wizards being found out about.

[KoKo]

86. I'll be a Devil's Advocate and wonder if perhaps the "plug" got

pulled to expose it all before the election? Perhaps the "Powers that Be" were trying to stave off the financial collapse until Obama was elected (knowing the polls were showing he'd win) and something misfired and the "pin was pulled" early exposing all the rot and Madoff was collateral damage.

[nc4bo]

26. We keep throwing money into a system where the fundementals are not strong.

They are weak and remain rotten to the core.

I'm so torn on this economic mess we're in and it makes me so angry that nothing will happen to those responsible for creating it.

My little voice keeps screaming at me that the best cure would probably be to let the disease run it's course. The money medicine just barely relieves the symptoms and is not even close to a cure. The disease continues to run rampant and all the money in the world we throw at it will just be consumed with nothing to show for it. And, as usual, those least capable of getting through it will suffer the most.


I am :scared: :scared: :cry:

[midnight]

29. What fundamentals need to be strengthened-the SEC. ?

[nc4bo]

31. Geez midnight, my post wasn't just a subject line :S

[tclambert]

38. Thanks for the link to that video. First time I've heard that story.

I have been unable to locate the exact quote, I think it might be from Heinlein, but it goes something like this: "Every man is only a few days worth of missed meals from becoming a revolutionary."

If banks collapse, you have no checking account. If credit companies collapse, no credit card. If currency collapses, cash is worthless. Then how do pay for a double Whopper with cheese (hold the pickle)?

In the video he said this was a Thursday when we came 3 hours from collapse. So the revolution would start Friday.

But I'm an old chess player. I can't help asking, "Then what?" The revolution starts Friday, but how does that help me get my double Whopper with cheese? Yet, the food situation hasn't changed. It can still be produced and transported, it just can't be paid for. In the chaos, people might stop going to work, and the logistical system could break down. Would people really start starving in short order because the banks failed? Seems like there ought to be a Plan B.

[antigop]

50. "Every man is only a few days worth of missed meals from becoming a revolutionary."

One of my partner's favorite lines is:
"Every Republican is one catastrophe away from becoming a Democrat."

[Tansy_Gold]

68. Plan B

The catastrophe that would turn the pukes into Dems would be the collapse of the banking system, and at that point they would be nationalized. And I think it will come sooner rather than later.

I think the stock market will crash first. I think we'll see a steady precipitous drop of about 2000-2500 points, over the course of a week or so, and then the Treasury will step in and take over the banks.

I suspect there are a lot of ordinary people who are starting to hoard cash. I'm not sure what it will be worth or what they THINK it will be worth, but they're no longer trusting the banks. They're not buying shit they don't need, and they're hoarding as much cash as they can. And that could bring the banks -- the too big to fail ones -- down.

I don't think there will be rioting and nationwide insurrection, though there may be local problems. But we do still have SOME infrastructure and some fundamental economy, and I think we'll slowly pull through, for the most part. But it will take a long time and things will be very different on the other side.


Tansy Gold, who is already different

[llmart]

102. I disagree on one point.

Most people don't even have any cash to hoard. They've lived off of credit for so long they have nothing.

[DemReadingDU]

108. well, many people have a lot of stuff purchased with credit cards

Many people use credit cards for all the latest and greatest stuff...big screen tv, cell phone, blackberry, other electronic gadgets, several vacations per year, expensive shoes and clothes, etc.

How much stuff do we need? I think by this time next year, we are all going to find out that what we want (and buy), isn't necessarily what we need.

[llmart]

109. True.....

I don't want to blow my own horn but I've advocated voluntary simplicity for years and try to live that way. And once you get older a lot of people do get wiser about what is really important in life and it's not possessions. It really takes very little to live a decent life. I never bought into the whole accumulating and keeping up with the Joneses theme that is so much a part of our culture. I have six siblings who are like me so it must have been something we learned from our parents. I am married to someone who got the opposite message from his parents. They thought their sole purpose in life was to see how much crap they could accumulate and stuff their basement to the rafters with useless junk just to say they have it. I must say, it certainly is difficult to reconcile our differences sometimes.

[Demeter]

99. Perhaps "Moon Is a Harsh Mistress"?

Bernardo LaPaz?

[tclambert]

103. Yeah, it sounds like the Prof.

But it sounds like the kind of thing Jubal Harshaw or Lazarus Long might say. I just haven't been able to verify the source or exact wording. Frustrating. Bartlett's has way too few quotes from Heinlein.

[Hugin]

64. Wow... Just wow... I note this tidbit was drawn from the fringes of the Internet.

Instead of being a full blown alarm sounded Nation wide by our ever vigilant public service oriented Press Corporate Right-Wing Media Noise Machine.

Boy, if this ever became common knowledge the Republicans could kiss ever being the Majority Party good-bye FOREVER!

Bastards.


Thanks for bringing this to my attention Ozy.

[cosmicdot]

72. Rep. Kanjorski's campaign contributions

fwiw, thought it might be insightful to see who has bankrolled Kanjorksi's campaigns (http://en.wikipedia.org/wiki/Kanjorski - first elected to the House in 1984, when Reagan was re-elected)

Top Contributors to Kanjorski 2007-8 cycle:

AXA
SLM Corp
PMA Group
FMR Corp (Fidelity)
Federated Investors Inc
Ospraie Management
Goldman Sachs
Liberty Mutual Insurance
Bear Stearns
LTS Corp
American International Group
ACE Ltd $12,500 (HQ'd in Switzerland and Bermude; ran by Maurice Greenberg's son, Evan -- they both work for the Nixon Center: Maurice is Chairman; Evan is on the Advisory Council)
Fidelity National Financial
GUS plc
Wells Fargo
Credit Union National Assn
JPMorgan Chase & Co
National Multi Housing Council
Foley Law Firm
Promontory Financial Group

Top Industries contributing to Kanjorski:

Insurance
Securities & Investment
Lawyers/Law Firms
Real Estate
Commercial Banks
Finance/Credit Companies
Misc Finance

If there wasn't a "D" after his name, it would have been hard to have known his Party.

Finance, insurance and real estate contributed $1.2M in 2007-8 of the
total $2,517,285 raised

Paul E. Kanjorski is a top recipient from the following industries for
the 2007 - 2008 election cycle:

* Credit Unions (#2)
* Finance/Credit (#2)
* Insurance (#2)
* Mortgage bankers and brokers (#2)
* Savings & Loans (#3)

http://www.opensecrets.org/politicians/summary.php?cid=N00001509&cycle=2008

[ozymandius]

13. Why Obama’s new Tarp will fail to rescue the banks

Has Barack Obama’s presidency already failed? In normal times, this would be a ludicrous question. But these are not normal times. They are times of great danger. Today, the new US administration can disown responsibility for its inheritance; tomorrow, it will own it. Today, it can offer solutions; tomorrow it will have become the problem. Today, it is in control of events; tomorrow, events will take control of it. Doing too little is now far riskier than doing too much. If he fails to act decisively, the president risks being overwhelmed, like his predecessor. The costs to the US and the world of another failed presidency do not bear contemplating.

What is needed? The answer is: focus and ferocity. If Mr Obama does not fix this crisis, all he hopes from his presidency will be lost. If he does, he can reshape the agenda. Hoping for the best is foolish. He should expect the worst and act accordingly.

....

Under the second view, a sizeable proportion of financial institutions are insolvent: their assets are, under plausible assumptions, worth less than their liabilities. The International Monetary Fund argues that potential losses on US-originated credit assets alone are now $2,200bn (€1,700bn, £1,500bn), up from $1,400bn just last October. This is almost identical to the latest estimates from Goldman Sachs. In recent comments to the Financial Times, Nouriel Roubini of RGE Monitor and the Stern School of New York University estimates peak losses on US-generated assets at $3,600bn. Fortunately for the US, half of these losses will fall abroad. But, the rest of the world will strike back: as the world economy implodes, huge losses abroad – on sovereign, housing and corporate debt – will surely fall on US institutions, with dire effects.

....

The new plan seems to make sense if and only if the principal problem is illiquidity. Offering guarantees and buying some portion of the toxic assets, while limiting new capital injections to less than the $350bn left in the Tarp, cannot deal with the insolvency problem identified by informed observers. Indeed, any toxic asset purchase or guarantee programme must be an ineffective, inefficient and inequitable way to rescue inadequately capitalised financial institutions: ineffective, because the government must buy vast amounts of doubtful assets at excessive prices or provide over-generous guarantees, to render insolvent banks solvent; inefficient, because big capital injections or conversion of debt into equity are better ways to recapitalise banks; and inequitable, because big subsidies would go to failed institutions and private buyers of bad assets.

Why then is the administration making what appears to be a blunder? It may be that it is hoping for the best. But it also seems it has set itself the wrong question. It has not asked what needs to be done to be sure of a solution. It has asked itself, instead, what is the best it can do given three arbitrary, self-imposed constraints: no nationalisation; no losses for bondholders; and no more money from Congress. Yet why does a new administration, confronting a huge crisis, not try to change the terms of debate? This timidity is depressing. Trying to make up for this mistake by imposing pettifogging conditions on assisted institutions is more likely to compound the error than to reduce it.

http://www.ft.com/cms/s/0/9ebea1b8-f794-11dd-81f7-000077b07658.html?nclick_check=1

---

Fortune favors the bold.

[Demeter]

19. Timidity, or Refusal to Deal with Reality?

It's a damn steep learning curve, and Obama has nobody with any expertise in his Cabinet. Occasional phone calls to Krugman aren't going to be sufficient, especially if your hired hands ignore his advice. Not hiring Howard Dean will be another real failure. Dean's probably the one with the most useful administrative experience and openness to novel solutions that we have in the world.

But based on his early moves, one senses that Obama spent too much time campaigning and not enough getting a foundation to work from, and that some juvenile, ignorant, and corporately compromised midgets have firm hold on his ear and attention.

Meanwhile, the Base is ignored, reviled, and not even tossed a bone, and the undoing of the Bush years is proceeding at a glacial pace. Nothing Bush did is worth saving! Dump it all, and be done with it. There's no need to review in agonizing thoroughness! And shut down both wars and all the brushfires. We can't afford them!

If by chance Bush actually slipped up and produced something useful, it can be added back in.

[Tansy_Gold]

22. Exactly. And that's why I posted what I did back in November

As soon as it became apparent he was leaning on "old" expertise to run his administration, I knew we were screwn(sic).

He didn't have any "change" ideas. It was all campaign rhetoric. and now no one (except a few of us brave souls here) is brave enough to call his sorry ass on it.


CHANGE, Barack you maroon. CHANGE. Not more of the fucking same.




Tansy Gold, even further behind schedule and entering into panic mode.

[ozymandius]

21. Here is a picture of insolvency.

[ozymandius]

25. Geithner Plan Smackdown Wrap (yea! Yves Smith!)

I cannot recall a major US policy initiative being met with as much immediate revulsion as the so-called Geithner plan. Even the horrific TARP, which showed utter contempt for Congress and the American public was in some ways less troubling. Paulson demanded $700 billion, nearly $200 billion bigger than the Department of Defense, via a three page draft bill, nothing more that a doodle on a napkin, save that it did bother to put the Treasury secretary above the law. But high-handedness was the hallmark of the Bush Administration; it was only the scale and audacity of the TARP that was the stunner.

And the TARP initially did have some supporters (perhaps most important, among the media, who trumpeted the "Something must be done" case). Fans are much harder to find for the latest iteration of the seemingly neverending "let's throw more money at the banks" saga.

As we, and increasingly others, have said, the Obama economic team is every bit as captive to Wall Street's interests as the Bushies were. The differences increasingly look stylistic, not substantive.

Treasury Secretary Geithner presented today what in essence was a plan to come up with a plan. I now understand why he is so loath to have government run banks. He presumably sees himself as an elite bureaucrat, as his glittering resume attests. Yet the man has a deadline to come up with a proposal, yet puts off presenting it twice (the "oh he has to work on the stimulus bill" is as close to "the dog ate my homework" as I have ever seen in adult life). What he served up as an initiative is weeks to months, depending on the item, away from being operational (if even then; the public-private asset purchase program will either not see the light of day, or be far narrower and smaller than what is needed).

And in case you think I am being unfair, yesterday I got an e-mail from a political consultant who got a report on the Senate Banking Committee briefing by the Treasury the night before the announcement. No briefing books, no documents. He deemed it to be no plan. That assessment was confirmed today by a participant at the session, who said that the details were so thin that one staffer asked, "So what, exactly, is the plan?" and repeated questions from one persistent Senator got "absolutely no answers".

Thus Geither's belief that government can't manage assets is sheer projection of his own inability to deliver. The FDIC winds up banks all the time. During the S&L crisis, as William Black reminds us, FSLIC appointed receivership managers that later research determined did reduce losses. Sweden, Norway, and Chile all nationalized (and relatively quickly reprivatized) dud banks during their financial crises. This isn't like trying to go the moon (which was a government initiative, lest we forget). There are plenty of models and lots of good proposals. What is lacking is will. History says that an aggressive, take-out-the-dead-banks program is the fastest and all-in cheapest way out of a financial crisis. But if you believe that something will not work, as Geithner does, it isn't at all hard to produce that outcome.

[Demeter]

30. that Didn't Take Long, Did It?

so Geithner is not only out of his depth, he's out of his mind. Obama has to can him immediately to maintain any credibility.

As I said yesterday--nobody offered to bail Madoff out. Shut down the insolvent banks and let healthy ones divide up the work and hire the people they will need. They can sort out the sheep from the goats. They aren't insolvent, after all, so they know something.

[radfringe]

32. meme for the day...

If they are TOOOO big to fail - they are TOOOO big to exist

take'em over, break'em up .... what you said :D

[DemReadingDU]

33. There was someone on TV a few weeks ago, said to declare all banks insolvent

Then a bank would have to prove it was solvent. I wonder how many banks would be left? Credit unions?

[tclambert]

45. I love Stock Market Watch. This is just the discussion I wanted to read today.

Before I threw some coal on the computer, I was wondering why the markets hated Geithner's proposal so much. Now I see.

Frankly, I agree. TARP and, what's the new one, BARF (Bad Assets Relief Fund?), seem like the wrong approach. One group here on SMW wants to temporarily nationalize the banks, following the script of the S&L Bailout of the late '80s. Paul Krugman supports that approach, too. I keep saying they injected the money into the wrong end of the economy. They've been giving it directly to the banks, thinking it will somehow leak out to the people who can't make mortgage payments. I say if they gave $700B to people who are having trouble paying mortgages, those mortgages would get paid, the foreclosure rate would drop, real estate prices would stabilize, Mortgage Backed Securities would turn from toxic to wholesome and nutritious, the big Wall Street financial companies wouldn't go bankrupt, there wouldn't be so many layoffs, and people could buy cars, too.

Of these three approaches, the one they are actually trying looks least likely to work.

[Hugin]

65. I've been leaning toward the "Shoring up the foundations plan" too.

Sorry, it's not a fancy acronym... But, if instead of dumping approx $120,000/household into a Black Hole, the money
was sent to the households for use in paying off mortgages, etc... Well, I can't, but, think that many of the problems would evaporate.

I know $120,000 would pretty much break me even and a little more. Not to mention $120,000 is about 3 years annual salary for the Average American. So, this plan would also serve to accelerate the recovery by THREE YEARS! For crying out loud... IT WOULD MOVE THE RECOVERY THREE FRICKIN YEARS CLOSER TO THE PRESENT TIME! They don't get that and they aren't listening.

It's becoming more and more obvious the D.C./Wall Street/1%-ers have no intention of looking out for Main Street.

[Tansy_Gold]

75. Ding! Ding! Ding! today's Golden Glob Winner!

The acronym, the FANCY acronym, indeed yea verily THE acronym. . . . .



Shoring
The
Foundations
Up.




You win, Prag! er, Hugin.

:yourock:



Tansy Gold

[Hugin]

83. I doubt the "STFU" plan will ever be as popular as the "FRSP" plan with the masses.

But, I can dream.

Thank you, Tansy_Gold... Thank you... :bow: :curtsy: :bow:

[Tansy_Gold]

85. Well, to be perfectly honest with you. . . . . .I prefer STFU

I know we all kid around here a lot, but there have been some very gruesome events in the news the past few days and, because I'm really very staunchly anti-death penalty and because one novel I read many many years ago about the FR still gives me nightmares, I think I'm gonna stick with STFU and take a pass on anything actually resembling FRSP.

I really don't want anyone to die over this. Do I want the guilty to wallow in poverty and suffer a lot? Well, I wouldn't have no objections to that.

Mostly I'd like to see capital punishment applied to the corporations. Cut off their capital. Make the sorry suckers work for their pay/earnings/dividends/bonuses.

Tansy Gold, squeamish

[Hugin]

87. My worry is that the FRSP tends to have 'blowback'...

Eventually, consuming all parties... Not just the guilty. This is true of every time it has been used throughout history.

Plus, it does nothing what-so-ever to actually address the problems.

It's more of a 'bread-and-circuses' solution.

[tclambert]

104. The Reign of Terror sequel to La Revolucion always gives me pause.

[TalkingDog]

93. Shore the Foundation Up = STFU

As long as they STFU while putting the money into making jobs and increasing wages, I could live with that.

[ozymandius]

55. Obama on Nationalization

From the fine people at Calculated Risk

TERRY MORAN: There are a lot of economists who look at these banks and they say all that garbage that's in them renders them essentially insolvent. Why not just nationalize the banks?

PRESIDENT OBAMA: Well, you know, it's interesting. There are two countries who have gone through some big financial crises over the last decade or two. One was Japan, which never really acknowledged the scale and magnitude of the problems in their banking system and that resulted in what's called "The Lost Decade." They kept on trying to paper over the problems. The markets sort of stayed up because the Japanese government kept on pumping money in. But, eventually, nothing happened and they didn't see any growth whatsoever.

Sweden, on the other hand, had a problem like this. They took over the banks, nationalized them, got rid of the bad assets, resold the banks and, a couple years later, they were going again. So you'd think looking at it, Sweden looks like a good model. Here's the problem; Sweden had like five banks. (LAUGHS) We've got thousands of banks. You know, the scale of the U.S. economy and the capital markets are so vast and the problems in terms of managing and overseeing anything of that scale, I think, would -- our assessment was that it wouldn't make sense. And we also have different traditions in this country.

Obviously, Sweden has a different set of cultures in terms of how the government relates to markets and America's different. And we want to retain a strong sense of that private capital fulfilling the core -- core investment needs of this country.

And so, what we've tried to do is to apply some of the tough love that's going to be necessary, but do it in a way that's also recognizing we've got big private capital markets and ultimately that's going to be the key to getting credit flowing again.

Comments from Paul Kedrosky:

(S)aying that Sweden had five banks and the U.S. has thousands, so nationalization can’t happen here, is misleading. It ignores the relative GDPs of the two countries. ...(and) the problem is chiefly in the six largest U.S. banks ...

....
But stop and think about what Obama is saying. We know the correct answer, but we are afraid to do it - because of our "culture" - so we are going to follow the Japanese plan.

We should definitely stress test the banks. My suggestion: announce when this will be complete (within 30 days), make the results public, and preprivatize the insolvent ones.

---

Nouriel Roubini says bank nationalization is the way to go.

So does Paul Krugman through a stress-test analogy.

Joseph Stiglitz too.

And now some words penned by the other President from Illinois: The Duty to Think Anew

[Demeter]

56. Not My Culture

They have no problem shutting down businesses owned by "people not like us". It's pure class warfare, not custom.

This is the kind of "advice" that his named men are giving him--special pleading not to be decaptitated in the marketplace. I say: Off With Their Heads!

Demeter, aka the Red Queen.

[tclambert]

60. All this talk about Sweden vs. Japan, stress testing banks, and Krugman's S&L analogy is moving the

debate, at least for me. I'm beginning to buy into the "temporarily nationalize the failing banks" solution. It's just that one word "nationalize" that will trigger the outrage of so many. To make it possible, the word "temporarily" must be emphasized. TEMPORARILY Like that.

[ozymandius]

62. Temporary is the key. The other word being used is "preprivatize".

I would never support the wholesale, permanent nationalization of our banking system. In this case - where trillions of dollars are being used to keep zombie banks alive for the sake of "tradition" - that is a barking mad idea.

I posted on the Weekend Economist thread this list of suggestions from one of Paul Krugman's readers:

1. The criminals who caused this financial disaster would all be facing RICO charges instead of getting $18 billion dollar taxpayer funded bonuses.

2. Instead of Geithner (tool of the NY Fed) we'd have Volcker (the man who tamed inflation back in the 70s) Instead of Summers (failed college president) we'd have Nouriel Roubini (the NYU economist who called this disaster three years ago)

3. Instead of throwing good money after bad, he'd declare a bank holiday, send in the auditors to force banks to mark to market then nationalize the insolvent banks, give the bond holders a hair cut, guarantee the depositors, then start a Federal "good bank" that would function like a utility.

4. Just like Roosevelt in the depression, he would cancel the derivatives contracts that threaten the system.

5. Force 'cram downs' where banks adjust mortgages down to match underlying market realities and then give the bondholders 80% of the upside if the houses appreciate.

6. Rewrite the extremely punitive bankruptcy law that the credit card companies and their cronies (I'm looking at you Biden) forced through in 2005.

7. Launch a real investigation to determine whether speculative manipulation drove oil to $150.

The two lines in bold really are essential to restoring solvency and confidence in the banking system. These moves would also save us a whole lot of money and inflationary/deflationary headaches.

Temporary. That is key.

[jxnmsdemguy65]

82. ozy, can you elaborate on Roosevelt's ...

canceling of derivatives contracts? I am a student of Roosevelt and would like to explore this topic. Never have been able to get my head around what derivatives were all about, so some historical context might be helpful....

[ozymandius]

84. I believe the original post may be in error.

The somewhat anonymous post at the NY Times website states that FDR canceled the derivatives contracts. However I can find nothing on the subject from that era, except for the control over the price of gold, which FDR implemented when the federal government seized gold assets to bolster the currency with the Gold Reserve Act. Those would be the only "speculative contracts" that come to mind in relation to FDR's policies.

[TalkingDog]

92. Dylan Updated: Trillion Dollar Bash

Well, that big dump blonde
With her wheel in the gorge
Turtle, that friend of theirs
With his checks all forged
And his cheeks in a chunk
With his cheese in the cash
They're all gonna be there
At that trillion dollar bash
Ooh, baby, ooh-ee
Ooh, baby, ooh-ee
It's that trillion dollar bash.

Everybody from right now
Go ever there and back
The louder they come
The bigger they crack
Come now, sweet cream
Don't forget to flash
We're all gonna meet
At that trillion dollar bash
Ooh, baby, ooh-ee
Ooh, baby, ooh-ee
It's that trillion dollar bash.

Well, I took my counselor
Out to the barn
Silly Nelly was there
She told me a yarn
Then along came Jones
Emptied the trash
Everybody went down
To that trillion dollar bash
Ooh, baby, ooh-ee
Ooh, baby, ooh-ee
It's that trillion dollar bash

Well, I'm hittin' it too hard
My stones won't take
I'm get up in the mornin'
But it's too early to wake
First it's hello, goodbye
Then push and then crash
But we're all gonna make it
At that trillion dollar bash
Ooh, baby, ooh-ee
Ooh, baby, ooh-ee
It's that trillion dollar bash.

Well, I looked at my watch
I looked at my wrist
Punched myself in the face
With my fist
I took my potatoes
Down to be mashed
Then I made it on over to
That trillion dollar bash
Ooh, baby, ooh-ee
Ooh, baby, ooh-ee
It's that trillion dollar bash.

http://www.youtube.com/watch?v=nJuAWoiQcz0

Edit: good taxpayers don't skimp on the trillions

[Hugin]

96. Great tune.

:thumbsup:

[ozymandius]

6. China exports tumble at fastest pace since 1998

HONG KONG (MarketWatch) -- China's exports contracted at the fastest rate in more than a decade in January from a year earlier, while imports fell by an even wider margin, indicating further layoffs and output cutbacks could be in store for the world's third largest economy.

Exports declined 17.5% to $90.45 billion after declining 2.8% in December, according to data released Wednesday from the General Administration of Customs. The decline was the biggest in percentage terms since October 1998, according to calculations by J.P. Morgan.

Imports retreated 43.1% to $51.34 billion, following a 21.3% decline in the previous month.

http://www.marketwatch.com/news/story/china-exports-fall-january-fastest/story.aspx?guid={2BFF0552-6905-4CE2-9D74-29C043AD4367}&dist=msr_1

[ozymandius]

7. More cuts, less severance at GM

3,400 in U.S. to lose jobs; pay for some to be trimmed 10%

General Motors Corp., which announced on Tuesday it would cut another 3,400 salaried workers in the United States, will send those workers into the worst job market in decades with less severance than in the past.
Advertisement

The job cuts are part of a sweeping restructuring effort at GM, which is racing to present a long-term viability plan to the government by next Tuesday as a condition of the $13.4 billion in federal rescue loans it is receiving to stay afloat.

GM said it will reduce salaried employees worldwide by 10,000, or 14%, and also trim U.S. salaried workers' pay by as much as 10%.

.....

In the past, GM white-collar workers who lost their jobs generally received one month of pay for each year of service. But starting April 1, GM is reducing its severance package, GM spokesman Tom Wilkinson confirmed.

The automaker now will provide about two weeks of pay and benefits for each year, up to a cap, to salaried workers in the United States -- a move that shows just how tightly GM is managing its cash in this uncertain economy and also reflects the tougher oversight on the company's finances by the federal government. Programs in other countries may vary.

http://www.freep.com/article/20090211/BUSINESS01/902110332

[ozymandius]

8. Wal-Mart To Eliminate Up to 800 Jobs At Headquarters

Wal-Mart is planning to eliminate as many as 800 positions from its corporate office in Northwest Arkansas over the next few weeks as it attempts to adapt to the economy by cutting costs and improving efficiency, the company said yesterday.

Spokesman David Tovar said the move would mainly affect merchandising, real estate, marketing and support staff at Wal-Mart headquarters in Bentonville, Ark. Some positions will not be filled, while others will be relocated to offices across the country, he said.

Tovar said the cuts were necessary as Wal-Mart realigns its business. As it reduces the number of store openings in light of the economic downturn, for example, fewer people are needed in its real estate business. Tovar said some of those positions may be transferred to the team that handles store remodeling.

The cuts represent roughly 6 percent of the 14,000 people who work at the headquarters of the world's largest retailer. Wal-Mart employs about 1.4 million people in the United States, and store employees were not affected by the announcement.

http://www.washingtonpost.com/wp-dyn/content/article/2009/02/10/AR2009021003844.html

[ozymandius]

11. BOE’s King Says U.K. in Deep Recession, Pledges Further Easing

Feb. 11 (Bloomberg) -- Bank of England Governor Mervyn King said the U.K. is in a “deep recession” and pledged to cut interest rates and increase the supply of money in the economy.

....

The Bank of England’s forecasts show the economy will contract at an annual 4 percent rate by the end of the first quarter and inflation will slow to 0.5 percent at the end of next year.

http://www.bloomberg.com/apps/news?pid=20601068&sid=a6fYjVG3rHY4&refer=economy

[Pachamama]

15. I can't sleep right now...we are thrown all this info by various experts and the reality is whether

one has an economics degree or not, common sense and just watching what has been unfolding tells you that things are not good and probably far worse than they want to let people know in order to avoid panic.

I am just waiting for the other shoe to drop and sadly, I don't think any of the announcements made yesterday by Geitner et al are going to make a bit of difference to solving the problems that we are facing.

I read an article in the Financial Times that indicated that the TARP II is doomed to failure and that if Obama doesn't take hard action, this mess he has inherited will eventually mark his presidency, regardless of all good intentions.

Practically every investment I own has tanked and many completely underwater and I see them taking decades to recover if ever. I'm glad I own gold that I started buying about 5 years ago and thinking I should be taking cash I have now and buying more along with silver. And even then, I think to myself, how is all this going to work out? Around the world, people like myself are thinking the same thing, regardless of what part of the socioeconomic scale one is on. The question is - how am I going to keep things going? My husband's company had layoffs last month and he dodged a bullet and is still employed, but like many Americans, he could be 2 weeks away at any moment on the next round of layoffs as the economic situation worsens. If I was to try to go back to work, there are no jobs. We basically poured our nest egg into rebuilding our house after a devastating flood 3 years ago and took on more debt as a result and the remaining investment/savings/401ks/stock options etc. we own have tanked. Other assets such as properties have declined in value and couldn't be easily liquidated or even at all if we tried. We are better off than most and I am grateful for my blessings, including that I have health insurance (still and at all) especially during a time when I have been battling cancer, yet we are no less facing so many of the same realities as even those with far less. So the reality is that it wouldn't be an unrealistic thing to say that atleast 50-75% (maybe more?) of this country is facing that they could be 60-90 days away from financial ruin and losing it all.

I keep asking myself how long this house of cards can continue. And I'm sorry, when I hear the Sec. of the Treasury stand there and state how Billions more are going to be pumped into the same system that is broken and we are paying the bill, I have no confidence. Seriously, who has confidence in this? And when I look at my 401k that is down almost 44% in the last year and is less now than it was 5 years ago (and more like the value of 10 years ago if you take out the contributions made), I ask myself how long it will take to recover. And if I tried to sell my house, I couldn't without losing about 90% of my equity. We live in an area known for its outstanding public school and yet the kids going to school are in trailers because the school has been demolished (was badly damaged during the same flood that hit our house) and the construction of the new school has been put on hold since the state of CA is not releasing any of the money. There is talk that because of cuts in Education funding that there will be cuts in the teachers this next year. (Yet, Schwarzenegger our Guv wants to expand the construction of Death Row at San Quentin). And how much longer can the dollar have any worth? Its crazy. All of this is complete insanity and I just sit here shaking my head because the reality is that so many on the DU have talked about this for years, we knew this was coming and yet even with the knowledge it was coming and the awareness of events that most people don't have, what can people really do?

:cry:

[Demeter]

18. Get Debt Free and Energy Self-Sufficient and Try to Get the Rest of Your Family the Same

then you will be the kernel around which the new world can form. Food and water sufficiency as well if it's within your reach. Learn how to do things for yourself and collect similarly useful people to barter with or call upon.

Think like a pioneer circa 1700. And vote smart. Collect useful tools and learn how to use them, repair them, maintain them.

[Pachamama]

23. The debt free part is the hard/impossible part....

Even though we have no credit card debt, like most Americans, we have a mortgage that couldn't just be paid off within a short period of time. We have solar on our house and are essentially energy self-sufficient, but being water sufficient in a time of drought in California isn't possible and even if we wanted to drill a well on our property, the county and town wouldn't allow it (size of property and the distance to other properties). We own a property in Canada with acreage, a house and a well and could survive there if needed and we just left tomorrow everything behind, but I don't think it has come to that just yet.

I have a years supply of food stocked and I know how to hunt and gut a deer and cut up the meat if need be. I wouldn't even need to take out my shotgun here to shoot the deer, they just collect nightly in the nearby parking lot of a park and I could run them over with my car as they stand there. My kids have pet chickens in our backyard that are laying at least 3 eggs a day. We have a garden that grows food, alhough not enough to feed our family. With the drought in CA I wonder how long before I should convert our pretty front lawn to a vegetable garden instead. The Miwok indians gathered acorns from the Coastal oaks and ground them up and made flatbread that is high in protein. I guess I could start collecting acorns if need be.

All your advice is good, but if my husband lost his job tomorrow and we had to continue keeping up with our mortgage payments to keep the roof over our head, our already seriously slashed and burned assets and investments could only keep us going for so long.

That is why I posted what I did earlier. I'm probably more prepared and more sustainable than most people and I'm seeing the seriousness of the matters at hand and really wondering what can be done if this all collapses around us. Maslows hierarchy of needs - water/food/shelter/safety are essentially the thing I think about constantly and while I am probably able to address those better than most, I'm terrified about the fragility of everything around us collapsing and none of us being able to do a damn thing about it to prevent or stop it, yet we will all pay the price and suffer.

:hi:

[Demeter]

24. If you Took in Boarders, the Mortgage Could be Paid off sooner

It's a risky gamble, even with non-strangers (depends on what kind of people are in your acquaintance).

Current thinking is even if one is foreclosed, stay and squat! The banks would work out a deal because there are no buyers....not sure if that is sure for all properties...some are more desirable than others.

It really sounds like you are doing the best you can. If your mortgage has no prepayment penalty, putting even $10/month extra towards the balance or principle can make the length and the interest payments drop significantly. It's worth investigating. There are ways. Good luck!

[tclambert]

46. And, if you check out Festivito's debt postings, you'll see your family owes something like

$100,000 as its share of the national debt. ($10T divided by about 100 million families.) Pay up, deadbeats.

[Demeter]

54. I Think You Need to Realize That You Have Done Your Best

and it's not all up to you. Perhaps there's some kind of insurance product that might help you sleep at night. Perhaps you need to divert yourself with a glass of wine or a frivolous activity. If you can't sleep at night, get a paper route--put the money into the mortgage (after car expenses). You'll be tired enough to sleep. I know this from experience!

Cut yourself some slack. Life is really meant to be enjoyed by all. You have to fight for that right, like every other, but it is your right.

Worrying yourself into illness or madness is not productive. Please take care of yourself, too. We all need you--you've got it more together than 90% of the nation or the world.

And ignore tclambert and his carping about the National Debt.

[tclambert]

105. Ouch!

Demeter! I'm hurt. (Nah, not really.)

[ozymandius]

20. You have so forcefully and articulately described the chasm of disconnect

between we who must live with the government's decisions and the government's broken system. In everything you describe, the citizenry is losing ground. Healthcare, schools, currency, retirement security: all are sacrificial lambs, it seems, to the popular "tough on crime" electioneering that favors expansion of the prison system.

I am sick too, Pachamama, as well as many who gravitate to this thread. Information moves so quickly today, at the speed of the Internet, and that which matters tends to end up here. The "law and order" types in my Republican-controlled state are dead to me. If law and order were such a high value then these politicians would embrace positive, constructive policies that would remove the incentive for crime. Then we get to tax cuts. There is yet another bankrupt idea from the party that has failed and failed because of a decrepit understanding into what mechanisms create a civil society.

I wish there were a panacea to the systemic societal illnesses you describe. My take on things is that we should act boldly, without forethought to what is politically popular - just what is necessary.

[Pachamama]

27. Thanks Ozymandius...thanks for your words and for taking the time to post this info for stock mkt

watch daily as you do and other pertinent economic info and food for thought. I read the threads daily but generally give a rec to bump up the thread but don't join the thread and participate - until now. The insanity of the situation we are in is hitting me not just in recognition of the crisis we find ourselves in, but also where it impacts me personally. This "recession" is unlike any of the prior ones that have been in our lifetimes and I dare to say, this may be like what my grandparents talked about when they talked about the economic collapse they suffered in Germany following WWI and what my husbands grandparents/parents describe in surviving the great depression here in the US in the 30's. And the impact globally is incredible.

Its why I cant sleep and feel so vulnerable and that I can do very little about it. I am frustrated because like you, I believe something big and bold needs to be done (like a new deal) and it needs to take on the system as we know it. And like you said something that is without forethought or concern about what is politically popular and instead what is necessary. The reality is that the Republicans supported a failed system since Reagan and throughout the last 8 years that is imploding. And they aren't going to change. They want to see Obama fail and will do all they can to help that happen. I fear that Obama's efforts for bipartisanship, he has allowed the Republicans to control the agenda, water down any efforts to fix things and that they will happily point to its failure when it all comes crashing down. And sadly, most Americans have the memory and bandwith to remember very little when it comes to the historical events that lead to things and they probably will go along with the Republican message that Obama got us in this mess.

The other thing is I sometimes wonder who really is in control in this world. Is Obama really the most powerful person in the world as some suggest about the President of the US? Does he really get to choose who runs what? Why doesn't he nationalize the Banks? Get rid of the Fed? Investigate the hell out of the banks and the entire system? Why does he have people like Summers etc. calling the shots on the economics? Why doesn't he have someone like a Prof. Paul Krugman or Prof. Robbie Batra advising him and heading things up? Why was it so necessary to have someone like a Geitner who was from the Fed come in to head the treasury?

These are all the things spinning through my head right now. And as I type this to you, one of my Pachababies came out of her bedroom, crawled up in my arms and is snoring. I hold her and I just think how are we going to keep things together for them and all our children in this mess of a world we are leaving them.

:hi:

[DemReadingDU]

36. These are great postings today

Well, the SMW always has good postings, but today, the seriousness of our economy decline prevails. Just by being aware of the upcoming collapse and being prepared, we are all way ahead. You sound like you have prepared more than most people I know. Really, we have our family, close neighbors and friends to share and work together. That, I think, is what we are heading towards. It will be different, but not necessarily bad.

[ozymandius]

51. Thank you, Pachamama.

I was never before so radicalized in my beliefs and actions until I became a father. Radical, meaning, idealizing a clear goal for a future, better society and rejecting violence as a means to acquire it. Pretty radical, eh?

Every sane parent wants the world to be a better place for their child. The fact that we can deliberate these ideas, almost in real time, gives strength to our voices and our intent.

[specimenfred1984]

59. This isn't what most people want to hear but...

Remember that 70% of the former USSR's economy was black market before its collapse. That means a lot of the U.S. economy will go into "illegal" dealings, like buying drugs online or in Canada, not reporting illnesses/accidents to fraudulent insurance companies, not reporting income, never calling the police, etc...

The U.S. won't hold torturers accountable, we sure as hell aren't going to hold some bankers accountable either. This is a fascist country, ruled by corruption and corporations infiltrated by criminals who, through their skillful use of propaganda, have made their crimes appear as if they are not even crimes. I realized this a few years ago and since then everything in business and politics makes perfect sense.

[Demeter]

63. Several good and irrefutable points

US is at least half a criminal conspiracy, black market, third world country.

The other half, beating themselves to death trying to do what is right, are losing. Either we take back the power, or we join the crooks. Balancing on the edge is only a temporary solution, and fraught with hourly danger.

Too many have decided to join the crooks, not realizing that they won't get the kid-glove treatment that the rich crooks get. Madoff just barely qualifies for it. If he were a little bit bigger, he'd get bailed out and pardoned....

[Tansy_Gold]

76. But there are many many elements of the black market, or

as some call it, the "underground economy." Some are illegal, some are. . . . invisible.

The more you can figure out how to live off the grid, the better off you'll be.

And the more you as a lower-tier individual can siphon out of "their" economy, the better off you'll be. It might mean anything from taking in a boarder and not reporting the income on your 1040, doing services or selling goods for cash and not reporting them, to filing insurance claims and overstating the amount of loss. Now while I'm not suggesting or recommending that anyone do anything actually illegal, just remember that when teh system falls apart, some things that are legal won't be and some that aren't will.


Tansy Gold

[Robbien]

34. US Chamber of Commerce is issuing a report of their recommendations to the SEC

They say these are sweeping changes, but are just more of the same old, same old.

The United States Chamber of Commerce's Center for Capital Markets will outline 23 suggestions Wednesday for improving the operations at the Securities and Exchange Commission. In a 92-page report, the Chamber lays out ideas for sweeping organizational changes at the agency, including the creation of a chief operating officer position to oversee the activities of the SEC. This recommendation may be the most radical proposal," the report says. "It would fundamentally change the responsibilities of every division director and senior officer at the SEC."

"It would also enable the chairman to perform the CEO responsibilities under Reorg Plan 10 and provide a degree of consistency and uniformity to SEC operations that has been absent for much of its history."

Other suggestions in the report include creating a new "Coordinating Council" to help resolve inter-division disputes, adding more staff with experience in economics and capital markets, creating an accelerated conditional approval process for new investment products and re-aligning certain divisions of the agency.

It also discusses improvements on the processes of issuing no-action letters, exemptive orders and self-regulatory organization rule orders.

more . . .
http://www.easybourse.com/bourse-actualite/marches/us-chamber-study-proposes-big-organizational-changes-at-sec-614012

Sweeping new ideas?:

Speed up approvals of new derivative investment products
Re-instate the issuing of no-action letters which Shapiro just banned
blah, blah, blah

But of course, when the Chamber of Commerce talks the DC villagers listen.

[Hugin]

73. Easily the most worthless organization on the planet.

By far.

[Demeter]

100. Except for the GOP

Aren't they one and the same? Or one a subset of the other?

[Festivito]

37. Debt: 02/09/2009 10,717,726,200,848.14 (UP 445,829,502.25) (Tiny again.)

(Two tiny days, one up, today down.)

= Held by the Public + Intragovernmental(FICA)
= 6,409,788,263,996.47 + 4,307,937,936,851.67
DOWN 572,980,736.98 + UP 1,018,810,239.23

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

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 306-Million person America.
If every American, man, woman and child puts in $3.27 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.81, ABOUT TEN BUCKS for a 1B$ 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 the 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)

PERSONALIZED DEBT:
Every 14 seconds we net gain a another American, so at the end of the workday of this report, there should be 305,770,372 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $35,051.55.
A family of three owes $105,154.66. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 31 days.
The average for the last 21 reports is 5,141,315,868.62.
The average for the last 30 days would be 3,598,921,108.03.
The average for the last 31 days would be 3,482,826,878.74.
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$/day.
There were 75 reports in 112 days of GWB's part of FY2009 averaging 8.03B$ per report, 5.38B$/day.
There were 14 reports in 20 days of Obama's part of FY2009 averaging -0.24B$ per report, -0.13B$/day so far.
There were 89 reports in 132 days of FY2009 averaging 7.79B$ per report, 5.25B$/day.

PROJECTION:
There are 1,441 days remaining in this Obama 1st term.
By that time the debt could be between 12.7 and 18.3T$.
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)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
02/09/2009 10,717,726,200,848.14 BHO (UP 90,849,151,935.06 so far since Obama 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: 693,001,303,935.70 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
01/20/2009 -001,254,116,733.01 -- Tue
01/21/2009 -000,225,946,840.81 ---
01/22/2009 -010,383,446,466.83 -
01/23/2009 -000,119,553,441.75 ---
01/26/2009 -001,004,948,620.76 -- Mon
01/27/2009 +000,188,054,837.85 ------------********
01/28/2009 -000,240,130,414.24 ---
01/29/2009 +014,335,901,611.96 ------------**********
01/30/2009 +007,363,512,286.86 ------------*********
02/02/2009 +046,334,807,167.90 ------------********** Mon
02/03/2009 -000,138,225,404.41 ---
02/04/2009 -000,068,491,025.50 ----
02/05/2009 +046,668,131,793.54 ------------**********
02/06/2009 +000,340,839,567.98 ------------********
02/09/2009 -000,572,980,736.98 --- Mon

101,223,407,581.80 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,053,094,397,589.07 in last 144 days.
That's 1,053B$ in 144 days.
More than any year ever, including last year, and it's 104% of that highest year ever only in 144 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 144 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=3731483&mesg_id=3731489

[Festivito]

107. Debt: 02/10/2009 10,721,365,792,566.28 (UP 3,639,591,718.14) (Tiny once again.)

(Three tiny days for public debt.)

= Held by the Public + Intragovernmental(FICA)
= 6,410,177,089,722.80 + 4,311,188,702,843.48
UP 388,825,726.33 + UP 3,250,765,991.81

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

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 306-Million person America.
If every American, man, woman and child puts in $3.27 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.81, ABOUT TEN BUCKS for a 1B$ 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 the 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)

PERSONALIZED DEBT:
Every 14 seconds we net gain a another American, so at the end of the workday of this report, there should be 305,776,543 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $35,062.75.
A family of three owes $105,188.24. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 to 32 days.
The average for the last 22 reports is 5,073,055,679.96.
The average for the last 30 days would be 3,720,240,831.97.
The average for the last 32 days would be 3,487,725,779.97.
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$/day.
There were 75 reports in 112 days of GWB's part of FY2009 averaging 8.03B$ per report, 5.38B$/day.
There were 15 reports in 21 days of Obama's part of FY2009 averaging -0.29B$ per report, -0.14B$/day so far.
There were 90 reports in 133 days of FY2009 averaging 7.74B$ per report, 5.24B$/day.

PROJECTION:
There are 1,440 days remaining in this Obama 1st term.
By that time the debt could be between 12.7 and 18.3T$.
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)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
02/10/2009 10,721,365,792,566.28 BHO (UP 94,488,743,653.20 so far since Obama 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: 696,640,895,653.80 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
01/21/2009 -000,225,946,840.81 ---
01/22/2009 -010,383,446,466.83 -
01/23/2009 -000,119,553,441.75 ---
01/26/2009 -001,004,948,620.76 -- Mon
01/27/2009 +000,188,054,837.85 ------------********
01/28/2009 -000,240,130,414.24 ---
01/29/2009 +014,335,901,611.96 ------------**********
01/30/2009 +007,363,512,286.86 ------------*********
02/02/2009 +046,334,807,167.90 ------------********** Mon
02/03/2009 -000,138,225,404.41 ---
02/04/2009 -000,068,491,025.50 ----
02/05/2009 +046,668,131,793.54 ------------**********
02/06/2009 +000,340,839,567.98 ------------********
02/09/2009 -000,572,980,736.98 --- Mon
02/10/2009 +000,388,825,726.33 ------------********

102,866,350,041.14 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,056,733,989,307.21 in last 145 days.
That's 1,057B$ in 145 days.
More than any year ever, including last year, and it's 104% of that highest year ever only in 145 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 145 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=3733404&mesg_id=3733550

[UpInArms]

40. dollar watch

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

Last trade 85.410 Change -0.170 (-0.22%)

US Dollar, Japanese Yen Surge as Geithner's Lack of Clear Policy Actions Stoke Risk Aversion

http://www.dailyfx.com/story/bio1/US_Dollar__Japanese_Yen_Surge_1234304967055.html

The US dollar and Japanese yen rocketed higher on Tuesday due to a jump in risk aversion, a threat that has continued to linger in the markets for months. The driver? Comments by Treasury Secretary Tim Geithner and Federal Reserve Chairman Ben Bernanke failed to suggest that a quick fix for the woes in the credit market was in the works. The reality of the situation is that there is no silver bullet to reverse the damage done to the financial markets, and instead, it will take a significant amount of time to even begin to see a semblance of true stability. Indeed, Mr. Geithner's speech provided more of a broad outline for policy actions, rather than clear cut plans.

The first goal was to enact regulations in which banking institutions would have to go through comprehensive stress tests and would subsequently receive capital if needed with a facility that uses funds from the Treasury as a “bridge to private capital.” The second goal was to establish a Public-Private Investment Fund, which would target toxic assets and provide a mechanism for valuing them. The third goal was to expand the Federal Reserve’s Term Asset Backed Securities Loan Facility (TALF) in order to create the Consumer and Business Lending Initiative, which should lower borrowing costs and improve access to small business lending, student loans, consumer and auto finance, and commercial mortgages. Finally, Mr. Geithner said that President Obama’s economic team will formulate and announce a comprehensive plan to address the housing crisis over the next few weeks. Meanwhile, Mr. Bernanke's speech focused primarily on the Federal Reserve’s efforts to improve transparency of their various lending facilities, but there was little in the way of new information announced.

Looking ahead, a series of speeches and testimony are scheduled for Wednesday starting with Federal Open Market Committee (FOMC) Governor Elizabeth Duke at 9:50 ET, who will speak in New York on stabilizing the housing market. At 10:00 ET, Treasury Secretary Timothy Geithner will testify on TARP in front of the Senate Budget Panel. At 13:00 ET, Chicago Fed President Charles Evans will speak on the US economic outlook. For the most part, comments by these individuals should be innocuous for price action in the forex markets. However, any sort of biased commentary or extreme opinions on the outlook for the economy has the potential to impact risk sentiment and thus forex carry trades, with improved risk appetite likely to weigh on the US dollar and Japanese yen while benefiting high-yielding currencies like the Australian dollar and New Zealand dollar.

...more...

Pound Drops As BoE Signals More Rate Cuts As Economy In A 'Deep Recession'

http://www.dailyfx.com/story/bio1/Pound_Drops_As_BoE_Signals_1234350586338.html

The Pound reversed earlier gains from a better than expected employment report as the BoE signaled more rate cuts in its quarterly report as it lowered its forecast for growth and inflation as the country is in a “deep recession” . The Sterling had rallied when jobless claims printed at 73,800 which were below economist’s forecasts of 89,000. However, that was quickly negated by Governor King’s prediction that employment would fall sharply in 2009, when unemployment is already at a 10 year high of 6.3%. After reaching as high as 1.4541 the Sterling would fall below the 20-day SMA at 1.4349.

The BoE is now forecasting that CPI will drop to 0.7% in the 3Q of 2009 and bottoming at 0.5% at the end of 2010. A weak pound is helping push prices lower as inflation risks continue to be “modestly to the downside”. The central bank would also state that growth risks are “weighted heavily to the downside” as it forecast GDP to contract by 4% in the first quarter alone. Although the committee has signaled that more easing is imminent, it stated that the impact of rate cuts have limited due to the failure of the banking system. Although Governor King would recognize that falling prices and a weaker pound is providing some stimulus to the economy it will take time for these effects and those of the recent rate reductions and stimulus to pass through the economy. If the 20-Day SMA fails to hold as support then we could see a re-test of 1.4000 on the lower interest rate expectations.

The Euro failed to break above resistance at 1.3000 during overnight trading after it erased most of its losses from yesterday. The single currency appreciation came despite German inflation dropping to the lowest level in almost five years at 0.9%. The ECB has remains staunch in its stance that deflation isn’t a concern. However, disinflation is enough of a concern to cause the central bank to lower interest rates at its March meeting. This was supported by comment from ECB member Gonzalez-Paramo who said in an interview with Intereconomia radio. “A rate of 2 percent is not the lowest rate we can think of, taking into account the situation right now, inflation expectations continue anchored and growth slowdown is intense”. Therefore, we may see the Euro remain range bound between 1.2700 and 1.3100 as risk appetite and interest rates expectations take turns driving price action.

We are already starting to see the dollar give back some of its gains from yesterday as risk aversion starts to ease. U.S. equity futures are pointing to a higher open as we may see bargain hunting after yesterday’s selloff. U.S. Treasury Secretary Tim Geithner failed to inspire confidence when he unveiled the details of the banking plan. The lack of detail and specific action left traders concerned that the government still lacks a plan to deal with the toxic assets that have plagued the financial system. Therefore, we may see support for there green back continue until there are clearer signs that the subprime crisis has passed. However, the Senate passing the fiscal stimulus plan leaves one last hurdle before we see ratification of the bill which could spark optimism and weigh ion the dollar. The Senate and House have to reconcile the differences between their two proposals. Therefore, it may take until the early next week before we see final plan delivered to President Obama. Meanwhile, the U.S. trade balance is due to cross the wires and is expected to show the deficit shrink as U.S. demand continues to falter.

...more...

[UpInArms]

41. Merrill secretly moved up bonus payments - Cuomo

http://www.reuters.com/article/bondsNews/idUSN1135227020090211

NEW YORK, Feb 11 (Reuters) - Merrill Lynch secretly accelerated bonus payments and gave at least $1 million to each of nearly 700 employees as the brokerage was amassing billions of dollars of losses, New York Attorney General Andrew Cuomo said in a letter to U.S. Rep. Barney Frank.

Cuomo's letter comes as Frank's House of Representatives Financial Services Committee on Wednesday gets set to grill executives from eight banks that received $125 billion from the U.S. Treasury last fall.

Among the chief executives answering questions on how they spent the taxpayer money will be Ken Lewis of Bank of America Corp (BAC.N), which acquired Merrill Lynch last month.

Merrill executives have drawn fire because they paid 2008 performance bonuses in December, earlier than usual and despite the fact that Merrill had losses of $15.3 billion in the fourth quarter. Bank of America initially received $25 billion from the Treasury and later was forced to seek $20 million more, plus $188 billion in asset guarantees.

Cuomo, who began questioning Wall Street banks about their 2008 bonus plans in October, said in the letter to Frank that Merrill may have taken steps to pay lavish bonuses so that taxpayers would foot the bill.

"It appears that instead of disclosing their bonus plans in a transparent way as requested by my office, Merrill Lynch secretly moved up the planned date to allocate bonuses and then richly rewarded their failed executives," Cuomo wrote.

A copy of the letter was obtained by Reuters.

Merrill, with Bank of America's knowledge, paid $3.6 billion in bonuses for 2008. That's an average of $91,000 per employee, Cuomo said, but the lion's share went to a select group.

The top four recipients received a combined $121 million; the next four received a combined $62 million; and the next six received a combined $66 million, according to Cuomo. The top 149 executives received a total of $858 million, and 696 received at least $1 million each, he wrote.

...more...

scum

[UpInArms]

44. U.S. bank CEOs defend use of govt bailout funds (LIARS)

http://www.reuters.com/article/newsOne/idUSN1032923720090211

WASHINGTON, Feb 10 (Reuters) - Chiefs of the biggest U.S. banks said they have not used government bailout money for executive compensation, dividends or lobbying and are taking cuts in pay, according to copies of congressional testimonies obtained by Reuters on Tuesday.

The chief executives at Goldman Sachs (GS.N), JPMorgan Chase (JPM.N) Citigroup (C.N), Bank of America (BAC.N), Bank of New York Mellon (BK.N), State Street (STT.N), Morgan Stanley (MS.N), and Wells Fargo (WFC.N) are slated to testify Wednesday before the House Financial Services Committee.

At the hearing they are expected to face a firing squad of lawmakers who want to know how their financial institutions spent money received under the $700 billion Troubled Asset Relief Program (TARP) and why more isn't being done to help homeowners.

Lawmakers are expecting some humility from the CEOs as well as acknowledgment that their banks will channel government funds to boost lending to consumers and businesses to help resuscitate an ailing U.S. economy mired in a recession.

"It is abundantly clear that we are here amidst broad public anger at our industry," said Goldman Sachs CEO Lloyd Blankfein said in prepared testimony.

Blankfein said he has never seen "a wider gulf" between the industry and the public and said many people believe -- "justifiably so" -- that Wall Street lost sight of its larger public obligations by allowing unchecked practices to undermine the financial system's stability.

...more...

why is itthat when the government funds a family planning center in Africa that gives a very sick woman an abortion - that is "funding abortions" but they didn't use bailout money for bonuses?

Liars.

I spit on them.

[tclambert]

52. "Lawmakers are expecting some humility from the CEOs" It was their hubris

that led to this situation, wasn't it? Man, the ancient Greeks got it right again, and the Book of Proverbs (16:18): "Pride goeth before destruction, and a haughty spirit before a fall." Or as we commonly say, "Pride goes before a fall." And here's a little on pride from Sophocles (got my Bartlett's out):

The tyrant is a child of Pride
Who drinks from his great sickening cup
Recklessness and vanity,
Until from his high crest headlong
He plummets to the dust of hope.

[Demeter]

57. It Was Their Piracy that Started This

It is their hubris and power to scare people that's keeping it going.

But the ability to scare people is losing strength, isn't it?

[UpInArms]

79. "BoA timed the bonuses in such a way as to force taxpayers to pay for them through the deal funding"

http://www.marketwatch.com/news/story/NY-attorney-general-Cuomo-blasts/story.aspx?guid=%7BEE91F361%2D96FD%2D4CF8%2DB204%2D8090EBD755C2%7D

excerpt:

richly rewarded their failed executives," Cuomo wrote Frank, D-Mass.
Cuomo said that Merrill had never before paid bonuses so early.

"One disturbing question that must be answered," Cuomo told Frank, "is whether Merrill Lynch and Bank of America timed the bonuses in such a way as to force taxpayers to pay for them through the deal funding.

"We plan to require top officials at both Merrill Lynch and Bank of America to answer this question and to provide justifications for the massive bonuses they paid ahead of their massive losses."

Cuomo also detailed how the bonus pool was spread among staff.

He said that while the bonus pool encompassed 39,000 employees, the lion's share went to a relatively small number of executives. "Merrill chose to make millionaires out of a select group of 700 employees," Cuomo said.

<snip>

As to the size of individual bonuses, Cuomo said 14 staffers got bonuses of $10 million or more and 20 received bonuses of at least $8 million, while a group of about 200 got $3 million or more.

[KoKo]

88. They need to give that money back. Institute the "clawbacks" and hold the CEO's

accountable for fraud! Not one person has been held accountable ....except Madoff who lives in luxury under House Arrest while his wife mailed out her valuables and now we hear she withdrew millions from her brokerage accounts days before Bernie fessed up.

No wonder people are angry and feel hopeless. We all feel that we were caught up in the Bush Crime families doings for eight long years and now it just continues. Everyone covering everyone else's back while we foot the bill or get thrown out of our jobs, homes and health insurance.

Meantime the bloviators have the "Line Up" going on over in the Barney Frank House Hearings...and how many of those hearings have we here listened to through the years that GO NOWHERE! And, it wasn't because the Dems were "out of power." Given what the Repugs have manged to do with a solid MINORITY we can understand what the Dems didn't do with either their Minority or Majorty..

On Edit: Not ranting at you, UIA's in this post.... :blush:... I just got carried away and the enormity of what's sounding like the biggest swindle in American History on all of us.

[DemReadingDU]

42. ABC Nightline: Obama Interview on Economic Agony

2/10/09 Obama on Economic 'Agony'
As market falters, Obama sits down for a"'Nightline" exclusive.
http://abcnews.go.com/Video/playerIndex?id=6851346

appx 16 minutes


edit for the story
Obama: 'There Is No Easy Out' for Wall Street
In Exclusive Interview, President Warns of 'a Perfect Storm of Financial Problems'
http://abcnews.go.com/Politics/Business/story?id=6844314&page=1

[radfringe]

47. Question: If you took your car to a mechanic

and the mechanic "f**k-up" the repair, would you go back to that mechanic?

If No, then why do we expect the same people who created this freaking mess to fix it?

[ozymandius]

49. You have a great gift for rhetoric.

You ask the $9 trillion question. It'll be like waiting for Godot to hear an answer from The Villagers.

[florida08]

58. FYI

The Chief Thief Officers are testifying before Congress now..Goldman Sachs, JP Morgan, Citigtoup, Wells Fargo, Bank of America, Morgan Stanley, Bank of New York Mellon and Street Bank
http://www.cspan.org/Watch/C-SPAN3_wm.aspx

[radfringe]

61. grilling of the Economic Elite?

think anything will come out of it?

I hear they will be serving Ponzi-Souffle for lunch. Collapses before it gets to the table

[florida08]

67. :grin:

well at the moment they're all doing well and are lending. Prepared for credit card crunch that's coming. Goldman Sachs say they have never given golden parachutes. Questions now about the Merrill Lynch huge bonuses right before B of America bought them.
The questions so far are softball

[radfringe]

69. The questions so far are softball

oh? They are serving creampuffs for dessert first? lol

[antigop]

70. Greider: "A Moment of Reckoning for the Democratic Party" -- great video, imo

http://openleft.com/showDiary.do?diaryId=11526

[antigop]

71. TPM:Are executive pay caps getting sliced from the stimulus bill?

http://tpmdc.talkingpointsmemo.com/2009/02/are-executive-pay-caps-getting-sliced-from-the-stimulus.php

During an interview with TPMDC yesterday, a senior Democrat on the House Financial Services Committee delivered troubling news: His party could remove the Senate's strong executive pay limits from the stimulus bill in an attempt to keep the measure's costs down.

"The plan is to take out the executive compensation provisions ... and blame the Republicans for setting out the level " for the final version of the stimulus, Rep. Brad Sherman (D-CA) told me.

The Senate's limits on compensation for executives receiving government bailout money -- a welcome sign after President Obama's CEO pay caps were revealed to be riddled with loopholes -- were scored as a $10 billion money-loser by the Congressional Budget Office. Because of pressure to limit the size of the stimulus in order to retain GOP senators' support, Sherman's prediction about the executive pay caps is looking likely to come true.

But why would Democrats want to send such a bizarre signal about their commitment to reining in corporate excess? When MoveOn.org has gotten more than 300,000 signatures on a petition calling for even stronger salary caps at bailed-out companies, why would Congress want to water down its proposed pay limits?

Neither Senate Majority Leader Harry Reid's (D-NV) office nor Finance Committee Chairman Max Baucus' (D-MT) office responded to queries about cutting the pay caps. But we'll know more this afternoon, when a formal conference meeting is being held with GOP negotiators in the room. Of course, all signs are pointing to an agreement that already exists after closed-door talks among Democrats stretched into the night yesterday.

Oh, great. Just great.

[florida08]

74. that's chit

They've got to stop playing gotcha and do what they said they would or else they'll be gone next year. When Rep. Gary Ackerman asked
what they did with the TARP money he got vague answers but requested that all 8 submit in writing to the panel and told them they would be expecting it. He then asked "How much have each of you invested in your own company"? 6 out of the 8 said '0'. The other two (one was Citigroup but couldn't see the other)said 12 million and 8 million.

[Ghost Dog]

80. EU sets triple-summit bid to tackle slowdown

Wed Feb 11, 2009 11:01am EST BRUSSELS, Feb 11 (Reuters) - The European Union announced plans on Wednesday to hold no fewer than three economic summits to iron out national differences that threaten to hamper its efforts at tackling the recession.

The move came after France and others questioned the ability of the Czech Republic -- the small, ex-communist state holding the EU's rotating presidency -- to chart a path out of the worst financial debacle in the bloc's 50-year history.

Czech Prime Minister Mirek Topolanek vowed to end a public row over protectionism with French President Nicolas Sarkozy that has added to the image of European disunity, but said differences among capitals were inevitable.

"We have to realise that the individual member states have different approaches to solving this issue," Topolanek told a news conference in Brussels after talks with European Commission President Jose Manuel Barroso.

"My goal is to hold a political debate at the highest level in order to strengthen EU cooperation in countering the crisis."

Separately, the EU Commissioner for monetary affairs issued one the starkest warnings yet that time was running out to get financial systems underpinning the economy functioning again.

"If financial markets will not function in a more normal way during the next months, the efficiency of fiscal stimuli and monetary policy decisions will be seriously affected," Joaquin Almunia told a European Parliament debate.

Aside from a long-scheduled March 19-20 economic summit in Brussels, Topolanek called a special one-day meeting of EU leaders on March 1 to discuss efforts to stabilise the financial sector, and a further summit in May to address employment.

These are on top of the myriad of meetings in preparation for summits of the G8 rich nations and the G20.

/... http://www.reuters.com/article/marketsNews/idAFLB33391620090211?rpc=44

HIGHLIGHTS-EU's Almunia at European Parliament

Wed Feb 11, 2009 10:49am EST BRUSSELS, Feb 11 (Reuters) - The following are comments by EU Economic and Monetary Affairs Commissioner Joaquin Almunia at the European Parliament on Wednesday.

Issuance of EU bonds:

"I think it is unfortunately not viable now, because of the conditions of the market. This is not the right moment to adopt this decision. We should reach alternative decisions that are second best and viable in the short term."

"We are discussing how to coordinate better the issuance of bonds."

Bond spreads:

"I think spreads today are exaggerating credit risks."

Euro zone cohesion:

"There is a zero probability for the euro area to split ... I cannot imagine any government making this decision."

Protectionism:

"We have been analysing with some concern some signals of protectionism ... Protectionism is the worst response to this problem (economic crisis)."

Financial markets:

"We are convinced that if financial markets will not function in a more normal way during the next months, the efficiency of fiscal stimuli and monetary policy decisions will be seriously affected."

/. http://www.reuters.com/article/marketsNews/idINLB79263020090211?rpc=44

[UpInArms]

81. Is the gold market telling us that an economic catastrophe is imminent?

http://www.marketwatch.com/news/story/Is-gold-discounting-economic-catatrophe/story.aspx?guid=%7B6ABDD8F6%2D6FD9%2D4197%2DB7C0%2DD60FF9BCC945%7D

It certainly might seem as though it is. By late morning Eastern time Wednesday, an ounce of the yellow metal was ahead by more than $30 from where it closed Tuesday.

But it doesn't take much of a historical memory to appreciate that gold's message is far more inscrutable.

Consider, for example, that gold traded for nearly $1,000 per ounce last July, compared with the $945 level at which bullion was trading Wednesday morning. That's a very telling contrast: Though things weren't all brightness and light last summer, Lehman Brothers wasn't in Chapter 11, Merrill Lynch was still its own company and TARP referred to something you took on a camping trip.

Even so, gold was higher then than now. Why?

This question becomes even more pertinent upon realizing the federal government's actions since last July have been a textbook illustration of the inflationary behavior for which Ben Bernanke earned his nickname of "Helicopter Ben." Yet, curiously, gold -- the ultimate inflation hedge -- is lower today than then.

No doubt there is more than one explanation for what's going on in the gold market. One theory that is particularly popular among many gold bulls is that the world's central banks are engaged in a conspiracy to depress gold's price.

...more...

[JNelson6563]

89. Very dramatic, isn't it?

One can almost hear Jaws music in the background, may the gods help us.

Julie

[ozymandius]

101. Closing Stats and Blather

Dow 7,939.53 Up 50.65 (0.64%)
Nasdaq 1,530.50 Up 5.77 (0.38%)
S&P 500 833.74 Up 6.58 (0.80%)
10-Yr Bond 2.762% Down 0.085
NYSE Volume 6,073,139,000
Nasdaq Volume 2,264,875,750

4:25 pm : The major indices traded sideways for much of the session. Word that congressional officials have agreed on a comprehensive economic stimulus plan provided stocks with a late bounce, helping stocks close with a solid gain.

A subdued tone permeated Wednesday's trading. Market participants seemed to be settling in after sending stocks sharply lower in the prior session. However, news that the Senate and House have agreed on the terms of a $789.5 billion economic stimulus bill combined with support at key technical levels spurred stocks higher.

Though the announcement didn't contain anything new or surprising, the idea that further steps toward progressing economic conditions also provided short-sellers reason to cover their positions. According to reports, final votes for the stimulus bill are expected to occur during the next couple of days so that it can be signed by this coming weekend.

Other headlines had little overall influence on the action this session.

Genzyme (GENZ 71.08, -0.11), Marsh McLennan (MMC 21.41, +2.70), and Reynolds American (RAI 39.84, +0.94) all announced better-than-expected quarterly earnings results. Arcelor Mittal (MT 25.75, +0.95), Credit Suisse (CS 26.93, +0.95), and NVIDIA (NVDA 8.15, -1.17) fell short. Applied Materials (AMAT 9.77, +0.08) broke even, excluding certain items, but that was expected by Wall Street. AMAT delivered downside revenue guidance, though, and said it will cut roughly 14% of its work force. Nike (NKE 44.31, -0.74) indicated it could cut 4% of its work force.

Research In Motion (RIMM 48.76, -8.28) expects fourth quarter earnings to be at the low end of its previous forecasts. Its pessimistic outlook weighed on other large-cap tech stocks, which caused the Nasdaq 100 to lag the headline indices. The Nasdaq 100 finished 0.2% lower.

Most of Wall Street's top executives testified today about their use of TARP funds. Their testimony largely made for background noise, and had little bearing on the stock market's direction.

Still, financial stocks were the session's best performers. The sector gained 5.2%. However, that is still shy of what it will reclaim before it can offset the prior session's near 11% drop.

Energy was the session's poorest performing sector. Energy stocks fell 1.3% as crude oil futures tumbled for the third time this week. Crude prices were hampered by a larger-than-expected inventory build and a reduced forecast for global oil demand from the IEA. Crude closed at $35.80 per barrel, down 4.7%.

While crude dropped, gold registered impressive gains for the second straight session. Gold closed at $944.50 per ounce, up more than 3% to its highest level in more than six months.

According to the latest trade data, the December deficit totaled $39.9 billion, which is up from the prior reading. The improved deficit reflected a drop in imports, but that was partly offset by a drop in exports. That feeds concern that overall global trade is contracting sharply. Additionally, revised data are expected to lead to a downward revision to the fourth quarter GDP. DJ30 +50.65 NASDAQ +5.77 SP500 +6.58 NASDAQ Dec/Adv/Vol 1169/1464/2.15 bln NYSE Dec/Adv/Vol 1224/1794/1.36 bln

[JackRiddler]

106. (kicking w/thanks to Ozy for all the great analysis)

Adding to journal to save thread...