STOCK MARKET WATCH, Thursday February 19

[ozymandius]

Source: du

STOCK MARKET WATCH, Thursday February 19, 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 17, 2009

Dow... 7,555.63 +3.03 (+0.04%)
Nasdaq... 1,467.97 -2.69 (-0.18%)
S&P 500... 788.42 -0.75 (-0.10%)
Gold future... 978.20 +10.70 (+1.09%)
30-Year Bond 3.53% +0.04 (+1.12%)
10-Yr Bond... 2.73% +0.07 (+2.48%)

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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

Gold, Is the Future Still Bright or Fading?
BY CHRIS PUPLAVA

As promised, today’s article picks up where last week’s article left off with the focus predominantly on gold, not gold stocks. This year marked an historic event, as something occurred for the third time in nearly 80 years, which is the value of gold exceeding the value of the S&P 500. The first occurrence was during the onset of the Great Depression with the S&P 500 falling below the fixed price of gold on October 29th, 1929. The gold to S&P 500 ratio fluctuated around parity until the stock market plummeted in earnest in 1931 and 1932, with the peak in the ratio ultimately rising to 4.76 in late February of 1933 as the S&P 500 finally bottomed.

....

Since gold has been de-linked from the USD it has displayed an inverse relationship with the USD. The top in gold in 1974 marked the bottom in the stock market and the top in gold in 1980 marked the turn of a secular bear market in gold and a secular bull market in stocks. The tables turned at the dawn of the millennium with gold beginning in a secular bull market and the S&P 500 beginning in a secular bear market. Using the two prior occurrences of gold breaking parity with the S&P 500 shows that once parity is broken the ratio typically stays near parity for several months and then explodes upwards and ends in climatic fashion. So, once parity is broken the action is typically not a whip saw event, where gold falls back below the value of the S&P 500, but the start of a significant outperformance of gold relative to the stock market.

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

[JNelson6563]

15. Look at all the love you got!

Really glad to see you've so many fans dear Ozy. :toast:

Julie

[ozymandius]

2. Today's Reports

08:30 PPI Jan
Briefing.com 0.2%
Consensus 0.3%
Prior -1.9%

08:30 Initial Claims 02/14
Briefing.com 620K
Consensus 620K
Prior 623K

10:00 Leading Indicators Jan
Briefing.com NA
Consensus 0.0%
Prior 0.3%

10:00 Philadelphia Fed Feb
Briefing.com -26.0
Consensus -25.0
Prior -24.3

11:00 Crude Inventories 2/13
Briefing.com NA
Consensus NA
Prior 4.72M

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

[UpInArms]

36. U.S. Jan. PPI rises 0.4% excluding food, energy

02. U.S. Jan. producer prices rise 0.8%
8:36 AM ET, Feb 19, 2009

06. U.S. Jan. food producer prices fall 0.4%
8:30 AM ET, Feb 19, 2009

07. U.S. Jan. energy producer prices rise 3.7%
8:30 AM ET, Feb 19, 2009

08. U.S. Jan. PPI rises 0.4% excluding food, energy
8:30 AM ET, Feb 19, 2009


(edited to add item 02)

[UpInArms]

37. U.S. initial weekly jobless claims unchanged at 627,000 - last week rev'd up 4,000

01. U.S. continuing jobless claims rise 170,000 to 4.98 mln
8:35 AM ET, Feb 19, 2009

02. U.S. initial weekly jobless claims unchanged at 627,000
8:35 AM ET, Feb 19, 2009

[UpInArms]

49. U.S. Feb. Philly Fed index falls to -41.3 - lowest since October 1990

03. U.S. Feb. Philly Fed lowest since October 1990
10:03 AM ET, Feb 19, 2009

04. U.S. Feb. Philly Fed shipments index -32.4, record low
10:03 AM ET, Feb 19, 2009

05. U.S. Feb. Philly Fed index falls to -41.3
10:02 AM ET, Feb 19, 2009

[UpInArms]

55. Philly Fed index plunges to 18-year low in February

http://www.marketwatch.com/news/story/Philly-Fed-index-plunges-18/story.aspx?guid=%7BF7AB674E%2D9884%2D4F22%2DAC82%2D324C87E495CC%7D

WASHINGTON (MarketWatch) -- Factories in the Philadelphia region reported declining business in February for the 14th month in the past 15, the Federal Reserve Bank of Philadelphia reported Thursday. The Philly Fed index dropped to negative 41.3 in February from negative 24.3 in January. It's the lowest since October 1990. Readings below zero show that more manufacturing firms reported worsening conditions than reported improvements. The new orders index fell to negative 30.3 in February from negative 22.3 in January. The shipments index fell to an all-time low of negative 32.4. Factory owners are optimistic about improvement over the next six months, however.

[UpInArms]

50. U.S. Jan. leading economic indicators rise 0.4%

07. U.S. Jan. leading economic indicators rise 0.4%
10:00 AM ET, Feb 19, 2009

[UpInArms]

51. January leading indicators up; recession's intensity to ease

http://www.marketwatch.com/news/story/January-leading-indicators-up-recessions/story.aspx?guid=%7B48F49164%2D23BD%2D4D28%2D98DC%2DCE3D9A034036%7D

WASHINGTON (MarketWatch) -- Economic weakness will continue through this year, though the recession's intensity could ease over the next few months, the Conference Board said Thursday. For the second consecutive month, the index of leading economic indicators rose, gaining 0.4% in January, following a downwardly revised 0.2% in December. The recent gains are due, in part, to the Federal Reserve's huge injections of cash into the money supply. Despite the rise in January, widespread weakness remains as the troubled job and housing markets continue to take their toll. "The second half of 2009 may see a period of anemic growth," said Ken Goldstein, economist at the Conference Board. "In fact, a return to robust growth may not occur until well into 2010, even if the long climb starts a few months from now."

okay - they "downwardly revised" December's number so what is to prevent them from "downwardly revising" January's number next month?

[UpInArms]

53. here's the actual report:

http://www.conference-board.org/economics/bci/pressRelease_output.cfm?cid=1


LEADING INDICATORS. Five of the ten indicators that make up the leading economic index increased in January. The positive contributors — beginning with the largest positive contributor — were real money supply*, the interest rate spread, index of consumer expectations, manufacturers' new orders for nondefense capital goods*, and manufacturers' new orders for consumer goods and materials*. The negative contributors — beginning with the largest negative contributor — were average weekly initial claims for unemployment insurance (inverted), building permits, average weekly manufacturing hours, stock prices, and the index of supplier deliveries (vendor performance).

* The LEI increased for the second consecutive month in January, but November and December values were revised down as new data for manufacturers' new orders became available. Between July 2008 and January 2009, the LEI decreased 1.9 percent (a -3.7 percent annual rate), faster than the decline of 1.1 percent (a -2.1 percent annual rate) during the previous six months. In addition, the weaknesses among the leading indicators have remained widespread in recent months.

* The CEI fell sharply again in January, driven by continued large declines in industrial production and employment. The decline in the CEI has continued to accelerate — to 2.7 percent (a -5.4 percent annual rate) in the six-month period through January, from the decrease of 0.7 percent (a -1.5 percent annual rate) for the previous six months (January to July 2008), and the weaknesses among its components have remained widespread in recent months. The Lagging Economic Index (LAG) fell for two consecutive months but the CEI fell more, and as a result, the coincident-to-lagging ratio (a leading indicator) continued to decrease. Meanwhile, real GDP contracted at a 3.8 percent annual rate in the fourth quarter of 2008, following a decline of 0.5 percent (annual rate) in the third quarter.

* Although the LEI has risen during the past two months, it is too soon to say the contraction in the LEI that began in July 2007 is coming to an end. The LEI has continued to decline over a six-month period in the second half of 2008, with continued widespread weakness among its components. The primary sources of strength in the LEI in recent months have been the consistent and large contributions from inflation-adjusted money supply and the interest rate spread, and consumer expectations have only provided a weak positive contribution. At the same time, the CEI remains on a downtrend that began in November 2007, and the decline in the index has accelerated in recent months.

* All in all, the recent behavior of the composite economic indexes suggests that the economy will continue to be in recession in the near term.

[Demeter]

65. They Need New Crystal Balls

or just balls in general....

[UpInArms]

69. Petroleum Inventories Report:

04. U.S. oil inventories fall by 200,000 barrels last week: EIA
11:01 AM ET, Feb 19, 2009

05. U.S. gasoline inventories rise by 1.1 million barrels: EIA
11:01 AM ET, Feb 19, 2009

06. U.S. distillate inventories fall by 800,000 barrels: EIA
11:01 AM ET, Feb 19, 2009

[ozymandius]

3. Oil near $35 amid grim US economic news

SINGAPORE – Oil prices rose slightly to above $35 a barrel Thursday in Asia despite grim U.S. economic news that pointed to a deep recession and weaker crude demand.

Light, sweet crude for March delivery rose 54 cents to $35.18 a barrel by late afternoon in Singapore on the New York Mercantile Exchange. The contract on Wednesday fell 31 cents to settle at $34.62.

The March contract expires on Friday, and traders switched their focus to the April contract, which rose 62 cents to $38.03.

....

In other Nymex trading, gasoline futures rose 0.83 cent to $1.07 a gallon. Heating oil gained 1.71 cents to $1.16 a gallon, while natural gas for March delivery jumped 3.0 cents to $4.24 per 1,000 cubic feet.

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

[ozymandius]

4. UBS to pay $780M, open secret Swiss bank records

WASHINGTON – Banking giant UBS has agreed to pay $780 million and turn over once-secret Swiss banking records to settle allegations it conspired to defraud the U.S. government of taxes owed by big clients.

As part of the deal struck in federal court in Fort Lauderdale, Fla., UBS has made the unprecedented step of agreeing to immediately turn over to the U.S. government account information for U.S. customers of the bank's cross-border business.

In doing so, federal authorities have struck a big crack in Switzerland's vaunted bank secrecy laws.

....

Sen. Carl Levin, D-Mich., has estimated that abusive tax shelters and hidden offshore accounts cost the U.S. government nearly $100 billion a year in lost tax revenue.

http://news.yahoo.com/s/ap/20090218/ap_on_bi_ge/ubs_secrets

[Hugin]

103. Gee, this sure is getting little attention today.

To me the news is quite shocking and welcome.

[ozymandius]

5. Bernanke cuts growth view, considers inflation target

WASHINGTON (Reuters) – U.S. Federal Reserve policymakers largely gave up hope for economic growth in 2009 and discussed setting an inflation target last month as a deepening recession heightened fears of a dangerous decline in prices.

With employment falling, the housing market showing no sign of stabilization, and credit conditions still tight despite official interest rates being cut to close to zero, the central bank projected the economy would shrink by between 0.5 percent and 1.3 percent this year, the Fed said in minutes of its January 27-28 policy meeting released on Wednesday.

....

U.S. stock markets showed little reaction to the revised forecast. Some economists noted that the gloomier economic view was still not as grim as many private forecasts.

The unraveling economy has pushed inflation uncomfortably low in the eyes of Fed officials, but the central bank stopped short of setting an explicit inflation target. An inflation target is seen by some policy-makers as an important took in achieving stable prices.

http://news.yahoo.com/s/nm/20090219/bs_nm/us_usa_fed

[ozymandius]

6. Fed says US economy will get worse in 2009

WASHINGTON – The Federal Reserve warned Wednesday that the nation's crippled economy is even worse than thought and predicted it would deteriorate throughout 2009, with no sign that the housing market will stabilize.

The Fed's bleak estimates indicated that unemployment could climb as high as 8.8 percent this year and that the economy would contract for a full calendar year for the first time since 1991.

The central bank's latest projections came hours after a separate report showed that new home construction and applications for future projects both fell to record lows last month.

Still, some economists saw a silver lining in the otherwise dismal housing report: Scaled-back building should reduce the number of unsold homes and contribute to an eventual housing recovery.

http://news.yahoo.com/s/ap/20090218/ap_on_bi_ge/economy_20

---

Oh great. All we need is another jobless recovery. Just freakin' dandy.

[ozymandius]

7. Stanford deployed a web of lies, documents show

WASHINGTON – Disgraced banker R. Allen Stanford's pitch to investors was equal parts glamour and flattery.

By serving a select and wealthy clientele, employing top-flight talent and being "a privately held institution free to focus on our No. 1 priority, which is our clients," Stanford was able to earn "premium returns," his bank documents claimed.

But those profits may never have existed. Despite claiming to have made double-digit returns between 1993 and 2005, the company's annual returns hadn't reached 10 percent since 1994, according to court papers.

....

The claims of inflated returns allowed the bank to plow more money into other parts of Stanford Financial Group, paying "disproportionately large commissions" to its affiliate Stanford Group Company, the documents say.

Even in 2008, a year when many stock market indexes lost around 40 percent, the company claimed losses of only 1.3 percent.

http://news.yahoo.com/s/ap/20090219/ap_on_bi_ge/stanford_web_of_lies

[radfringe]

8. confused

I'm seeing conflicting stories regarding the whereabouts of Stanford.

It was reported no one knows where he is, in another article it said he was found trying to board a plane out of the country - now this morning there are several stories, published as early as 15 minutes ago, that he's missing.

Was he found and then went missing again? Was he ever found in the first place? Is this just a case of papers being behind in the story?

[Demeter]

10. Missed Him by that Much!

I think they went looking, but he went running, and now it's a big chase scene. Very exciting, I 'm sure.

We ought to get some very good theater out of all this, in 20 years or so. Think of "the fugitive". or "the great imposter", updated for modern times....and then Cheney will be played by a future heir to Georgr Robinson or other gangster character actor...

[radfringe]

11. thanks!

original story that I read had him nabbed at Houston airport, but it seems his credit card was declined when he tried to charter a private plane, this tipped off authorities.

when they arrived at airport - stanford was gone.

[DemReadingDU]

14. should have paid cash

:eyes:

[Roland99]

34. Have they checked for slow-moving white Ford SUVs?

[AnneD]

38. This is Texas, Honey.......

It would be a slow moving heavy duty pick up truck.......

Let's set the record straight!

Edited to add that we have an international airport and Continental is based here. As slow as the SEC/FBI has been to issue any warrents-He could have been gone before the ink dried.

[Robbien]

41. Articles said Stanford had a fleet of six or seven private airplanes.

He flew Tom Delay, Cornyn and other politicos around the Caribbean all the time.

So it sure is funny that instead of using one of his own planes, the man was trying to hire someone's private plane.

One of Stanford's planes was confiscated by Mexico in a drug raid, but what about the others?

[Demeter]

66. May I hand off the Stanford Tracking to You, Robbien?

I did Madoff, after all.

[Robbien]

95. It is surprising you find Stanford dull

So far it has been fascinating with so many moving parts. Much better than Madoff.

You've got Stanford creating a fiefdom down in Antigua employing about twenty percent of the population, buying up the politicians and buying a title. There are US Politicos flying in and out of the Caribbean on Stanford planes setting up non-taxable offshore accounts, golfing, watching cricket and making sure US laws are favorable to not tax offshore accounts. There is drug running with an ex-DEA Chief Agent of Miami running security for Stanford. One of the banks is suspect of being a front for US spies in Venezuela. And you've got the guy on the run. You've got both the FBI and SEC trying to keep the whole thing secret but then a nosy financial blogger beating the drums forcing the SEC hands.

And all this before we even know who has been burned by the Ponzi scheme.

[Demeter]

101. You Have Access to a Lot More Juicy Detail!

We don't get that kind of dirt up here in the frozen North. Except about Madoff.

[Robbien]

106. Umm

Not to sure how far north in Michigan you are of where I am since I'm just a couple dozen miles north of Chicago.

But with a smattering of Spanish and luckily many Latin American blogs being in English, there are many juicy details to be gotten here in frosty North Chicago.

Such as Stanford having a fiancee while still being married to his wife of twenty something years and having six kids. That fiancee is one of the heads of the EU cricket league which he stiffed.

Such as giving politicos in Antigua bribes of $200,000 each, in front of a large crowd while giving a speech saying he was hurt that anyone would accuse him of giving people bribes.

[Demeter]

108. Ann Arbor Isn't Far North, But the Local Paper Wouldn't Run a Picture Of Obama Until He Won

the primaries and was set to be the nominee....

I could have read the Spanish blogs, I suppose...but I haven't had the time or curiosity.



Chicago is much more a national center, by the way. Even without the Presidential presence, Chicago ranks with NYC and DC. Michigan doesn't rate any higher than Puerto Rico, these days.

[Robbien]

113. That is just west of Detroit is it not

I haven't been over that way since the mid eighties. Even then the area was pretty conservative, in comparison.

by the way the Colombians are seeking to find out who is investing in Stanford through their bank. They are demanding names!

http://www.reuters.com/article/mergersNews/idUSN1951494120090219
Colombia seeks details on local Stanford investors

[Demeter]

114. About 40 minutes west of Detroit; Home of the University of Michigan

You've heard of the Wolverines, surely?

[Robbien]

117. Hear of the Wolverines?

Of course

I graduated from Indiana U

[Demeter]

102. Somebody in Bush Circles Was Trying to Do The Same to Haiti

I believe a Haitian national...

[Ghost Dog]

121. Far out. Sure ain't "cricket",

as far as one is allowed to see... (edit: somewhere along the railroad track...)

[AnneD]

90. Here's something for your scrap book , Robbien.....

Stanford’s dad disbelieving
Father of financier learned of case when friend alerted him
By LINDSAY WISE Copyright 2009 Houston Chronicle
Feb. 19, 2009, 12:46AM


BILLY SMITH II Chronicle
James Stanford, father of R. Allen Stanford, talks about the SEC’s accusations against his son in an interview in Mexia.

Share
Print Email Del.icio.usDiggTechnoratiYahoo! BuzzMEXIA — James Stanford hadn’t spoken with his son for a few days when a friend called Tuesday and told him to turn on the television news, where he learned federal regulators had charged R. Allen Stanford with fraud.

James Stanford says he was stunned at the civil complaint against his billionaire son.

“I cannot imagine, I cannot believe, I will not believe what is being alleged actually happened,” he told the Houston Chronicle on Wednesday.

Stanford spoke in the small Mexia office of Stanford Financial Group, a nondescript white building nestled in neatly pruned shrubbery, just off U.S. 84. The office in the central Texas town is a far cry from the plush Houston headquarters of the company — the center of Allen Stanford’s financial empire, now controlled by a court-appointed receiver as the U.S. Securities and Exchange Commission pursues the fraud case.

Every day, James Stanford, 81, drives a few blocks from his childhood home to the Mexia office, with a single secretary stationed in the entryway to answer the phone.

James Stanford is listed as a director of Stanford Financial Group, the privately held parent company of Allen Stanford’s businesses. But he said he has not been actively involved in running any of the businesses and currently has no ownership or investments in Stanford companies. He is not accused in the SEC complaint.

more......

http://www.chron.com/disp/story.mpl/business/6270256.html

Robbien can have the job-I'll add some tasty nuggets when I find them. BTW we have a large number af private air strips around here too.

[tclambert]

12. It has been complicated by the international press.

Apparently "Sir" Allen Stanford is a big name in several parts of the world and the foreign press is covering it with, in some cases, even less accuracy than the American press. Some reported he was arrested as soon as charges were filed. The latest I can find is that he is still missing. And now reports are linking him to the drug business. From ABC:

"Authorities tell ABC News that as part of the investigation, which has been ongoing since last year, Mexican authorities detained one of Stanford's private planes. According to officials, checks found inside the plane were believed to be connected to the Gulf cartel, reputed to be Mexico's most violent gang. Authorities say Stanford could potentially face criminal charges of money laundering and bribery of foreign officials."

more at: http://abcnews.go.com/Blotter/story?id=6907429&page=1

Money laundering might explain how he made such excellent returns.

Stanford looks quite a bit younger than Madoff. Could be he thinks he's too young for prison or the Ken Lay escape.

And for those youngsters out there contemplating the perpetration of giant frauds or Ponzi schemes, this is the example to follow. Get your ass out of the country to one of your friendlier, less extraditious countries before the agents in cheap suits come up to your penthouse with the handcuffs. Well played, Sir Allen, well played.

[Demeter]

17. You Know, I'm Suffering From Criminal Financier Fatigue (CFF)

I hung on every report about the wild and zany Madoff, but I'm bored stiff by Stanford.

Maybe because one expects such behavior from Texans, and anyone who has any dealings with one is asking for artificial limbs.

The hook with Madoff was all those sophisticated Manhattan socialites and hangers-on getting taken. And the cheap and flashy Florida crowd. And the supposedly canny Jews.

[Demeter]

39. Robbien's Got the Stanford Beat

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3746438

[AnneD]

94. Billionaire’s investment clients in painful limbo

Texas billionaire R. Allen Stanford remained unreachable Wednesday, even to his father in Texas, as investors grew more fearful about the status of their money in his offshore bank and Houston-based brokerage, both alleged centers of fraud.

“We’re just sick about it. It’s visceral,” said Sandra Walsh, a retired school librarian in Houston.

She and her husband, Harry, a retired college professor, keep their life savings in a brokerage account at Stanford Financial Group.

Since a federal judge froze all assets in Stanford’s empire Tuesday — personal and business — and placed everything in receivership, investors have been turned away from Stanford operations in Houston and elsewhere, with frantic calls left unreturned.

Some customers arrived in St. John’s, Antigua, by private jet and attempted without success to withdraw funds from the Stanford International Bank, which is headquartered there and is a defendant in the fraud case, the Associated Press reported. Depositors at affiliated banks in Latin America also were turned away.

More.....

http://www.chron.com/disp/story.mpl/business/6270272.html

The Houston Comical is on the case-but I want to see what the Houston Press says if the cover it. Comical is like an old bloodhound relaxing on the front porch-they wait til they hear the other dogs baying before they get involved-but once they do they are pretty good at leading or being close to the lead.

[Ghost Dog]

122. Pure (bloodhound) poetry. Thanks AnneD.

Made my day.

[AnneD]

70. Morning Marketeers..........

:donut: and lurkers. I guess it is true-every thing is bigger in Texas-even the cons. Here this swindle is going on right under our noses and he gets away with it. But then we have a history of swindles.

Houston was founded by the Allen Brothers-a couple of land swindlers. They painted Houston as a tropical paradise and coned folks into leaving perfectly good North and Southeastern spots for this Mexican Colony. Once the settlers figured they were conned-Santa Ana decided to reassert HIS authority .....Bad move, the settlers had no other place to move to and few ways to do it-so they dug in and told Santa Ana to fuck off.

So folks are stuck in this 'tropical paradise'. Now I love my adopted home town but even I would not give it that description. It wasn't until the advent of air conditioning that we got any real growth. Fortunately-the folks that stayed here were good people and this has always been a place to make a fresh start. Unfortunately-those 2 factors is what draws the swindlers (the Bushes, Fastow, Lay). Maybe this is why our laws lean toward the Punishment side.....Any way I still like it here in the land of the Sinners and Saints. BTW,the list of Saints is much longer. Trust me-I wouldn't try to con you.

Happy hunting and watch out for the bears.

[tclambert]

20. Oh, wait, what if he's in witness protection? Yeah, that's the ticket.

The feds flipped him, and he agreed to provide info on the Gulf cartel. To protect him from these ultra-violent gangsters, they had to give him a new life . . .

as a store manager of a Piggly Wiggly outside Tulsa,

or a lawnmower salesman at a Sears in Lubbock,

or a mailman in Boise,

or a car mechanic in Fresno (no, too technical),

or a greeter at a Wal-Mart in Mineola,

or (fill in your own middle class job and mid-size city, anything that's hilarious for a former billionaire.)

[Demeter]

85. Stanford probe widens, Venezuela seizes bank

http://news.yahoo.com/s/nm/20090219/bs_nm/us_stanford_30



...............
Stanford's whereabouts remain unknown. U.S. federal agents raided Stanford Group offices in Miami, Houston and other U.S. cities earlier this week.

On Wednesday, ABC News, citing U.S. federal authorities, reported the Federal Bureau of Investigation and others had been investigating whether Stanford was involved in laundering drug money for the Mexico Gulf cartel.

Mexico's banking regulator said on Thursday it was investigating the local Stanford bank affiliate for possible violation of banking laws.

Peru's securities regulator on Thursday suspended the operations of a local Stanford unit after a similar move on Wednesday by neighboring Ecuador.

The fallout from the U.S. Securities and Exchange Commission fraud case against the flamboyant 58-year-old sports entrepreneur has rippled far beyond U.S. borders, prompting investigations from Houston to Antigua and Caracas.

The SEC accused Stanford in a civil complaint of fraudulently selling $8 billion in certificates of deposit with impossibly high interest rates from his Antiguan affiliate, Stanford International Bank Ltd (SIB), in a scheme that stretched around the world.
..........

Venezuelan President Hugo Chavez's government moved to take control of the small Stanford Bank Venezuela after it and other Stanford-owned institutions in the oil producer were swamped by panicked investors seeking to withdraw their money.

"We have taken the decision to take over," Finance Minister Ali Rodriguez said, adding that the government would seek to quickly sell the bank.

REGULATORS MOVE IN

Venezuela's move followed similar action by authorities around the region. Regulators in Panama took over a Stanford affiliate there, and a local arm of Stanford Financial Group halted its activities on the stock exchange in Colombia.

Clients besieged branches of the Stanford-owned Bank of Antigua on Wednesday in the tiny Caribbean island that was a key outpost of Stanford's business empire. The lines were smaller on Thursday, witnesses said.

Antigua and Barbuda Finance and Economy Minister Errol Court said late on Wednesday the twin-island Caribbean state was scrambling to shore up its banking system against the potentially devastating impact of the U.S. fraud charges against its biggest private investor and employer.

Antigua and Barbuda's Bankers Association (ABBA) issued a public warning that if customers continued to withdraw funds from Bank of Antigua, "this could destabilize not only Bank of Antigua but the entire financial system."

In Venezuela, banking officials were more reassuring, saying the troubles at Stanford Bank Venezuela, one of the country's smallest retail banks, was unlikely to cause much of a disturbance in the sector.

The possible UK link to the scandal emerged after the Evening Standard newspaper said the accounting firm C.A.S. Hewlett had audited Stanford's books. Antigua-based C.A.S. Hewlett recently moved its operations to London, according to published reports...The manager of C.A.S. Hewlett's offices in St. John's told Reuters the firm was unaware of any discussions with UK authorities. He said that in 10 years working at the firm he had never met Stanford.


Wednesday's ABC report, which cited unnamed officials, said Mexican authorities had detained one of Stanford's private planes as part of a drugs investigation.

ABC quoted authorities as saying Stanford could face criminal charges of money laundering and bribery of foreign officials. Authorities said the SEC's action against Stanford on Tuesday may have complicated the federal drug probe.

Stanford's whereabouts remain a mystery. CNBC television reported this week that he had tried to hire a private jet to fly from Houston to Antigua, but the jet lessor refused to accept his credit card.

The SEC says it does not know where Stanford is and says he failed to respond to subpoenas seeking testimony.

A federal judge appointed a receiver on Tuesday "to take possession and control of defendants' assets for the protection of defendants' victims."

Stanford's personal fortune was estimated at $2.2 billion last year by Forbes Magazine. He holds dual U.S.-Antiguan citizenship, has donated millions of dollars to U.S. politicians, and has secured endorsements from sports stars, including golfer Vijay Singh and soccer player Michael Owen.

The England and Wales Cricket Board (ECB) has already severed its association with Stanford, and a planned Stanford-sponsored international cricket tournament is now unlikely to take place, ECB chairman Giles Clarke said.

In Antigua, Stanford owns the country's largest newspaper, heads a local commercial bank, and is the first American to receive a knighthood from its government. He has homes across the region, from Antigua to St. Croix in the U.S. Virgin Islands to Miami.

(Additional reporting by Deisy Buitrago and Jorge Silva in Caracas, Catherine Bosley and Luke Baker in London, Maria Luisa Palomino and Terry Wade in Lima; writing by Pascal Fletcher; editing by John Wallace)


I SIMPLY CANNOT READ THE PHRASE "SERIOUS FRAUD OFFICE" WITHOUT BREAKING UP IN LAUGHTER....

[UpInArms]

87. Allen Stanford probe widens

http://www.reuters.com/article/newsOne/idUSTRE51H5IO20090219sp=true

CARACAS/ST.JOHN'S (Reuters) - U.S., Latin American and European investigators widened probes on Thursday into the far-flung financial empire of Texas billionaire Allen Stanford, accused of "massive fraud," and Venezuela seized one of his banks.

Britain's Serious Fraud Office (SFO) said it was monitoring a possible UK link to the case after media reports that Stanford's books were audited in Britain.

Stanford's whereabouts remain unknown. U.S. federal agents raided Stanford Group offices in Miami, Houston and other U.S. cities earlier this week.

On Wednesday, ABC News, citing U.S. federal authorities, reported the Federal Bureau of Investigation and others had been investigating whether Stanford was involved in laundering drug money for the Mexico Gulf cartel.

Mexico's banking regulator said on Thursday it was investigating the local Stanford bank affiliate for possible violation of banking laws.

Peru's securities regulator on Thursday suspended the operations of a local Stanford unit after a similar move on Wednesday by neighboring Ecuador.

The fallout from the U.S. Securities and Exchange Commission fraud case against the flamboyant 58-year-old sports entrepreneur has rippled far beyond U.S. borders, prompting investigations from Houston to Antigua and Caracas.

...more...

all that's missing is the sex and the rock and roll :eyes:

[Robbien]

96. Stanford leaves cancer patients waiting for millions

BOSTON (Reuters) - A world-renowned U.S. hospital dedicated to treating children with cancer for free received millions in aid from billionaire Allen Stanford, raising the hope that there would be millions more.

Stanford Group Co, reputed for corporate giving, was a multimillion dollar donor to St. Jude Children's Research Hospital in Memphis, Tennessee.

But after Stanford was charged this week with an $8 billion fraud, staff at the cancer hospital realized that millions they were expecting from Stanford might never arrive.

. . .

Only a few weeks ago, the fifth generation Texan boasted about his company's generosity to St. Jude Children's Research Hospital in an internal report with pictures of him touching one patient and holding another on his knee.

The photos contrast with the image of the business mogul who favors yachts, helicopters and private planes to move around the world.

"St. Jude Children's Research Hospital has been Stanford's corporate charity of choice for three years, and our partnership has raised over $15 million for the hospital during that time," Stanford wrote in the 2008 edition of the Stanford Eagle, a glossy company magazine.

But St. Jude's has not received the $15 million Stanford wrote about in his report, Chipman said.

"We have received $8 million from them in two years, 2007 and 2008," Chipman said. He speculated that Stanford's statement in the magazine might have anticipated this year's contribution.

Chipman said Allen Stanford toured the hospital once and donated the first check, but Stanford did not attend the ceremony to hand over the second check.

While the hospital could use the extra $7 million from Stanford, Chipman said it has been assured that the golf tournament where Stanford raised the money he donated to the hospital would go on as planned this summer with a new sponsor.

http://www.reuters.com/article/domesticNews/idUSTRE51I63C20090219?sp=yes

A few years ago Stanford was bragging down in Antigua that he was building the hospital in Tennessee. Another exaggeration since all he did was hand over several million.

[Demeter]

9. Madoff Loss Spawned in ‘Bargain With Devil’ at Cerberus Bank

http://www.bloomberg.com/apps/news?pid=20601109&sid=aFC_U5GBjZOc&refer=home

REMEMBER THAT GEITHNER PLAN TO HAVE "PRIVATE" MONEY BAIL OUT US BANKS? WELL, THEY TRIED THAT IN JAPAN WITH CERBERUS AND FLOWERS, AND GOT TAKEN BY MADOFF AND COMPANY!



Feb. 19 (Bloomberg) -- Two of Japan’s eight nationwide banks are braced for $2.6 billion in losses after investments by U.S. private equity groups, which the Obama administration is counting on to help bail out the U.S. financial system.

The lenders took on increased risks under foreign ownership. Aozora Bank Ltd., acquired in 2003 by Cerberus Capital Management LP, reported reverses on subprime mortgages, GMAC LLC shares and Bernard Madoff’s fund. Shinsei Bank Ltd., bought in 2000 by private investors including billionaire J. Christopher Flowers, had losses on a stake in Germany’s Hypo Real Estate Holding AG.

“Aozora and Shinsei were managed like many banks in America, investing in derivatives and other toxic assets,” said Neil Katkov, head of Asia research at Boston-based Celent LLC. “It was a bargain with the devil.”

Buyout firms including Cerberus and J.C. Flowers & Co. are stumbling with investments from Japan to Germany as their acquisitions are battered by the credit crisis and the deepest recession since the early 1980s. As many as 50 percent of companies owned by private-equity firms may default by 2011, according to a study of 328 holdings by Boston Consulting Group.

The failures are affecting a cross section of the global economy. Mervyn’s LLC, Lyondell Chemical Co. and Linens ‘n Things Inc. -- all controlled by buyout firms -- have filed for bankruptcy. Cerberus received U.S. government aid for Chrysler LLC and GMAC, the lender affiliated with General Motors Corp.

Rules Loosened

U.S. Treasury Secretary Timothy Geithner last week urged that private investors take on a role in rescuing financial institutions, and regulators eased rules to promote private takeovers of banks. Carlyle Group LP, the world’s second-largest buyout firm behind Blackstone Group LP, has lined up $1 billion to invest in banks, according to people familiar with the matter.

In Japan, Flowers co-led a group of international investors to buy Shinsei for 121 billion yen ($1.3 billion). The new owners invested the bank’s money in Hypo Real Estate, the German property lender battling to avoid insolvency. That’s contributed to Shinsei forecasting a 48 billion yen loss this financial year.

Flowers said in an interview that the bank invested abroad too much, yet its overall record with his fund is very profitable.

After Cerberus gained control of Aozora, Japan’s eighth- largest nationwide lender, the bank switched its focus from making domestic loans to investing overseas. Last week, it forecast a 196 billion yen deficit for this financial year and ousted Chief Executive Officer Federico Sacasa.

[tclambert]

16. Think they invested any with the Stanford Financial Group?

That would complete the trifecta.

[Demeter]

18. Stanford specialized in South and Central America

Kind of like Poppy and Shrub....

[FarCenter]

57. Stanford and Poppy are near neighbors in Tanglewood

[Demeter]

13. Switzerland threatened with bankruptcy

http://www.creditwritedowns.com/2009/02/switzerland-threatened-with-bankruptcy.html

In an interview with Swiss daily Tagesanzeiger, a well-known economist has warned that Switzerland risks bankruptcy, if the recent market turmoil centering on Eastern Europe is not contained quickly. At issue are loans made in Swiss francs to Eastern European debtors. With many countries in the region falling into depression, currencies and asset prices are plunging. Therefore, debtors domiciled in Eastern Europe are increasingly expected to have difficulty with mounting foreign debt loads — and that spells trouble for Switzerland.

Below is my translation of the Tagesanzeiger article.

Switzerland threatened with bankruptcy

Swiss banks have given billions of credit to Eastern Europe - now the customers cannot pay back the money. Switzerland is threatened with the fate of Iceland, says economist Arthur P. Schmidt.

In countries such as Poland, Hungary and Croatia, the Swiss franc has become an important currency. Thousands of households and small firms took out loans in Swiss francs, and not in the national currency zloty, forint, or kuna because of lower interest rates. In Hungary, 31 percent of all loans are in Swiss currency. Amongst household loans, they are almost 60 percent.

Borrowers in distress

Now, the financial crisis has ended the era of cheap credit. As a result, Eastern European currencies are falling. At the end of September, one had to pay 46 francs for 100 Polish zlotys. Today it is 30 francs. That means more and more borrowers are having problems with interest payments and repayment. So the question is what effect this has on the Swiss financial marketplace. One who sees a dark future for Switzerland is economic expert Artur P. Schmidt. He believes that the Swiss franc is in danger because of the loans in Eastern Europe.

In Poland, Hungary and Croatia, the Swiss franc has become an important foreign currency - the dollar, so to speak, of Eastern Europe. Thousands of households and businesses have franc loans. Why?

The rapid growth in many countries of Eastern Europe was stimulated through loans in Swiss francs. Swiss banks and offshore institutions loaned the local banks francs, which passed the francs onto their customers. The loans were attractive because borrowers pay interest rates much lower than required for loans in local currency.

Now, this system has been shaken?

Yes, the system has only worked as long as the exchange rate between the franc and the currencies were reasonably stable. But that is not currently the case. For example, the Hungarian forint and Polish zloty have lost over a third of their value against the Swiss franc in recent weeks. Because of the devaluations of the national currencies, the debt to Switzerland has increased by more than one-third. Many of the Eastern European countries have serious payment difficulties, and are virtually bankrupt.

What does this mean for Switzerland?

It is likely that a significant proportion of the total 200 billion U.S. dollars of Eastern European loans were issued in Swiss francs. According to a report by the Bank for International Settlements worldwide franc loans equivalent to around 675 billion U.S. dollars are in circulation - which was about 150 billion directly from Switzerland, 80 billion of Great Britain and about 430 billion U.S. dollars through offshore financial centres. How many of these loans have gone bad is not known. But even if the failure rate is 20 percent, the banks would lose a lot of money.

Is the federal government going to intervene now?

If the banks require a massive writedown of such loans, above a certain magnitude, the government must intervene. This is already happening via the Swiss National Bank. In Poland, it has made several billion francs available to the local central bank so that Polish banks can cover the loans. At the same time, the Swiss National Bank inquired by the European Central Bank whether it could borrow money in an emergency. This is a clear warning sign that the Swiss franc could be under huge devaluation pressures in the near future.

Swiss banks were too careless in their lending in Eastern Europe?

Yes, indeed. Many bankers wanted to earn a lot and neglected the risks. The National Bank is also at fault as it did not intervene. In addition, the regulator and the politicians completely failed.

What Switzerland must do now?
Now, the possible losses caused by these loans must be made transparent. Above all, all of the Eastern European risks must be fully disclosed. Together with the loan losses from UBS and Credit Suisse, the entire writedown for Switzerland could exceed the Swiss gross domestic product.

That is to say?
Switzerland, like Iceland, is threatened with a potential national bankruptcy. One consequence would be that the Swiss currency could fall massively in value — possibly even crash. Another would be that Switzerland’s credit rating would be massively downgraded. That would be a trauma for the country: Switzerland was always as a stronghold of stability. The franc could become an unstable soft currency. Then Switzerland would perhaps be forced to abandon the franc and take on the euro.

This article fills in a lot of gaps for me. Two weeks ago, I happened to catch another post in the Swiss press about the Swiss government issuing debt in U.S. Dollars. In my post “Why are the Swiss now issuing debt in U.S. Dollars? I asked an open question as to why the Swiss were issuing debt in dollars. No one knew and I had yet to hear a satisfactory answer to this question.

However, my post also pointed to central bank swap lines between Switzerland and a number of countries in Eastern Europe as a related event. The Tagesanzeiger article makes clear that these swap lines are needed due to Eastern European exposure to loans in Swiss Francs. I expect the U.S. dollar swap lines and dollar debt issuance are related - as are the Euro swap lines with the ECB - for liquidity in case of emergency.

These machinations are a testament to the continued fragility of the global financial system. The interconnectedness across currencies and countries is staggering. One domino falls and the whole global financial system is at risk.

Welcome to the dark side of globalisation.


THE GNOMES OF ZURICK MUST HAVE RETIRED AND LET THE KEEBLER ELVES SUCCEED THEM

[Ghost Dog]

123. Well, that's surely a "wake up" call. There'll be more fingers pointing at the Pound Sterling next,

if they don't manage to kill the €uro first...
___

Edit:

[Demeter]

19. Germany may rescue debt-laden EU members

http://www.telegraph.co.uk/finance/financetopics/recession/4682531/Germany-may-rescue-debt-laden-EU-members.html

By Ambrose Evans-Pritchard
Last Updated: 7:18PM GMT 17 Feb 2009

Finance minister Peer Steinbruck said it would be intolerable to let fellow EMU members fall victim to the global financial crisis. "We have a number of countries in the eurozone that are clearly getting into trouble on their payments," he said. "Ireland is in a very difficult situation.

....
Credit default swaps (CDS) measuring risk on Irish debt rose to 386 basis points yesterday despite Berlin's show of support, suggesting that the markets remain sceptical over hard-line German financier's change of heart.

The CDS on Austrian debt surged to 180 on fears of banking contagion from Eastern Europe, while Greece, Belgium, Italy and Spain have all seen a surge in default costs.

However, it is clearly Ireland that is now in the eye of the storm as Dublin struggles to prevent the budget deficit spiralling up to 12pc or even 13pc of GDP as the economy contracts. Fears are mounting that Ireland may not be able to cover the massive liabilities of its banking system.

The Maastricht Treaty prohibits eurozone bail-outs by EU bodies but Article 100.2 allows for aid to countries facing "exceptional occurrences beyond its control". The European Investment Bank is already providing aid by steering project finance to regions in distress. This could be expanded subtly into short-term help.

Ultimately, the European Central Bank could purchase bonds from vulnerable countries in the open market. That would amount to a full monetary bail-out, and the de facto creation of an EU debt union. Such proposals have been anathema to Germany in the past.

[Demeter]

21. Greenspan Predicts TARP Will Prove Insufficient, Supports Bank Nationalization

"http://www.nakedcapitalism.com/2009/02/greenspan-predicts-tarp-will-prove.html

"it's remarkable that Greenspan has come out saying that nationalizing banks is the "least bad" policy option, as he did in a Financial Times interview. Now we are seeing role reversal: the loyal libertarian reluctantly admitting the need for regulation and the advantages of taking over dud banks, even big dud banks, while the Democrats tip toe around the idea of doing anything that might ruffle bankers feathers too much.

[AnneD]

75. So much....

for Ayn Rand.:P

[Ghost Dog]

125. What was the brand of that cigarette, again?

... And just how and where was the "tobacco" grown???

:shrug:

[Demeter]

22. Recap: The Stimulus Bill and the Macro Impact

http://www.econbrowser.com/archives/2009/02/recap_the_stimu.html

Analysis of the Obama legislation with lots of graphs, from Congressional Budget Office

[Best_man23]

23. Should add 'Financial Sector Officials under House Arrest'

[Demeter]

26. To Which Post, Please?

Although that could apply to any and all of them, in retrospect

[Demeter]

24. Does Anyone In Obama's Administration Pay Taxes?

http://market-ticker.denninger.net/authors/2-Karl-Denninger

Now Rahm Emanuel is accused?

"NEWS broke last week that Rahm Emanuel, now White House chief of staff, lived rent- free for years in the home of Rep. Rosa De Lauro (D-Conn.) - and failed to disclose the gift, as congressional ethics rules mandate. But this is only the tip of Emanuel's previously undisclosed ethics problems.

.....

Emanuel never declared the substantial gift of free rent on any of his financial-disclosure forms. He and De Lauro claim that it was just allowable "hospitality" between colleagues. Hospitality - for five years?

Some experts suggest that it was also taxable income: Over five years, the free rent could easily add up to more than $100,000.

Of course it is taxable income. Anyone can give anyone up to $10,000 a year tax-free, but "gifts in kind" are still required to be reported and are taxable. If it is really $100,000 worth it exceeds the giftable amount and is subject to tax, just as certainly as it is if you get a chauffeured car and driver (aka Daschle)

What's worse though is this:

Nor is this all that seems to have been missed in the Obama team's vetting process. Consider: Emanuel served on the Freddie Mac board of directors during the time that the government-backed lender lied about its earnings, a leading contributor to the current economic meltdown.

The Federal Housing Enterprise Oversight Agency later singled out the Freddie Mac board as contributing to the fraud in 2000 and 2001 for "failing in its duty to follow up on matters brought to its attention." In other words, board members ignored the red flags waving in their faces.

The SEC later fined Freddie $50 million for its deliberate fraud in 2000, 2001 and 2002.

Meanwhile, Emanuel was paid more than $260,000 for his Freddie "service." Plus, after he resigned from the board to run for Congress in 2002, the troubled agency's PAC gave his campaign $25,000 - its largest single gift to a House candidate.

Oh that's nice.

We've now got a chief of staff who served on the board of Freddie Mac while they were flim-flamming their books?

Now THAT is "Change We Can Believe In"

PS: President Obama, if you truly didn't know about this, you need to fire Rahm today. If you did know about it, you need to resign.

[Loge23]

30. ...and only "the tip" of the witch hunt

I was only talking about this the other day.
Who would want to run for anything these days?
The discourse has become so polluted with slime that anyone who runs can and will be swapped with the dirty brush of politics.

Clearly, we are in the beginning of a long, ugly cycle of republican intimidation tactics.

On the other hand, the only folks left to deal with the morass of politics are the very people that have lost all contact with the concept of "by and for the people". They have been slimed repeadedly and they become by association, slime.

Not to be apocalyptic, but the current financial/political/societal breakdown in this country (and the world) is looking more and more like it just can't be fixed - even as it continues to deteriorate.

[DemReadingDU]

32. financial/political/societal breakdown

It does appear that the world is in for some turmoil, to put it mildly.

[Hugin]

45. Yep, for some reason the Republicans think they're making hay with these tactics.

However, conventional wisdom (at least as I see it) has the Republicans, starting with Reagan, responsible for the current economic crisis.

They really need to listen to the "Don't kill Royalty" advice handed out a few hundred years ago... The logic being, if the common citizenry see how easy it is, they won't stop until ALL Royalty is gone... Including them. The last election clearly showed We-The-People are pretty damn tired of the status-quo and this slime is a large dose of the status-quo.

Believe me, the next step isn't a return to a Republican Majority like seems to be the dream of those slimers... It's a 'Throw ALL of the Bums out' Movement on the horizon.

[DemWynner]

54. when I was growing up

My dad told me there would need to be a revolution when I got older. He said the track that the corrupt political system was on would need a revolution. He is a dem, but does not like the old time dinosaurs. I think he was right, thought he was crazy then.

[Wednesdays]

58. Whitewater version 2.0

Here come the calls for special prosecutors and all, and the fishing expeditions...

:banghead:

[CountAllVotes]

79. Now THAT is "Change We Can Believe In"

I posted something to this effect yesterday.

Have we all been suckered?

Holy sh*t! :wow:

and to think - only 3+ more years of this if we survive the war in Afghanistan which has begun only 3 weeks after the great savior took office.

I am not the least bit optimistic after reading this and I thank you for your guts and insightful post.

CountAllVotes

[TheWatcher]

98. The problem is many will still fall down and Blindly Worship no matter what

"Support The Football Team No Matter What."

I am so sick of that mentality on BOTH sides. This is NOT a Sports Team Rivalry.

Throw ALL THE BUMS OUT if that's what it takes.

:mad:

[Demeter]

25. UN crime chief says drug money flowed into banks

http://www.reuters.com/article/marketsNews/idUSLP65079620090125

VIENNA, Jan 25 (Reuters) - The United Nations' crime and drug watchdog has indications that money made in illicit drug trade has been used to keep banks afloat in the global financial crisis, its head was quoted as saying on Sunday.

Vienna-based UNODC Executive Director Antonio Maria Costa said in an interview released by Austrian weekly Profil that drug money often became the only available capital when the crisis spiralled out of control last year.

"In many instances, drug money is currently the only liquid investment capital," Costa was quoted as saying by Profil. "In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor."

The United Nations Office on Drugs and Crime had found evidence that "interbank loans were funded by money that originated from drug trade and other illegal activities," Costa was quoted as saying. There were "signs that some banks were rescued in that way."

Profil said Costa declined to identify countries or banks which may have received drug money and gave no indication how much cash might be involved. He only said Austria was not on top of his list, Profil said.

[UpInArms]

27. dollar watch

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

Last trade 87.125 Change -0.935 (-1.20%)

Euro, Pound Rally on Increased Risk Appetite; Has Yen Lost Its Safe-haven Status?
Thursday, 19 February 2009 10:20:56 GMT

http://www.dailyfx.com/story/dailyfx_reports/daily_brief/Euro__Pound_Rally_on_Increased_1235042473207.html

The Euro rallied over 100bps from yesterday’s low of 1.2516 to a high of 1.2674 as Asian and European stocks ended their skid. However, the gains may be limited as former support at 1.2700 may turn into resistance. There was no fundamental data to impact price action but sentiment towards the European economy remains negative and with the ECB expected to cut rates at their March policy meeting, we could see Euro weakness resume. As the rest of the developed nations head toward a zero interest rate policy the ECB has refrained from following as they fear sowing seeds for future troubles. However, the current downturn is extraordinary due to the meltdown of the financial markets and if the central bank remains behind the curve it could set the back the European economy for years.

The British Pound would also find support on the increasing optimism sending it rose nearly 300 bps from yesterday’s low of1.4104 to a high of 1.4150. However, recent weakness has sent sterling below the 20-day SMA at 1.4357 which could provide resistance. However, the key level to watch will be the 50-Day SMA at 1.4591. The only economic data to cross the wires was M4 money supply and public sector net borrowing. Britons borrowed £3.3 billion less in January which was a sharp decline from the £16.5 billion the month prior, which could signal that tomorrow’s retail sales numbers may be worse than expected. However, the decline was better than the £7.0 billion that was expected which continues the trend of U.K. data surprising to the upside.

The BoJ keep its benchmark rate at 0.10% as expected but failed to outline further measures to increase purchases of short-term government bills as markets were expecting pushed down JGB’s. The Yen has continues to weaken as the currency has started to lose its safe-haven status due to concerns over the Japanese economy. The global downturn, a strong Yen and the inability of corporations to generate funding has sent the economy into its worst downturn in 35 years. Additionally, with other countries now on the verge of implementing a ZIRP the Yen has lost its attractiveness as a funding currency. The 100-Day SMA lies ahead as resistance at 94.18, a break above there could lead to a test of 97.42 the 11/25 high.

The U.S. government made another attempt to put a floor under the housing crisis when President Obama announced the details of a $75 billion foreclosure prevention plan. The measure helped calm fears which have stopped the bleeding of equity markets. The increase in risk appetite that was generated during overnight trading is expected to continue today as Dow futures were up over 75 points which could lead to further dollar weakness as investors sell U.S. treasuries for riskier assets. However, the fundamental calendar may dampen bullish sentiment as initial jobless claims are expected to be above 600,000 for another week which will remind investors of the mounting job losses the economy has and will continue to experience. Additionally, producer prices are expected to have declined by 2.4% in January on an annualized basis, but the 0.3% forecasted gain in the monthly reading could be a sign that prices are stabilizing. The Philadelphia Fed manufacturing reading is expected to decline to -25 as weak domestic and global demand has stalled activity. The data could limit the potential for dollar weakness as traders realize that despite the government’s efforts the U.S. economy is far from on the road to recovery.

...more...

US Dollar Mixed as Obama Announces Housing Program, Fed Releases Bleak Economic Outlook

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/US_Dollar_Mixed_as_Obama_1234993662749.html

The US dollar saw a mixed day of trading on Wednesday, gaining against the euro, Swiss franc, and Japanese yen while falling versus the commodity bloc. Based on broad losses for the Japanese yen, the moves signaled slight improvements in risk appetite. There was a flurry of economic releases, as well as news from President Obama and the Federal Reserve. First, US housing starts and building permits both fell by more than 50 percent in January from a year earlier to their lower levels ever, with record keeping having begun in 1955. At the same time, import prices fell negative for the sixth straight month in January while the annual rate hit a fresh record low of -12.5 percent, thanks to a stronger US dollar and lower commodity costs. Additionally, industrial production contracted for the third straight month at a rate of 1.8 percent while capacity utilization hit a nearly 26-year low of 72 percent, as manufacturers slashed output on the back of waning demand.

Meanwhile, President Obama announced a $275 billion program that will move to cut mortgage payments by matching reductions lenders make to interest payments to 31 percent of the borrower’s monthly income. The Treasury will also buy up to $200 billion of preferred stock in Fannie Mae and Freddie Mac, and detailed guidelines are due to be released on March 4. Finally, the Federal Open Market Committee's (FOMC) meeting minutes from January yielded few surprises, but in an effort to be more transparent, the central bank started to issue longer-term forecasts for growth, unemployment, and inflation. FOMC members apparently discussed on January 16 the prospect of creating an inflation target, and while they did not make a decision, today's press release shows that many FOMC members "judged that a longer-run PCE inflation rate of 2 percent would be consistent with the dual mandate," which is in line with the inflation targets of other central banks, such as the Bank of England and European Central Bank. Another notable factor was that “some FOMC members saw some risk for deflation,” which is a timely comment because Friday's release of US CPI is forecasted to fall negative for the first time since 1955.

Looking ahead to Thursday, signs of deflation may continue to emerge at 8:30 ET as the US Producer Price Index (PPI) is forecasted to rise a slight 0.3 percent in January, while the annual rate may tumble to a nearly 7-year low of -2.4 percent. Meanwhile, the measure that excludes volatile food and energy costs could slow to an annual pace of 3.8 percent from 4.3 percent. Overall, the news would suggest that input costs are falling dramatically with declining commodity prices, which should translate into lower consumer prices. At 10:00 ET, the Conference Board’s US leading indicator for the month of January is forecasted to fall flat, after rising 0.3 percent in December. However, any strength in the index may be contained to M2 money supply as a result of the Federal Reserve’s efforts to boost liquidity. As a result, the headline reading may ultimately be deceiving and it will be important to look at the breakdown as well, including the components gauging average workweeks, jobless claims, consumer goods orders, orders for non-defense capital goods, and building permits. At the same time, the Philadelphia Fed index for the month of February could slump to -25.0 from -24.3, but if the report fares as the Empire Fed index, it could break below the November lows of -39.8. Indeed, the US manufacturing sector has been hit particularly hard by the recession, as both domestic and foreign demand has fallen.

...more...

[UpInArms]

28. Sprint Nextel posts $1.6 billion loss - Wireless-phone company loses 1.3 million subscribers

http://www.marketwatch.com/news/story/Sprint-posts-16-billion-loss/story.aspx?guid=%7B6F2EB7A3%2DE721%2D46F9%2D8ED5%2D86061029B431%7D

WASHINGTON (MarketWatch) -- Sprint Nextel Corp. on Thursday posted another quarterly loss after shedding 1.3 million wireless customers, reflecting the company's difficulty in turning its business around, especially in a deep U.S. recession.

In the fourth quarter, Sprint reported a net loss of $1.62 billion, or 57 cents a share, compared with a loss of $29.32 billion, or $10.31 a share, in the year-earlier period. The 2007 quarter included a massive noncash write-down to reflect a decline in value of assets acquired in the 2005 acquisition of Nextel.
Revenue fell 14% to $8.43 billion.

Omitting one-time items, Sprint (S: 2.71, -0.05, -1.8%) said it would have earned a penny a share, compared with income of 23 cents a share in the same quarter of 2007.

Wall Street analysts expected Sprint to lose 6 cents a share, excluding one-time items, on sales of $8.55 billion, according to the consensus compiled by FactSet Research.

Sprint has been losing net customers for nearly two years despite a concerted effort to reverse the decline. The faltering U.S. economy has also undercut its effort, forcing Sprint to announce last month that it will eliminate 8,000 jobs, or 15% of its workforce.

...more...

[Demeter]

68. Can you Hear Me Now?

Sorry, I couldn't resist.

[Dr.Phool]

86. Huh?

Say what?

[Ghost Dog]

129. Breaking up, say again, sorry?

copy. :rofl:

[UpInArms]

29. Poll: Public fears about troubled economy growing

http://news.yahoo.com/s/ap/20090219/ap_on_bi_ge/ap_poll_economic_stress

WASHINGTON – As the economy continues to struggle, the public is growing increasingly concerned about losing jobs, not having enough money to pay the bills and seeing their retirement accounts shrink, according to an Associated Press-GfK poll.

Nearly half of those surveyed said they worry about becoming unemployed — almost double the percentage at this time last year.

The poll released Wednesday also found public support dipped slightly in the past month for the $787 billion package of tax cuts and government spending President Barack Obama signed into law this week on the promise that it will save or create 3.5 million jobs and re-ignite the economy.

"I lost a job myself," said Edd Winkler, 40, a married attorney and father of two in Grand Rapids, Mich. "There were just too many attorneys for the amount of work we had coming in to the firm at that time." Winkler has opened his own practice, and says most of his work involves bankruptcies.

"I know a lot of other people who have lost jobs," he added.

Mariann Lewis, 55, of Stewartstown, Pa., says she was laid off this month from her job in a grocery store's deli department.

"It's pretty sad when a food store lays people off," said Lewis, who is married. "It's not like people are going to stop buying food."

...more...

[Demeter]

31. Ah! But People HAVE Stopped Buying Food!

They have altered the quality and the quantity of their food purchases. And as a result, milk, which was pushing 4 a gallon just months ago is now regularly on sale for $2. It's a loss leader, of course, but also a reflection of the reality that people aren't buying milk. So the airy herds are sent to be hamburger, and the children of America get a nutrition break. For a while.

[AnneD]

80. And our song for today.....

All I've got....

If I could just find a way to get inside your heart
I would be the luckiest guy
If I can just be the one who’d be by your side
Just a chance to feel what it’s like

REFRAIN 1
And I’d do anything to be in his shoes
‘Cause I know I could give even more

CHORUS
Baby, this love, it’s all that I’ve got
More than diamonds and pearls and all the wealth in this world
Baby, this love, it is all that I’ve got
But I know it’s gonna last forever and ever

(Ooh, love, it’s all that I’ve got)
It’s all that I’ve got (it is love)

Standing outside your world, wishing you’d let me in
And I’d show you what my love can bring
Helplessly hoping you’d give me half a chance
‘Cause I know I’m just one step away

REFRAIN 2
And I live in a dream that I wish would come true
Waiting for a happy ending


more......


http://www.lyricsmode.com/lyrics/0-9/1728/all_ive_got.html

And everything old is new again.

[Demeter]

33. Living in the Post-Bubble World

http://www.dailyreckoning.com/living-in-the-post-bubble-world/

From Dubai comes word that the property market has not just fallen…it has ceased to exist. This from Justice Litle:

“You can’t put a percentage figure on the market drop. In fact, there isn’t a market at all.”

“The scary thing is, they’re nowhere close to facing reality… the official listings have only reduced prices by 10-20%, even with no buyers in sight, and builders are hoping to build more…”

Meanwhile, in the United States, the S&P has completed 6 quarters of negative growth and is now registering it first quarter ever of negative earnings. That’s right, dear reader, put all the S&P companies together. Add up their earnings. Subtract their losses. Result: net losses.

MarketWatch reports:

“A sixth quarter of negative growth ties the prior record set when Harry Truman was president, running from the first quarter of 1951 to the second quarter of 1952.

“‘Next quarter, we’re expecting a new record of seven quarters of negative growth,’ said an analyst.

“As of the close of business Thursday, calculates S&P earnings per share, on a reported basis, at a loss of $10.44 for the quarter. If financials were taken out of the equation, that deficit would drop to $2.35 a share.”

We are in a period of price discovery. Many shares, businesses, and credits are on offer. Typically, people are reluctant to make bids until they have a clearer idea of what these things are worth. What are they worth now that we’re in a post-Bubble world? No one knows. And no one seems in a hurry to find out.

Even in Japan, the search for the bottom continues. It hardly seems possible. The Japanese economy was already in a deep hole after 19 years of recession/depression. Now, it’s digging deeper.

The latest figures show the Japanese economy falling at a 12% annual rate – faster than ever. Well, faster than at any time during its 19-year slump. The last time the economy in Japan slumped this hard was 35 years ago...


*** Strategic Short Report’s Dan Amoss offers his two cents on Geithner’s Financial Stability Plan, or ‘TARP 2.0’:

“Part of the new Financial Stability Plan involves an unspecified ‘public/private’ partnership to buy up toxic assets. Apparently, the idea for a public/private partnership was a last-minute development leading up to Tuesday’s announcement. Word is that several prominent hedge fund managers met privately with Larry Summers, one of the administration’s top economic advisers, just days before Tuesday’s announcement.

“Here’s my guess at how this arrangement might develop in the coming weeks: Long-term financing from the Treasury to distressed debt hedge funds is a very creative way to hide a government subsidy. The potential cash-on-cash return for hedge funds interested in cheap toxic assets is probably not enticing enough for them to pay what the banks are asking. But if the Treasury acts as a prime broker by providing, say, 10-year financing at 4%, so hedge funds can lever up their equity by five times, maybe the funds will be willing to pay a bit above the banks’ asking price and still earn a decent five- or 10-year return. This is a backdoor way to recapitalize stressed banks and get toxic assets into stronger hands without exposing taxpayers to too much credit risk. Combined with a major new mortgage refinancing initiative, this might have a shot at success.



*** On the U.S. end, the pols can’t leave bad enough alone. The voters won’t stand for it. They’re going to ‘do something’ – if it kills us all. What they are trying to do is obvious – inflate away America’s debts. So far, the market has been ahead of them – wiping out more money than the feds can replace. Sooner or later, they’re bound to turn the situation around...

[Festivito]

35. Debt: 02/17/2009 10,789,783,760,341.41 (UP 30,767,678,688.42) (28+2. Stimulus signed.)

(Four tiny days for public debt, then one fairly big day, then back to a teeny tiny day, now a substantial 28B$ of public and a not so uncommon move in the FICA side. NOTE that the stimulus has passed and it must be borrowed. At least this time it will go where it is needed, and we'll know where it goes -- unlike what happened when ** was still in office mucking things up.)

= Held by the Public + Intragovernmental(FICA)
= 6,481,923,355,207.56 + 4,307,860,405,133.85
UP 28,425,868,676.29 + UP 2,341,810,012.13

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 305,819,743 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $35,281.51.
A family of three owes $105,844.54. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 32 days.
The average for the last 21 reports is 7,662,013,087.20.
The average for the last 30 days would be 5,363,409,161.04.
The average for the last 32 days would be 5,028,196,088.48.
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$/day.
There were 19 reports in 28 days of Obama's part of FY2009 averaging 0.11B$ per report, 0.08B$/day so far.
There were 94 reports in 140 days of FY2009 averaging 8.14B$ per report, 5.46B$/day.

PROJECTION:
There are 1,433 days remaining in this Obama 1st term.
By that time the debt could be between 12.8 and 18.6T$.
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)
02/17/2009 10,789,783,760,341.41 BHO (UP 162,906,711,428.33 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: 765,058,863,429.00 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ------------********
02/11/2009 -000,221,760,520.78 ---
02/12/2009 +043,810,585,841.25 ------------**********
02/13/2009 -000,268,428,512.00 ---
02/17/2009 +028,425,868,676.29 ------------********** Tue

186,346,510,896.05 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,125,151,957,082.34 in last 152 days.
That's 1,125B$ in 152 days.
More than any year ever, including last year, and it's 111% of that highest year ever only in 152 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 152 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=3744485&mesg_id=3744611

[Festivito]

109. Debt: 02/18/2009 10,789,925,775,196.76 (UP 142,014,855.35) (Teensy tiny.)

(If movement started yesterday, it certainly stopped today.)

= Held by the Public + Intragovernmental(FICA)
= 6,482,101,482,601.99 + 4,307,824,292,594.77
UP 178,127,394.43 + DOWN 36,112,539.08

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 305,825,915 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $35,281.27.
A family of three owes $105,843.8. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 to 33 days.
The average for the last 22 reports is 7,320,194,985.75.
The average for the last 30 days would be 5,368,142,989.55.
The average for the last 33 days would be 4,880,129,990.50.
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$/day.
There were 20 reports in 29 days of Obama's part of FY2009 averaging 0.02B$ per report, 0.05B$/day so far.
There were 95 reports in 141 days of FY2009 averaging 8.05B$ per report, 5.43B$/day.

PROJECTION:
There are 1,432 days remaining in this Obama 1st term.
By that time the debt could be between 12.8 and 18.6T$.
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)
02/18/2009 10,789,925,775,196.76 BHO (UP 163,048,726,283.68 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: 765,200,878,284.30 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ------------********
02/11/2009 -000,221,760,520.78 ---
02/12/2009 +043,810,585,841.25 ------------**********
02/13/2009 -000,268,428,512.00 ---
02/17/2009 +028,425,868,676.29 ------------********** Tue
02/18/2009 +000,178,127,394.43 ------------********

186,336,583,452.63 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,125,293,971,937.69 in last 153 days.
That's 1,125B$ in 153 days.
More than any year ever, including last year, and it's 111% of that highest year ever only in 153 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 153 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=3746341&mesg_id=3746468

[bemildred]

40. 627,000 in new jobless claims

WASHINGTON -- The number of unemployed workers receiving unemployment benefits jumped to an all-time high near 5 million earlier this month, while new jobless claims remain well above 600,000. Both figures were worse than expected and new projections from the Federal Reserve show unemployment rising for the rest of this year.

The Labor Department reported Thursday that the number of people receiving regular unemployment benefits edged up to 4.99 million, marking the fourth straight week those receiving benefits have been at a record level.

The continuing claims figure underscores the difficulty people are having in this recession finding another job, which means they are forced to receive benefits for a longer period.

An additional 1.5 million people are receiving benefits under an extended unemployment compensation program approved by Congress last year, bringing the total number of people receiving unemployment benefits to 6.54 million for the week ending Feb. 7.

http://www.latimes.com/business/la-fi-jobs20-2009feb20,0,1611736.story

[bemildred]

42. Wholesale inflation takes biggest jump in 6 months

WASHINGTON -- Inflation at the wholesale level surged unexpectedly in January, reflecting sharply higher prices for gasoline and other energy products.

The Labor Department said Thursday that wholesale prices increased by 0.8 percent last month, the biggest gain since last July and well above the 0.2 percent increase that economists had expected.

The acceleration was led by a 3.7 percent surge in energy prices with gasoline prices jumping by 15 percent, the biggest gain in 14 months.

Even outside the volatile food and energy sectors, wholesale prices showed a bigger-than-expected increase, rising by 0.4 percent. Economists had expected a slight 0.1 percent rise in so-called core inflation.

http://www.latimes.com/business/la-fi-inflation20-2009feb20,0,1026708.story

[UpInArms]

43. Spaceship-like car to hit U.S. roads

www.reuters.com//news/video?videoId=98891&src=vidAd1

yeehaw!

[Hugin]

47. Hey! I saw one of those driving around the other day IRL!

Pretty snazzy! :o

[radfringe]

52. with the one wheel in the back

how is it in the snow?

one of my concerns as I live in PA, lots of mountains/hills to climb and go down in my area

[DemWynner]

59. That is important

I live in IA and we bought our car in the summer. When winter came the little Nissan did not do very well.

[FarCenter]

61. Easy conversion to cope with snow

Just change out the two front wheels for skis, replace the rear wheel with a track, and you are good to go.

[radfringe]

62. not practical

when you can have a day where the road is snow covered in the morning and clear in the afternoon - or becomes snow covered on your way home from work

[FarCenter]

67. I wasn't really serious, but it does sort of look like a snowmobile

Maybe skis in the front and a studded tire in the back for running around a ski resort area?

[tclambert]

132. It looks a little like the solar cars the University of Michigan built in the '90s.

Their more recent solar cars are even more aerodynamic. Check out http://www.engin.umich.edu/solarcar/ and http://www.engin.umich.edu/solarcar/blog/labels/WSC%202007%20Season.html

They could drive all day at the posted speed limit, as long as it was a sunny day. Cloudy days, not so much.

[antigop]

44. Mad Rush in D.C. to give back Stanford's money--except Sessions and Cornyn

http://tpmdc.talkingpointsmemo.com/2009/02/mad-rush-in-dc-to-give-back-stanfords-money-except-cornyn-sessions.php

You could have predicted this, but members of Congress are now jostling to see how quickly they can donate political contributions from fugitive financier Allen Stanford -- accused of an $8 billion fraud by the SEC -- to charity.

Sen. John McCain (R-AZ) got the ball rolling yesterday, vowing to get rid of his $28,150 in Stanford donations, and The Hill reports this morning that President Obama will follow suit for the $4,600 Stanford gave him during the campaign. Rep. Charles Rangel (D-NY) is also donating his Stanford contributions to charity.

But guess who's hanging on to the cash? Sen. John Cornyn (R-TX), who took slightly less than $20,000 from Stanford, and Rep. Pete Sesions (R-TX), who received about $41,000, according to local media reports.

Cornyn "believes in the presumption of innocence," his office told the local Texas TV station that inquired about Stanford. I guess that means Cornyn's also not giving back the $50,000 Stanford gave to underwrite the Texas State Society's Black Tie and Boots inaugural ball last month, when the GOP senator chaired the society.

Stanford Financial Group, the alleged fraudster's Texas company, was a "Lone Star Partner" for the ball, giving Stanford and his fellow executives access to "special ... VIP areas" during the party, according to a copy of the invitation. (Special thanks to reader B. for the tip.)

[Robbien]

46. Polaroid says assets used to cover fraud in Tom Peters $3.5B Ponzi

A comment from Tom Petters about Polaroid Corp. — from a secretly recorded phone call played in a courtroom in October — has added another puzzle in the fraud case against the jailed Twin Cities businessman.

"I also worry about the Polaroid connection," Petters said to the man at the other end of the line.

What Petters meant by the "Polaroid connection" is still unknown. But lawsuits filed against two hedge funds last week may provide a clue.

Petters, 51, is being held without bail, indicted on 20 counts of wire and mail fraud. He has pleaded not guilty and is preparing for trial.

Petters bought Polaroid Corp. in 2005 for $426 million. The company, known years ago for its instant-print cameras and film, struggled in the digital age. But Petters saw value in the Polaroid brand and its move into digital products.

Polaroid, now in bankruptcy, sued the two hedge funds, Acorn Capital Group LLC and Ritchie Capital Management LLC, in U.S. District Court, claiming Petters forced Polaroid to transfer money and liens on its property to cover loans made to Petters entities and to help cover up an alleged massive Ponzi scheme involving Petters Group Worldwide, a Minnetonka-based company now also in bankruptcy.

Acorn loaned $281 million to Petters-controlled companies, one complaint says. Another suit puts the total for Ritchie at $189 million.

The lawsuits state that when the hedge funds realized their loans were in trouble, they worked with Petters to get promissory notes for millions of dollars issued by Polaroid.

Acorn realized in early 2008 that the prospect of having its loans repaid was "doubtful." The hedge fund then "capitalized on the information that it had garnered" and used that to tap Polaroid, the lawsuit says.

In an Aug. 12, 2008, letter to Petters Group Worldwide, Acorn said Petters had defaulted on the loans and called for immediate repayment.

Federal investigators raided Petters' headquarters on Sept. 24. Tom Petters was arrested at his home on Oct. 3.

Attorneys for Acorn and Ritchie didn't return calls seeking comment Wednesday.

The lawsuits note that Polaroid wasn't a party to the agreements or numerous renegotiated agreements that Petters made with the hedge funds. Petters signed off on the agreements, as he was the chairman of Polaroid and the sole member of the board of directors, the lawsuits claim.

http://www.twincities.com/ci_11735108

This Petters ponzi isn't getting much press, perhaps because this is mainly a GOPer preying on other GOPers.

[Demeter]

104. I had wondered what had happened to Polaroid

I thought they had missed the technology change--but this is worse.

[Robbien]

48. Redemptions Reduce Hedge Funds To Less Than $1 Trillion

Hedge fund assets fell under $1 trillion in January as investors headed for the exits, according to a new report.

Investors withdrew $74 billion from hedge funds last month, according to TrimTabs Investment Research, leaving total industry assets at $964 billion. The outflow is the second-highest on record, after $117 billion in withdrawals in December.

Hedge fund assets have fallen by more than half since May, when they totaled $1.9 trillion. The industry has lost $315.6 billion to redemptions since September alone.

Just one category of hedge funds tracked by TrimTabs added money in January, with equity funds bringing in $2 billion.

http://www.finalternatives.com/node/7002

[Robbien]

56. SEC sues former Wayzata hedge fund

More than 50 Minnesotans may be out nearly $16 million that they invested with a onetime Wayzata-based hedge fund, according to a lawsuit filed Wednesday by the Securities and Exchange Commission (SEC) in federal court in Minneapolis. The government is attempting to shut the fund down before any money that's left disappears.

The SEC alleges that former Minneapolis resident John Lawton misled investors about the successes of the fund, Paramount Partners, and overstated its balance sheet to hide some losses.

. . .

"We've had successful years. Last fall was really good," Lawton said.

The SEC told a different story in its court pleadings. Of the 54 investors who invested with Lawton and Paramount between 2001 and 2008, nearly all were Minnesotans.

The SEC said they invested about $10.8 million on the Lawton's assertion that the fund was earning returns of 19 percent to 65 percent -- "with only one losing year, 2004, in which Paramount supposedly lost approximately 5 percent."

As of Dec. 31, the SEC said, Paramount and Lawton's investment advisory firm, Crossroad Capital Management, gave investors financial statements that listed assets totaling $17 million. But those funds actually totaled just $5.3 million, the government said, and they continued to dwindle in January and February and now are $1.3 million.

http://www.startribune.com/business/39816617.html?elr=KArksLckD8EQDUoaEyqyP4O:DW3ckUiD3aPc:_Yyc:aUUT

[antigop]

60. Looming pension shortfall another hurdle for GM

http://money.cnn.com/news/newsfeeds/articles/djf500/200902181319DOWJONESDJONLINE000839_FORTUNE5.htm

General Motors Corp. (GM), facing a shortfall in its once over-funded pension obligations, said Wednesday it is looking for ways to reduce what it owes retirees.

The auto maker, in requesting up to $16.6 billion in additional federal aid on Tuesday, warned it may need more money in 2013 and 2014 to cover pension shortfalls.

More than 650,000 U.S. salaried and hourly retirees draw a GM pension.

The auto maker's pension fund had a surplus in recent years but diminishing returns in weak financial markets, along with draws on the fund to cover restructuring, have diminished the reserves.

GM estimates its pension fund faced a $12.8 billion deficit in 2008, compared to a surplus of $20 billion in 2007.

Pension benefits for hourly and salaried workers amount to an $8 billion to $9 billion liability against the automaker's net present value, GM said in its request for aid.

"We need to have discussions with other governments to understand what our options are," GM Chief Financial Officer Ray Young said Wednesday in a conference call with analysts.

Young predicted many major companies will soon find themselves in the same pension predicament facing GM.

Watch for a reprise of the Pension "Protection" Act.

[antigop]

63. TPM: "I suspect we'll eventually find that with Madoff securities fraud was not the only crime."

http://www.talkingpointsmemo.com/archives/2009/02/the_plot_thickens_--_and_gets_smoky.php

We've known about the securities fraud charges against off-shore bank kingpin Sir Allen Stanford. But now TPM alum Justin reports that the FBI has a separate, on-going investigation into whether Stanford's operation served as a money-laundering operation for one of the big Mexican drug cartels.

We'll see how this story develops. But it does point to something I've given quite a bit of thought to -- and a decent amount of poking around on -- with the Madoff case. When you're involved in fraudulent enterprises involving billions of dollars, with lots of unaccounted for and untracked streams of money, organized criminal syndicates -- whether it's the mob or drug gangs or whatever -- just tend not to be too far behind. I suspect we'll eventually find that with Madoff securities fraud was not the only crime.

Does Josh know something?

[specimenfred1984]

64. Reading about all this crime is a really good sign

It means positive change is actually occurring, the crimes aren't hidden anymore. Yes, it's going to take a long long time but at least it's movement in the right direction if democracy is to be restored.

[Demeter]

72. It Also Means That There's Been 30+ Years of Cheating Going On

Which is my entire adult life. How can you raise good citizens in that kind of environment? It is the ultimate hypocrisy.

[Demeter]

74. Financial Contracts and the Lying Liars Who Create Them By The Mogambo Guru

http://www.dailyreckoning.com/financial-contracts-and-the-lying-liars-who-create-them/


02/17/09 Tampa Bay, Florida The Economist magazine innocently asks, “Why is finance so unstable?”

Immediately, I jump to my feet to scream my guts out that, “It’s because the amount of corruption is, like it always is at the end of long booms, completely off the freaking charts, and nothing is as it seems; everybody is lying to you; everybody is trying to steal your identity and you are being ripped off every freaking day, in countless ways, by corrupt thieving morons in government who are so, so desperate at this point that they are resorting to insanity!”

Apparently, that was not the winning answer, and my powerful entry was tossed aside in favor of, “Financial services are different from other industries, if only because so much of the business is writing bets. One side pays the other for a claim that comes good if, say, oil prices fall, or a company defaults on its bonds, or householders make the mortgage payments on time.”

So, stung at not having my answer selected as the winning entry, I think to myself, “Insurance policies don’t explain why the financial markets are unstable! So my answer is better! Where’s my damned prize?”

Perhaps in response to my anticipated objection, I could tell by long experience that they started to say something like, “You’re a moron, so why don’t you shut up?” But instead they took the “high road” and put me in my place by saying that “Expansion in most businesses is held in check by the need to build assembly lines, rent retail space or hire workers. All that takes time and money. By contrast, financial contracts can be written almost instantaneously and without limit.”

Instantaneously and without limit! Wow! Now I see!

The problem arose when people found out that everybody lied about the money or the collateral that they were putting up as their halves of the bets! Hahaha!

And then they lied about those bets to use as collateral for other bets, around and around until everybody owned, and owes, lots and lots of these derivative bets until one day – surprise! – they are all found out to be a Big Load Of Lying Crap (BLOLC)! Like now! Hahahaha!

They don’t call it BLOLC, of course. They call it “counterparty risk”! Hahahaha!

The interesting thing to me is that The Economist magazine explains that the market for derivatives has gotten so huge because (and this is the important point) they are useful to people signing contracts, as “After America came off of the gold standard in 1971, businesses wanted a way of protecting themselves against the movements in exchange rates”, by which they mean that nobody wants to experience a loss of the buying power of their stupid fiat money!

So, figuratively climbing upon my soapbox to thunder at passersby, once again we have one more damning piece of evidence, to add to the mountain of other evidence, that the dollar being tethered to gold, as per the Constitution, was a Good, Good Thing (GGT), and that any other arrangement was a Bad, Bad Thing (BBT), especially the fiat dollar thing, which was the worst thing of all things, and now the Worst Of The Worst Things (WOTWT) is going to happen to us!

And the reason for the calamity is stupidity, pure and simple, as The Economist magazine notes that the infamous Black-Scholes option-pricing model “showed how to work out an option price from the known price-behaviour of a share and a bond. It is as if you had a formula for working out the price of a fruit salad from the prices of the apples and oranges that went into it”, while at the same time price movements in the option prices come from “the equation in physics that describe the diffusion of heat.” Hahahaha!

The Economist doesn’t go so far as to agree with me that this stupid theory that “all probabilities are always normally distributed, even over the long-term” is ridiculous, and which is even stupider than thinking that “investing in the stock market is the same as saving”, which, along with the tragic concept of “everlasting love”, are the three stupidest things I have ever heard of in all my years on this planet you call Earth.

Well, let’s not forget the other stupidity that brought Black, Scholes and Long Term Capital Management to ruin; assuming that there would always be somebody out there who was so stupid as to take the other side of their bets, no matter what was happening, at predicted prices! Hahaha! Morons!

Apparently, since I see that I am the only one laughing, I assume that I am missing the point, because The Economist magazine keeps insisting that “The idea behind quantitative finance is to manage risk. You make money by taking known risks and hedging the rest” which doesn’t make much sense to me because if the risks are known to everybody, then the option is priced as a 50-50 bet, and I am here to tell you that I laugh at anybody who says that they can make money on a 50-50 bet! Hahaha!

Of course, nobody at the offices of The Economist will answer the phone when I call to argue the point, but they imply that my theory, my ignorance and my sheer stupidity notwithstanding, problems soon arose because “the idea behind modeling got garbled when pools of mortgages were bundled up into collateralized-debt obligations (CDOs)”, resulting in a “baffling complexity” of assets where “each one contained a unique combination of underlying assets”, thus making them “impossible to model in all but the most rudimentary way”.

By this, I assume they mean that if it weren’t for that One Tiny Thing (OTT), everything would be fine, and we would be prospering and laughing, having a wonderful time, perhaps sharing a pizza el supremo mucho grande extravaganza, a princely cholesterol-bomb topped with every pork product known to man, instead of hunkering down in our filthy, stinking bunkers waiting for the world to collapse in flames and the fiat dollar to collapse, as have all other fiat currencies in all of history and all the stupid economies that depended upon them.

Of course, there is still time to buy a pizza, and a little more gold and silver before the prices explode! Whee! This investing stuff is easy!

[UpInArms]

71. Here's a great simple explanation for so much

http://www.suburbanhousehunters.com/about/mortgage-crisis/

[Demeter]

73. The Geithner Resignation Pool By Dave Gonigam

http://www.dailyreckoning.com/the-geithner-resignation-pool/

02/13/09 Baltimore, Maryland I know we’re only three and a half weeks into the new administration. But I think it’s already time that informed lay people can start guessing how long Tim Geithner will last as Treasury Secretary.

I won’t take a position on this myself. I will instead marshal facts and evidence you can use to make your own guess in the comments section.

Let’s start with a piece in the International Herald Tribune, which surveys a host of establishment economists, all arriving at the same conclusion: Many of the major banks are insolvent, and Geithner’s TARP II plan — even once the details are fleshed out — will be inadequate to the task.

Hmmm… A Geithner brainchild that even by conventional, interventionist standards is a dud. Where’ve we encountered that before? Oh yeah, the decision to let Lehman go under last fall when Geithner was still head of the New York Fed.* Seemed like a good idea at the time, until it unleashed the Counterparty Cascade from Hell — nearly taking down AIG, forcing money-market funds to “break the buck,” and by some accounts bringing the U.S. financial system within three hours of meltdown.

Our next item of evidence is a report that Goldman Sachs called an emergency meeting of its biggest clients — hedge funds, private equity guys — on Tuesday after Geithner floated his TARP II turkey. Goldman first denied the meeting ever took place. Then it tried to spin the meeting as having been scheduled weeks in advance. Whatever the truth, clearly some of the meeting’s participants wanted it known they weren’t happy with the plan and strategically leaked the assertion that it was called at the last minute.

For someone who’s a Goldman guy through and through, Geithner doesn’t seem to be getting much of a vote of confidence here. No, Geithner’s never been on the payroll, but his designated chief of staff was a Goldman lobbyist, one of the board members of the New York Fed that Geithner used to run was a Goldman guy, and he’s a protege of uber-Goldman guy Robert Rubin.

So there’s the evidence, gleaned just from taking in my usual morning news diet. Again, I won’t take a stand on how long Geithner will last, although I strongly doubt he’ll be fired outright, which is why I call this the Geithner Resignation Pool; whenver the time comes we’ll get the usual song-and-dance about wanting to spend more time with family. So fire away with your own guesses about the timing.

* I’ve been misinterpreted on this before, so let me be clear: I’m a free-market guy who thinks all mismanaged banks should get what’s coming to them; better to purge the rot from the system and get it over with. I’m merely pointing out how Geithner blows it even using the yardstick of conventional bankster wisdom.


IF IT WERE UP TO ME, HE WOULDN'T HAVE BEEN CONFIRMED....

[Demeter]

78. Geithner and Summers Consolidating Power (Auto Bailout Edition)

http://www.nakedcapitalism.com/2009/02/geithner-and-summers-consolidating.html

It looks like Tim Geithner and Larry Summers are executing a land grab. From the New York Times:

President Obama has dropped the idea of appointing a single, powerful “car czar” to oversee the revamping of General Motors and Chrysler and will instead keep the politically delicate task in the hands of his most senior economic advisers, a top administration official said Sunday night.

Mr. Obama is designating the Treasury secretary, Timothy F. Geithner, and the chairman of the National Economic Council, Lawrence H. Summers, to oversee a presidential panel on the auto industry. Mr. Geithner will also supervise the $17.4 billion in loan agreements already in place with G.M. and Chrysler, said the official, who insisted on anonymity.

The official also said that Ron Bloom, a restructuring expert who has advised the labor unions in the troubled steel and airline industries, would be named a senior adviser to Treasury on the auto crisis.


For the record, we have never been happy about the prominent roles Geithner and Summers are playing. Both played significant roles in creating and maintaining the system that lead to our financial mess. They are simply unable to see beyond their ideological blinkers. And as proteges of Robert Rubin, they are epitomes of what Willem Buiter calls "cognitive regulatory capture".

So consider the fact set. Geithner is clearly over his head and overloaded. He announced a multiifacted plan to rescue the banks, and it will take a full-bore effort over the upcoming weeks and months to sort that out. And Reuters indicates that Geithner is Obama's "designee" on the auto program.

The last thing you want to do is overload someone who is already in danger of muffing a crucial project. But here we go, Geithner and Summers now have more to do, and the auto industry bailout is coming to a head shortly. This was already set to be handled by a "car czar". The car czar has instead been supplanted by a car committee, which does not strike me as wise (it adds interpersonal dynamics into a process that would benefit from clear leadership). And having the overloaded Geithner and bull in the china shop Summers as leaders means that other participants, most importantly those who know something about the industry, are likely to be marginalized.

Consider the track record: this duo sidelined Paul Volcker, who brings enormous experience, a first class reputation, and a willingness to question orthodoxy. That says loud and clear that they place self interest above doing the right thing. Volcker is an enormously valuable resource, but apparently his connections, his skepticism of bankers, and his towering height made him too much of a threat.

And we see this again in the auto bailout, where the dastardly duo has persuaded Obama to set up a structure that assures them control over the answer, even though they have no knowledge of the industry.

Now there could be less nefarious explanations. Perhaps the "car czar" idea died stillborn due to an inability to find someone with industry expertise who could be trusted to be evenhanded and had no tax problems. But even if a committee structure was deemed necessary, why have Summers and Geithner head it? I could see have them, or key deputies of theirs, as members, but having two leaders lacking in industry expertise, and time to bone up, looks terribly short-sighted.

But other reports suggest that we may be in sentence first, verdict afterward mode, so expertise is irrelevant. From Bloomberg:

Five Senate Democrats, including Debbie Stabenow of Michigan, wrote a letter on Feb. 5 urging Obama to name an expert in manufacturing as part of a panel to help oversee the auto loans.

“This advisory group provides a tremendous opportunity to bring together our country’s greatest manufacturing leaders to help our domestic automakers create the vehicles and technology of the future,” the senators said in the letter.

Bloom {former investment banker and United Steelworkers adviser], who will be a senior adviser at the Treasury, has experience with an issue at the heart of the restructuring -- health-care costs. Bloom helped negotiate the Goodyear Tire & Rubber Co. health-care fund, union spokesman Wayne Ranick has said. In 2005, Bloom met with UAW officials who were then evaluating GM’s request for health-care concessions.


Update: Reader Swedish Lex surmises, "No point in appointing a czar if the companies are going into a pre-arranged chapter 11." That sounds right, except bankruptcy experts have said a pre-pack is not an option for the automakers. They set forth the timetable and it runs to more than a year and a half. Back to the original post:

And the risk of lack of knowledge is real. Summers is close-minded. That trait was part of his undoing as Harvard president. From the Financial Times, "Out of His League":

“He himself is not widely educated,” said Judith Ryan, a professor of German literature. I met Ryan, a 63-year-old Australian who speaks with a mid-Atlantic drawl, in her office near Harvard Square. On her walls were pictures of Rilke and Kafka, watching as Ryan ate a late, rushed lunch of yoghurt and Starbucks coffee. She attended the faculty meeting in University Hall on February 7 and was one of the academics who stepped up to the microphone to criticise Summers.

“He is a brilliant economist but not really very curious about how other disciplines function and what is at stake today in those disciplines,” she said. Ryan regularly sat in on tenure meetings with Summers. “He really tends to translate things into economic models and he would start to talk about his impressions of the field. Our visitors were astonished. He would ask the meaning of words that I thought were part of most people’s vocabulary.” “Syntax” was one example, she said....

Ryan also expressed misgivings shared by some of the other professors I spoke to about the pro-science direction Summers was taking the university. “He had a very present-day notion of the aims of education,” she said with a shrug. “He didn’t see the point of studying ancient Greece.”


I have long believed that one of the most valuable traits for people in general, and leaders in particular, is to understand the limits of their knowledge, and to seek out sources and individuals who can help fill those gaps. Summers (and perhaps Geithner, if the Summers imprinting has taken) is of the reverse inclination: he thinks that what he knows has universal relevance. Scary.

[Danascot]

76. Toon for ya

[UpInArms]

83. that really puts it out there so that anyone

with 2 brain cells can understand it!

:thumbsup:

[Ghost Dog]

131. Right....

Oh fuck.

That bridge looks shaky too...

[Demeter]

77. Joanne Has Posted "Derivatives for Dummies" by the Other Katherine Harris

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x426655

Worth 2 look-sees, one for info, one for humor.

[mikelgb]

81. Looks like the virtual Candy Heart market is thriving anyway....

[UpInArms]

82. Record US $94 bln note auctions highlight supply

http://www.reuters.com/article/bondsNews/idUSN1950685220090219

NEW YORK, Feb 19 (Reuters) - Accelerating weekly records in issuance of U.S. Treasury notes are increasing the danger that investors may start to demand much higher yields and raise the U.S. government's borrowing costs, analysts said.

On Thursday, the Treasury Department announced a record weekly issuance of $94 billion in two-year, five-year and the newly reintroduced 7-year note for next week. That easily exceeds the previous weekly record of $67 billion notes and bonds issuance set earlier this month.

The amount for next week broadly matched analysts' forecasts for between $89 billion and $97 billion, and U.S. government debt prices held steady at lower levels. But analysts are concerned that as the auctions approach, Treasuries may come under more pressure.

"It's almost like we get quarterly refundings every week now," said William O'Donnell, head of U.S. interest rate strategy at UBS Securities in Stamford, Connecticut.

"We remain concerned that the supply and demand curves will continue to diverge and that this divergence will eventually force an unwanted, by Washington at least, rise in base rates that will thus force loan rates higher," O'Donnell said.

A surge in consumer borrowing costs and mortgage rates, which are tied to the Treasury market, could deal the already sliding U.S. economy another serious blow just when the government is trying to stabilize banking, housing and manufacturing.

A surge of U.S. government issuance to pay for financial and economic rescues, which is expected to reach some $2 trillion this year, runs the risk of swamping the nearly $6 trillion of Treasuries outstanding, with supply outstripping demand.

The benchmark 10-year Treasury note's yield, which moves inversely to its price, has rebounded from a five-decade low of 2.04 percent in mid-December to a recent high above 3.05 percent on Feb. 9.

That benchmark yield could rise well above 3 percent over the next year if foreign investors, who hold about half the U.S. government debt market, demand higher rates in compensation for buying the swelling supply of debt, fixed income analysts warn.

...more...

[Demeter]

84. BofA, Citi shares fall on nationalization fear

http://news.yahoo.com/s/nm/20090219/bs_nm/us_banks_shares_1


(Reuters) – Citigroup Inc (C.N) shares fell to 17-year lows on Thursday, with Bank of America Corp (BAC.N) stock also plunging, amid renewed fears that growing losses could lead to government control of troubled U.S. banks, wiping out shareholders.

Bank of America shares were down 10.7 percent to $4.07 in morning trading on the New York Stock Exchange, while Citigroup stock fell 10 percent to $2.62, after touching its lowest level since 1991.

"When you talk about nationalization you hear the names Citi and Bank of America as the top two names burning out," said Walter Todd, a portfolio manager at Greenwood Capital Associates.

"We still don't have any clarity about what course of action they (the government) are going to take. In the absence of specifics, people just jump to their own conclusions," he added.

Last month, Bank of America Corp (BAC.N) posted its first quarterly loss in 17 years, after mounting losses at recently acquired Merrill Lynch. Citigroup has lost $28.5 billion in the last 15 months, hammered by bad debts and toxic assets.

Each bank received $45 billion in government aid in recent months and a backstop on toxic assets-related losses.

[DemWynner]

88. I think that this should happen

The banks have been running a muck and not using the funds that they got for TARP correctly. The fat needs to be cut form these banks and they need to be run correctly. I would hope they would put the right people in charge and this would not become run the same way things are being run now. The government has a way of taking what is so bad that they can not get worse and putting the people that caused the issues in charge to fix it.

[RUMMYisFROSTED]

89. "Running a muck."

Perfect.

[Dr.Phool]

91. A muckity-muck

[RUMMYisFROSTED]

93. A muckity-fuck.

A cluster muckity-fuck.

[Roland99]

92. At the close (or close enough anyway) New DJIA low and S&P under 780

DJIA 7,465.95 -89.68 -1.19%
Nasdaq 1,442.82 -25.15 -1.71%
S&P 500 778.94 -9.48 -1.20%
Global Dow 1,306.83 -1.07 -0.08%
NYSE 4,880.93 -43.61 -0.89%
AMEX 1,351.52 +9.53 +0.71%
Dow Util 344.31 +2.11 +0.62%
Russell 2000 416.73 -6.45 -1.52%
Semcond 196.09 -10.30 -4.98%
Gold future 976.50 -1.70 -0.17%
30-Year Bond 3.69% +0.16 +4.62%
10-Year Bond 2.86% +0.13 +4.73%

[Dr.Phool]

97. Whatever happened to that wizard with the charts?

A couple of months ago, he said that his charts showed a floor of 8700 for the Dow and that it was IMPOSSIBLE for it to close below 8500.

I think he was studying the 3 million day moving average.

He said we were all a bunch of dummies, and just didn't understand markets. We told him he didn't understand rigged casinos.

[TheWatcher]

110. He's probably in Group Therapy with a bunch of curiously Silent Members of the THANK GOD IT PASSED!"

Brigade. (CAVEAT: Although I did briefly spar with one of the more annoying ones last night, who seems to think that because the Eastern Europe Situation got covered by a source he doesn't trust, that the whole thing is uncredible, and doesn't exist, DESPITE the fact it was covered by sources that ARE credible, and certainly DOES exist. He also seemed to imply that these things aren't credible either: Russian Exchanges Closed on Tuesday, Lock Limit Down, Iceland Collapse, the massive unrest in Iceland, Greece, and France, The Unfunded Liability of the US is 66 Trillion Dollars, and Ireland reported over the weekend it was in danger of defaulting. And I can only assume he's STILL Thanking God It Passed!!!!1111)

I remember that guy, though. Completely ignored all reality, and all the obvious that lay before him. I've learned the hard Way It's USELESS to try and convince those who are wedded to delusions to get a divorce.

I found out a couple of months ago that a DEAR friend of mine, who is one of the sharpest knives in the drawer and a brilliant Sales Strategist, took a complete Bath in the Fall Collapse. When I say she is one of the sharpest knives in the drawer, I MEAN IT. She KNOWS about the manipulation, rigging, ALL OF it. She knows about all the things that have been discussed ad nauseum on this thread for YEARS.

But she still took a bath. Why?

Because of something so simple, and so Basic.

Greed.

Nothing more than Greed.

She thought TPTB would bring it all back up, and she would be fine.

I knew, after my conversation with her, that if someone like her, with her knowledge and smarts, and understanding of how things worked, WILLINGLY took a bath in this and took no action to protect herself, that there wasn't much hope for the Sheeple who continue to blindly believe in the very system that is killing them.

By the way, she's still LONG, as of today.

:wtf:

[Demeter]

112. The PTB Have Been Trying to resuscitate the Bubble Economy

but between Bush, Reagan and Greenspan, there is nothing left. Except people. And the PTB really can't deal with people, unless they are bombing them, of course.

You have to feed, clothe, and house people, educate their children, provide water and sewers, health care, etc, etc,...and if you do, they MIGHT let you share in their productivity.

Well, they screwed that up real good. The people aren't sharing.

[TheWatcher]

115. Bubblenomics is the only way they know how to run things.

And I agree with you, I don't think there are any Bubbles left they can blow here. But as we have learned so harshly in the past, it would be a mistake to underestimate them, even at this late hour. I'll believe the Corpse is dead when I see the final shovel full of dirt patted down on the grave. And even then I'll be wary of a Romero like Re-Awakening. Having said that, the likelyhood of them reflating this IS rather slim, though.

I think about what Mike Malloy said a few years ago just before the Second Stolen Election. He was referring to Bush and his Cabal and the prospect of Fake or Staged False Flag Terror, or perhaps an excuse to declare Martial Law and possibly cancel the election, but it applies here just the same:

"What Are They Going To Do? They Have To Do SOMETHING from the playbook, since they can't GOVERN."

Bubbles, Artificial Growth, Rigged And Scripted Policy, Fantasy Economics, it's all they know.

Which Script will they choose to "Save The System?"

Because Lord Knows, they don't know how to manage anything real.

And the people are a means to an end for their agendas and schemes. They could care less about us.

We SHOULDN'T share with them. We should show them the DOOR. ALL of them.

[Demeter]

116. It's nice to have your acknowledgment

sometimes one feels that talking to a wall at least gives an echo.

Wish Obama would do some of that acknowledgment of the Progressives and Liberals.

[TheWatcher]

120. I wish he would too, Demeter. I REALLY wanted to believe in that man.

Part of me still does, even though, deep down the part of me that knows better is telling me just to let go, and deal with the reality that is bitter and will not go down well.

Nor will it End Well.

And THANK YOU for posting what you did about Rahm today.

When one takes a long, objective look at the "Apostles" that "The Savior" has chosen, it is very difficult to grasp that this is the "Change" we have been told to "Believe In."

It's a very dangerous stance to take right now, because far too many, as I have said ad nauseum like a skipping CD, are wedded to the delusion of a "Support The Football Team" mentality, ignoring the red flags and warning signs that should be OBVIOUS that this is NOT the Roast Beef On Rye Deli Sandwich we ordered, but looks VERY suspiciously like the same BALONEY Sandwich we have been fed for a couple of generations now.

The biggest red flag so far, aside from referred to appointments, has of course been the same Gun-To-The-Head Rhetoric that was used during the Stimulus Bill fiasco. "Pass this immediately, or we'll all die." I swear, living in this country is beginning to make me feel like that Dog on the cover of the National Lampoon Cover from many years ago.

As a matter of fact, let's revisit that classic moment shall we, and incorporate it into Modern Theme:

This Is Your Government "Saving You From The Recession":



I can only wonder, that when this latest scheme doesn't work, if people will hold our leadership's feet to the fire, or OURS.

That is a truly scary thought. :(

[Dr.Phool]

124. That post on Rahm.

I cut and pasted it in an e-mail, and sent it to everyone I know. A lot of us got screwed by Rahm. I knew he was a sleazebag years ago. He screwed a couple of good friends of mine, who were running for Congress in '06. He flat-out denied them funding from any sources. He actively undermined several progressive campaigns. And I remember getting the run-around from Harold Ford, when I ran in '04.

I really hope some nasty things happen to these people. Like long jail sentences.

I remember that issue of NatLamp from a long time ago. That's what it feels like now. I refuse to root for the "Home Team" when they're doing the exact same thing the other team was doing. Where is bankruptcy reform? Health care reform? Job protections? We're planning on escalating a war again. Does anybody have the balls to cut expensive, useless, obsolete weapons systems from the Pentagon's budget? Same flies, different shit. OK, different flies, same shit.

I said I'd give Obama a chance, to see what he'd do. Like you said, It says a lot when you see the apostles the messiah assembles.

[Ghost Dog]

133. "No one can now doubt the word of America"

(no link: disreputable source).

[bread_and_roses]

137. I read you, Demeter, and Dr. Phool and the others - even if I don't respond - and I imagine

that there are a good few others like me. I'm not really interested in the market other than as a kind of sociological barometer, nor could I explain much of what "market talk" there is here - but I get the gist. And this thread typically has some of the best posts on the site, and great links to other items around the web. You often express what I am thinking quite well, but it is boring and just takes up space for someone to continually just post "right on!" or "well said" - which is about the sum total of the contribution I'd make. Keep at it! You are not talking to a wall, I'm sure.

[DemReadingDU]

141. Glad you responded, never boring

It's like we know that we are all in the same boat, Titanic?

Where's those life preservers!!!

[Demeter]

143. Thank you kindly!

Love your monicker! I treat the market the same as you--and try to keep from getting trampled by the elephants.

[Demeter]

118. I think the False Flag Plotting Was Discarded

because it conflicted with too many of these lately-revealed crooks' plots and ponzi schemes.

Bush got his funding from these guys. That's the biggest part of this story, and that last part that will ever see the light of day. I just hope to live that long. It will finish off the Religious Right, among other things.

[Hugin]

127. Pssst...

Remember Georgia. ;)

[Demeter]

142. That Was a Wet Firecracker!

Can't even get a decent plot out of those wannabe has-beens! Putin sure showed BushCo how it's done. Consider the Ukrainian gas embargo.

[UpInArms]

119. reminds me of:

Jeffrey Skilling, until recently Enron's longtime president, put it at industry conference in 1997: "You must cut costs ruthlessly by 50 to 60 percent. Depopulate. Get rid of people. They gum up the works."

[Wednesdays]

130. I think it was a typo

He really meant to say the charts showed a floor of 700 and that it was impossible for it to close below 500.

[Dr.Phool]

99. FBI just served civil papers on Stanford in Va.

So far just a breaking headline on MSNBC.com.

[Demeter]

111. LBN Thread

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3747275

Poor boy is depressed, so they didn't arrest him....

[tclambert]

135. All this kerfuffle and they didn't arrest him?

"Hi, we think you've ripped off billions of dollars and we've been chasing you all over the country. Here's some papers. You can go. Kthxbai."

[SeeHopeWin]

100. When will the market be finished?

[UpInArms]

105. done for the day - here's the poop

Dow 7,465.95 89.68 (1.19%)
Nasdaq 1,442.82 25.15 (1.71%)
S&P 500 778.94 9.48 (1.20%)
10-Yr Bond 2.857% 0.129

NYSE Volume 6,599,443,500
Nasdaq Volume 2,048,950,625

4:30 pm : Stocks were unable to hold early gains as sellers entered the action and pushed the Dow below its November lows. The Dow logged its lowest intraday level and closing level since 2002.

Meanwhile, the S&P 500 has managed to hold above its November closing low of 752. Traders have their set on 800 as a key technical level since a break above 800 could prompt short-covering, while a test and failure to break above 800 could lead to fresh weakness. This session's weakness came after stocks began the session with broad-based gains.

Stocks had been up more than 1% in the early going. The initial advance was largely attributable to short-covering as that followed flat trading in the prior session. However, a renewed selling effort in financial stocks fueled pressure in the broader market.

Financials were up much as 2.4%, but finished 5.2% lower. Dow components Bank of America (BAC 3.93, -0.64) and Citigroup (C 2.51, -0.40) were primary laggards. C fell to a new multiyear low.

Fellow Dow component General Electric (GE 10.06, -0.49) also registered a new multiyear low. Market participants have been treating it like a financial stock given the company's exposure to capital and financial markets.

Prudential (PRU 19.02, -3.59) was one of the session's weakest performers following Fitch's decision to downgrade Prudential's debt rating and commercial paper rating. Though there was concern the company could lose access to the Fed's commercial paper funding facility, reports indicated Prudential has access to the commercial paper program through its insurance arm.

Technology (-3.3%), which is the largest sector in the S&P 500 by market weight, also underperformed the broader market. Its weakness largely hinged on a disappointing quarterly report from Hewlett-Packard (HPQ 31.39, -2.69), which headlined a mixed batch of corporate announcements.

Hewlett-Packard issued a mixed earnings forecast, which overshadowed in-line quarterly earnings results. CVS Caremark (CVS 28.71, +1.72) and Newmont Mining (NEM 40.79, -1.97) announced better-than-expected quarterly earnings. Noble Energy (NBL 49.94, +1.30) also beat expectations, but Apache (APA 66.67, -0.42) missed. Sprint Nextel (S 3.25, +0.54) posted a loss, but it wasn't as bad as expected. Coca-Cola (KO 43.30, +0.62) increased its dividend, while CBS Corp (CBS 4.97, -0.16) slashed its dividend in the face of better-than-expected earnigns.

Economic data also remains uninspiring. Initial jobless claims totaled 627,000, topping the 620,000 claims that were expected. Initial claims were unchanged week-over-week, while the four-week moving average moved up to 619,000 from 608,500.

Continuing claims reached record highs of 4.99 million. Economists forecast 4.81 million continuing claims. The four-week moving average for continuing claims stands at 4.84 million, up from 4.75 million.

Jobless claims were a drag on the January index of leading economic indicators, which increased 0.4%, exceeding the consensus forecast of a 0.1% increase. An increase in the money supply proved to be the main driver lifting the index, but the increased money supply contributes to inflationary concerns.

Producer prices, which measure inflation, increased more than expected in January. The January PPI and core PPI were up 0.8% and 0.4%, respectively. DJ30 -89.68 NASDAQ -25.15 SP500 -9.48 NASDAQ Adv/Vol/Dec 892/2.05 bln/1788 NYSE Adv/Vol/Dec 856/1.49 bln/2215

3:30 pm : Crude oil futures experienced an eventful session. This morning, the DOE released its crude inventory data; crude oil inventories had a draw of 138,000. The consensus was a build of 3.2 million. This news sent the April crude oil futures soaring; April contracts finished up 6.4% to $39.80 per barrel. The March crude oil futures expire at the close of tomorrow's session; the March contracts closed at $39.48 per barrel, up 14% for the session.

Natural gas inventories were also released today, the draw of 24 bcf was less than the expected draw of 50 bcf. March natural gas contracts reacted in accordance to the higher than expected supply with a selloff to the $4.00 level, which hasn't been seen in natural gas since late 2002. March natural gas contracts attempted to recover for the rest of the session, but finished down 3.6% to $4.06 per contract.

In contrast to the energy commodities, April gold futures had an uneventful day after its recent surges. April gold finished the session reasonably unchanged at $976.50 per ounce. March Silver also finished the session relatively unchanged at $13.94 per ounce. DJ30 -56.07 NASDAQ -16.80 SP500 -5.65 NASDAQ Adv/Vol/Dec 1026/1.6 bln/1629 NYSE Adv/Vol/Dec 1030/1.05 bln/2037

3:05 pm : Financial stocks (-3.1%) continue to trade with marked losses. Weakness in the sector is widespread, but the steepest losses are being seen among regional banks (-6.5%), consumer finance companies (-7.8%), and life insurance companies (-8.9%).

Prudential (PRU 19.67, -2.94) is among the sector's weakest performers. Its shares have succumbed to weakness stemming from Fitch's decision to downgrade Prudential's senior unsecured debt rating and commercial paper rating. That spurred word the company will lose eligibility to the Fed's commercial paper funding facility, which was established to enhance the liquidity of the commercial paper market.

However, Reuters reported that Prudential has access to the commercial paper program through the company's insurance arm, and that the company's liquidity requirements are not dependent on access to commercial paper or debt capital markets.

Still, Lincoln National (LNC 12.02, -1.36), MetLife (MET 22.95, -1.25), and Allstate (ALL 18.54, -1.20) are all trading lower in related weakness. DJ30 -45.16 NASDAQ -14.12 SP500 -4.09 NASDAQ Adv/Vol/Dec 1092/1.45 bln/1545 NYSE Adv/Vol/Dec 1111/940 mln/1928

[Demeter]

107. It Closes at 4:30 Eastern. we're Open all Night

Is that what you are asking, or are you more Apocalyptic?

[DemReadingDU]

126. When no one plays

As long as there are people to play the 'casino', the market will never be finished. When everyone withdraws their money from the market, it will stop.

:crazy:

[Hugin]

128. Due to my involuntary mandatory retirement investments...

I'll never be allowed to stop playing. :crazy:

[DemReadingDU]

139. Hope those mandatory investments don't evaporate into thin air

So many toxic securities have been loaded into all kinds of investments, what is safe? I guess we will find out, after the collapse.

[Ghost Dog]

134. What "money"?

:shrug:

Even without money, there will still be work that must be done.

[DemReadingDU]

136. Some people have money to play the stock market

If no one has money to play the market, the stock market would cease to exist?

Work? There will always be work, might not get paid much for it. Maybe we will do the barter system after the collapse.

[readmoreoften]

138. Work and the stock market have little to do with one another.

We don't need a stock market to run an economy. Half the world survived as Communist for half a century. Communism collapsed because they had to spend all their worker's resources on military build-up to fight us. The stock market is inessential to development. You might not like the lack of choice, you might dislike an authoritarian government (not that this doesn't happen under capitalism), but the stock market is just plain inessential. Things get built and food gets grown and art gets made with or without the stock market.

[DemReadingDU]

140. Exactly.

The stock market is just another form of gambling.

[SeeHopeWin]

144. Thank you for getting my point...!