STOCK MARKET WATCH, Thursday February 26

[ozymandius]

Source: du

STOCK MARKET WATCH, Thursday February 26, 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 25, 2009

Dow... 7,270.89 -80.05 (-1.10%)
Nasdaq... 1,425.43 -16.40 (-1.14%)
S&P 500... 764.90 -8.24 (-1.07%)
Gold future... 966.20 -3.30 (-0.34%)
30-Year Bond 3.60% +0.11 (+3.06%)
10-Yr Bond... 2.95% +0.15 (+5.22%)

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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

Myopic vs. Strategic Thinking
BY CHRIS PUPLAVA

Before getting to the heart of today’s article I’d like to first provide the following definition below:

* “Myopic”

o Unable or unwilling to act prudently; shortsighted.
o Lacking tolerance or understanding; narrow-minded.
o Lack of discernment or long-range perspective in thinking or planning.

The above definition aptly describes the policy of President Obama towards one of the greatest suppliers of oil to our country, Canada, as President Obama is leaning towards putting pressure on reducing emissions from Canadian oil sands production.

....

While the goal of reducing the carbon footprint is a noble venture, Obama’s policies are likely to have unintended consequences. For example, who’s to say that instead of spending billions to meet possible future regulations on oil sands production that Canadian oil exporters don’t simply export their oil to China or other oil-starved countries?

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

[willing dwarf]

8. Perhaps the myopia is more Chris Puplava's?

It seems to me that we've seen Obama sucessfullly make use of a "both/and" strategy before. In this case, there may be ways to both make use of the real need and desire of the US to buy oil from Canada and the absolute need to move toward cleaner energy.

All the wealth of the world won't save us if we won't save ourselved from the destruction of the planet through global warming, excess greenhosue gases etc. We'd better start using a lot more both/and thinking if we want the eco system to survive.

[ozymandius]

10. That's what I felt Puplava was missing.

It seems to be a larger issue of input-to-output revenue. Emerging markets cannot support an enterprise when the returns scarcely cover the cost of investment.

[Roland99]

39. Guess it depends on how greedy Canada is vs. how much they do care about the environment

Sounds like the author was projecting a bit, eh?

[ozymandius]

2. Today's Reports

08:30 Durable Goods Orders Jan
Briefing.com -2.5%
Consensus -2.5%
Prior -2.6%

08:30 Durables, Ex-Tran Jan
Briefing.com -2.2%
Consensus -2.2%
Prior -3.6%

08:30 Initial Claims 02/21
Briefing.com 625K
Consensus 625K
Prior 627K

10:00 New Home Sales Jan
Briefing.com 320K
Consensus 324K
Prior 331K

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

[UpInArms]

34. Initial Claims @ 667,000 - highest since 1982

8:30 a.m. U.S. 4-week avg continuing claims up 89,250 to 4.93 million

8:30 a.m. U.S. continuing jobless claims rise 114,000 to 5.11 million

8:30 a.m. U.S. 4-week average claims up 19,000 to 639,000

8:30 a.m. U.S. weekly initial jobless claims rise 36,000 to 667,000

http://www.marketwatch.com/news/story/Initial-jobless-claims-rise-ongoing/story.aspx?guid=%7BFDA2CFE1%2D4E1C%2D4EED%2DA457%2D7CF781F7FF8C%7D

WASHINGTON (MarketWatch) -- Signaling persistent labor market weakness, first-time applications for state unemployment benefits for the week ending Feb. 21 rose 36,000 to a seasonally adjusted 667,000.

The level of initial claims is the highest since October 1982 and up 86% from the same period in the prior year. The four-week average of new claims, which measures the underlying trend, rose 19,000 to 639,000 -- also the highest level since October 1982, and up 84% from the prior year.

For the week ending Feb. 14, the number of people collecting benefits reached a record high, rising 114,000 to 5.11 million -- a level that is 86% higher than in the prior year. The four-week average of continuing claims was also a record, gaining 89,250 to 4.93 million -- a level that is 80% higher than in the prior year.

The insured unemployment rate reached the highest level since July 1983, rising to 3.8% from 3.7%. The data go back to 1967.

Earlier this week, the Conference Board reported that consumer confidence plunged in February to a record low on worsening concerns about jobs, income and the economy. Those poor results came in despite Washington's $787 billion stimulus package that administration officials say will save or create 3.5 million jobs.

...more...

[UpInArms]

35. Orders for durable goods sinks 5.2% in January

http://www.marketwatch.com/news/story/Orders-durable-goods-sinks-52/story.aspx?guid=%7B477A24C5%2D219D%2D46A2%2DBD9B%2D9E01E313E1C8%7D

WASHINGTON (MarketWatch) - Demand for U.S.-made durable goods fell for the sixth straight month in January amid widespread weakness from both domestic and foreign buyers. Orders for durable goods -- such as airplanes, computers and washing machines --fell 5.2% in January, the Commerce Department reported Thursday. Orders fell in every major sector. The report was much weaker than the 3% drop expected by economists surveyed by MarketWatch. Excluding the 13.5% drop in transportation orders, orders fell 2.5%. Orders for core capital equipment goods - the kind of things companies use to expand or upgrade their productive capacity - fell 5.4% in January after falling 5.8% in December.

[Roland99]

42. More detail....

http://apnews.excite.com/article/20090226/D96J9SC80.html

The department's report showed that orders for autos dropped 6.4 percent in January, from the previous month. Orders for primary metals - a category that includes steel - fell 4.6 percent. Demand for fabricated metal products declined 1.1 percent.

Machinery orders went down 2 percent. Orders for computers and related products plunged 16 percent. Orders for electrical equipment, household appliances and other components fell 6.1 percent.

Stripping out volatile transportation orders, which can bounce around a lot from month to month, all other orders sank 2.5 percent in January, also the sixth straight monthly decline.

[Dr.Phool]

36. Weekly jobless claims jumped unexpectedly last week to 667,000

BREAKING NEWS
msnbc.com news services
updated 13 minutes ago

WASHINGTON - New jobless claims jumped unexpectedly last week to 667,000, with continuing claims topping the 5 million mark.

Thursday morning’s data from the Labor Department are the latest evidence that the current recession is deepening as it extends into its second year.

[Roland99]

38. Darn that Obama. He hasn't fixed the economy yet???

WTF is he waiting for??




:sarcasm:

[UpInArms]

47. U.S. new-home sales down 48.2% compared with year ago

05. U.S. Jan. new-homes sales drop 10.2% to 309,000 rate
10:00 AM ET, Feb 26, 2009

06. U.S. Jan. new-home sales weaker than 320,000 expected
10:00 AM ET, Feb 26, 2009

07. U.S. new-home sales at record low rate in January
10:00 AM ET, Feb 26, 2009

08. U.S. Jan. new-home inventory record high 13.3 month supply
10:00 AM ET, Feb 26, 2009

09. U.S. Jan. median-sales price down record 9.9% vs. December
10:00 AM ET, Feb 26, 2009

10. U.S. new-home sales down 48.2% compared with year ago
10:00 AM ET, Feb 26, 2009

[ozymandius]

3. Oil rises on hopes drop in US demand is slowing

SINGAPORE – Oil prices rose above $42 a barrel Thursday in Asia as a lower-than-expected U.S. crude inventory increase sparked investor optimism that the collapse in demand may be slowing.

Benchmark crude for April delivery climbed 48 cents to $42.98 a barrel by afternoon in Singapore on the New York Mercantile Exchange. The contract gained $2.54 on Wednesday to settle at $42.50.

The Energy Department's Energy Information Administration said Thursday that crude inventories rose by 700,000 barrels for the week ended Feb. 20. Analysts expected crude stocks would grow by 2.25 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

....

In other Nymex trading, gasoline futures rose 0.93 cent to $1.176 a gallon. Heating oil increased 0.73 cent to $1.245 a gallon, while natural gas for March delivery gained 4.3 cents to $4.072 per 1,000 cubic feet.

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

[ozymandius]

4. US Interior secretary scraps oil-shale leasing

SALT LAKE CITY – In a second reversal of the Bush administration, Interior Secretary Ken Salazar said Wednesday he is scrapping leases for oil-shale development on federal land in Colorado, Utah and Wyoming.

Salazar rescinded a lease offer made last month for research, development and demonstration projects that could have led to oil-shale works on 1.9 million acres in the three states, greatly expanding the program.

"I am withdrawing that Jan. 14 solicitation because in my view it was a midnight decision, and it was flawed," Salazar told reporters on a teleconference call from Washington, D.C.

He said he also is scrapping an initial 5 percent royalty rate on oil-shale production that "sells taxpayers short." Conventional oil and gas production on public land produces royalties of up to 18.8 percent.

http://news.yahoo.com/s/ap/20090226/ap_on_go_ca_st_pe/oil_shale_salazar_5

[Demeter]

11. Good Man!

I am impressed by this appointee, at least.

[ozymandius]

5. RBS posts record $34 billion loss, unveils restructuring plan

LONDON – The Royal Bank of Scotland posted an annual loss of 24.14 billion pounds ($34.4 billion) — the biggest in British corporate history — and unveiled a massive restructuring plan on Thursday that will offload many of its international businesses.

The already part-nationalized bank also said it will dump 325 billion pounds of toxic assets into a government insurance program, a step that could result in the state increasing its stake to as high as 95 percent.

RBS Chairman Philip Hampton blamed the massive 2008 loss, which compared with a 7.3 billion pound profit in 2007, on the "unprecedented turbulence" in financial markets and deteriorating conditions around the world.

http://news.yahoo.com/s/ap/20090226/ap_on_bi_ge/eu_britain_earns_royal_bank_of_scotland

[ozymandius]

6. World stocks mixed as investors mull US bank plan

HONG KONG – Asian markets retreated Thursday, with benchmarks Hong Kong and South Korea sinking about 1 percent, after an early rally faded amid doubts about a U.S. plan to stabilize banks and worsening prospects for global companies. European shares opened higher.

Japanese stocks, higher in the morning, closed little changed even as the weakening yen hovered near three-months lows against the dollar, easing pressure on exporters. China's markets took the day's biggest beating as enthusiasm for Beijing's stimulus measures runs low and the economic outlook remains grim.

Across the region, investors appeared unconvinced by U.S. Treasury Department's plan to "stress test" 19 of the largest banks to determine whether they can endure a severe downturn in the economy. Under the plan, any companies that fail under two economic scenarios would be required to raise private funding or accept government stakes.

....

In Europe, markets were higher as the Royal Bank of Scotland posted a record net loss of 24.14 billion pounds ($34.4 billion) for 2008 — the biggest in British corporate history — and announced a massive program to divvy up many of its international businesses.

As the markets opened, Britain's FTSE 100 advanced 2.1 percent, Germany's DAX added 1.7 percent and France's CAC 40 gained 1.4 percent.

http://news.yahoo.com/s/ap/20090226/ap_on_bi_ge/world_markets

[ozymandius]

7. AIG mulls further government stakes as auction deadline looms

Beleaguered U.S. insurance giant American International Group (AIG.N) may allow the U.S. government to take control of certain assets should the sale of stakes in various units fail to produce attractive offers, according to a source close to the matter.

Another option under discussion is for Washington to convert $40 billion (28 billion pounds) worth of preferred stock into common shares, said the source, who was not authorised to speak on the record.

AIG, facing the prospect of a third round of government aid and the largest quarterly loss in U.S. corporate history, is trying to sell off assets to stay afloat and help pay back part of the $150 billion it borrowed after being driven to the brink of collapse last year.

Deadlines for bids for the Asian assets, sales of which could raise tens of billions of dollars for AIG, are due on Friday, according to sources. AIG is also selling off stakes in U.S. subsidiaries.

http://uk.reuters.com/article/motoringAutoNews/idUKTRE51P1T920090226

[Demeter]

21. AIG considers break-up in bid to stay afloat

http://www.ft.com/cms/s/0/fe997b42-0380-11de-b405-000077b07658.html


AIG and the US authorities are in advanced discussions over a radical restructuring that would split the stricken insurer into at least three government-controlled divisions in an attempt to keep it afloat, according to people close to the situation.

The restructuring, described by one insider as a “controlled break-up”, could lead to the end of AIG’s 90-year history as a stand-alone global insurance conglomerate. It also could provide a template for carving up other troubled financial groups – such as Citigroup – should they be brought under government control, the people involved say.


AIG, built into a global insurance powerhouse by decades of deal-making by its former chief executive Hank Greenberg, on Wednesday said it was working “with the Fed to evaluate potential new alternatives for addressing AIG’s financial challenges”. The Fed declined to comment

Under the plan, the government would swap its current 80 per cent holding in the insurer for large stakes in three units – AIG’s Asian operations, its international life insurance business and the US personal lines business. A fourth unit, comprised of AIG’s other businesses and troubled assets, could also be formed.

In return, the authorities would relax the terms, or even cancel a large portion, of a $60bn five-year loan to AIG and convert $40bn-worth of preferred stock into shares, in an effort to ease the company’s burden.

If the plan goes ahead, AIG would remain as a holding company for now. But people involved in the talks say that company could disappear if the government decides to recoup taxpayers’ investments in the insurer by selling or listing the three divisions separately.

The final shape of the new rescue attempt – the third government bail-out of AIG in five months – could still change as talks between company executives, US Treasury, the Federal Reserve and credit rating agencies continue.

However, people close to the situation said AIG was on track to announce the overhaul on Monday, when it is expected to report a $60bn loss with its fourth-quarter results. The board is due to meet on Sunday.

Insiders said the new rescue plan was precipitated by AIG’s deepening financial woes – which were caused by a sharp rise in unrealised losses in its investment portfolio – and its difficulties in selling large assets to repay the current loan.

One of AIG’s most prized assets, American International Assurance, its Asian business that was once valued at $20bn, attracted lukewarm interest. Potential bidders have been deterred by turbulent conditions in insurance and credit markets.

The sale of AIG’s US personal lines business, which had been close to being acquired by Zurich Financial, has also run into trouble as funding markets remain under pressure, according to people familiar with the process.

The two divisions are likely to split off. The third unit to be carved out, American Life Insurance Company, is a global life insurance company with operations in more than 50 countries and a large presence in Japan.

It remains unclear whether the US life insurance business and Foreign General, AIG’s international property and casualty insurer, will be included in one of the three divisions or sold separately. International Lease Finance Corporation, AIG’s large aircraft leasing business, is likely to be given a government credit line and put up for sale.

[ozymandius]

9. Bank Nationalization: Who Would Bear the Pain?

The question of whether big, weak banks such as Citigroup (C) and Bank of America (BAC) should be nationalized is dividing the nation right up to the highest realms of finance. On Feb. 18 the Financial Times quoted former Federal Reserve Chairman Alan Greenspan as saying that temporary nationalization of some banks "may be necessary." Six days later his successor, Ben Bernanke, told Congress that nationalization "just isn't necessary." At that bank stocks zoomed 13%.

The truth is, nationalization is not a painless cure for unhealthy banks. It could get both expensive and messy. But it may nevertheless be the right solution for one or more of the biggest, most vulnerable institutions. The reason is simple: The U.S. economy continues to spiral downward despite nearly two years' worth of half-measures aimed at propping up the status quo. Extreme actions are needed to fix the financial system. It could turn out that such steps can be taken only via nationalization. That would give the federal government power to negotiate—and, if necessary, force—a workable solution for all of the important players.

....

So how should the burdens be shifted in the U.S., if at all? Well, creditors of weak banks have been largely spared to date. The political question—and let's face it, nationalization is a political issue as much as an economic one—is whether that favored treatment can or should continue. Big bondholders are getting nervous that the tide of opinion is turning against them. Kathleen C. Gaffney, who is co-manager of the Loomis Sayles Bond Fund (LSBDX), says it's fair enough for stockholders to lose in a bank rescue because "stockholders know the risk." In contrast, she argues, "bondholders expect to at least get a return of their principal." Likewise, Joshua S. Siegel, managing principal of New York-based StoneCastle Partners, a private equity firm that invests in banks, says forcing bank creditors to take a haircut "would be rewriting the laws of commerce. The capital markets would collapse, because who would ever again buy debt in any company that's regulated?"

http://www.businessweek.com/magazine/content/09_10/b4122000822178.htm?chan=rss_topStories_ssi_5

[Demeter]

13. The Present State of Things Isn't Exactly Painless, Either

The goal is the proverbial hole rule: when you find you're in one, first step is stop digging.

There isn't any way that the Big Uglies can be made whole and beautiful. Their model is unworkable. Chop them up, sell off the parts, and restructure the banking system into something a little more durable, functional, and fiscally prudent.

[DemReadingDU]

30. Great idea!

The best I've heard so far!

[Festivito]

12. Debt: 02/24/2009 10,843,355,058,860.91 (UP 3,828,467,374.01) (Small.)

(Just small.)

= Held by the Public + Intragovernmental(FICA)
= 6,530,393,414,088.52 + 4,312,961,644,772.39
UP 473,801,933.93 + UP 3,354,665,440.08

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 305,862,943 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $35,451.68.
A family of three owes $106,355.04. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 to 32 days.
The average for the last 22 reports is 10,134,451,473.97.
The average for the last 30 days would be 7,431,931,080.91.
The average for the last 32 days would be 6,967,435,388.36.
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$/day.
There were 24 reports in 35 days of Obama's part of FY2009 averaging 0.24B$ per report, 0.19B$/day so far.
There were 99 reports in 147 days of FY2009 averaging 8.27B$ per report, 5.57B$/day.

PROJECTION:
There are 1,426 days remaining in this Obama 1st term.
By that time the debt could be between 12.8 and 20.8T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
02/24/2009 10,843,355,058,860.91 BHO (UP 216,478,009,947.83 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: 818,630,161,948.50 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ------------********
02/19/2009 +012,906,622,783.22 ------------**********
02/20/2009 +035,338,367,983.16 ------------**********
02/23/2009 -000,426,861,213.78 --- Mon
02/24/2009 +000,473,801,933.93 ------------********

166,834,424,286.68 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,178,723,255,601.84 in last 159 days.
That's 1,179B$ in 159 days.
More than any year ever, including last year, and it's 116% of that highest year ever only in 159 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 159 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=3754939&mesg_id=3754993

[Festivito]

75. Debt: 02/25/2009 10,837,499,231,127.11 (DOWN 5,855,827,733.80) (Small.)

(Just small with SS/FICA moving down.)

= Held by the Public + Intragovernmental(FICA)
= 6,530,807,049,597.79 + 4,306,692,181,529.32
UP 413,635,509.27 + DOWN 6,269,463,243.07

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 305,869,115 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $35,431.82.
A family of three owes $106,295.46. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 33 days.
The average for the last 23 reports is 9,439,221,943.20.
The average for the last 30 days would be 7,236,736,823.12.
The average for the last 33 days would be 6,578,851,657.38.
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$/day.
There were 25 reports in 36 days of Obama's part of FY2009 averaging 0.10B$ per report, 0.11B$/day so far.
There were 100 reports in 148 days of FY2009 averaging 8.13B$ per report, 5.49B$/day.

PROJECTION:
There are 1,425 days remaining in this Obama 1st term.
By that time the debt could be between 12.8 and 20.2T$.
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)
02/25/2009 10,837,499,231,127.11 BHO (UP 210,622,182,214.03 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: 812,774,334,214.70 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ------------********
02/19/2009 +012,906,622,783.22 ------------**********
02/20/2009 +035,338,367,983.16 ------------**********
02/23/2009 -000,426,861,213.78 --- Mon
02/24/2009 +000,473,801,933.93 ------------********
02/25/2009 +000,413,635,509.27 ------------********

167,386,285,200.36 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,172,867,427,868.04 in last 160 days.
That's 1,173B$ in 160 days.
More than any year ever, including last year, and it's 115% of that highest year ever only in 160 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 160 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=3756753&mesg_id=3756794

[ozymandius]

14. Nation Instinctively Forms Breadline

Drawn by a strange force they could neither resist nor describe, millions of Americans reportedly dropped what they were doing Tuesday and, acting as if by instinct alone, gathered into one massive nationwide breadline.

According to witnesses, citizens across the country exited their homes in near unison, leaving behind growing stacks of bills, empty kitchen cupboards, and what was once a life of comfort to form the spontaneous, 2,000-mile-long queue.

Who else?

[ozymandius]

15. more snark

[willing dwarf]

17. Yeah they're right though, sometimes it feels like we're playing "Depression"

A sort of nostalgia for the stories of family connectedness and the trust neighborhs had for each other during the good-old days seems to take hold. Last week when I was sewing together a hat from a sweater sleeve I'd shrunk I had the feeling I was channelling the thrift of my dead grand mama who used to make plant support ties from old panty hose, who would file her bills in plastic milk cartons which she'd cut open to serve as baskets.

Maybe we, the children and grandchildren of depression survivors are needing to relive those experiences to know we too can survive?

[DemReadingDU]

32. I don't think we'll be 'playing' depression for much longer

We'll be living it. Too many signs that turmoil is coming. I guess I have always re-used items, just like my mom and grandma. Surviving is being creative and adaptable. Many young people don't have these skills, yet. But they'll learn.

[DemReadingDU]

31. I could see massive long breadline happening in France

but never in America. Americans are too wimpy. (maybe there is a different word that better describes most Americans?)


edited subject, because posting is far down from the original article

[InkAddict]

40. I don't know - remember the dubious Hands Across America

Many even paid for the experience...

On the other hand...maybe the seeming spontaneity of the line formation wasn't so spontaneous...remember the "mountain of mashed potatoes," Devil's Mountain, and http://www.youtube.com/watch?v=tUcOaGawIW0

Bet everyone in line could hum that tune: five-tone music motif in a pentatonic scale.

[Hugin]

46. +5 for the 'Close Encounters' reference.

Well done!

[AnneD]

65. Esp since the .....

great French Director Francois Truffaut had an acting role in it (it was close to his premature death- I think from brain cancer). No, the French would be rioting and at the very least taking to the streets. The government would be pissing in their shoes and remembering the last time there was an uprising.

I wonder about America. We seem to have lost our sass or mojo.

[TalkingDog]

71. No tin-foil hats here: it's the Fluoride

http://www.ncbi.nlm.nih.gov/pubmed/2612943

http://books.nap.edu/openbook.php?isbn=030910128X&page=205


AnnieD have you never wondered why I drink only distilled water, or rain water, and only pure-grain alcohol?


Not enough patience to find a good "They Live" pic.

[Demeter]

16. Today's Rant: Dave Lindorff: Wall Street and Bernanke -- The Blind Leading the Blind

http://www.buzzflash.com/articles/lindorff/205

Free market aficionados, particularly in the media, have long been wont to tell us that the "market knows best." That was always the line when progressives (remember when there used to be progressives in government?) would come up with some do-good scheme such as a public jobs program during the Johnson War on Poverty, or Medicare, or bigger subsidies for urban mass transit. If the stock market sank, they'd pronounce whatever program or bill it was as a bad idea, because "the market" (meaning investors), had nixed it by selling shares.

The same kind of analytical brilliance has been routinely ascribed by economic pundits to investors when it comes to business decisions -- particularly mergers and acquisitions, or divestments and breakups. If Bank of America announces that it is going to buy the foundering Merrill Lynch and shares of B of A fall, then the merger is a bad idea. If the shares rise, it's a good idea. And so it goes.

The whole idea that a bunch of people who sit around at computer screens betting on stocks and eating cheese doodles all day really know much of anything, or that taking their herd responses collectively as some kind of delphic oracle has always seemed the height of folly to me. But if you really wanted proof that investors taken collectively are idiots, you could simply look at the stock market. Monday, every index plunged by about 4%, pulling the overall market to lows not seen in 12 years, because of concerns that the recession was deepening, the big banks were toast, and the government's economic stimulus plan was not going to help much.

There was every reason to expect the downward trend to continue, but up stepped Federal Reserve Chair Ben Bernanke, and, in a statement presented in Congress, said that in his considered view, the current recession could be over by the end of this year.

Relieved investors jumped back into the market and bought stocks, pushing the Dow and the S&P indexes back up by almost as much as they'd lost the day before.

But wait a minute! Isn't Ben Bernanke the same guy who was chair of the Fed last year and the year before? The same chair who completely failed to see the coming credit crisis and global financial collapse? And if that's the case, why on earth would investors take seriously anything he says about the future direction of the economy?

You'd have to be in a state of glycemic overload to believe anyone who told you that this recession, which is just starting to really roll downhill, is going to be over by the end of 2009. Why, we're also getting reports that earlier estimates that official unemployment this year would hit 8 percent are far too low, and that it will actually be closer to 9 and rising by year's end. (Real unemployment -- that is as measured the way the Dept. of Labor used to measure it before the Carter Administration changed the methodology to hide how bad things were in the late 1970s -- is about 18 percent already.)

We don't even know as of today what the fate of the three so-called U.S. automakers will be. One may end up sold, or partly sold to China, one may go bust, and the other may be belly up a year from now. And as for the banks, there are plenty of smart people who are pointing out that banks such as Citibank and B of A are really, at this point, zombies, and that the government may end up, against its will, having to take them over, break them apart, and sell off the parts that still float, using the rest for kindling.

I'm no economic prognosticator, but I do know that this economy is not about to bounce back. The whole American public is now in a hunkered down, defensive position, hoarding money, worrying about losing employment, struggling to pay bills. Consumers, whose activities accounted until recently for 72 percent of U.S. GDP, have lost upwards of $8 trillion in lost investments and shriveled home equity. That's not an environment that sets the stage for a recovery.

Bernanke is talking through his hat. The only rational reason to buy today on Bernanke's comment would be if you surmised that the average investor is an idiot and would likely buy based on the Fed chairman's comments. But then, of course, you would only be buying to ride the short bump those comments would cause, jumping back out soon afterwards, before common sense returned and the market continued its downward slide.

Of course, looking more broadly, there is a theory that market behavior can be predictive as a leading indicator. Major economic downturns have generally been preceded by major market crashes (just as recoveries have been preceded by market rises). We had a roughly 40% crash in the market in 2008, which, judging from history, would be predictive of a serious recession. But we've also had an additional slump of 16-18 percent just since Jan. 1. In normal times that would almost qualify as a "bear market" (a serious market crash, defined as a fall of 20% over a two-month period) in itself, and as such, would be considered a "leading indicator" of a coming economic slowdown.

Far be it for me to say investors know anything about the future of the economy, but I'd guess that their longer-term lack of confidence in the stock market is giving a far more accurate and honest assessment of the likely direction of the U.S. and global economy than Chairman Bernanke's latest comments to Congress.

I'd also be willing to bet that they weren't taking Bernanke seriously in Congress or in the White House, where the whole premise of the stimulus package -- a two-year affair -- is that things will not start to look better until at least the end of 2010 or sometime in 2011.

DAVE LINDORFF is a Philadelphia-based journalist and columnist. His latest book is "The Case for Impeachment" (St. Martin's Press, 2006 and now available in paperback edition). His work is available at www.thiscantbehappening.net.

[ozymandius]

23. Bernanke Admits Fed Is Clueless and Banks are Zombified

Inquiring minds are asking "To what extent is the Fed is in the dark?"

Amazingly Bernanke answered that question today in Congress with complete candor. All you need to know is how to translate his statements. Please consider Bernanke tells Congress Fed knows what it is doing.

Federal Reserve Board chairman Ben Bernanke tried to assure Congress and investors that federal regulators are not grasping at straws in the response to the financial crisis.

"We're not making it up," Bernanke told the House Financial Services panel.

"We're working along a program that has been applied in various contexts."

"We're not completely in the dark."

My Translation (Mike Shedlock):

"We're making it up as we go along"
"We have no idea what we are doing so the program changes every day"
"We are completely in the dark"

http://globaleconomicanalysis.blogspot.com/2009/02/bernanke-admits-fed-is-clueless-and.html

[Demeter]

24. As I Always suspected

Can't Obama fire Bernanke, or persuade him to "go away"? And take Geithner with him.

[bread_and_roses]

50. He has another good article on Obama's address over-all, especially regarding bank bail-outs

I know people here don't like Counterpunch but I often find good articles there. Here's Lindorff on the front page:

But clearly, the proposals offered by the president for tackling the crisis are not up to the task. He spoke primarily of the need to “get banks lending” again, explaining that this would require pouring still more hundreds of billions of dollars into these failing institutions. You’d think that with a whole stable of bankers at his elbow, the president would by now have heard from at least someone that this is nonsense, but apparently not. Nobody in the White House or the Cabinet seems to want to point out to the boss that the reason banks aren’t lending is because most people—and companies—aren’t interested in borrowing. The economy is tanking and assets are sinking in value by the day. Why would anyone want to borrow to invest in such an economy? Furthermore, even if someone did want to borrow, banks will not want to lend unless they think there’s a reasonable prospect of having the money repaid. That means they want to see income, they want to see a full order book, they want to see, in the case of a mortgage, an asset that is fairly valued. None of this exists.

That’s why the first $350 billion that was given to the banks last fall was simply pissed away and lost, not lent out, and it’s why the same thing is likely to happen to the next $350 billion Obama is preparing to give away. It won’t matter if he establishes a monitoring system for the second tranche of the Troubled Assets Relief Program bailout funds, or a mandate that they be used for making loans.

What is needed to fix this crisis is job security, and the only way to create that is by creating jobs.

He goes on to propose far more extensive and directly government funded jobs programs - a la New Deal. Obama is doing some good things, for sure, but I fear his baby-step incrementality and timidity in tackling the fundamentals will cost us all dearly. Nor am I convinced that the American people are not ready to hear some more "radical" proposals - again, a la Rooseveltian jobs - the anger against the banksters is just waiting for match, and Obama has the oratorical skills to ignite it if he chooses.

[ozymandius]

18. AIG Breakup LIkely

AIG Breakup LIkely

Two observations: First, every time AIG has retraded its deal the US taxpayer has come out worse, so my assumption in the absence of conflicting evidence is that this is more of the same.

Second, many observers refer to AIG as "nationalized" due to the government's 79.9% ownership. But has the Federal Reserve, for instance, asked board members to submit letters of resignation? Power is not simply a function of standing, but also of will, and the powers that be seem to have exercised just about no influence, save the ouster of CEO Robert Willumstad and raising a stink about fancy parties. Note the desire expressed to keep AIG afloat. In context, it could just as well mean preserving their standing as a private concern, rather than merely operating as a business. If AIG were truly nationalized, rating agency downgrades would not be an issue; the firm would be treated as state owned, hence state backed and deserving of an agency-type rating.

-more at link-

[Demeter]

19. Total to back Trans-Sahara gas pipeline

http://www.ft.com/cms/s/0/23d401e6-0338-11de-b405-000077b07658.html

Total, the French oil major, said on Wednesday that it was ready to participate in a planned Trans-Saharan gas pipeline, seen by European governments as a potential route to reducing their dependence on Russian energy.

Gazprom, the Russian gas monopoly, has already expressed an interest in the €15bn scheme as part of a wider strategy of gaining access to Nigeria’s vast gas reserves, seen as crucial to future energy security in Europe and the US.

[Demeter]

20. Luxembourg attacks UBS over Madoff fund (TWISTY!)

http://www.ft.com/cms/s/0/ed034050-0378-11de-b405-000077b07658.html

UBS, the Swiss bank, was accused of “serious failure” by Luxembourg’s financial regulator over its custodianship of a $1.4bn fund that funnelled money into Bernard Madoff’s alleged $50bn “Ponzi” scheme.

The regulator ordered the bank to pay compensation, saying the “poor execution of its due-diligence obligations constitute a serious failure of its surveillance role as a depositary bank.”

The Commission de Surveillance du Secteur Financier gave the Swiss bank’s local arm three months to pay compensation for its failures and improve procedures and structures.

The CSSF has already moved to shut down the fund, Luxalpha, but Wednesday’s public denunciation UBS was highly unusual, legal experts said.

It comes as the Grand Duchy fights charges that investors in Luxembourg are less protected than in other EU countries. Many Luxalpha investors were French.

UBS said it was “unfair” to blame the bank. An official said: “The investors in Luxalpha were sophisticated and explicitly agreed that the safekeeping of the securities was Madoff’s responsibility and not UBS’s.”

However she added that UBS remained “keen to continue to co-operate with the authorities.”

People familiar with CSSF’s negotiations with the Swiss bank said the regulator had been pushing hard for compensation.

UBS officials have sought to minimise the bank’s role in the Luxalpha feeder fund, saying the bank never actively marketed or recommended the fund.

Luxalpha was set up in 2004 at the request of a group of investors who already had money with Mr Madoff and wanted to hold their investments through a Luxembourg fund.

As custodian, it earned fees of less than one hundredth of one per cent, said officials familiar with the arrangement.

Luxalpha’s Direct investors were required to sign a subscription form that said “the risk of loss of the assets following a default (even if unlikely) of the US registered broker-dealer is borne entirely by the shareholders.”

Since Mr Madoff’s arrest in December, Luxembourg has been forced to rebuff suggestions that lax regulation has underpinned the success of its financial centre.

Christine Lagarde, the French finance minister, pointed the finger at Luxembourg last month for its application of EU rules designed to protect investors by placing a regulatory duty on the fund’s depositary bank.

In a letter to the European Commission, copied to Luxembourg’s prime minister, she argued that “the protection of investors varies from one country to another”, a suggestion Luxembourg’s authorities were quick to rebut.

A lawyer close to the matter said: “Basically, the blame will either fall on UBS as the depositary bank, or it will fall on the regulator for not doing their jobs.

“The only way for to rebuff French claims is for UBS to take at least a portion of the blame.”

[Demeter]

22. Iceland scraps threat to UK over asset freeze

http://www.ft.com/cms/s/0/0e146bde-02ac-11de-b58b-000077b07658.html

Iceland’s new government has dropped plans to take the UK government to the European Court of Human Rights over its use of anti-terror laws to freeze Icelandic assets, ending the most vicious spat between the UK and Iceland since the 1970s cod war....The previous government pledged in January to pursue legal action against the UK in Europe for its decision to use the anti-terror legislation, dropping plans to sue the British government in UK courts after its legal advisers said it would not win. It claimed the British move massively undermined confidence in its banking system and triggered its eventual collapse.

The Icelandic government was deeply offended at being equated with al-Qaeda and arguments over the issue degenerated into an outbreak of deeply undiplomatic exchanges between both sides and led to anti-British street protests in Reykjavik, Iceland’s capital.

WHAT DO THEY THINK WE ARE, THE ICELANDERS SAID, GEORGE BUSH?

[Demeter]

25. Ford chiefs to accept 30% salary cuts

http://www.ft.com/cms/s/0/237092f6-02d3-11de-b58b-000077b07658.html

Bill Ford, chairman of Ford Motor, and Alan Mulally, the Detroit carmaker’s chief executive, have agreed to cut their salaries by 30 per cent this year and next as part of a drive to show that the company’s senior ranks are sharing in the sacrifices demanded from lower-level workers...







30% of what? Is 30% of a large amount really a sacrifice?

[adamuu]

37. should be $1. Seriously. They have no shame. n/t

[Demeter]

26. Merrill hit by unseen $500m charge

http://www.ft.com/cms/s/0/b7451256-02d1-11de-b58b-000077b07658.html

Ineffective internal controls at Merrill Lynch caused the firm to understate its 2008 losses by more than $500m, the investment bank said on Tuesday in its annual report.

Merrill, which was acquired by Bank of America on January 1, shocked investors last month with the disclosure of a $15.3bn loss for the fourth quarter of 2008 and full-year losses of $27.1bn. But in its revised figures, Merrill disclosed that its losses for 2008 were $27.6bn.

The additional $500m in losses appear to have come from the discovery that Merrill used a flawed model for measuring the value of derivatives that were used in its hedging strategy.

Auditor Deloitte & Touche concluded that Merrill had “not maintained effective internal control over financial reporting” as of the end of 2008.

The disclosure is another blow to the reputation of John Thain, the Merrill chief executive who was ousted by BofA chief Ken Lewis last month. Mr Thain was hired by Merrill in late 2007 in part because of his reputation as a skilled risk manager...

According to the annual report, the discrepancy in valuation involved internal swaps used between Merrill and its affiliates. In 2008, the report said, Merrill “began using a different set of yield curves to value certain intercompany swaps”.

SOUNDS LIKE A PONZI SCHEME TO ME!

[Tansy_Gold]

60. they should value ALL derivatives at $00.00 unless they can

provide evidence of real (market?) value. (And if you can't sell it at any price, then the only value it has is $00.00)


Let's see what their balance sheets look like then.



Tansy Gold

[Demeter]

62. "Swiss" Cheese (Made by UBS)

How's that for a pun, eh?

[Demeter]

27. The Two Documents Everyone Should Read to Better Understand the Crisis RSS stumble digg reddit del.i

http://www.huffingtonpost.com/william-k-black/the-two-documents-everyon_b_169813.html


As a white-collar criminologist and former financial regulator much of my research studies what causes financial markets to become profoundly dysfunctional. The FBI has been warning of an "epidemic" of mortgage fraud since September 2004. It also reports that lenders initiated 80% of these frauds. When the person that controls a seemingly legitimate business or government agency uses it as a "weapon" to defraud we categorize it as a "control fraud" ("The Organization as 'Weapon' in White Collar Crime." Wheeler & Rothman 1982; The Best Way to Rob a Bank is to Own One. Black 2005). Financial control frauds' "weapon of choice" is accounting. Control frauds cause greater financial losses than all other forms of property crime -- combined. Control fraud epidemics can arise when financial deregulation and desupervision and perverse compensation systems create a "criminogenic environment" (Big Money Crime. Calavita, Pontell & Tillman 1997.)

The FBI correctly identified the epidemic of mortgage control fraud at such an early point that the financial crisis could have been averted had the Bush administration acted with even minimal competence. To understand the crisis we have to focus on how the mortgage fraud epidemic produced widespread accounting fraud.


Don't ask; don't tell: book profits, "earn" bonuses and closet your losses


The first document everyone should read is by S&P, the largest of the rating agencies. The context of the document is that a professional credit rater has told his superiors that he needs to examine the mortgage loan files to evaluate the risk of a complex financial derivative whose risk and market value depend on the credit quality of the nonprime mortgages "underlying" the derivative. A senior manager sends a blistering reply with this forceful punctuation:

Any request for loan level tapes is TOTALLY UNREASONABLE!!! Most investors don't have it and can't provide it. e MUST produce a credit estimate. It is your responsibility to provide those credit estimates and your responsibility to devise some method for doing so.

Fraud is the principal credit risk of nonprime mortgage lending. It is impossible to detect fraud without reviewing a sample of the loan files. Paper loan files are bulky, so they are photographed and the images are stored on computer tapes. Unfortunately, "most investors" (the large commercial and investment banks that purchased nonprime loans and pooled them to create financial derivatives) did not review the loan files before purchasing nonprime loans and did not even require the lender to provide loan tapes.

The rating agencies never reviewed samples of loan files before giving AAA ratings to nonprime mortgage financial derivatives. The "AAA" rating is supposed to indicate that there is virtually no credit risk -- the risk is equivalent to U.S. government bonds, which finance refers to as "risk-free." We know that the rating agencies attained their lucrative profits because they gave AAA ratings to nonprime financial derivatives exposed to staggering default risk. A graph of their profits in this era rises like a stairway to heaven. We also know that turning a blind eye to the mortgage fraud epidemic was the only way the rating agencies could hope to attain those profits. If they had reviewed even small samples of nonprime loans they would have had only two choices: (1) rating them as toxic waste, which would have made it impossible to sell the nonprime financial derivatives or (2) documenting that they were committing, and aiding and abetting, accounting control fraud.

Worse, the S&P document demonstrates that the investment and commercial banks that purchased nonprime loans, pooled them to create financial derivatives, and sold them to others engaged in the same willful blindness. They did not review samples of loan files because doing so would have exposed the toxic nature of the assets they were buying and selling. The entire business was premised on a massive lie -- that fraudulent, toxic nonprime mortgage loans were virtually risk-free. The lie was so blatant that the banks even pooled loans that were known in the trade as "liar's loans" and obtained AAA ratings despite FBI warnings that mortgage fraud was "epidemic." The supposedly most financially sophisticated entities in the world -- in the core of their expertise, evaluating credit risk -- did not undertake the most basic and essential step to evaluate the most dangerous credit risk. They did not review the loan files. In the short and intermediate-term this optimized their accounting fraud but it was also certain to destroy the corporation if it purchased or retained significant nonprime paper.


Stress this: stress tests are useless against the nonprime problems


What commentators have missed is that the big banks often do not have the vital nonprime loan files now. That means that neither they nor the Treasury know their asset quality. It also means that Geithner's "stress tests" can't "test" assets when they don't have the essential information to "stress." No files means the vital data are unavailable, which means no meaningful stress tests are possible of the nonprime assets that are causing the greatest losses....

MORE AT LINK

[DemReadingDU]

33. FBI saw mortgage fraud early

1/28/09 FBI saw mortgage fraud early
The FBI was aware for years of "pervasive and growing" fraud in the mortgage industry that eventually contributed to America's financial meltdown, but did not take definitive action to stop it. "It is clear that we had good intelligence on the mortgage-fraud schemes, the corrupt attorneys, the corrupt appraisers, the insider schemes," said a recently retired, high FBI official. Another retired top FBI official confirmed that such intelligence went back to 2002.

Both retired FBI officials asserted that the Bush administration was thoroughly briefed on the mortgage fraud crisis and its potential to cascade out of control with devastating financial consequences, but made the decision not to give back to the FBI the agents it needed to address the problem. After the terrorist attacks of 2001, about 2,400 agents were reassigned to counterterrorism duties.

But Deputy Director Steve McMillin of the Bush White House's Office of Management and Budget told the P-I last year that even partially restoring the FBI crime-fighting capabilities was not a priority.
Nevertheless, high FBI and Bush administration officials knew a potentially devastating problem was on the horizon and failed to stop it.

more...
http://seattlepi.nwsource.com/national/397690_fbiweb28.html

[Demeter]

57. Because Fighting Crime Was Never Even on the BushCo Radar

let alone a priority. After all, how can you fight yourself, let alone your patrons?

[Dr.Phool]

59. A lot of crime was on their radar.

As long as it involved Tommy Chong and bongs. Or weed. Or Democrats.

They even cut anti-terror funds to fight nekkid pictures! Ashcroft and Gonzo were regular Dick Tracy's.

[Demeter]

28. Lehman liquidators confident of HK asset sales

http://www.ft.com/cms/s/0/a502677a-02a3-11de-b58b-000077b07658.html


The liquidators of Lehman Brothers’ Hong Kong operations have been approached by more than 250 parties interested in the bank’s assets, it has been disclosed.

Prospective buyers include private equity groups, hedge funds and real estate investors. The unexpected level of interest offers hope to thousands of creditors of the eight Hong Kong entities, which account for the bulk of the bank’s Asian operations excluding Japan.

The revelation came at a media briefing in Hong Kong, the first since KPMG, the professional services firm, was appointed as a liquidator after the collapse of the US bank last September.

Eddie Middleton, KPMG partner, said a divestment programme could begin after the Hong Kong entities entered formal liquidation in the next six weeks. “My fear was that there wouldn’t be much interest in the Lehman assets. We are now filled with more confidence that there will be some competitive tension when it comes to selling assets,” he said. “The challenge will be to realise best value for these assets in what is a very challenging macro-economic environment.”

Last November the Financial Times revealed that the book value of the assets of the Hong Kong units was $20bn. KMPG said on Tuesday the entities had aggregate liabilities of $22.6bn.

Lehman Brothers’ liquidation, the largest bankruptcy in history, offers a glimpse into the complex inner workings of global investment banks, where large amounts of money flow among numerous subsidiaries or fund balance sheet investments.

KPMG said one Lehman Hong Kong unit held 44 positions in Asian real estate, with a book value of $1.25bn.

Mr Middleton said units held 294 positions in principal investments and loans across 13 Asian countries, with a notional value of $2.9bn. These positions included corporate bonds, equity options and warrants, and were being actively managed by KPMG.

At the time of collapse, proprietary traders at Lehman Hong Kong held 930 investments in listed equities, valued at $370m. KPMG has liquidated $100m worth of derivatives positions.

KPMG highlighted the complexities of the bank’s intracompany transfers, which total tens of billions of dollars. Lehman’s Hong Kong units are owed an aggregate $6.7bn by the bank’s Japanese arm.

SO LEHMAN'S LOOKS GOOD TO THE VULTURES--ANOTHER REASON TO 'SACRIFICE' IT?

[Demeter]

29. GE denies unit needs more cash to cover debt

http://www.ft.com/cms/s/0/5223faa6-02cf-11de-b58b-000077b07658.html


General Electric said a recent $9.5bn equity infusion into the conglomerate’s GE Capital unit would cover its obligations should the finance arm trip a fixed-charge covenant on its debt, disputing an analyst’s suggestion that the division may need more cash.

Deutsche Bank analyst Nigel Coe cut his target price on GE from $17 to $12 and cast doubt on the finance division’s profit forecast, pushing GE’s shares 5.7 per cent lower on Monday and lifting the cost of insuring GE Capital’s debt against default near a record high.

The deepening financial crisis has transformed GE Capital from the profit engine that powered the stunning ascent of the company’s stock price throughout the 1990s to what Wall Street sees as a liability that imperils the conglomerate’s pristine credit ratings, its $1.24-a-share annual dividend and a reputation for consistent outperformance.

In a statement on the company’s website, GE argued that Mr Coe failed to account for the $9.5bn when he wrote that the company may have to divert more cash or pay down its debt should GE Capital fall short of the unit’s $5bn earnings forecast and trip its covenant for maintaining a minimum profit-to-fixed charges ratio....While Mr Coe issued a terse follow-up note on Tuesday reiterating GE’s statement, he stopped short of correcting his initial report.

“If indeed the fixed charge ratio does fall to 1.06x at December 31, GE believes the recent injection of $9.5bn equity capital into GE Capital would be more than sufficient to make good on any commitments under the covenant,” he wrote in Tuesday’s note.

Mr Coe also noted that GE Capital is measured only against the covenant at the end of the year.

He could not be reached for comment.

[Hugin]

41. I was going to say... I hope Rick Santelli never needs anything.

But, alas... It looks as if he does.

[Hugin]

43. The 10 dirty tricks we need to be watching for...

Here are the 10 "dirty tricks" Wall Street lobbyists likely will use to help jump-start a new bull market:

Gridlock helps the rich get richer
No Glass-Steagall revival
Keep rating agencies ‘official’
Limit new derivative regulations, keep ’shadow banking’ alive
Offload toxic debt into a government-owned ‘bad bank’
Support executive pay limits — in public, anyway
Create accounting standards loopholes
No limitations on SEC hiring
Invest heavily in lobbying
Major PR brainwashing: Yes, yes, a new bull is coming

To which I will add... Keeping the myth of Credit Scores alive to insure the common American stays in their place.

This is a cross post from the Economy forum... (Thanks RedEarth)

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x58099

Originally from MarketWatch...

http://www.marketwatch.com/news/story/Ten-dirty-tricks-Wall-Street/story.aspx?guid={34D0B6E7-FEDC-4193-8F18-71D97715997B}

[antigop]

51. Thanks for posting this...I had missed it on the Economy forum n/t

[DemReadingDU]

44. The Periodic Table Of Doomsday Economic Charts

chart here
http://www.financialarmageddon.com/2009/02/an-ugly-picture.html

or here
http://zerohedge.blogspot.com/2009/02/periodic-table-of-doomsday-economic.html

[Hugin]

45. Excellent find!

That's one for the OP, IMHO. :thumbsup:

[DemReadingDU]

48. I wish the chart would have links to each graph

Now that would be very cool

[DemReadingDU]

49. Martin Weiss at noon today, free online conference

2/26/09 Weiss says: I’m so concerned about the dangerous threats to virtually every stock and bond, I have taken the liberty of reserving a spot for you at today’s emergency online video briefing, “The 11 Laws of Bear Market Success.”

There’s no need for you to do anything right now; I’ve already registered for you, gratis. All you have to do is turn up your computer speakers and click this link a few minutes before noon, Eastern Time today.

here's the link
http://weiss.streamlogics.com/bearmarketsuccess/


You’ll learn:

* Why following bull market rules at a time like this is a recipe for disaster: How big mutual funds, financial planners and Wall Street brokers have dumped pure garbage into your portfolio …

* Why investments you may think are safe — “too-big-to-fail” banks, “insured” municipal bonds, and junk bonds masquerading as quality bonds — are little more than ticking time-bombs set to blow your portfolio apart at virtually any moment, and … more

http://www.moneyandmarkets.com/ive-never-done-this-before-29896

Edit: Usually about once a month, Martin Weiss and Mike Larson have an online conference, but we've always had to pre-register. But today, he's opened the link to anyone who wants to watch and listen. They are informative, some better than others relative to what interests you.
Tune in!

[DemReadingDU]

63. This part is interesting

Weiss has The 11 Laws of Bear Market Success, which if followed, gains can be made in a bear market. So to prove this, Weiss his taking his own money, $1 million, and creating a new fund at Fidelity consisting of safe investments. Other people can also put their money into this fund.

Prior to selling or buying various investments for this ongoing fund, Weiss will send an alert 2 days prior to the purchase, so others will know ahead of time, what is going on and make the same purchase (if they want to). Claus Vogt will be a fund manager.


edit: click more info about Weiss's Million-Dollar Contrarian Portfolio
http://images.moneyandmarkets.com/reports/Event/Bear/

[AnneD]

67. They were very

very busy.

[DemReadingDU]

76. Here's a transcript, and follow-up report

Transcript
http://images.moneyandmarkets.com/reports/MCP/9342/transcript.html


Follow-up report
http://images.moneyandmarkets.com/reports/MCP/9342/93593.asp?sc=p225&ec=93593


In case you missed part of today’s briefing or want to watch it again, we’re offering an unprecedented encore performance of “11 Laws of Bear Market Success,” THIS Saturday.

So, on Saturday, February 28, just make sure you’re at your computer at 3:00PM Eastern Time (12:00 noon Pacific Time). At that time, turn up your computer speakers, and click this link.
http://weiss.streamlogics.com/bearmarketsuccess/

[antigop]

52. I got busted by the SEC. Where should I flee?

http://www.slate.com/id/2212107

Financier R. Allen Stanford, who stands accused of defrauding investors of $8 billion, reportedly tried to flee the country last week before the FBI found him in Fredericksburg, Va. What's the best place for an American fugitive to go?

Russia, Libya, Iran, or one of the other 90-odd countries that don't have extradition treaties with the United States. The U.S. has signed bilateral treaties with more than 100 countries, from the Bahamas to Israel to Zimbabwe, pledging that a fugitive will be sent back to the country where he committed a crime, plus numerous multilateral agreements promising to cooperate in fighting terrorism and the drug trade. (See a complete list here.) Unfortunately for fugitives, that means most of the developed world is off-limits. If you want to be totally safe, you'll have to go somewhere no one really wants to be—or that isn't on friendly terms with Uncle Sam.

You could also head to a country whose extradition treaty is weak or has massive loopholes. Cuba, for example, signed an agreement with the United States in 1926 but, under Fidel Castro, has long served as a haven for American fugitives. (The two countries did make an exception for hijackers after a series of high-profile hijackings in the late '60s and early '70s.) Before 9/11, extradition treaties frequently contained "political offense exceptions," which said that a host country did not have to return a criminal who would be punished for political reasons—a provision the United States invoked in refusing to return IRA members to Ireland. And to this day, certain countries refuse to extradite someone if they think the criminal will receive the death penalty or otherwise have his human rights violated.

[Hugin]

54. He hasn't reached the last refuge of the scoundrel yet...

They always find them cowering in a pup-tent.

It's like the last deranged thought through their head as their scheme collapses around them is... "I think I'll go camping."

[antigop]

55. HA! You mean like the guy who jumped out of the airplane? N/t

[Hugin]

56. Yes, him...

and about the last dozen or so.

Booosh's cousin was holed-up in an RV.

The only one who has so far broken the trend is Madoff... But, well... He may consider his Luxury Apartment Arrest to be 'Roughing it'.

We may be onto a pattern here.

[antigop]

53. Financiers used "hot line" to SEC examiners

http://www.truthout.org/022409J

In a hearing which exposed failures by the government's financial police, Congressman Stephen Lynch (D-Massachusetts) highlighted the existence of a "hotline," which he said could be used by Wall Street firms to call off government inspectors. The existence of a "hotline" has been confirmed by the Securities and Exchange Commission (SEC), though its purpose has been disputed.

The SEC - the federal agency tasked with policing the financial industry - has come under heavy criticism for incompetence and negligence in its role as the regulator of the giant Wall Street firms, the collapse of which has already cost taxpayers billions of dollars and continues to threaten the world economy. The most prominent example of SEC failure is the decades-long $50 billion Ponzi scheme - likely the largest financial fraud in history - orchestrated by Bernard Madoff. The fraud was identified by money manager and private investigator Harry Markopolos, the star witness at the February 4 hearing before the House Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises.

[Demeter]

58. Sound of Open hand Smacking Forehead

Is this a comedy? That's the only explanation I can offer.

[antigop]

61. We live in a third world country....with nukes n/t

[antigop]

64. Hey, folks! I think I'll apply for a job at the Treasury.

http://blogs.abcnews.com/politicalpunch/2009/02/volcker-shamefu.html?ref=fp4

Volcker: 'Shameful' That Treasury is Understaffed

Sounding off on hiring problems that we reported earlier this week, a leading economic adviser to President Obama today said it was "shameful" that the "weak" Treasury Department is so understaffed that Secretary Tim Geithner is "sitting there alone".

"There is an area that I think is, I don't know, shameful is the word," Paul Volcker said this morning at a Joint Economic Committee hearing. "The Secretary of the Treasury is sitting there without a deputy, without any undersecretaries, without any, as far as I know, assistant secretaries responsible in substantive areas at a time of very severe crisis. He shouldn't be sitting there alone."

Volcker is chair of the President's Economic Recovery Advisory Board.

"Now various things have contributed to this, I guess, inlcuding vetting procedures, but it really is an unfortunate situation."

I'll take the Federal retirement plan and health benefits.

[specimenfred1984]

66. Do it, but go for it as an outside contractor

That way you can say what really needs to be said. Of course, there's a good chance that you will be ignored but now that us democrats are running things there's a good chance what you say may actually be heard and implemented.

[antigop]

68. I wouldn't get the federal health benefits as a contractor. n/t

[specimenfred1984]

69. Of course not, and the 1st time you spoke up as an insider you'd be fired

and lose them anyway. It'd be an ugly process of setting you up for reprimands, failing to give you promotions, etc...the same crud that corporations pull. Most people want ideas, but they'll steal them as "their own" ideas, it's the culture of corruption we live in. As an outside contractor, you get to keep your ideas and principles.

[antigop]

70. Sorry...I need health benefits. n/t

[RUMMYisFROSTED]

77. Apply and don't speak up.

:shrug:

[Ghost Dog]

72. Insurers, banks lead Europe shares higher

Thu Feb 26, 2009 12:49pm EST FRANKFURT, Feb 26 (Reuters) - European shares closed higher on Thursday, snapping a four-day losing streak, as Royal Bank of Scotland (RBS.L) boosted a resurging banking sector, while investors received U.S. housing data positively .

The FTSEurofirst 300 .FTEU3 index of top European shares closed 2.3 percent higher at 732.47 points, after hitting a six-year low on Wednesday. It has fallen more than 12 percent so far this year, after plummeting 45 percent last year.

RBS jumped 25.5 percent after saying it would put 325 billion pounds ($463 billion) of its assets into Britain's bank insurance scheme. It also booked a 2008 loss of 24.1 billion pounds, the biggest in British corporate history.

"When a state puts a bank under its wings, it always causing a small recovery rally," said Giuseppe-Guido Amato, strategist at Lang & Schwarz in Germany, referring to statements by RBS that the British government's stake in the bank could rise as high as 95 percent.

Banking stocks gained, with UBS (UBSN.VX), Deutsche Bank (DBKGn.DE), BNP Paribas (BNPP.PA), Societe Generale (SOGN.PA) up between 8.9 percent and 16.2 percent.

"For me, this is the frail attempt of a bear-market rally. It may not be sustainable enough, but if the markets go into the weekend on a positive note, I could imagine that gains will continue next week," he added.

...

The DJ Stoxx insurance index .SXIP was the top sectoral gainer, up 9.75 percent.

...

Sentiment in Europe was also boosted by U.S. President Barack Obama's budget proposal, unveiled on Thursday, pencilling in the possibility he may request an additional $250 billion to help fix the troubled U.S. financial system.

On the downside, pharma stocks were the biggest sectoral decliners. The DJ Stoxx healthcare index .SXDP shed 1.1 percent, while Sanofi-Aventis (SASY.PA), Bayer (BAYG.DE) and AstraZeneca (AZN.L), were down 1.8 percent to 2.5 percent.

Around Europe, UK's FTSE 100 index .FTSE was up 1.7 percent, while Germany's DAX index .GDAXI rose 2.5 percent and France's CAC 40 .FCHI gained 1.8 percent.

/... http://www.reuters.com/article/marketsNews/idCALQ87552520090226?rpc=44&sp=true

[specimenfred1984]

73. Donnie Douche called in to prop up Sue Herrera's fat ass

Anybody catch any of that on bizfraud TV today? He didn't say what he should've said, that Sue and her gang-o-whores are part of the problem. Those TV business clowns have been lying their butts off every single day for years now and have zero credibility.

[TheWatcher]

74. They are just doing their job as per their Marching Orders from Above.

Fleece The Sheep in any and every way possible.

The only useful thing CNBC is good for is Cramer.

Not because that loud, Manic, Criminal Piece of shit ever has anything useful to say, or has any relevance whatsoever.

But because usually if you follow what he says on CNBC and his blog, and do the EXACT opposite, it has almost been a a sure-thing for traders, especially Index Futures on The Dow.

It's called the Cramer Fade-O-Matic.

And more often than not, it works like a charm.

ANOTHER example of how this "Market" is totally unmanipulated, and free of Corruption. :sarcasm:

Having said that, the CNBC whores belong in the Guillotine of Accountability with the rest of them.

Criminals and Liars the lot of them.

Yet ANOTHER ugly close in the last 10 minutes today.

I guess the Euphoria and Arousing Excitement of Record Unemployment and the suffering of the Public wore off early.

[Demeter]

78. You Know, I'm Feeling Really Down about the BFEE Freedom from Persecution

I hope to God that these bastards have lost more money than they could afford through their basic incompetence. It may be the only justice they receive.

[ozymandius]

79. end of the day stuff

Dow... 7,182.08 -88.81 (-1.22%)
Nasdaq... 1,391.47 -33.96 (-2.38%)
S&P 500... 752.83 -12.07 (-1.58%)
30-Year Bond 3.65% +0.05 (+1.25%)
10-Yr Bond... 2.98% +0.03 (+1.12%)

Stocks Surrender Early Gains

The major indices began the session with solid gains, helped by ongoing efforts to bolster the financial system, but choppy trading and more negative headlines eventually took their toll on stocks, sending them into the red.

Stocks climbed as much as 2% in the early going after participants reacted positively to reports the United Kingdom government will help protect banks against future losses by insuring assets.

To address potential future challenges to the U.S. financial system, President Obama is proposing to add a $250 billion placeholder in this year's budget. The money would come on top of funds already allocated to stemming the financial crisis, and would push the proposed deficit to $1.75 trillion.

The planning in Europe and at home marked another step in overcoming financial calamity.

At its session high, the financial sector was up almost 7%, while banks were up more than 13%, according to the KBW Banking Index. Those gains were eventually pared, though.

FDIC reported that at the end of the fourth quarter its list of troubled institutions grew to 252 from 171 at the end of the third quarter. News that there is a larger number of institutions challenged by dour economic conditions didn't necessarily tell investors anything new. However, the report still accounts for one more negative headline.

Financials finished the session 2% higher. The KBW Banking Index finished almost 5% higher. JPMorgan Chase (JPM 23.05, +1.32) provided leadership after it indicated first quarter results are solidly profitable thus far, and the company's outlook is roughly in-line with analysts' expectations.

Though the broader market has followed the lead of financial stocks in recent weeks, financials were unable to induce buying in the broader market. All three major indices gradually surrendered their early gains and finished the session with a loss.

Health care stocks lagged for the entire session. The sector closed with a 5.1% loss. Particular weakness was seen in managed care companies, which dropped amid concern that health care reform will reduce Medicare spending.

Bleak economic data did little to support stock buying.

The latest data indicated January durable goods orders fell a more-than-expected 5.2%. Excluding transportation, durable goods fell 2.5%, which was also steeper than expected.

January new home sales fell more than expected to an annualized rate of 309,000 units, which is a record low.

Jobless claims continue to rise beyond expectations. Initial claims climbed 36,000 to 667,000 from the prior week. Continuing claims came in just below 5.03 million, up from nearly 5.00 million in the prior reading.

Earnings news had little impact on trading. General Motors (GM 2.38, -0.17) missed expectations, as did Safeway (SWY 18.37, -2.75). Fluor (FLR 34.90, +1.95) posted better-than-expected results and issued upside guidance. Express Scripts (ESRX 52.79, -4.67) reported in-line results.