STOCK MARKET WATCH, Monday May 4

[ozymandius]

Source: du

STOCK MARKET WATCH, Monday May 4, 2009

Bush Administration Officials Under Indictment = 2
Financial Sector Officials Under Indictment = 0
Financial Sector Officials In Prison = 2

AT THE CLOSING BELL ON May 1, 2009

Dow... 8,212.41 +44.29 (+0.54%)
Nasdaq... 1,719.20 +1.90 (+0.11%)
S&P 500... 877.52 +4.71 (+0.54%)
Gold future... 888.20 -3.00 (-0.34%)
30-Year Bond 4.09% +0.04 (+1.09%)
10-Yr Bond... 3.17% +0.05 (+1.60%)

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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 Observation

Of Fingers and Dikes
BY BRIAN PRETTI

The concept of perception versus reality is an extremely important distinction in the current economic cycle and circumstances of the moment. And remember, it’s not that potential misperceptions being priced into financial assets at any point in time are somehow bad, but rather THE issue of importance is making sure we are in touch with factual reality at all points in time so that we hope to make a judgment about whether what markets are discounting is correct or otherwise. Trying to make an informed judgment about this distinction is an exercise literally crucial to ongoing investment decision-making and risk management. You already know financial markets are not moved by reality 100% of the time. Far from it. Human greed, emotion, fear, distress, etc. all get to take turns driving the financial market pricing bus. We all just hope to be smart enough to know when a reckless driver has the wheel.

The equity market has certainly caught the attention of the investment community as of late. Time to take a much needed and very important detour in this discussion. Right to the point, let’s review the character of the credit market. Certainly a general sense of optimism has risen as the equity market has levitated as of late. And that sense of optimism engenders the thinking that the economy and general financial market conditions MUST be getting better because rising equities are simply foreshadowing such an outcome. In other words, history has taught us that equities lead and so if equities are rising, the implication is better days lie ahead. But in the current cycle, we all know that credit market issues have been the locus of distress and the exact cause for a dramatic loss of wealth in financial assets really globally. So although it’s certainly fun to watch the equity markets romp higher, it’s the credit markets that deserve a really big piece of our attention. Better days lie ahead as a generic comment when both the equity and credit markets are healing in simultaneous fashion.

....

For now this is a very small portion of the total Fed balance sheet. In all honesty, the Fed impact on the credit market character of Agency paper has not been as strong as the now surely implicit guarantee of Fan and Fred debt by the US government. Nominal yields on agency paper have dropped like a rock over the last year. This only could have taken place if investors truly believed the US government would back up any and all Agency debt (which they most surely will). The Fed balance sheet has also helped in this neck of the credit market woods make conditions “appear” as if they are improving with spreads between Agency and Government debt contracting meaningfully over the last year. So between the Fed and the now more than implied Government guarantee of Agency debt, this area of the credit market looks to be healing. Of course without the Government and Fed intervention, it would be a catastrophic disaster, probably the locus of massive default.

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

[ozymandius]

2. Today's Reports

10:00 Construction Spending Mar
Briefing.com NA
Consensus -1.4%
Prior -0.9%

10:00 Pending Home Sales Mar
Briefing.com NA
Consensus 0.0%
Prior 2.1%

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

[Ghost Dog]

29. Construction spending, pending home sales rise

WASHINGTON – Construction spending and pending home sales both were better than expected in March, hopeful signs that those battered industries may be stabilizing.

The Commerce Department reported Monday that construction spending increased 0.3 percent in March, the best showing since a similar rise last September. Economists surveyed by Thomson Reuters had expected spending to drop 1.5 percent for a sixth straight monthly decline.

Meanwhile, the National Association of Realtors said its index of pending home sales rose 3.2 percent to 84.6 in March, the second monthly increase after it hit a record low in January. The pending sales index also is 1.1 percent above last year's levels. Typically, there is a one- to two-month lag between a contract and a done deal, so the index is a barometer for future home sales.

...

Spending on private residential projects fell 4.2 percent in March, the latest in a series of declines that began three years ago when the housing bubble burst with disastrous effects for the home industry and the overall economy.

Nonresidential construction rose 2.7 percent in March, the biggest advance in nine months. It marked the second straight increase and was led by gains in office construction, hotels and power plants.

Government building activity also showed strength in March, rising 1.1 percent. A 1.3 percent gain in state and local activity offset a 1.7 percent drop in spending on federal projects. The rise in state and local activity could be early signs of the impact of the $787 billion economic stimulus bill that Congress passed in February in an effort to get money to the states for "shovel ready" building projects.

The various changes left total construction spending at a seasonally adjusted annual rate of $969.7 billion in March. Even with the unexpected increase, building activity is 11.1 percent below year-ago levels, reflecting the country's steep recession.

/... http://news.yahoo.com/s/ap/20090504/ap_on_bi_ge/us_economy;_ylt=As6lo4FuEZUY1HXuiYl_y8OyBhIF

[ozymandius]

3. Oil hovers at $53 as traders eye possible recovery

SINGAPORE – Oil prices hovered above $53 a barrel Monday in Asia as investors looked to U.S. bank stress test results and April unemployment data this week for signs the worst of the recession is over.

Benchmark crude for June delivery was up 22 cents to $53.42 a barrel by late afternoon in Singapore, in electronic trading on the New York Mercantile Exchange. The contract Friday rose $2.08 to settle at $53.20.

...

Two key indicators of the economy's health that investors will be eyeing this week are the U.S. government's assessment of the health of 19 big banks on Thursday and April employment data on Friday. American employers cut 663,000 jobs in March sending the unemployment rate up to 8.5 percent, the highest level in more than 25 years.

...

However, large crude inventories and slumping demand continue to drag on prices, which have traded near $50 a barrel for about a month.

...

In other Nymex trading, gasoline for June delivery rose 0.76 cent to $1.53 a gallon and heating oil gained 1.28 cents to $1.40 a gallon. Natural gas for June delivery jumped 2.6 cents to $3.57 per 1,000 cubic feet.

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

[Demeter]

16. Oh Yes, Float The Concept of a Recovery--So Summer Gas Prices Can Hit the Heights

Good try, oil barons, but no chance of that this year. Unless you want to shut down the economy completely.

[ozymandius]

4. Buffett attacks bank tests, eyes flu pandemic

OMAHA, Nebraska (Reuters) – Warren Buffett attacked the government's stress tests of 19 large U.S. banks, saying they failed to properly assess the industry's health, and that he would buy more shares in three big banks Berkshire Hathaway Inc already owns.

The world's second-richest man also said Berkshire, which generates about half its business from insurance, would consider writing policies to insure against a potential swine flu pandemic if it got paid enough.

....

Three Berkshire holdings, Wells Fargo & Co, U.S. Bancorp and SunTrust Banks Inc are among 19 large banks the U.S. government is stress testing to gauge whether they need more capital to survive a deep recession.

....

Berkshire would consider writing insurance policies for pandemics, including one that Buffett said assumes the U.S. mortality rate rises by 25 percent in 2010, equivalent to roughly an additional 600,000 deaths.

http://news.yahoo.com/s/nm/20090503/bs_nm/us_berkshire_buffett_banks

[ozymandius]

9. New Stress Trial Balloon Floated

I am coming to realize there might be method in the seeming madness of changing dates and shifting sneak previews via favored members of the press as to what the stress tests might entail.

Tire out the critics, numb the casual followers, and leave the boosters in firm control of share of mind.

Let's face it, the fact that the authorities are allowing banks to negotiate the findings is a very very bad sign. It says either they don't trust the results themselves, or they lack the guts to act like they are in charge. But regulators are always in charge (well until fifteen plus years of criticism in the media and Congressional budget cuts left them undernourished and fearful). And now they also have the power of the purse on their side too. BreakingViews had a few choice words:

...the behind-the-scenes tug of war between banks and the government over the results of their recent stress tests strains the already tenuous credibility of the exercise. It also shows that banks have become too powerful....

So it’s curious that regulators have put so much stock in the tests they announced in February...

But like the banks’ earlier and insufficiently stressful stress tests, the government’s worst-case outlooks aren’t all that far-fetched. They also use banks’ own estimates, meaning unscrupulous managers could tweak them to get a better grade. And bankers say they’ll produce very little information that regulators don’t already have.

Because of this, bank risk managers (not the most credible group these days) tend to view these tests as a public relations stunt that regulators will use to force their institutions to toe Uncle Sam’s line. That, in itself, is worrying. Regulators shouldn’t have to invent justifications for regulating properly. The right response by a bank when its overseer says jump is, “How high?”

There is another way the stress tests fall short. As was revealed earlier, the tests are focusing on bank loan exposures. Ahem. The real risk to the system is not in not-too-difficult to value (and sell) loans, but in the complex dreck and derivatives exposures at the big capital markets players, namely Citi and Bank of America. Even if a bank as big as Wells Fargo, a very big bank but in traditional retail and wholesale businesses, were to prove terminally impaired, it might be costly to resolve, but procedurally it would not be pathbreaking.

....

The other reason to focus on the securities and derivatives exposures rather than loans is many of them are much more sensitive to a deterioration in economic conditions than loans. While loan losses tend to rise in a linear fashion, the values of complex instruments can drop precipitously when cash flows on the underlying asset pool drop below certain trigger levels.

http://www.nakedcapitalism.com/2009/05/new-stress-trial-balloon-floated.html

[ozymandius]

5. Hungry Fiat Now Wants Opel

Sergio Marchionne is on a roll. The chain smoking, black-sweater wearing chief executive of Fiat was scheduled to meet with German government officials on Monday to lay out his plans for taking over Opel, the struggling European division of General Motors that has said it needs $4.3 billion to survive through the economic crisis.

....

One of Marchionne’s key proposals is to spin off Fiat Automobiles and combine that as a newly listed company with Opel and Chrysler, which Fiat is taking over in return for sharing its small-car technology and manufacturing platforms. (See “Fiat's Plan, Chrysler's Pain.”) The German government has till now refused to give state aid to Opel but will offer support to an investor on the condition that it keeps Opel plants open.

http://www.forbes.com/2009/05/04/fiat-opel-gm-markets-equities-automotive.html

[ozymandius]

6. GM Bankruptcy Probable as Obama Favors UAW Against Bondholders

May 4 (Bloomberg) -- General Motors Corp. may be more likely to end up in bankruptcy based on the Obama administration’s willingness to place Chrysler LLC into court protection to safeguard union health-care benefits.

With GM and its biggest bondholders at odds over resolving $27 billion in unsecured claims by a June 1 deadline, the Chrysler model indicates that President Barack Obama may resort to bankruptcy to end any impasse over that debt, said Martin Fridson, chief executive officer of New York-based credit investment firm Fridson Investment Advisors.

....

GM bondholders proposed April 30 they get a 58 percent ownership stake in the Detroit-based automaker in exchange for their $27 billion in unsecured claims. Bondholders are objecting to GM’s proposal they get a 10 percent share of GM equity while a union health fund would get $10 billion in cash and as much as a 39 percent stake for their $20 billion in unsecured claims.

....

GM said last week it must cut $44 billion in obligations from its books, including $10 billion of loans from the U.S. government, to return to an operating profit next year and win permission from the Obama administration to keep $15.4 billion in loans and win $11.6 billion more.

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

[ozymandius]

7. (On a roll) Buffett Lambastes Bankers, Insurers for ‘Greed,’ ‘Stupidity’

May 4 (Bloomberg) -- Berkshire Hathaway Inc. Chairman Warren Buffett lambasted bankers, insurers and regulators for being blind to the possibility home prices could fall, and said their shortcomings caused the worst recession in half a century.

Buffett and Vice Chairman Charles Munger said Wall Street sold subprime mortgage “sewage,” blamed the media and regulators for missing the danger and said the government stress tests of financial firms won’t advance Berkshire’s understanding of the stocks the company owns. Buffett hosted a record 35,000 people at the Omaha, Nebraska-based firm’s annual meeting May 2 and spoke at a news conference yesterday.

....

Buffett told shareholders he expects Berkshire will eventually profit from derivative bets on world stock markets that caused a $10 billion liability as of the end of 2008. Berkshire will only have to make payments on the contracts if markets are below agreed-upon levels when the terms expire, which is 10 years from now at the soonest. Berkshire has received about $4.9 billion in payments on the derivatives.

Life insurers that made similar bets with customers by guaranteeing returns on equity-linked retirement products “didn’t get paid appropriately,” Buffett said yesterday.

When insurers “tell the policyholder that he gets some of the up side and you take all the down side, that’s poison,” Buffett said. “That would be like a stockbroker telling you that he’ll pay you back if your stocks lose money.”

http://www.bloomberg.com/apps/news?pid=20601103&sid=a13D.XJgy_X0

[ozymandius]

8. Colleges Flunk Economics Test as Harvard Model Destroys Budgets

May 1 (Bloomberg) -- On a Thursday morning in March, the $32 million School of Management building at Simmons College in Boston is all but deserted. Three students lounge in armchairs facing floor-to-ceiling windows that look over the quad with its winding walkways and greening lawn; another makes photocopies.

.....

Simmons, home to 4,700 students, opened the 66,500-square- foot (6,200-square-meter) center in January, two months before the U.S. stock market hit its lowest point in 12 years. Even before the ribbon cutting, enrollment in the management school had been dropping.

Now, the vacant halls are reminders of the new math confounding U.S. colleges. Students, pummeled by scarce loans and savings plans that have fallen as much as 40 percent, are heading for less expensive schools. The perks designed to lure them during boom times -- from hot tubs to dorm-suite kitchenettes, to in-room cable TV -- are crushing universities with debt. Even projects like Simmons’s “green” management building, with its rain-absorbing roof patio and toilets with two flushing modes, can turn into burdens as schools struggle with rising expenses, plummeting endowments and needier applicants.

.....

From Harvard University to California’s 3 million-student community college network, the American system of higher education is in turmoil. The economic crash is upending each step in the equation that families use to determine where students will spend four of their most formative -- and expensive -- years. Today is the deadline that most schools set to receive a decision from accepted applicants.

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

---

Larry Summers indeed leaves a battered legacy at the institution where he was fired.

[Dr.Phool]

12. That's just a preview of what America will look like.

Summers, Rubin, Giethner, Friedman and Greenspan LLC. Licensed economic demolition experts.

[Demeter]

17. Summers Earned His Dismissal

I wonder if the sex discrimination scandal was a cover up for the more egregious financial fiasco Summers created.

Or maybe he's just versatile--a miserable failure in many dimensions, like Bush.

[saigon68]

19. Larry Summers is a clown

[Tansy_Gold]

27. That's an insult to clowns. n/t

[saigon68]

31. True and in retrospect I apologize to the clowns

That I may have inadvertently disturbed.

[wordpix]

23. totally relates to banks making risky loans for Big Development

with the help of gov. cronies OKing the new developments. See:

How Lehman Got Its Real Estate Fix

http://www.nytimes.com/2009/05/03/business/03real.html?pagewanted=1&_r=1&em

[Hugin]

30. "toilets with two flushing modes"

Hey! That's just like where I went to school!

Our toilets had two modes too... Clogged or Unclogged! Wow! I had no idea we were more advanced than Harvard!

I gotta add this to my resume! :D

:hurts:

[ozymandius]

10. It's really difficult to see how this shit is allowed to take place in broad daylight.

A Conflict of Interest is Not a Conflict of Interest If It Involves Goldman

The "all animals are created equal, but some are more equal than others" logic appears to operate in full force as far as Goldman is concerned. Violations of normal rules of conduct are not merely tolerated, but are asserted to be acceptable.

Now admittedly, the latest news tidbit, of former Goldman co-chairman Steven Friedman staying on as chairman of the New York Fed after Goldman became a bank holding company, isn't as troubling as when current Goldman chief Lloyd Blankfein was the only Wall Street denizen to meet with Hank Paulson when the Treasury was deciding what to do about AIG. Readers may recall that Goldman had the biggest exposure to AIG and thus had the most to benefit from a course of action that would be generous to counterparties (who had chosen of their own cognizance to enter into contracts with the big insurer).

.....

It's bad enough that Friedman owned Goldman shares while involved in policy discussions that would affect the bank. The fact that he went and bought more shares is breathtaking. Of course, this shows a huge deficiency in Fed procedures. Directors should be barred from trading stocks in any institution regulated by the Fed. While it is technically not inside information (you need to be an insider of the company in question, that is, have a fiduciary duty to its shareholders), it certainly raises the specter of trading on privileged information.

---

And the Fed's defense statement? Here 'tis: New York Fed officials say that to have forced Mr. Friedman off the board while it sought a Geithner successor would have deprived it of two leaders at a crucial time.

Crucial for what? Maximizing profits on derivatives contracts at taxpayer expense for 100 cents on the dollar, perhaps?

[Demeter]

18. With Leaders Like That, Who Needs Enemies?

[wordpix]

21. check this out re who's on NY Fed: Two Captains of USS Meltdown

http://www.nytimes.com/2009/05/03/business/03real.html?pagewanted=1&_r=1&em

snip: Missing out on the Stuyvesant Town deal stung Lehman, said one of the firm’s bankers who declined to be identified because he wasn’t authorized to speak publicly about his time at Lehman. It wasn’t just the lost fees. Mr. Walsh considered Tishman Speyer a core client. What’s more, Tishman Speyer’s chairman, Jerry Speyer, had a close relationship with Mr. Fuld. They were both board members of the Federal Reserve Bank of New York; Mr. Speyer and Mr. Fuld’s wife, Kathleen, were trustees of the Museum of Modern Art. snip

The article is about the wild high flying loans from investment banks to big developers. I smell gov. rats on the take here, too, b/c the development deals would only go down with their approvals. The NY Fed appears to be in on the get-rich-quick schemes, too.

[neverforget]

39. The best government Goldman can buy

:mad: :puke: :argh: :grr:

[Festivito]

11. Debt: 04/30/2009 11,238,592,141,958.64 (UP 85,669,727,570.36) (Big RISE, 45B$.)

(A big rise in the debt after previous report's drop netting about a 45B$ rise.)

= Held by the Public + Intragovernmental(FICA)
= 6,930,824,942,975.56 + 4,307,767,198,983.08
UP 79,347,503,951.43 + UP 6,322,223,618.93

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: $9.8, ABOUT TEN BUCKS for a 1B$ 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 306,264,086 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,695.76.
A family of three owes $110,087.27. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 31 days.
The average for the last 23 reports is 8,478,398,316.51.
The average for the last 30 days would be 6,500,105,375.99.
The average for the last 31 days would be 6,290,424,557.41.
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$/day.
There were 70 reports in 100 days of Obama's part of FY2009 averaging 0.34B$ per report, 0.35B$/day so far.
There were 145 reports in 212 days of FY2009 averaging 8.37B$ per report, 5.73B$/day.

PROJECTION:
There are 1,361 days remaining in this Obama 1st term.
By that time the debt could be between 13.1 and 19.8T$.
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)
04/30/2009 11,238,592,141,958.64 BHO (UP 611,715,093,045.56 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: 1,213,867,245,046.20 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
04/09/2009 +024,055,285,655.59 ------------**********
04/10/2009 +000,051,156,797.54 ------------*******
04/13/2009 +000,309,440,014.97 ------------******** Mon
04/14/2009 +000,167,862,523.71 ------------********
04/15/2009 +044,205,591,028.33 ------------**********
04/17/2009 -038,696,374,097.81 -
04/20/2009 +000,193,620,436.16 ------------******** Mon
04/21/2009 -000,363,758,089.93 ---
04/22/2009 +000,051,738,680.14 ------------*******
04/23/2009 -012,857,484,009.95 -
04/24/2009 -000,133,239,400.23 ---
04/27/2009 +000,285,896,492.06 ------------******** Mon
04/28/2009 +000,154,949,620.57 ------------********
04/29/2009 -034,727,762,120.64 -
04/30/2009 +079,347,503,951.43 ------------**********

62,044,427,481.94 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,573,960,338,699.57 in last 224 days.
That's 1,574B$ in 224 days.
More than any year ever, including last year, and it's 155% of that highest year ever only in 224 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 224 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=3857096&mesg_id=3857126

[Festivito]

33. Debt: 05/01/2009 11,208,076,192,300.55 (DOWN 30,515,949,658.09) (up-DN-UP-DN.)

(A big drop in the debt after previous report's rise netting about a 45B$ rise from its previous report, now adding about 17B$ net from the three reports. Three reports YO-Yoing the debt.)

= Held by the Public + Intragovernmental(FICA)
= 6,927,622,336,982.99 + 4,280,453,855,317.56
DOWN 3,202,605,992.57 + DOWN 27,313,343,665.52

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: $9.8, ABOUT TEN BUCKS for a 1B$ 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 306,270,258 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,595.38.
A family of three owes $109,786.14. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 days.
The average for the last 22 reports is 4,428,265,231.42.
The average for the last 30 days would be 3,247,394,503.04.

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$/day.
There were 71 reports in 101 days of Obama's part of FY2009 averaging 0.08B$ per report, 0.18B$/day so far.
There were 146 reports in 213 days of FY2009 averaging 8.11B$ per report, 5.56B$/day.

PROJECTION:
There are 1,360 days remaining in this Obama 1st term.
By that time the debt could be between 13.1 and 18.8T$.
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)
05/01/2009 11,208,076,192,300.55 BHO (UP 581,199,143,387.47 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: 1,183,351,295,388.10 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
04/10/2009 +000,051,156,797.54 ------------*******
04/13/2009 +000,309,440,014.97 ------------******** Mon
04/14/2009 +000,167,862,523.71 ------------********
04/15/2009 +044,205,591,028.33 ------------**********
04/17/2009 -038,696,374,097.81 -
04/20/2009 +000,193,620,436.16 ------------******** Mon
04/21/2009 -000,363,758,089.93 ---
04/22/2009 +000,051,738,680.14 ------------*******
04/23/2009 -012,857,484,009.95 -
04/24/2009 -000,133,239,400.23 ---
04/27/2009 +000,285,896,492.06 ------------******** Mon
04/28/2009 +000,154,949,620.57 ------------********
04/29/2009 -034,727,762,120.64 -
04/30/2009 +079,347,503,951.43 ------------**********
05/01/2009 -003,202,605,992.57 --

34,786,535,833.78 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,543,444,389,041.48 in last 225 days.
That's 1,543B$ in 225 days.
More than any year ever, including last year, and it's 152% of that highest year ever only in 225 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 225 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=3860332&mesg_id=3860382

[DemReadingDU]

13. Columbus Ohio - National Century victims awaiting repayment

5/3/09 National Century victims awaiting repayment
By John Futty

When National Century Financial Enterprises collapsed into fraud-fueled bankruptcy, few investors were hit as hard as those in Arizona.

More than 100 of the state's agencies and communities were in an investment pool that held notes worth $131 million in the Dublin-based health-care finance company. Chandler, Ariz., a suburb of Phoenix, took the largest individual hit, losing $13 million.

"There was shock, there was disbelief," said Nachie Marquez, a spokeswoman for the city. "It's taxpayer funds. You put your trust in an investment pool and you think it's safe."

The Arizona investors were among hundreds of institutional victims across the U.S. whose losses totaled $2.38 billion -- the largest known fraud case in the country involving a private company.

The government is "aggressively working" to recover the money from the founders and executives of National Century. They were ordered to pay restitution after they were convicted in federal court in Columbus of conspiracy, securities fraud, mail fraud and money laundering, said Assistant U.S. Attorney Doug Squires.

Last week, U.S. District Judge Algenon L. Marbley issued an order requiring National Century co-founder Lance K. Poulsen, considered the architect of the scheme, and his co-conspirators to forfeit $1.7 billion in assets, the amount prosecutors say represents the proceeds of the conspiracy.

But attorneys for the victims say they are more likely to recover the most significant amounts through lawsuits filed against financial institutions that allegedly are liable for the fraud.

"While we appreciate the government's efforts to squeeze money out of the individual criminal defendants," the financial institutions named in the civil litigation "are able to pay much more than any of these folks have," said Scott Humphries of Houston-based Gibbs & Bruns. The law firm represents investors who lost a total of $1.6 billion.

Investors filed a flurry of lawsuits against National Century, its executives and its financial advisers after the company filed for bankruptcy in 2002. The suits, involving hundreds of plaintiffs in five states, were combined in 2003 and assigned to one federal judge in Columbus.

JPMorgan Chase, a trustee for National Century funds, agreed to pay $425 million to settle its portion of the lawsuit in February 2006, according to an annual report it filed with the Securities and Exchange Commission.

The plaintiffs said JPMorgan Chase was negligent in allowing National Century to make fraudulent transfers among its accounts and for not detecting or revealing the illegal activity to investors.

Settlement money and insurance coverage helped the city of Chandler recoup some of its losses, Marquez said.

"We've recovered about 40 cents on the dollar for our clients," Humphries said.

Civil litigation continues against Credit Suisse, the investment bank that issued National Century's bonds.

Meanwhile, the U.S. attorney's office has collected $2.3 million so far from the criminal defendants, said Fred Alverson, an office spokesman.

The total includes $396,178 that federal agents seized in March from the bank account of Rebecca S. Parrett, a National Century executive who has been a fugitive since shortly after her conviction in March 2008.

The money recovered from the defendants was delivered to the federal clerk's office but has not been distributed to any victims, Alverson said.

National Century purchased the accounts receivable from hospitals, clinics and nursing homes using money obtained by selling asset-backed notes to institutional investors.

Evidence in the criminal trials showed that the company executives diverted money to support their lavish lifestyles and made unsecured loans to the health-care providers, leading to the company's collapse.

The bankruptcy process had begun in 2002 when the FBI obtained a warrant to search the company's Dublin headquarters. Agents collected more than 2,000 boxes of documents and computer files that formed the basis for an investigation involving the FBI, the Internal Revenue Service, U.S. postal inspectors and Immigration and Customs Enforcement.

Institutional investors, which included police and firefighter pension funds, churches, labor unions, cities and counties, and insurance companies, were led to believe the company's bonds were among the safest investments available.

The business model presented to investors was solid but never followed by the company, Squires said.

"(Company executives) did not dip their toes in the pool of fraud, they jumped in from Day One," he said. "From the first investor report, it was fraudulent."

The assets of the conspirators were researched by the federal probation office, but the information is not public record. Defense attorneys have said their clients' assets largely were exhausted while fighting the criminal charges.

Squires said the U.S. attorney's office will attempt to get "every available penny" from those convicted by seizing bank accounts, pensions, 401(k)s and property.

http://www.columbusdispatch.com/live/content/local_news/stories/2009/05/03/nationalcentury.ART_ART_05-03-09_B3_VODO9IJ.html?sid=101



link backwards to previous articles
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3806687&mesg_id=3806727

[wordpix]

14. How Lehman Brothers Got Its Real Estate Fix - Big Development behind the crash

http://www.nytimes.com/2009/05/03/business/03real.html?pagewanted=3&_r=1&em

By DEVIN LEONARD
Published: May 2, 2009

BACK when he was a major Wall Street deal maker, Mark A. Walsh, the former head of the global real estate group at Lehman Brothers, had a running joke with Carmine Visone, one of his managing directors. Mr. Visone, 10 years older than his boss, would lecture Mr. Walsh about the importance of fundamentals: land values, construction cost and rents. snip

One partnership pursued by Mr. Walsh exemplified his newfound appetite for ever riskier deals: transactions with the SunCal Companies of Irvine, Calif., an operation with an intriguing business model. It bought land, primarily in its home state, and sought government approval for residential development. If it got the green light, it sold the land to builders for an enormous profit. Mr. Walsh lent SunCal more than $2 billion and formed a close relationship with its founder, Boris Elieff. Mr. Elieff did not return calls seeking comment. snip

Lehman wasn’t the only bank throwing bridge equity into real estate. In October 2006, Wachovia and Merrill Lynch pledged $1.5 billion for Tishman Speyer’s $5.4 billion acquisition of Stuyvesant Town, the huge apartment complex in Manhattan. In February, Goldman Sachs, Morgan Stanley and Bear Stearns put up $3.5 billion into the Blackstone Group’s $32 billion deal to buy Equity Office Properties Trust.

Missing out on the Stuyvesant Town deal stung Lehman, said one of the firm’s bankers who declined to be identified because he wasn’t authorized to speak publicly about his time at Lehman. It wasn’t just the lost fees. Mr. Walsh considered Tishman Speyer a core client. What’s more, Tishman Speyer’s chairman, Jerry Speyer, had a close relationship with Mr. Fuld. They were both board members of the Federal Reserve Bank of New York; Mr. Speyer and Mr. Fuld’s wife, Kathleen, were trustees of the Museum of Modern Art.

And it wasn’t long before Mr. Walsh found a way to do an even bigger deal with Mr. Speyer’s company. In May 2007, Lehman and Tishman Speyer offered to buy Archstone-Smith Trust, a $22 billion deal struck at the peak of an already dangerously frothy market. Tishman Speyer put up a mere $250 million of its own equity. Lehman, in a 50-50 partnership with Bank of America, put up $17.1 billion of debt and $4.6 billion in bridge equity financing.

more....

:eyes: Have you ever fought a development in your town? Just as I've always thought, Big Development in league with Big Banks in league with their puppets in government, many of whom have not yet been discovered, are behind the latest crisis. Bad loans to moms & pops buying their dream homes are only the tip of the iceberg.

[Ghost Dog]

28. Thing is, even when these corrupt and/or criminal people get found out

(and fingers are pointed, especially at the politicians and the developers, less often at the financiers, around here in Spain, for example, all the time) they almost never seem to get busted; or if they are busted, they never seem to be required to really pay for it at a level commensurate with their crimes; and the little people who are most hurt by all this never receive any, or anywhere near adequate compensation.

In fact, as we all know here, its the little people who are being required to pay to continue to prop up the criminal and the corrupt up 'above'.

Sad that, in the US at least, if there's any danger of Revolution because of all this it's the danger of a Fascist one.

[Demeter]

15. It's 1973 All Over Again, and that Cartoon Is Onion-Worthy

That was exactly the job market that greeted Demeter when she popped out of Engineering School.

[Ghost Dog]

20. Obama seeks tax changes for U.S. firms overseas

WASHINGTON, May 4 (Reuters) - President Barack Obama on Monday will propose changing provisions in the tax code that he says encourage U.S. companies to move jobs overseas, as part of a broader package aimed at saving $210 billion over 10 years.

U.S. officials said that in an announcement planned for 11:05 EDT (1505 GMT), Obama will seek to follow through on a campaign promise to change the tax treatment of American firms with overseas operations.

...

Currently, U.S. firms are allowed to defer paying taxes on profits earned overseas if they plow those profits back into their foreign subsidiaries.

Critics say those rules encourage businesses to bolster their foreign operations instead of creating jobs at home.

...

A central provision would prohibit companies from deducting expenses supporting their overseas operations until they pay taxes on offshore profits.

The officials said the plan would also end a practice by which some firms take big deductions against their taxes by inflating the amount of foreign taxes they have paid.

The proposal also includes extension of a research and experimentation tax credit the administration says businesses have been pushing for, which is expected to give a tax cut of $74.5 billion over 10 years to companies investing at home.

...

The Obama plan would close loopholes that allow firms and individuals to hide income. He also plans to bolster enforcement of overseas tax evasion and wants to see stiffer penalties for those who fail to meet reporting requirements.

/... http://www.reuters.com/article/marketsNews/idINN0334332620090504?rpc=44&sp=true

[Ghost Dog]

22. China stimulus triggers foreign fund inflows

SHANGHAI/HONG KONG, May 4 (Reuters) - A bumper stimulus package and encouraging data have renewed confidence in China's growth story, drawing a fresh surge of foreign money into its equity funds, but that flow could slow if Shanghai's chart-topping stock rally loses steam.

The Shanghai Composite Index .SSEC has piled on 41 percent so far this year, partially recouping 2008's 65 percent plunge, the biggest drop in its 18-year history as the global economic slump burst the market's speculative bubble.

This time around foreign funds are buying into China's $600 billion, two-year stimulus package and its determination to sustain strong growth by stoking domestic appetite for its goods and services even as export demand stays depressed.

Some encouraging recent data have altered foreign investors' views, from thinking China would be the last to succumb to the global slowdown, to betting on a speedy recovery in the world's third-largest economy.

/... http://www.reuters.com/article/marketsNews/idINHKG14115520090504?rpc=44

[Ghost Dog]

24. Asia faces up to challenges of global crisis

NUSA DUA, Indonesia (Reuters) - The global downturn could lead to unrest, more poverty and environmental challenges in Asia, regional leaders were warned on Monday, after they agreed on a $120 billion emergency fund to counter the crisis.

Asian economies have been hard hit by the collapse in global demand largely because of the region's heavy reliance on exports. Singapore, Hong Kong and Japan are in recession and growth elsewhere is the weakest in years forcing governments to divert spending to measures to boost economic activity.

"Poverty is worsening in many countries. Businesses are struggling. The extremely urgent climate change agenda could be affected," Indonesian President Susilo Bambang Yudhoyono said at the annual meeting of the Asian Development Bank.

"If all this goes unchecked, down the road we could see social and political unrest in many countries," he told representatives of the ADB's 67-member countries, including finance ministers and central bank governors.

To counter the crisis, the ADB said it will raise its lending by half and Asian governments agreed at the weekend to launch a $120 billion fund that countries can tap to avert a balance of payments crisis.

Longer term, it is key for emerging Asian economies to build domestic demand to counter the reliance on export earnings, ADB delegates said.

Many Asian exporters have seen demand for their products halve from a year earlier as the deepest global downturn in decades hammered world trade.

"The Chinese government's basic approach is to expand domestic demand, particularly consumer demand, to promote growth," Finance Minister Xie Xuren said.

...

To achieve this goal, ADB Governor Haruhiko Kuroda said Asian nations needed to channel more savings into investments and consumption.

"They need to spend more on health, education and social security to reduce household needs for precautionary savings. They need strategies to transfer more corporate savings to households to encourage greater consumer spending."

The ADB has forecast that the region's economies are likely to grow just 3.4 percent in 2009, the slowest pace since the Asian financial crisis a decade ago. It sees growth recovering to 6.3 percent next year if demand rebounds.

/... http://finance.yahoo.com/news/Asia-faces-up-to-challenges-rb-15114862.html?.v=2

[DemReadingDU]

25. Charles Hugh Smith - Why no commentary on meltdown of auto industry?

5/4/09 Charles Hugh Smith

I find it hard to believe that the near-complete meltdown of the U.S.-owned auto industry has elicited such little commentary or reflection. Even though I expect blatant propaganda from our government and mass media, I am still surprised by the massive spin and general complacency over what is clearly a watershed collapse and a host of new precedents with unforseen consequences.

It's as if America watches its U.S.-owned auto industry fall and then yawns, changing channels to something more "upbeat."

The news is both Orwellian and Kafkaesque, coarsely propagandistic and twisted at the same time. Chrysler, we are told by our president, will emerge stronger, better, more wonderful than ever, etc.

Really? Based on what? Sadly, the company has almost no new models in the works, and has partnered up with another failed auto company in Europe which is essentially propped up by another government (Italy) keen on saving a relative handful of high-profile unionized industrial jobs.

Fiat has not sold many cars in the U.S. for the simple reason they are not competitive in price or value. That a Chrysler/Fiat marriage will quickly create and build vehicles which will compete on price, value and durability with those made in Ohio, Kentucky, Tennesee and elsewhere in the U.S. by Japanese-based manufacturers is a bit of a stretch.

We are also reminded almost gleefully (or is it desperately?) that Ford is still standing, due to raising billions of dollars back when that was still possible, and it's still selling lots of cars in North America. That it "only" lost $1.4 billion in the last quarter was cause for massive celebration and a tripling of its stock.

Yes, that is good news, but shouldn't we also be looking at what the collapse of GM and Chrysler means for the entire U.S.-owned industry and the nation as a whole? The fact that Ford sold 136,000 vehicles instead of collapsing is good news, but what is the company's long-term viability? And is the survival of one of the Big Three and the reduction of the other two to shadows of their former selves really cause for a sort of weirdly complacent celebration?

It seems to me that such catastrophic events should be cause for reflection and analysis, not yet another PR-propaganda blitz about how happy-happy it all is.

full essay...
http://www.oftwominds.com/blogmay09/bigthree05-09.html


Perhaps because everyone is talking about swine flu!
:eyes:

[tclambert]

35. This has loads of factual errors.

And substitutes opinion for fact. He's spinning his complaint about excessive spin.

1) Fiat left the US market in 1984. http://en.wikipedia.org/wiki/Fiat#History They don't sell cars in America because they don't have any dealers. With a Chrysler deal, they gain access to Chrysler's dealer network.

2) Ford sold 134,000 cars in April, 2009, almost 8,000 more than Toyota, the first time they've sold more in a month than Toyota in a long time. http://www.autoblog.com/category/by-the-numbers/

3) Chrysler is working on new models. 5 to 9 for 2010. http://www.autoblog.com/2008/09/10/chrysler-wants-to-bring-up-to-9-new-vehicles-by-2010/ One they are working on is the all-electric Envi. https://www.chryslerllc.com/en/innovation/envi/overview/

Despite that, I agree with his main points. The American auto industry is important to the US. It hasn't been discussed enough. And the talk in the media is mostly spin and not much substance. I would add that I would like to see more discussion of the clear double standard applied to the automakers vs. the big banks. Why does one get derision and the other gets carte blanche?



GM stock about flat today, Ford up 3.25%, Fiat up 8.38%, Toyota up 3%, Honda up 3.45%, Nissan up 2.89%.

[tclambert]

36. On May 1st, Boomerbust said he recommended buying Ford

back in November when it was at $1.50/sh. Couldn't find that recommendation in the archives. Not saying it's not there. I just couldn't find it. I did find this: On November 6th, 2008, Dr. Phool jokingly said he was going to buy Ford (the whole company) since the stock price was so low. He estimated it would take $10,000. I think the good doctor was just funning us. Or he may have made a hell of a profit.

Ford at $5.88/sh today. Up almost a factor of 4. I'm wishing I had actually bought some back then. It used to trade around $15/sh. I'm seriously thinking about taking the plunge.

[Dr.Phool]

37. Actually I did think about it.

I was half fooling, but if I had money I could afford to gamble with, I would have.

I would have had to sell some gold to do it, but I erroneously thought gold would go a little higher, and Ford would stay low for a while.

Oh well. I'm just as rich now as I was that day. Which is holding my head above water.

I did get a nice sunburn over the week-end though. And I didn't even stay at a Holiday Inn Express!

[Demeter]

40. Oh, I Don't Know

After decades of railing at the unresponsive Big 3, people shut up and voted with their feet and dollars, buying the kind of cars they needed wherever they could find them. Can't argue with the deaf, dumb, blind and stubborn.

[UpInArms]

26. dollar watch

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

Last trade 84.632 Change +0.090 (+0.12%)

US Dollar Lower As Asian Stocks Rise on Chinese Manufacturing Growth

http://www.dailyfx.com/story/special_report/special_reports/US_Dollar_Lower_As_Asian_1241413177371.html

Critical Levels



The Euro traded higher in the overnight session, punching through the 1.33 level to add as much as 0.6% against the US Dollar. The British Pound followed suit, adding as much as 0.4% against the greenback.

Asia Session Highlights



Risk trends dominated forex price action in overnight trading, with the US Dollar extending losses as stocks pushed higher across Asian exchanges. The MSCI Asia Pacific Index surged over 3% as China’s Purchasing Managers Index rose to 53.5 in April from 52.4 in the preceding month, showing manufacturing expanded for the second consecutive month (a reading above 50 suggests the sector is growing) and fueling expectations that a rebound for the Asian giant will see positive spillover elsewhere and bolster the global economic recovery. China announced in March that it would spend close to 4 trillion yuan to boost the economy, targeting infrastructure, industrial modernization, and rural development. Meanwhile, a meeting of the Association of Southeast Asian Nations together with Japan, China and South Korea agreed to set up a $120-billion foreign-currency reserve pool at a meeting in Bali over the weekend.

In Australia, the House Price Index tumbled -6.7% in the year to the first quarter, the largest drop on record and the biggest in at least 6 years. Together with recent disappointments in new home sales and vehicle sales, this data reflects Australian consumers’ continued hesitation to commit to big-ticket purchases. This seems logical considering the deepening economic downturn has pushed the unemployment rate to a 5-year high of 5.7%, weighing on disposable incomes, while access to borrowing has dwindled to unprecedented levels. Private consumption is the largest component of overall economic growth, so naturally the fallout in spending has substantially contributed to what is increasingly expected to be first Australian recession since 1991. Indeed, TD Securities reported that deepening economic turmoil pushed the annual pace of inflation to 2.1% in the year to April, the slowest in four years.

...more...

US Dollar Forecast Turns Bearish on S&P Rallies, NFP's Up Next

http://www.dailyfx.com/story/currency/eur_fundamentals/US_Dollar_Forecast_Turns_Bearish_1241218142205.html

The US Dollar’s multi-month uptrend was put to the test on yet another week of S&P 500 rallies, and the Greenback looks as though it may finally break through key technical support against the Euro and other key counterparts. A disappointing week for economic data only exacerbated the dollar’s woes; first quarter GDP results showed the biggest peak-to-trough economic contraction since 1958. The US Federal Reserve’s rate announcement was a surprising non-event, but market participants later punished the USD on continued promises for further fiscal and monetary stimuli to the US economy. Our short-term outlook has now turned bearish; it seems only a matter of time before the US dollar breaks key technical support against the euro and other major currencies.

The week ahead promises no shortage of economic event risk, and the infamous Non-farm Payrolls report virtually guarantees volatility through end-of-week trade. We will have the usual string of similarly important economic reports through the earlier week, and it will be important to watch whether the recent “second derivative” improvement in US economic data can be sustained. Economists have hailed the recent improvement in ISM Manufacturing data and other key reports as early signs economic recovery. Yet such hypotheses will be put to the test by the far-more-important ISM Non-Manufacturing report due Tuesday morning. Given that the Services sector comprises approximately three quarters of total US GDP, markets will heavily scrutinize any surprises in the data release. Recent ISM Manufacturing data pointed to a stabilization in consumption. Lack of confirmation via the ISM Services result would nonetheless jeopardize the recent upturn in economic sentiment, and any surprises in the closely-watched Employment index could likewise have a clear effect on NFP forecasts.

All eyes will subsequently turn to ADP Employment Change results and the all-important Non Farm Payrolls figures. Last month’s ADP data proved far worse than the official NFP result, but markets will nonetheless react to any especially large surprises out of the private employment survey. Smaller Challenger employment results and Wednesday’s Jobless Claims data will likewise provide a glimpse of relative labor strength—clarifying outlook for Friday’s NFP data. Of course, anyone who has been around FX markets long enough knows that it is virtually impossible to accurately predict NFP figures—much less anticipate the US Dollar’s reaction to the release. We will have to watch headline surprises in Friday’s NFP report and keep track of broader market reactions to the event. The US Dollar could counter-intuitively rally if a disappointment forces sizeable declines in the S&P 500 and other risky assets. It will otherwise remain important to gauge the trajectory of risky asset classes to guess subsequent direction in the safe-haven US currency.



...more...

[Ghost Dog]

32. Europe shares hit 16-wk high on econ recovery hopes

FRANKFURT, May 4 (Reuters) - European stock markets rallied on Monday, adding to April's record gains and led by energy and industrial engineering shares on the back of economic data suggesting that the recession might be moderating.

The FTSEurofirst 300 .FTEU3 index of top European shares ended up 1.6 percent at 842.70 points, its highest close since Jan. 12. Activity was dampened by a public holiday in Britain.

...

Shares in Fiat (FIA.MI) rose 8.1 percent after the Italian carmaker launched a plan to swallow up U.S. General Motors' (GM.N) European operations, notably German Opel, to create a listed European automotive group.

...

Oil & gas .SXEP ranked among the top sectoral gainers on Europe's benchmark index, which saw its biggest ever monthly rise -- 13 percent -- in April.

...

Manufacturing activity grew in China and India in April, and declined at its slowest pace in six months in the euro zone, raising hopes that the sharpest economic slump in six decades may have bottomed out. U.S. data showed pending sales of existing homes rose unexpectedly in March.

...

The European Commission, however, forecast that the economy of the 16-country euro currency zone would shrink 4.0 percent this year and by 0.1 percent in 2010, despite what it called some "positive signals" in recent days.

Some equity strategists said the recent stock market rally, which has seen the FTSEurofirst 300 index shoot up more than 30 percent from its March 9 low point, may soon grind to a halt.

/... http://www.reuters.com/article/marketsNews/idCAL429338220090504?rpc=44&sp=true

[Dr.Phool]

34. Wrap my head in duct tape. QUICK!

I wandered into GD again. Head ready to explode. New and improved Kool-Ade drinkers believe there was no inflation last year, thus no increase in Social Security.

I posted this excerpt from Kevin Phillips article in rebuttal.

"Hard Numbers: The economy is worse than you know". Written a year ago.

http://www.tampabay.com/news/article473596.ece

Hard numbers: The economy is worse than you know

Kevin Phillips, Harper's Magazine
In Print: Sunday, April 27, 2008

(snip)


Nothing, however, can match the tortured evolution of the third key number, the somewhat misnamed Consumer Price Index. Government economists themselves admit that the revisions during the Clinton years worked to reduce the current inflation figures by more than a percentage point, but the overall distortion has been considerably more severe. Just the 1983 manipulation, which substituted "owner equivalent rent" for home-ownership costs, served to understate or reduce inflation during the recent housing boom by 3 to 4 percentage points.

Moreover, since the 1990s, the CPI has been subjected to three other adjustments, all downward and all dubious: product substitution (if flank steak gets too expensive, people are assumed to shift to hamburger, but nobody is assumed to move up to filet mignon), geometric weighting (goods and services in which costs are rising most rapidly get a lower weighting for a presumed reduction in consumption), and, most bizarrely, hedonic adjustment, an unusual computation by which additional quality is attributed to a product or service.

The hedonic adjustment, in particular, is as hard to estimate as it is to take seriously. No small part of the condemnation must lie in the timing.

If quality improvements are to be counted, that count should have begun in the 1950s and 1960s, when such products and services as air-conditioning, air travel, and automatic transmissions — and these are just the A's! — improved consumer satisfaction to a comparable or greater degree than have more recent innovations. That the change was made only in the late '90s shrieks of politics and opportunism, not integrity of measurement.

Most of the time, hedonic adjustment is used to reduce the effective cost of goods, which in turn reduces the stated rate of inflation. "All in all," Williams points out, "if you were to peel back changes that were made in the CPI going back to the Carter years, you'd see that the CPI would now be 3.5 percent to 4 percent higher" — meaning that, because of lost CPI increases, Social Security checks would be 70 percent greater than they currently are.

Furthermore, when discussing price pressure, government officials invariably bring up "core" inflation, which excludes precisely the two categories — food and energy — now verging on another 1970s-style price surge.

(snip)

[Tansy_Gold]

38. I saw you over there.

I tried to lend immoral support. . . . .


Tansy Gold, who needs to stop "slumming" with her friends. . . .

[Demeter]

41. If You Can't Slum With Your Friends

you're likely to get your head bashed in. (Advice from a native Detroiter).

[Tansy_Gold]

42. True. True. And it *is* dangerous over there.

I mean, people defend the banks over there.

:scared:

It's creepy.





Tansy Gold