STOCK MARKET WATCH, Wednesday May 27

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday May 27, 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 26, 2009

Dow... 8,473.49 +196.17 (+2.32%)
Nasdaq... 1,750.43 +58.42 (+3.45%)
S&P 500... 910.33 +23.33 (+2.63%)
Gold future... 958.90 +7.70 (+0.81%)
10-Yr Bond... 3.54 +0.09 (+2.70%)
30-Year Bond 4.50 +0.11 (+2.55%)

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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

Another Turning Point at hand?
by Frank Barbera

For the last two weeks, it has appeared likely that a more important juncture could be at hand for the global capital markets. In our view, we continue to see evidence building in market after market that a trend change event is dead ahead. Take the Copper market for example. Over the years, Dr. Copper has done a better job at economic forecasting then almost any economist, and so again it was in this cycle, as Copper prices turned down well before the equity market. In the chart below, we show the price of Copper in bold along with its 50 day moving average, overlaid against the S&P 500. In this chart the S&P is lagged one week. Invariably, copper prices have broken down ahead of the S&P, in the current climate where the lupen-masses are now once again all looking for a resumption of growth, could it be that once again the Copper price is shining a light on the path directly ahead. To that end, we note that Copper closed back below its 50 day moving average at the end of last week for the first time since late February and has not broken its short to medium term rising trend. A negative harbinger once again for the stock market? -- We’ll soon see.

-chart-

....

Other formerly strong indicators are also now pointing at a potential turning point dead ahead. Take the Retailers for example, which have been the chief beneficiaries of the ‘happy thoughts’ percolating on Wall Street in the weeks just past. Formerly one of the worst performing sectors, retailers are perceived to be a major beneficiary of any recovery and as a result have led the stock market advance over the last few months. In our work, we divide the retailers into two groups, the Discretionary Retailers and the Recession Retailers. Names like CVS Corp, Costco, Big Lots, Dollar Family, TJX, Ross Stores, Payless describe the theme of the Recession Retailers, with the grand-daddy of them all being, of course, Walmart. To date, Walmart shares have sat idly by and observed, but not advanced much during the course of the rally.

....

In addition to the action of key stock market sectors, we continue to see strong evidence that sentiment has recently swung to one extreme side of the boat, in this case, back to optimism. In the chart above, we update our Investors Business Daily Call to Put Premium Ratio Oscillator which is coming off near record high values. At the same time, the Investment Advisory Newsletter polls, and other polls of investors ranging from futures traders to individual investors, the summation of that data has continued to move back to neutral values from being previously deeply oversold. In our Sentiment Composite Index, the zero line is often a major resistance point, and this indicator has now moved all the way back up to zero, with a close of +.89 on Friday. Regardless of what happens next, the outcome should be quite the genuine insight as to the real character of the current market with bullish “follow thru” from here representing a ‘hard to fight’ positive message, while a 'failure’ at present levels could reinforce the previous bear market trend.

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

[Demeter]

28. The Truest Indicator Of Recovery Will Be Rising Employment This Time

Since it hasn't happened since 2000.

[Ghost Dog]

2. Asia stocks at seven-month high as recovery hopes grow

... The MSCI index of Asian stocks outside Japan (^MIAPJ0000PUS - News) gained close to 2.3 percent by early afternoon in Asia after earlier hitting its highest intraday level since last October, when markets were tumbling in the wake of the collapse of Lehman Brothers.

Japan's Nikkei average (^N225 - News) rose 1.4 percent, breaking above its 200-day moving average, with shares of exporters surging on the U.S. consumer confidence report.

But gains were capped by concern that bankruptcy is drawing near for ailing General Motors (GM - News) after a deadline passed for its bondholders to exchange some of the debt into stakes in the company.

Elsewhere in Asia, shares in Hong Kong (^HSI - News) jumped 4.7 percent and Taiwan (^TWII - News) rose 3.1 percent

Energy, consumer discretionary and financial stocks led gains on Wednesday, as they have since the beginning of the 49 percent rally in the MSCI Asia Pacific ex-Japan index since early March.

But these sectors are also getting more expensive; valuations on a 12-month forward price-to-earnings basis are at the highest since mid-2008.

U.S. consumer confidence soared in May to its highest level in eight months, even though house prices fell at a record pace in the first quarter, data showed on Tuesday.

The consumer data pushed U.S. stocks by more than 2 percent.

Consumer spending accounts for roughly two-thirds of the U.S. economy, so is a positive signal for global trade including for Asian exporters. However, consumer confidence indexes have low correlations with actual spending.

Japanese also exports rose in April for the second month running, data showed on Wednesday, providing another sign that the slump in global trade may have bottomed.

Still, Germany reported earlier this week a record contraction in its economy in the first quarter.

FEELING GOOD?

Concerns about how the U.S. government will ramp up borrowing to feed a widening budget deficit have also weighed on markets since last week.

However, the sale of $40 billion in two-year U.S. Treasury notes on Tuesday saw strong interest, especially from overseas, suggesting there are willing buyers of U.S. debt.

Still, traders said longer maturities might not be met by such strong demand. Total issuance for the week is slated to total $101 billion, matching a record set earlier this year. Two more offerings this week will be for five-year and seven-year debt.

/... http://finance.yahoo.com/news/Asia-stocks-at-sevenmonth-rb-15353686.html?.v=1

[Ghost Dog]

5. Economy hopes lift Europe shares in early trade

LONDON, May 27 (Reuters) - European shares rose in early trade on Wednesday, led by banks and tracking gains in overnight markets after U.S. consumer confidence data fuelled hopes of an economic recovery.

At 0808 GMT the FTSEurofirst 300 .FTEU3 index of top European shares was up 0.4 percent at 868.50 points. The index has risen 5 percent in May and is set for its third straight month of gains, its best winning streak in two years.

Banks were broadly higher, with UBS (UBSN.VX), Royal Bank of Scotland (RBS.L). Credit Agricole (CAGR.PA), Societe Generale (SOGN.PA), Lloyds (LLOY.L) and HSBC (HSBA.L) adding 1.4 to 3.3 percent.

Analysts said equities gains were fuelled by central banks pumping liquidity into the system, and were set to continue.

"Liquidity rallies can last quite a while, perhaps more than a year -- we see European shares gaining 10 percent (overall) this year," said Franz Wenzel, strategist at AXA Investment Managers in Paris. "Excess liquidity is more in favour of riskier asset classes like equities -- asset classes benefit first before it can lead to inflation," he said.

...

Across Europe, Britain's FTSE 100 .FTSE was up 0.4 percent, Germany's DAX .GDAXI was up 0.5 percent and France's CAC .FCHI was up 0.5 percent. Wall Street futures SPc1 DJc1 NDc1 were around 0.2 percent higher.

...

The surge has been driven by improving macroeconomic data, better than expected results from some top companies and a stabilisation in banks.

It has also lifted cyclical stocks well above defensives. Cyclicals rise when hopes of economic recovery gain ground, while investors seek defensives in times of strife.

In the year to date the DJ Stoxx European basic resources sector index .SXPP has surged nearly 40 percent, while the banks index .SX7P has risen 22 percent.

On the other hand the DJ Stoxx European food and beverage index .SX3P, a defensive sector, has gained just 2.3 percent, while healthcare stocks .SXDP, utilities .SX6P and telecoms .SXKP are the three worst performing sectors, down 6.1 to 8.4 percent.

...

Macroeconomic data continued to be broadly positive. After U.S. consumer confidence surprised investors on Tuesday, hitting its highest level in eight, Japanese exports showed modest signs of recovery, figures for April showed on Wednesday.

"It's a sensible conclusion that we have avoided a depression, and while we're admittedly in a deep recession the terrain we are walking on has stabilised and the macroeconomic data are producing rays of hope for the second half," said AXA's Wenzel.

/... http://www.reuters.com/article/marketsNews/idCALR69209420090527?rpc=44&sp=true

[ozymandius]

3. Today's Report

10:00 Existing Home Sales Apr
Briefing.com 4.65M
Consensus 4.66M
Prior 4.57M

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

[Ghost Dog]

46. U.S. existing home sales rise 2.9 percent in April

WASHINGTON (Reuters) – The pace of sales of existing homes in the United States rose 2.9 percent in April, according to an industry survey on Wednesday that supported views the three-year housing recession was near a bottom.

The National Association of Realtors said sales climbed to an annual rate of 4.68 million units from a downwardly revised 4.55 million pace in March, initially reported as 4.57 million. That was slightly higher than market expectations for a 4.66 million-unit pace.

The inventory of existing homes for sale rose 8.8 percent to 3.97 million. The median national home price fell 15.4 percent from the same period a year-ago to $170,200.

/. http://news.yahoo.com/s/nm/20090527/bs_nm/us_usa_economy_existing_homes

[ozymandius]

4. Oil rises to 6-month high above $63

Oil prices rose to six-month highs Wednesday as an increase in U.S. consumer confidence fueled optimism that the world's largest consumer of oil is emerging from a severe recession.

Traders were also watching an OPEC meeting in Vienna amid expectations the oil cartel isn't likely to cut production.

Benchmark crude for July delivery was up 67 cents to $63.12 a barrel by midday in Europe in electronic trading on the New York Mercantile Exchange. Earlier in the session, the contract reached a peak of $63.45, its highest level since mid-November. On Tuesday, the contract rose 78 cents to settle at $62.45.

....

Oil and stock investors took heart from Tuesday's report from private research group The Conference Board that showed U.S. consumer confidence in May soared to the highest level since last September. Stock indexes jumped on the news, with the Dow Jones industrial average gaining 2.4 percent.

Some analysts are concerned the quick recovery of oil prices will boost gasoline prices and threaten to undermine consumer demand. Oil prices between $70 and $80 a barrel would hurt growth in developed countries while crude between $90 and $100 would slow emerging market economies, Bank of America Merrill Lynch said in a report Tuesday.

....

In other Nymex trading, gasoline for June delivery rose 3.11 cents to $1.8835 a gallon and heating oil was up 2 cents to $1.5653 a gallon. Natural gas for June delivery was up 1.4 cents to $3.551 per 1,000 cubic feet.

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

[ozymandius]

6. GM bankruptcy nears as bondholders shun tender offer

DETROIT/NEW YORK (Reuters) – General Motors Corp has failed to persuade enough bondholders to accept a debt-for-equity swap, setting the stage for the largest-ever U.S. industrial bankruptcy within days.

The event marks a critical disappointment for GM, the largest U.S. automaker and once considered the bellwether of U.S. manufacturing.

...

The largest U.S. automaker had so far failed to gain anywhere near the 90 percent of bondholder support desired to stave off bankruptcy, two sources familiar with the discussions told Reuters on Tuesday. Bondholders have until midnight to make their final decision on the tender.

As of midday Tuesday, the source said the company had only a "low-single-digit" percentage interest from bondholders.

...

GM shares, which could be worthless in a bankruptcy, ended Tuesday trade up 1 cent at $1.44 on the New York Stock Exchange after trading between $1.12 and $1.84 on the day.

http://news.yahoo.com/s/nm/20090527/ts_nm/us_autos

[ozymandius]

7. Home Prices Continued Their Decline in March

Home sales may be up in many parts of the country but prices continue to scrape along the floor, raising fresh doubts about the recovery of a critical sector.

Prices in 20 major metropolitan areas dropped by 18.7 percent in March when compared with the same month a year ago, according to the Standard & Poor’s Case-Shiller Home Price Index that was released Tuesday. That was about the same as February and just shy of January’s record plunge of 19 percent.

....

Overwhelmed, the banks are now taking a different approach: dumping the properties to clear their books, making them “extremely motivated sellers,” as Mr. Havig calls them.

These bargain homes make up nearly half the sales in Minneapolis, and are a big reason the agents’ own numbers show a one-year median price decline of 22.9 percent. That closely matches the corresponding Case-Shiller drop of 23.3 percent. But when foreclosures and short sales are stripped out, the decline for so-called traditional homes is much smaller: 2.3 percent.

http://www.nytimes.com/2009/05/27/business/economy/27home.html?em

[ozymandius]

8. Chrysler on Pace for Swift Finish to Restructuring

NEW YORK, May 26 -- When Chrysler filed for bankruptcy April 30, restructuring veterans scoffed at the idea that such a big company could move through the process quickly, and industry veterans warned that the U.S. manufacturing base would be deeply disrupted.

But today, federal bankruptcy Judge Arthur Gonzalez is scheduled to consider a motion to sell most of Chrysler's assets to a new entity led by Italy's Fiat. The judge's approval would set up the automaker for one of the biggest and fastest bankruptcy proceedings of its kind.

....

Opposition from creditors that surfaced during the proceedings quickly evaporated, as Gonzalez wasted little time ruling against their claims. On Tuesday, a small group of Chrysler's senior secured lenders lost its battle to halt the sale, removing the last major hurdle to today's hearing.

Some restructuring experts said they had not fully appreciated the influence the federal government would wield over the process.

http://www.washingtonpost.com/wp-dyn/content/article/2009/05/26/AR2009052603179.html?hpid=topnews

[Ghost Dog]

9. U.S. economy at risk of double-dip recession

By Emily Kaiser - Analysis

WASHINGTON (Reuters) - The U.S. economy appears destined for several years of weak growth and high unemployment that leave it vulnerable to a recession relapse after the massive dose of government stimulus wears off.

While tepid growth looks likely to resume late this year and build modestly into 2010, the credit bust has left households and businesses unable or unwilling to borrow and spend as freely as they did before the crisis. The U.S. government has stepped in as lender and spender of last resort, but its deep pockets are not bottomless. Waning political and investor appetite for taking on more debt could stand in the way of any additional big spending plans.

"When you remove the government stimulus, what the private sector can generate in terms of growth feels like a recession," said Jeffrey Rosenberg, head of global credit strategy at Banc of America Securities Merrill Lynch in New York. Rosenberg thinks the U.S. economy may trudge along at a sluggish growth rate somewhere in the range of 0.5 percent to 1.5 percent while banks recover from the credit crisis, which could take another three years. "If that's what you're able to generate, that economy is not generating the job growth required to bring the unemployment rate down," Rosenberg said.

This is a much darker outlook than the one put forward by President Barack Obama's administration in its latest budget projections, which show economic growth bouncing back to 3.2 percent next year and hitting 4.6 percent by 2012. It also calls into question the staying power of a recent stock market rally. The Standard & Poor's 500 is up more than 30 percent from an early March low.

The gloomier scenario assumes that banks take years to recover from losses that some economists think could reach $4 trillion; consumers curb borrowing and spending as they repair the $11.2 trillion hole blown through their savings last year; and the explosion in government debt drives up interest rates.

...

Typically, deep recessions are followed by powerful recoveries because when demand finally returns, companies quickly ramp up production. That helps explain why Wall Street has been feeling optimistic about recovery prospects. However, recessions caused by financial crises have a history of being long, deep and difficult to fully escape.

Treasury Secretary Timothy Geithner said on Thursday that the current crisis was "caused in large part by too much borrowing and too much lending. And the adjustment process of that will be difficult." How difficult that adjustment will be depends to a large degree on how dramatically consumers alter their behavior.

...

The other anchor is interest rates. Christian Broda, an economist with Barclays Capital, said higher borrowing costs "are an inescapable feature of the post-recovery world" as public deficits and spending grow.

...

It all adds up to a sluggish economy with less cushion to cope with a shock. What form that shock might take remains to be seen, but a jump in oil prices is one likely suspect. Oil has nearly doubled since the start of the year, topping $60 per barrel on Tuesday, and futures prices suggest it will edge higher at least through the peak summer driving season.

"You start firing up demand and guess which price goes up first? Oil," said James Galbraith, an economist who teaches at the University of Texas' LBJ School of Public Affairs. "If I were in a position to be talking strategy to the (Obama) administration, I would be saying you've got to take the energy business seriously. You're going to end up in a stagflation trap."

/more... http://www.reuters.com/article/wtUSInvestingNews/idUSTRE54P2ZC20090526?sp=true

[ozymandius]

16. Consumer Confidence Soars; How Much Is Unwarranted Hope?

ozymandius here: I frequently consider Mike Shedlock a clarion to espouse wacko libertarian economic talking points. Nonetheless I respect him - especially when he engages his skills of inferential comprehension and disassembly of rhetoric where it is needed.

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Sentiment that the bottom is in is rapidly picking up steam. Please consider Consumer Confidence Jumps by Most in Six Years.

Confidence among U.S. consumers jumped in May by the most in six years, fueling speculation the economy will recover later this year. The Conference Board’s sentiment index surged to 54.9, higher than forecast, according to figures from the New York- based research group today.

“Pent-up demand is increasing each passing day as reflected in these confidence numbers,” said Nariman Behravesh, chief economist at IHS Global Insight in Lexington, Massachusetts. “But there is a funny dynamic going on as people are waiting. The turn will come when there is a sense that we have passed the bottom,” which Behravesh said may happen as early as August.

My Comment: When the economy is losing 500,000 jobs a month and housing is saturated, outside of bargain hunting, demand is shrinking. Indeed, some consumers are looking for bargains on autos, and rental properties, but that demand will subtract form demand in 2010. This is all part of the healing process, but without jobs (and I still see no recovery in jobs), this round of premature bargain hunting will eventually give way.

....

For consumers with cash, with a job, and no fears of losing a job, saving $6,000 on a new car is quite a chunk of change. But what percentage of the population needs a new car, wants a new car, can afford a new car, has a job, and no fears of losing that job? And pray tell what will happen to demand in 2010 if dealers have to pay $6000 in incentives to clear lots now?

http://globaleconomicanalysis.blogspot.com/2009/05/consumer-confidence-soars-how-much-is.html

[ozymandius]

10. Banks Aiming to Play Both Sides of Coin (Enron-inspired accounting)

Some banks are prodding the government to let them use public money to help buy troubled assets from the banks themselves.

Banking trade groups are lobbying the Federal Deposit Insurance Corp. for permission to bid on the same assets that the banks would put up for sale as part of the government's Public Private Investment Program.

http://online.wsj.com/article/SB124338836675757049.html

subscription required to read the entire article

[ozymandius]

13. more from Calculated Risk

The lobbying push is aimed at the Legacy Loans Program, which will use about half of the government's overall PPIP infusion to facilitate the sale of whole loans such as residential and commercial mortgages.

Federal officials haven't specified whether banks will be allowed to both buy and sell loans ...

Some critics see the proposal as an example of banks trying to profit through financial engineering at taxpayer expense, because the government would subsidize the asset purchases.
...
"The notion of banks doing this is incongruent with the original purpose of the PPIP and wrought with major conflicts," said Thomas Priore, president of ICP Capital, a New York fixed-income investment firm overseeing about $16 billion in assets.

Hopefully the answer will be a resounding "NO". The purpose of PPIP is to remove the toxic legacy assets from the bank's balance sheet, not to allow the banks to game the program at taxpayer expense.

http://www.calculatedriskblog.com/2009/05/banks-lobby-to-game-ppip.html

[Ghost Dog]

45. Problem U.S. banks jumped to 305 in first quarter: FDIC

WASHINGTON (Reuters) – The number of problem U.S. banks and thrifts rose to 305 in the first quarter of 2009, up 40 percent from 252 in the prior quarter, marking the highest number since 1994, the Federal Deposit Insurance Corp said on Wednesday.

The sharp rise came as banks face mounting credit losses for home mortgages, commercial real estate and consumer credit cards amid the economic recession. The FDIC also said its deposit insurance fund fell to $13 billion in the first quarter, compared to $17.3 billion at the end of 2008.

"Bank failures continued to mount and they will continue to do so," FDIC Chairman Sheila Bair told reporters.

...

The rise in problem banks is reflected in the growing number of U.S. bank failures in 2009, which stood at 36 last Friday. If that pace continues, more than 100 FDIC-insured banks could fail this year after 25 in 2008 and just three in 2007.

/... http://news.yahoo.com/s/nm/20090527/bs_nm/us_banks_fdic

[ozymandius]

11. Are Worries About Rising Federal Debt Misplaced?

To be perfectly clear (as one discredited President was fond of saying), It would appear that the Treasury has a pretty considerable supply problem that is starting to hit now. Longer dated bonds slid in a serious way late last week and had another bad day today (although the 2 year action went well). And the Fed announced in March that it would buy a $300 billion in Treasuries over the next six months. $50 billion a month isn't much relative to the burgeoning calendar.

Now we have the "run for the hills" view, with John Taylor (of Taylor rule fame) giving a pretty typical take in "Exploding debt threatens America":

Under President Barack Obama’s budget plan, the federal debt is exploding,,, The federal debt was equivalent to 41 per cent of GDP at the end of 2008; the Congressional Budget Office projects it will increase to 82 per cent of GDP in 10 years. With no change in policy, it could hit 100 per cent of GDP in just another five years.

“A government debt burden of that <100 per cent> level, if sustained, would in Standard & Poor’s view be incompatible with a triple A rating,” as the risk rating agency stated last week.

I believe the risk posed by this debt is systemic and could do more damage to the economy than the recent financial crisis. To understand the size of the risk, take a look at the numbers that Standard and Poor’s considers. The deficit in 2019 is expected by the CBO to be $1,200bn (€859bn, £754bn). Income tax revenues are expected to be about $2,000bn that year, so a permanent 60 per cent across-the-board tax increase would be required to balance the budget. Clearly this will not and should not happen. So how else can debt service payments be brought down as a share of GDP?

Inflation will do it. But how much? To bring the debt-to-GDP ratio down to the same level as at the end of 2008 would take a doubling of prices. That 100 per cent increase would make nominal GDP twice as high and thus cut the debt-to-GDP ratio in half, back to 41 from 82 per cent. A 100 per cent increase in the price level means about 10 per cent inflation for 10 years.

Yves here. He just lost tons of credibility. Pull out your trusty HP calculator. it takes a hair over 7% inflation for ten years to double prices. We are supposed to take someone seriously who doesn't understand compounding, or worse, does, but chooses to argue his point dishonestly to make things sound worse? Oh, he's a senior fellow at the Hoover Institute. Silly me for asking.

http://www.nakedcapitalism.com/2009/05/are-worries-about-rising-federal-debt.html

[tclambert]

31. Republicans are anti-science and anti-math, now.

Although maybe a stupid editor tried to "fix" his arithmetic. Because an editor might say, "Hey, 100 divided by 10 is clearly 10, not 7." But try explaining to an editor that the tenth root of 2 is 1.071773463 (according to my old Casio), and then what a tenth root is and why it matters, and you'll see the glaze in the eyes. If you start in with logarithms, the editor may pass out completely.

And Hoover Institute. Is that named after Herbert Hoover? . . . (pause to look it up on Wikipedia). OMG, it really is. I was hoping maybe it was after the vacuum cleaner magnate, which would, of course, lead to a series of sucking jokes. (The jokes would be about sucking, and the jokes would no doubt suck, as well.)

Who would take economic advice from a place named after Herbert Hoover? Oh, "strong connections to the Bush administration." Well, thank you. That explains a helluva lot. No wonder the eight incompetent years of Bushonomics led to the nearest thing to Herbert Hoover's meltdown of the financial sector.

"Mister, we could use a man like Herbert Hoover again." Did they really take THAT as a rallying cry? They took Archie Bunker seriously?

[Demeter]

64. Yup.

A serious study found that conservative TV viewers didn't laugh at Archie, or that Michael J Fox character--but took them as literal, even though they knew it was a comedy (with laugh track).

I Always thought that showing stupidity in the lead character was encouraging stupidity to take root and grow in the viewing public. Maybe the 50's were boringly homogeneous, but at least they didn't glorify anti-social behaviors.

[Festivito]

12. Debt: 05/22/2009 11,301,675,926,828.94 (DOWN 3,997,571,205.24) (Debt up 7B$.)

(Not much of a change. Debt rises a bit, the FICA debt (owed to us the people) fluxuates down.)

= Held by the Public + Intragovernmental(FICA)
= 6,999,376,165,569.64 + 4,302,299,761,259.30
UP 7,301,981.46 + DOWN 4,004,873,186.70

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 $3.26 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.79, ABOUT TEN BUCKS for a 1B$ 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 12 seconds we net gain a another American, so at the end of the workday of this report, there should be 306,487,142 people in America.
http://www.census.gov/population/www/popclockus.html ON 05/25/2009 01:14 -> 306,504,012
Currently, each of these Americans owe $36,874.88.
A family of three owes $110,624.63. (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 5,028,116,489.64.
The average for the last 30 days would be 3,687,285,425.74.

There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 75 reports in 112 days of GWB's part of FY2009 averaging 8.03B$ per report, 5.38B$/day.
There were 85 reports in 122 days of Obama's part of FY2009 averaging -0.05B$ per report, 0.08B$/day so far.
There were 160 reports in 234 days of FY2009 averaging 7.98B$ per report, 5.46B$/day.

PROJECTION:
There are 1,339 days remaining in this Obama 1st term.
By that time the debt could be between 13.1 and 18.6T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
05/22/2009 11,301,675,926,828.94 BHO (UP 674,798,877,915.86 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: 1,276,951,029,916.50 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
05/01/2009 -003,202,605,992.57 --
05/04/2009 +000,068,750,275.89 ------------******* Mon
05/05/2009 +000,122,936,524.80 ------------********
05/06/2009 -000,058,764,073.21 ----
05/07/2009 +027,679,213,817.18 ------------**********
05/08/2009 -000,216,334,016.92 ---
05/11/2009 -000,029,759,155.68 ---- Mon
05/13/2009 -000,207,515,478.68 ---
05/14/2009 +013,927,016,419.76 ------------**********
05/15/2009 +013,064,365,189.63 ------------**********
05/18/2009 -000,012,816,531.74 ---- Mon
05/19/2009 +000,244,659,127.63 ------------********
05/20/2009 +000,422,183,214.17 ------------********
05/21/2009 +016,742,591,292.36 ------------**********
05/22/2009 +000,007,301,981.46 ------------******

68,551,222,594.08 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,637,044,123,569.87 in last 246 days.
That's 1,637B$ in 246 days.
More than any year ever, including last year, and it's 161% of that highest year ever only in 246 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 246 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=3892824&mesg_id=3892871

[Festivito]

62. Debt: 05/26/2009 11,305,594,490,199.65 (UP 3,918,563,370.71) (Small moves.)

(Small moves. Public Debt within half a billion of 7T$ even, expect 7T$ to be hit in next couple of days. 7 and 4 1/3. It's not a big deal, just easy to remember.)

= Held by the Public + Intragovernmental(FICA)
= 6,999,554,378,645.33 + 4,306,040,111,554.32
UP 178,213,075.69 + UP 3,740,350,295.02

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 307-Million person America.
If every American, man, woman and child puts in $3.26 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.79, ABOUT TEN BUCKS for a 1B$ 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 12 seconds we net gain a another American, so at the end of the workday of this report, there should be 306,515,942 people in America.
http://www.census.gov/population/www/popclockus.html ON 05/25/2009 01:14 -> 306,504,012
Currently, each of these Americans owe $36,884.2.
A family of three owes $110,652.59. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 32 days.
The average for the last 21 reports is 5,728,299,867.54.
The average for the last 30 days would be 4,009,809,907.28.
The average for the last 32 days would be 3,759,196,788.08.
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$/day.
There were 86 reports in 126 days of Obama's part of FY2009 averaging -0.07B$ per report, 0.00B$/day so far.
There were 161 reports in 238 days of FY2009 averaging 7.96B$ per report, 5.38B$/day.

PROJECTION:
There are 1,335 days remaining in this Obama 1st term.
By that time the debt could be between 13.1 and 18.5T$.
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)
05/26/2009 11,305,594,490,199.65 BHO (UP 678,717,441,286.57 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: 1,280,869,593,287.20 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
05/04/2009 +000,068,750,275.89 ------------******* Mon
05/05/2009 +000,122,936,524.80 ------------********
05/06/2009 -000,058,764,073.21 ----
05/07/2009 +027,679,213,817.18 ------------**********
05/08/2009 -000,216,334,016.92 ---
05/11/2009 -000,029,759,155.68 ---- Mon
05/13/2009 -000,207,515,478.68 ---
05/14/2009 +013,927,016,419.76 ------------**********
05/15/2009 +013,064,365,189.63 ------------**********
05/18/2009 -000,012,816,531.74 ---- Mon
05/19/2009 +000,244,659,127.63 ------------********
05/20/2009 +000,422,183,214.17 ------------********
05/21/2009 +016,742,591,292.36 ------------**********
05/22/2009 +000,007,301,981.46 ------------******
05/26/2009 +000,178,213,075.69 ------------******** Tue

71,932,041,662.34 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,640,962,686,940.58 in last 250 days.
That's 1,641B$ in 250 days.
More than any year ever, including last year, and it's 161% of that highest year ever only in 250 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 250 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=3894400&mesg_id=3894430

[Ghost Dog]

14. EU unveils reforms to make financial markets safer

BRUSSELS, May 27 (Reuters) - Banks will be more closely scrutinised under European Union plans unveiled on Wednesday to apply lessons from the credit crunch and better protect investors shaken by the worst financial crisis in decades.

The European Commission's plans form a core plank of the EU's response to the crisis. They are aimed at spotting any build-up of risk earlier and avoiding a need for governments again to fork out billions of euros to prop up banks.

Britain, Europe's biggest banking centre, has already signalled its unease with the plans, fearing a loss of regulatory sovereignty to new, centralised bodies.

...

The Commission proposed setting up two pan-EU bodies to correct what it sees as gaping regulatory holes.

A European Systemic Risk Council comprising central bankers and national regulators would monitor any build-up of risks and issue a call for action before they become unmanageable. The European Central Bank would be expected to host and chair the council, a step Britain and national banking regulators say gives too much power to the Frankfurt-based institution.

There would also be a steering group among three new authorities whose job would be to ensure EU rules are applied consistently across the 27-nation bloc. It would have powers to overrule a member state deemed not complying with common standards. Those three new authorities would oversee insurance, banking and securities markets.

The Commission's plans will go to a summit of EU leaders in June for endorsement, and the executive will come forward with draft laws later in the year. It wants the new regulatory system in place by the end of 2010, faster than de Larosiere foresaw.

The European Parliament and EU states will have the final word on the reforms.

/... http://www.reuters.com/article/marketsNews/idINBRQ00735720090527?rpc=44

[skoalyman]

15. Morning everyone wonder what they'll rally on today

crop circles? lol anyway here's a story that'll make you cringe at the thought of that last dinner roll

http://news.aol.com/article/man-killed-in-fight-over-dinner-rolls/498555

[ozymandius]

17. Folks often rally on Wednesday's "hope" 'cause it's better than Tuesday's "hope".

And g'morning :donut: :donut: :donut:

[tclambert]

35. But Monday was a holiday. So does Wednesday's "hope" shift to Thursday?

[DemReadingDU]

18. CNN: Economists: Recession to end in 2009

5/27/09 A recovery in the second half of this year will be 'moderate,' according to a report from the National Association for Business Economics.

The end of the recession is in sight, according to a new survey of leading economists.

While the economy is showing signs of stabilizing, the recovery will be more moderate than is typical following a severe downturn, said the National Association for Business Economics Outlook in a report released Wednesday.

The panel of 45 economists said it expects economic growth will rebound in the second half of 2009. However, the group still expects to see a decline in second-quarter economic activity.

more...
http://money.cnn.com/2009/05/27/news/economy/NABE_recovery_outlook/index.htm?postversion=2009052703


more fake feel-good news
:crazy:

[ozymandius]

19. If I had a nickel for every time these economists called a bottom -

I would need a wheelbarrow to haul my loot to the bank. To be metaphorical: do these people suggest that some air will be pumped into a flat tire that will, for all purposes, still be flat?

As for fundamental logic: on what do these economists base this assertion?

[skoalyman]

20. no doubt about that ozzy &

I just find them funny and mental, I've seen them spin the fudge numbers so many times, I'm just burnt out and don't even follow the eco. news for days on end.

[DemReadingDU]

21. It's all about perception

Just because Chrysler and GM are shutting down factories and dealers which will force thousands (millions?) into unemployment, hey it's still all good! Eventually, reality will be unavoidable.

[AnneD]

41. Morning Marketeers.......

:donut: and lurkers. That has been the problem with the GOP since after Nixon. It is all about appearances and perception with little of no substance to back them up. They talk about family values but look how they value families...theirs AND yours. They talk about service to the country but look how they serve. They talk about less government spending but look at the last 8 years. They talk about moral character but look at their moral character.
I am not casting stones, we have some character on this side that I would love to weed out, but I don't make it an issue and be a hypocrite about it. Watch where they place their money, that is where their treasure lies. I have seen more self enrichment than anything else. They are have problems with the 'Republican' brand because folks aren't falling for the perception anymore. And as far as the 'Democratic' brand- our leaders better start doing more or their majority will be timed using an egg timer. They are suppose to be a party of the people-they need to be acting like one!

The way to resolve the economic crisis is this......IT AIN'T OVER TIL JUST ABOUT EVERYONE HAS A JOB. It is that simple. Until then all these happy happy numbers are nothing but spun sugar-cotton candy, edible but of little nutritional value. You can't grow strong on a steady diet of it. We have had a steady diet of this since 2000. It is time to get back to meat and potatoes. Infrastructure and the jobs the can provide, WPA and CCC. Utilize our human capital-in just isn't just a budgetary expense-it's a sound investment that can yield untold dividends.

Happy hunting and watch out for the bears.

[skoalyman]

66. your right I feel like after unemployment jumps up after

factories and dealers close down it will get even harder for them to tip the scales in favor of euphoric propaganda,then they'll get hit with reality. :nuke: :hi:

[MattSh]

32. Why would you want to haul your loot to a bank?

You want to lose it?

[ozymandius]

42. Heh - good one.

:) Banks are not equal. My local non-profit bank rates well, but not great, at Bankrate.com in terms of overall health. If given the choice of Skank of America, Shitibank, J.P. Mortgage and Wells Fartgo - I'd say 'no thanks'. I'll stick with my tiny hole-in-the-wall bank that's still burdened with regulations for a bank its size.

[Dr.Phool]

22. From another fake news channel.

As Ozy pointed out above. When you're shedding 5-600,000 jobs every month, housing is saturated, and I'll add nobody is feeling very secure, you ain't going to have any recovery.

A saw this at Automatic Earth last night on housing.

http://theautomaticearth.blogspot.com/

Ilargi: So yes, the confidence game works for now, and it no longer matters anymore how bad the news is. When the spin machine churns along at full speed, there's no news so bad that it can't be turned on its head, dressed up to the nice and sold as a hot virgin all the boys would commit a crime to lay their hands on. The question of course remains how long it will work, but for the moment we're stuck in a make-believe world suspended somewhere between the naked emperor and the ugly duckling. GM's bankruptcy came a big step closer again today as bondholders sounded a NO as decisive as it will be painful, not least for themselves.

US consumer confidence may have risen, but not on account of the workers, pensioners and dealers in the automotive industry. Neither will legislators and civil servants in California and soon 45 other states be donning smilies and party hats. And though there will always be voices that claim this morning's Case/Shiller housing numbers shoot greens, shooting blanks is a lot closer.

In April, about 475 American homeowners per hour were served with paperwork drawing them into one step or another of the foreclosure process, every hour, 24 hours a day. The CS Monitor envelops official data for inventory numbers and home values in a cloud of uncertainty: the paper estimates that 70% of done-deal foreclosed homes, for fear the prices they’d fetch in auction would be too low, are simply not put up for sale. 500.000 homes just sit there waiting for the tide to change. The report also suggests that the Obama administration exerts pressure on banks to keep them from trying to sell the properties.

All this serves to prolong an unrealistically high price level, as well as a hugely underestimated number of available homes. And that's still without all the owners who’ve simply removed the For Sale signs from their lawns. One consequence is that the poor people who buy homes today pay prices that are actively, artificially and substantially elevated by government policies. First through Fannie and Freddie's mortgage purchases, second through these don’t ask don't tell foreclosure policies. A government that tricks its own citizens into greatly overpaying for what is likely the most costly purchase in their lives, it truly is quite something from an ethics and morality point of view. But everybody's silent on the topic, nobody dares touch that scary real world out there.
(More) http://theautomaticearth.blogspot.com/
------------------------

As far as I'm concerned, the US is both fiscally and morally bankrupt right now. We have no money for ANYTHING, but we are still fighting 2 wars to prop up the appearance of an empire that doesn't know it's dead already.

They won't even debate whether or not that corporations should have to pay their share of legally required taxes. California is about to eliminate welfare and close all of their parks. The only growth they're going to have out there, is converting the Governators Mansion into a prison, after the riots start. They can't afford to build new ones.

We're at a crossroads in history. But, not the one they're talking about.

[DemReadingDU]

24. We're at a crossroads

but we really don't have much choice which road. They're all going the same way.


Hey, I was reading the comments at TAE. I found this, and thought of you!

"Maine Stein Song" (Rudy Vallee, 1930)
http://www.youtube.com/watch?v=j-sfdtRBIfI

edit: wait for a minute, before the words begin.

[Dr.Phool]

36. Good one!

[DemReadingDU]

40. Yeh!

and if you need the lyrics, they are written in the gray box on the right!

"Then drink to all the happy hours
Drink to the careless days"

:beer:

:toast:

[tclambert]

33. Will the initial claims numbers come out on Thursday this week?

Or does the Monday holiday shift it back a day? And won't that holiday skew the numbers? (With fewer workdays, employers may have fallen behind in firing people.)

[Dr.Phool]

37. They'll come out Thursday, as usual.

The holiday will skew next weeks numbers.

[DemReadingDU]

53. From a comment posted today at TAE

5/27/09
Ilargi said...

There'll always be pockets that hold on a bit longer. Likely something to do with work facilities, army bases or something. Eventually, though, credit will dry up for everyone across the board.


As I tried to explain above, there are reasons why the finance-government complex holds prices as high as they can for the time being. Without their machinations, prices would easily be 20-30% lower than they already are, and that would finish off the big banks. Delaying the inevitable further price plunge serves to allow them to shift more debt to the public. When Fannie and Freddie's real losses are revealed, which will run in the hundreds of billions, that's where the game stops. Even they, crooked as their dealings are, have to apply certain accountancy standards, i.e. report writedowns on losses. It'll be a bloodbath, and all regions will be impacted.

http://theautomaticearth.blogspot.com/2009/05/may-26-2009-ugly-emperor-and-naked.html?showComment=1243439231777#c7211893883260251710

[Demeter]

29. The Second Day of the Trading Week Is Always Down

Don't expect a rally.

[tclambert]

69. And you were correct. I salute your perspicacity.

Dow down 2%, Nasdaq and S&P also down. And all the stocks I regularly check are down. GM had bad news and dropped 20%. But Ford and Toyota also went down.

[UpInArms]

23. dollar watch

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

Last trade 80.430 Change +0.335 (+0.43%)

US Dollar Suffers a Sharp Reversal Despite a Positive Confidence Report

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/US_Dollar_Suffers_a_Sharp_1243384840539.html

Up until the open of the US session, it seemed as if the dollar was going to find significant reprieve to last week’s selling. However, when US-based liquidity filled out, the steady appreciation behind the world’s most liquid currency was quickly reversed in a matter of hours. If that wasn’t a clear enough sign that underlying risk trends are still holding their sway over investors’ appetites, the same bias was reflected in the broad pull back in the Japanese yen and the aggressive, 2.6 percent from the S&P 500 Index.

And, though the initial drive against the dollar may have grown out of the market’s efforts to diversify and re-invest into higher yielding assets; there is growing evidence that speculation and sentiment are perhaps playing a larger role in extending the currency’s losses. In turn, we have to determine whether this is grounds for a fundamentally based reversal in the greenbacks favor. One of the most palpable reports of sentiment for dollar interest (and it is accessible to those outside of Forex to boot) are the levels measured through the CFTC’s Commitment of Traders (COT) data. Released each Tuesday, this morning’s report indicated net short interest in the US dollar was at its most extreme since last July – around the same time that EURUSD failed a second time to surmount 1.60 and subsequently fell over 3,600 pips in the following three months. Does this mean that there is an imminent reversal or that the world’s most liquid currency pair will mark an equivalent decline as the one between July and October? In a one word answer: no. Sentiment is prone to extremes; and these acute shifts from equilibrium can last a long time. However, fundamentals may inadvertently be building a case in the dollar’s favor.

It is hard to remember a time when the US dollar was not highly correlated to risk trends; but that was the case just six to eight months ago. The currency’s rivalry with the Japanese yen as a top safe haven was born out panic and the need for liquidity that developed during the worst of the financial crisis in September and October of last year. It is only natural that the greenback should lose some of the premium that was built up during this period; but as long as speculation’s sway over the broader markets moderates, so too will its influence on the dollar. Looking beyond to objective fundamentals, it is looking more and more like the US economy is pulling out of its decline as fast as its strongest economic competitors. This is not to mean that readings for economic activity are positive; but rather, they are closer to signaling growth than the Euro Zone and UK figures for example. For traditional event risk this morning, the most market-moving piece of event risk was the Conference Board’s consumer confidence survey. The May reading did improve for the third consecutive month as expected; but the pickup was far more aggressive than the consensus was calling for. At 54.9 (anything above 50.0 signals net optimism) the gauge was at its highest level since September and logged its largest jump in six years. A breakdown of this report shows that this largely the reflection of expectations (which surged 21.3 points to 72.3), while the ‘Present Situation’ measure printed a tepid 28.9. This reflects a lot of optimism in the government’s ability to carry the economy back into to positive growth, which many feel is ill-advised; but confidence does have a direct correlation to spending nonetheless. In other news both the Richmond and Dallas regional manufacturing activity indexes printed better than expected results for May; while the lagging S&P Case-Shiller home housing index reported a deteriorating pace. We will see whether tomorrows existing home sales data and the quarterly House Price Purchase Index from the Federal Housing Finance Agency reports the same.

...more...

Forex Indicators Forecast US Dollar May Bottom

http://www.dailyfx.com/story/topheadline/Forex_Indicators_Forecast_US_Dollar_1243379035199.html

The US Dollar recently hit fresh 2009 lows against the Euro and other key currencies, but several sentiment indicators suggest that the Greenback may be near a major bottom.

Recent CFTC Commitment of Traders data shows that large speculators are now extremely short the US Dollar against the Euro, Australian Dollar, New Zealand Dollar, Canadian Dollar, and Swiss Franc. The impressive and unusual confluence of sentiment extremes have put us on high alert. Moreover said extremes in CME futures likewise coincide with two other important FX indicators: Forex Options Risk Reversals and our proprietary Speculative Sentiment Index data.

According to Over-the-Counter Forex options markets, traders currently favor out-of-the-money (OTM) US Dollar puts by an impressive margin. In other words, most are willing to pay more for aggressive bets on USD weakness. We look at “Risk Reversals”—the difference paid for OTM Puts and Calls. Below we see relevant extremes in the EUR/USD exchange rate.

Euro/US Dollar 25-Delta Risk Reversals Versus Euro/US Dollar Exchange Rate


Finally, our proprietary Retail FX Sentiment Indicator shows an interesting divergence between crowd trading and
EUR/USD price action.

Those who read our weekly Forex Speculative Sentiment Index report know that we typically take a contrarian view of “crowd” positioning. In our experience, the majority of traders are quite often on the wrong side of the trade and we can view directional sentiment extremes as strong leading indicators. Recently we have seen that the majority of retail speculators have sold into Euro/US Dollar strength. Indeed, our most recent Forex SSI report accurately called for further US Dollar weakness into the current week of trading. Yet more recent SSI readings suggest there is tell-tale divergence between price and forex positioning.

...more...

[UpInArms]

25. SF Fed economist sees key rate near zero for years

http://www.reuters.com/article/businessNews/idUSTRE54P4I920090526?feedType=RSS&feedName=businessNews

CHICAGO (Reuters) - The rule of thumb that often guides U.S. central bank interest rate policy suggests that the federal funds rate will need to remain near zero for "several years," a top Federal Reserve economist said on Tuesday.

Glenn Rudebusch, senior vice president at the San Francisco Fed, said the funds rate would need to be minus 5 percent by the end of 2009 to create the level of monetary stimulus implied by the Fed's own economic forecasts.

But when the time comes to reverse unconventional policy measures enacted by the Fed to support the economy, the process should be easier than some pundits have suggested, Rudebusch said in the bank's latest economic letter.

Rudebusch analyzed the interest rate outlook in light of the latest forecasts from members of the Federal Open Market Committee, released on May 20 with minutes from the Fed's April 28-29 meeting. The FOMC sets Fed interest rate policy.

For the past few decades the Fed's target rate has tracked the level implied by the Taylor rule, which calculates the ideal interest rate for a given set of economic conditions including the unemployment rate and inflation.

That link was severed in December 2008, when the funds rate was lowered to a range of zero to 0.25 percent -- essentially reaching its "zero bound" -- while the economic outlook continued to weaken.

From 5.25 percent last seen in September 2007, "the Fed has been able to ease the funds rate only about half as much as the policy rule recommends," he noted.

...more...

[UpInArms]

26. U.S. mortgage applications sink as loan rates rise

http://www.reuters.com/article/bondsNews/idUSNYS00508920090527

NEW YORK, May 27 (Reuters) - The highest home loan rates in more than two months drained demand for refinancing last week, dragging total U.S. mortgage applications to the lowest level since early March, the Mortgage Bankers Association said on Wednesday.

The average 30-year mortgage rate rose 0.12 percentage point to 4.81 percent, above a low of 4.61 percent two months ago though down more than a percentage point from a year ago.

The Mortgage Bankers Association's measure of demand for loans to buy homes rose by 1 percent, but has shown scant momentum during the keenly watched spring sales season.

Refinancing has been the lifeblood of the renewed push for mortgage funding much of this year, and even that has lost steam, according to the industry group's data.

Total U.S. mortgage applications fell 14.2 percent in the week ended May 22 to 786.0 on a seasonally adjusted basis, well off a recent peak of 1,250.6 in early April.

Home loan refinance requests last week slumped 18.9 percent to 3,890.4, about half of the 6,813.5 peak in early April. Refinancings accounted for just over 69 percent of all applications, after hovering closer to 75 percent in recent weeks.
...more...

[UpInArms]

27. U.S. accuses Texas professor, lawyer of fraud

http://www.reuters.com/article/businessNews/idUSTRE54P4Q920090526?feedType=RSS&feedName=businessNews

WASHINGTON (Reuters) - Two Texas men defrauded investors of some $19.5 million by faking bank records to show that their business, PrivateFX Global One, achieved annual returns of more than 23 percent in foreign exchange trading, U.S. regulators said on Tuesday.

The SEC said it obtained an emergency court order freezing the assets of Texas A&M finance professor Robert D. Watson and Houston lawyer Daniel Petroski. The U.S. Commodity Futures Trading Commission is also investigating the alleged fraud.

"We're reviewing the information in the pleadings and will respond after we've had a chance to review them," said Richard Roper, an attorney for Petroski.

<snip>

When the SEC and CFTC subpoenaed Watson and Petroski, the men gave investigators fake bank records about Global One's performance, the regulators said.

"In reality, these historical performance claims are not supported by valid financial records. Rather, the defendants have relied on false financial records and fake Deutsche Bank and LGT Bank account statements," the SEC's court complaint said.

...more...

[Demeter]

30. Wonder If He Has Tenure

[Pale Blue Dot]

34. Confirmed - Social Security Deluged with Early Retirement Requests

From Chris Martenson's blog:

On April 1st, in the context of writing about a newly appreciated shortfall in Social Security funding by the CBO, I wrote this (with the part I wish to discuss in bold):

Here’s a prediction – will be revised to the worse in about 6 months. I base this prediction on my belief that more people will opt for retirement than are currently projected and that entitlement program tax receipts will be below current projections. Also, nearly every prediction by the CBO has been revised to the worse over the past year so I am “riding the trend” with this prediction.

At the time several people commented that they thought this prediction faulty and saw the possibility of the exact opposite as being more likely.

I based my prediction on two concepts;

1. With jobs hard and credit tightening to find many folks would simply opt for early retirement as a means of securing any sort of cash flow at all.
2. Many folks would (rightly) conclude that sooner or later the government would change the rules - perhaps moving the retirement date out a few years or reducing benefits or both - and opt to retire early as a means of grandfathering in their own position.

I can't say for sure which of these reasons is most responsible here, but it looks like #1 is the winner for now:

Early retirement claims increase dramatically

Reporting from Washington -- Instead of seeing older workers staying on the job longer as the economy has worsened, the Social Security system is reporting a major surge in early retirement claims that could have implications for the financial security of millions of baby boomers.

Since the current federal fiscal year began Oct. 1, claims have been running 25% ahead of last year, compared with the 15% increase that had been projected as the post-World War II generation reaches eligibility for early retirement, according to Stephen C. Goss, chief actuary for the Social Security Administration.

Many of the additional retirements are probably laid-off workers who are claiming Social Security early, despite reduced benefits, because they are under immediate financial pressure, Goss and other analysts believe.

Goss said it remained unclear whether the uptick in retirements would accelerate or abate in the months ahead. But another wave of older workers may opt for early retirement when they exhaust unemployment benefits late this year or early in 2010, he noted.

The ramifications of the trend are profound for the new retirees, their families, the government and other social institutions that may be called upon to help support them.

On top of savings ravaged by the stock market decline and the loss of home equity, many retirees now must make do with Social Security benefits reduced by as much as 25% if they retire at age 62 instead of 66.

http://www.latimes.com/news/nationworld/nation/la-na-retirement24-2009may24,0,885521.story

http://www.chrismartenson.com/blog/confirmed-social-security-deluged-early-retirement-requests/19623

[DemReadingDU]

38. Spouse signed up, should get 1st check any day now.

We figure the chances are better if you are already receiving S.S., then it will be less likely to have it eliminated in the future.

I wish I could sign up early. It's anyone's guess if S.S. will even be able in a couple years for new retires to start receiving it.

[Dr.Phool]

47. Is he going to get his stimulus check also?

$250 for each SS recipient.

Railroad Retirement said that we would have ours by the end of the month. They have 2 days left before the week-end.

[DemReadingDU]

50. We never received any notification

Probably already had to have been receiving SS to get the stimulus.

:shrug:

[tclambert]

39. Yeah, I can see the jobless choosing early retirement.

People who HAVE jobs might want to hang on longer for the higher benefits. But people WITHOUT jobs have nothing to hang onto. What's the long term effect? More people at reduced benefits might actually reduce Social Security payouts over time. No, wait, let's not get back into projecting Social Security debts out to infinity like Bush tried to do once. Though I did love Al Franken's take on that. "If they project that Social Security will run a trillion dollar deficit out to INFINITY, well, that's not really so much. We can just pay a dollar a year for the first trillion years and we'll be OK."

[Tansy_Gold]

48. I did.

It's not much, but considering my husband paid into it all his working life and died before he could ever collect a dime, I figured I'd get what I could as soon as I could. And that opens a job for someone who doesn't have anything else.

SS plus my meager self-employment earnings keep me and the doggies in food and shelter. That's what counts.

And don't forget, this could all be fixed if they'd just raise the cap on taxable earnings. It's all about protecting the rich, and when this country slides into third-world feudal poverty because a few have sucked up all the wealth, well, you know what the rubber stamp says.

And people should also remember that when Fiat buys into Chrysler and Accenture moves out of the country, their profits and their taxes disappear from the U.S. economy.


Roger and out,


Tansy Gold

[Dr.Phool]

49. Me too.

I paid into Railroad Retirement most of my life. RR was the father of SS.

We have what is called an Occupational Disability. When my company went under with LTV Steal, I had 31 years in. My back couldn't take the vibration, and jarring from driving a locomotive anymore, so I qualified, because I couldn't do my job anymore.

Fuck it. I got out of there at age 49, 7 1/2 years ago, and Florida weather does wonders for my back. Up in Ohio, I could barely walk from November to April.

We paid a lot more into it than SS. Tier 1 was the SS equivalent, and for Tier 2, we paid in an additional 4%, and the employer an additional 16%. So, we get much better benefits. You can actually live on them.

[happyslug]

56. So what is the problem? Benefits are REDUCED to reflect early retirement.

If you retire at age 62, your benefits are reduced to reflect you did not wait till your retirement age of 65 (Soon to start to increase to age 67). Thus if you take early retirement, the government will pay out less cash per month over your retirement. The reduction in benefits, when you retire early reflects the cost to the Government of starting to pay you at age 62 instead of age 65, thus no change in NET outputs by the Government.

Furthermore the fact that less money will go into Social Security do to these early retirement is also reflected in the reduction in benefits, so this problem is a problem that does NOT exist. The tables already reflect the affect of early retirement. The people taking early retirement will get about the same benefit, in total, as if they waited till they turned 65, even through on a month to month basis they will be getting less.

[Tansy_Gold]

61. You're correct. Thanks for reminding us!

There is a point -- at something like age 81 -- where early retirement actually returns LESS (I think) than waiting to full retirement, but overall it's about equal.


Still, I'm gettin' mine while I can.



TG

[tclambert]

70. Thank you both for that explanation.

So the breakeven is 81. No problem. I'm stubborn enough to stick around at least that long.

The real problem with Social Security comes when medical science extends the average life expectancy to, say, 200. And then, of course, Florida will sink from the weight of all the retirees.

[Tansy_Gold]

73. I'm not positive on the break even point, tc.

And I could even be wrong on which way it breaks.

But in the short run -- say roughly 62 to 80 years of age -- a retiree is ahead to get in there early.

Someone who is better at math than I should be able to figure out the break point.

[MARALE]

57. My company offered a great ERP

Early Retirement Package. I think that there are many that are taking it. the people know that there will be lay-offs, so they are opting to go a bit earlier than normal. Also helps the ones that were going to retire, but lost on their 401k so delayed retiring.

There is probably a lot of companies that are doing the same thing to cut costs.

[Demeter]

65. By the Way, Retirees Can Work AND Collect SSI

Up to a certain amount, without paying taxes in excess....

[Tansy_Gold]

68. IIRC the amount of earnings is roughly $1100/month before benefits decrease

It's not so much a "tax" on the earnings as it is decrease in the SS benefits. I think they deduct $1 for ever $2 you earn over the limit, but supposedly they give it "back" after you reach the age of no limit on earnings.

[DemReadingDU]

43. Updated - interactive map of vanishing employment across the country

This was posted last month, but has now been updated for the latest numbers, for March 2009

http://1.bp.blogspot.com/_nSTO-vZpSgc/Sea8ZfvnlvI/AAAAAAAAF74/UBNSIaNsByQ/s400/Vanishing+Employment+Map.png





Click on the link from SLATE, then click on the green arrow in the map.
It takes appx 5 seconds for the map to start moving.

Appx every 5 seconds the map changes for employment for each month beginning January 2007 through March 2009. Beginning July 2008, watch the number of jobs gained (in blue) change to jobs lost (in red).

http://www.slate.com/id/2216238


Gives new meaning to red states.

[Dr.Phool]

44. Want to lower taxes? Want more services? Invade the Caymans.

Lax Little Islands
Comment
By David Cay Johnston

http://www.thenation.com/doc/20090601/johnston

(snip)

The Caymans are not really a country; they are a law firm posing as one. More than 12,000 "companies" operate out of a single building known as Ugland House, home to the law firm Maples & Calder. As Obama put it, "Either this is the largest building in the world or the largest tax scam." Under Caymans law these companies are barred from doing any business in the Caymans except hiding assets and profits. That means shares of stock, bonds and cash may technically be owned in the Caymans--which claims to be the world's fifth-largest center of bank deposits--but are really housed in New York, Greenwich, Houston, San Francisco. There is $1.9 trillion in bank deposits in the Caymans--money actually invested in the United States and other countries but invisible to the IRS.

The Clinton administration enabled this through a rule known as "check the box," which helped companies funnel profits into untaxed havens. US tax rules, liberally expanded by the Bush administration, enabled frauds like Enron to create hundreds of paper companies in the Caymans and other tax havens like Liechtenstein, Turks and Caicos, and the Isle of Man. Enron, as I revealed in a New York Times story in January 2002, paid no taxes because it had created hundreds of paper companies in these places. A subsequent investigation by the Congressional Joint Committee on Taxation uncovered internal documents describing Enron's tax department as a "profit center." Dick Cheney's Halliburton subsidiary, KBR--the old Kellogg Brown & Root construction company--has at least 21,000 employees paid via Caymans subsidiaries to escape taxes. KBR hired executives through these paper companies, enabling them to evade Social Security and Medicare taxes on their salaries and bonuses, much of which the taxpayers provided through Pentagon contracts.

President Obama estimates that his proposals for ending tax haven abuses will raise $101 billion over a decade. The Senate Permanent Investigations subcommittee puts the annual tax loss at $100 billion; Treasury sets the figure at $123 billion. Collecting those lost billions could mean that Americans could pay no withholding tax from November 15 to December 31; it could pay for healthcare for about 20 million of the roughly 50 million Americans without health insurance.

Because we are civilized, we should make the Caymans invasion the last resort in an escalating series of steps designed to persuade the islands to stop undermining US national security. For starters, as I proposed in Tax Notes magazine, Congress should pass a law funding pursuit of every major tax cheat, just as we pursue every killer, rapist and drug dealer. Using offshore accounts to cheat the government out of $50,000 or more for two or more years should be made a felony per se. Then let's provide an escape hatch, which would spare prosecution of anyone who fesses up and fully pays taxes, penalties and interest. The same law should make public the name and details of every person or company that skips the opportunity to make things right.

(more)

http://www.thenation.com/doc/20090601/johnston

[Danascot]

51. DU Job Board

There's a current post suggesting that DU have a job board:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x5728284

This idea was extensively discussed here at SMW a while back. I posted a reply to that effect as follows:

ozymandius tried to get one started

Ozy is the host of DU's excellent Stock Market Watch. He was trying to get a job board/employment resource going earlier this year but Skinner didn't support it. There were lots of great ideas batted around on the topic at the time and wide support from the denizens of SMW.

Here's the link to today's SMW:

http://www.democraticunderground.com/discuss/duboard.ph...

I would like to see an employment resource at DU but if we can't get one going here I would be happy to host one on my website which is oriented to the economic crisis, see link at my sig line below. If anyone here is willing to work on getting it going, please contact me. That said, I think it would be better to have it at DU because it's a much larger and established community and would be able to reach and help more people.

Maybe it's time to try to get this going again.

[AnneD]

63. Requesting a job thread at DU is like asking ....

for Elizabeth Warren to be Treasury Secretary-yeah it's a great idea and will help a lot of folks but what do you know about it.

I got tired of requesting. I know I've done it on several other thread here too. I finally got zen about it now. If it happens it happens. I tried to put the idea out there some time ago, was even getting leads-but I passed them on to folks around here that I knew.

[TheMachineWins]

52. Kudlow has exclusive Cheney interview

Isn't that special? CNBC whores decided that interviewing a traitor gives their network credibility.

[Dr.Phool]

58. Traitors interviewed by collaborators.

Now there's an idea.

[skoalyman]

67. They better enjoy the dog and phony show,because after its all

said and done CNBC may not be around.:toast:

[tclambert]

71. I love it when Cheney gives interviews. You can see he wants to confess.

Like Colonel Jessup (Jack Nicholson) in "A Few Good Men," he's proud of ordering torture and he wants to brag about it. I'd like to see a Frost/Cheney interview.

[Danascot]

54. Excellent article from Mother Jones

posted on DU at:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x5725985

direct link to article:

http://www.motherjones.com/politics/2009/05/six-ways-financial-bailout-scams-taxpayers

Six Ways the Financial Bailout Scams Taxpayers

The biggest loser of the financial bailout is indisputably the American taxpayer.

The Greatest Swindle Ever Sold

How the Financial Bailout Scams Taxpayers, Subsidizes Wall Street, and Props Up Our Broken Financial System

By Andy Kroll

On October 3rd, as the spreading economic meltdown threatened to topple financial behemoths like American International Group (AIG) and Bank of America and plunged global markets into freefall, the U.S. government responded with the largest bailout in American history. The Emergency Economic Stabilization Act of 2008, better known as the Troubled Asset Relief Program (TARP), authorized the use of $700 billion to stabilize the nation’s failing financial systems and restore the flow of credit in the economy.

snip

Given the lack of transparency and accountability, don’t expect taxpayers to be able to object too much. After all, remarkably little is known about how TARP recipients have used the government aid received. Nonetheless, recent government reports, Congressional testimony, and commentaries offer those patient enough to pore over hundreds of pages of material glimpses of just how Wall Street friendly the bailout actually is. Here, then, based on the most definitive data and analyses available, are six of the most blatant and alarming ways taxpayers have been scammed by the government’s $1.1-trillion, publicly-funded bailout.

1. By overpaying for its TARP investments, the Treasury Department provided bailout recipients with generous subsidies at the taxpayer’s expense.

2. As the government has no real oversight over bailout funds, taxpayers remain in the dark about how their money has been used and if it has made any difference.

3. The bailout’s newer programs heavily favor the private sector, giving investors an opportunity to earn lucrative profits and leaving taxpayers with most of the risk.

4. The government has no coherent plan for returning failing financial institutions to profitability and maximizing returns on taxpayers’ investments.

5. The bailout’s focus on Wall Street mega-banks ignores smaller banks serving millions of American taxpayers that face an equally uncertain future.

6. The bailout encourages the very behaviors that created the economic crisis in the first place instead of overhauling our broken financial system and helping the individuals most affected by the crisis.

…more…

[TheMachineWins]

55. I don't even need to read it all again, it comes down to this 1 decision:

Does the gov't bailout/prop the bankrupt and criminal banks to preserve capitalism as we know it or does the gov't accept the fact that capitalism failed and create a socialist-type system?

The dumbed-down American public has completely bought the fictionalization of deregulated capitalism so the only possible answer that our corrupt "leaders" could come up with was the propping-up of the criminals. Otherwise, dumbericans would have had to accept their 30+year delusion and lifetimes of failure and support of pure propaganda lies.

It's sad that we came to this as a nation but there it is.

[TheMachineWins]

59. Doggonit, I thought yesterday's rally was true-blue, for real, sincerity at it's best

Now it goes and sells off after I sunk my life's fortune (a coupon and the $3 I made at my last gig) into our glorious free market that has bottomed because it gets less worse all the time!

[tclambert]

72. Now, see, if you'd spent that $3 on Forever Stamps like I recommended last month,

that would have bought 7 stamps, with .06 left over, and those 7 stamps would now be worth $3.08. If you had saved the 6 cents, you'd be 14 cents ahead! Almost enough to buy a car company.

[DemReadingDU]

60. The Crisis and How to Deal with It

Volume 56, Number 10 · June 11, 2009

The Crisis and How to Deal with It
By Bill Bradley, Niall Ferguson, Paul Krugman, Nouriel Roubini, George Soros, Robin Wells et al.

Following are excerpts from a symposium on the economic crisis presented by The New York Review of Books and PEN World Voices at the Metropolitan Museum of Art on April 30. The participants were former senator Bill Bradley, Niall Ferguson, Paul Krugman, Nouriel Roubini, George Soros, and Robin Wells, with Jeff Madrick as moderator.

—The Editors


Interesting commentary, very long, can't decide which to highlight, so click here to read
http://www.nybooks.com/articles/22756