STOCK MARKET WATCH, Wednesday January 6

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday January 6, 2010

Bush Administration Officials Convicted = 1
Name(s): David Safavian

Bush Administration Officials Charged = 1
Name(s): Richard Lopez Razo

Financial Sector Officials Convicted since 1/20/09 = 11

AT THE CLOSING BELL ON January 5, 2010

Dow... 10,572.02 -11.94 (-0.11%)
Nasdaq... 2,308.71 +0.29 (+0.01%)
S&P 500... 1,136.52 +3.53 (+0.31%)
Gold future... 1,119 +0.20 (+0.02%)
10-Yr Bond... 3.76 -0.06 (-1.67%)
30-Year Bond 4.61 -0.03 (-0.73%)

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

Market Conditions During Trading Hours

GOLD, EURO, YEN, Loonie, Silver and US$

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Handy Links - Market Data and News:
Economic Calendar    Marketwatch Data    Bloomberg Economic News    Yahoo! Finance
    Google Finance    Bank Tracker    Credit Union Tracker    Daily Job Cuts

Handy Links - Economic Blogs:
The Big Picture    Financial Sense    Calculated Risk    Naked Capitalism    Credit Writedowns
    Brad DeLong    Bonddad    Atrios    goldmansachs666

Handy Links - Government Issues:
LegitGov    Open Government    Earmark Database    USA spending.gov

Handy Links - Videos:
The Coming Collapse of the Middle Class    Charlie Rose talks with Roubini    Charlie Rose talks with Krugman    William Black: This Economic Disaster

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This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.

Read more: du

[ozymandius]

1. The Stock Market Watch will now resume its normal super early hours.

School is back in session. Also note: Daily Job Cuts has been added to the Market Data box. Hat-tip to InkAddict for the updated link.

[Coes]

8. Daily Job Cuts link has wrong syntax

http://www.dailyjobcuts.combr%20/

[ozymandius]

10. Thanks!

Fixed now. Space bar made the difference.

[ozymandius]

2. Market Observation

Stocks Start the New Decade Strong, but That Should Change
BY ROBERT MCHUGH

....
There are so many Bearish forces nearby right now, including the temptation to sell stocks and take capital gains in January 2010, deferring taxes an entire year, that there is a real possibility the S&P 500 will fall short of that 1,200 upside target. Risk management will be essential should one choose to play the long side in the S&P 500 at this time. Those risk controls should include tight stop losses, and investment limits to amounts one is comfortable risking should the Bearish forces win this tug of war.

What are these Bearish forces? Well for one, our Blue Chip key trend-finder indicators refuse to generate a buy signal (meaning there is disagreement among the Purchasing Power Indicator, the 30 Day Stochastic and the 14 Day Stochastic indicator). We also have cycle analysis where history suggests the odds are stocks will experience a significant decline in any year ending in a “0.” Then there is the cycle analysis showing that historically over the past decade stocks have started meaningful declines sometime during the first few months of the year. Then there are the Bearish divergences present between prices and 10 day average advance/decline line indicators, and between prices and our Demand Power indicator. Then there is the weekly MACD which is rolling over from extreme overbought levels, which has historically led to significant declines. Plus the aforementioned incentive to take capital gains in early 2010. Also warning a significant top is near is the number of New 52 week Highs on the NYSE. They are at levels seen at previous major tops.

While stocks were rising Monday, we learned from an AP report in the Wall Street Journal that there were 1.43 million bankruptcy filings in the U.S. in 2009, a 32 percent increase over an awful number in 2008. December 2009 saw 116,000 bankruptcy filings...

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

[ozymandius]

3. Today's Reports

07:30 Challenger Job Cuts Dec
Briefing.com NA
Consensus NA
Prior -72.3%

08:15 ADP Employment Report Dec
Briefing.com -125K
Consensus -75K
Prior -169K

10:00 ISM Services Dec
Briefing.com 52.0
Consensus 50.5
Prior 48.7

10:30 Crude Inventories 12/31
Briefing.com NA
Consensus NA
Prior -1.54M

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

[UpInArms]

19. U.S. private sector sheds 84,000 jobs in Dec.: ADP

http://www.marketwatch.com/story/us-private-sector-sheds-84000-jobs-in-dec-adp-2010-01-06

WASHINGTON (MarketWatch) -- Private-sector firms in the U.S. eliminated 84,000 jobs in December, according to the ADP employment report released Wednesday. It was the fewest jobs lost since March 2008. The private-sector has shed jobs for 23 months in a row. In November, a revised 145,000 jobs were lost compared with the 169,000 originally reported, ADP said. The ADP index does not include government jobs. The ADP jobs data come two days before the Bureau of Labor Statistics releases its estimate of December nonfarm payrolls. Economists surveyed by MarketWatch are looking for payrolls to rise 10,000 in the BLS survey, the first gain in two years.

[Hugin]

23. Is "shed" the new "cut"?

Oh, and when are we going to get to add... increased... multiplied? :shrug:

I'll say it for the upteegazillionth time... An INCREASE of around 124,000/month jobs is required to just stay even with the growth of population.

[amandabeech]

34. I'm sure I'll be flamed, but we could do something about population growth.

We could, or we could demand that Congress and the President (ha), put immigration on hold until our economy improves and we have generated enough jobs for the people already here.

Elsewhere on DU recently, or was it on Karl Denninger's site, it was reported that we have no more jobs than we did in 1999, when our population was about 282,000,000. Our population now is 307,000,000 or thereabouts. I'm thinking that represents maybe 12,500,000 jobs.

I know that many people here do not link immigration to jobs but instead link immigration to history, particularly their family's.

Perhaps it is time to look pragmatically at immigration for awhile.

fter all, there was little immigration during the Depression, very unfortunately for some groups. How much more difficult would Franklin Roosevelt's job have been if immigration had been running at 1,000,000 per year not including temporary workers?

Let's not make the job of bringing back full employment any more difficult than it has to be.

[tclambert]

41. I've said before this planet would be better off with only about 1 billion humans on it.

We should turn the rest into soylent green, 'cause it would be a shame to waste all that protein. Remember, people burgers contain all the vitamins and nutrients you need. Other sources of food always seem deficient in one thing or another. People burgers--good for you, good for the planet!

[Dr.Phool]

43. I think eventually the Chinese will eat the rest of us.

Hey, they eat rats already.

In the meantime we could get a head start by eating the rich. But, watch all that fat.

[Capn Sunshine]

45. Orange Chicken Is PEOPLE!!!!

[tclambert]

49. Movie clip.

http://www.youtube.com/watch?v=8Sp-VFBbjpE&feature=related

[ozymandius]

48. "Parts is parts."

[ozymandius]

4. Oil hovers below $82 amid US crude inventory drop

SINGAPORE – Oil prices hovered below $82 a barrel Wednesday in Asia after a report showed U.S. crude supplies fell more than expected last week...

Traders closely study U.S. inventory data for signs of consumer demand trends, and crude supplies fell 2.3 million barrels last week, the American Petroleum Institute said late Tuesday.

Analysts had expected a drop of 1.6 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

The Energy Department's Energy Information Administration plans to announce its inventory report later Wednesday.

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

---

Bear in mind that refineries allow their supplies to deplete in order to avoid taxes on held inventory.

[ozymandius]

5. Asian consumers most upbeat, American sentiment dips

HONG KONG (Reuters) – Consumer confidence is strongest in emerging Asia, Brazil and Australia, but weakened slightly in the United States in the fourth quarter as Americans worried about job security, a survey showed on Wednesday....

Globally, the Nielsen Global Consumer Confidence Index averaged a reading of 87 points in the fourth quarter, little changed from the third quarter but 5 points higher than the second quarter.

The U.S. reading dipped to 82 in the fourth quarter from 84 three months earlier, reflecting concern about rising unemployment and ranking U.S. confidence at 18th among the 29 markets surveyed worldwide.

Many analysts believe a decisive rebound in U.S. consumer spending is vital for a sustained global economy recovery.

http://news.yahoo.com/s/nm/20100106/bs_nm/us_asia_economy_nielsen

[ozymandius]

6. Greek worries hit euro, world stocks flat

LONDON (Reuters) – The euro took a brief battering on Wednesday on worries the European Union would not rescue fiscally struggling Greece while global stocks ticked over with investors eyeing major U.S. data due later in the week.

European Central Bank officials were due to arrive in Athens later in the day to discuss Greece's financial difficulties, but foreign exchange markets were stirred up by a media report quoting ECB executive board member Juergen Stark as saying Greece would not be bailed out....

World stocks as measured by MSCI (.MIWD00000PUS) were flat, having risen more than 2 percent in the two previous trading session of the year and are sitting at around 15 month highs.

Emerging markets led the way, as they did for much of last year, with the relevant MSCI benchmark (.MSCIEF) up 0.4 percent. European shares put in tiny gains. The FTSEurofirst 300 (.FTEU3) was up less than 0.1 percent. It led higher by financials and miners.

http://news.yahoo.com/s/nm/20100106/bs_nm/us_markets_global

[ozymandius]

7. Contracts down: Is housing headed for double-dip?

WASHINGTON – The number of people preparing to buy a home fell sharply in November, an unsettling new sign that the housing market may be headed for a "double-dip" downturn over the winter.

The figures Tuesday came after a similarly discouraging report on new home sales, illustrating how heavily the housing market depends right now on government help.
In October, buyers raced to get contracts signed in time to take advantage of a tax credit for first-time homeowners that was set to expire. It has since been extended into spring — and now prospective buyers are taking their time.

The National Association of Realtors said its seasonally adjusted index of sales contracts fell 16 percent from October to November, ending nine months of gains. Economists surveyed by Thomson Reuters had expected only a 2 percent drop....

When the tax credit expires this spring and the government phases out programs to keep mortgage rates low, the housing market will have to stand on its own. Many economists doubt it can.

http://news.yahoo.com/s/ap/20100105/ap_on_bi_go_ec_fi/us_economy

[Festivito]

9. Debt: 01/04/2010 12,290,238,158,257.13 (DOWN 21,111,519,254.90) (Mon)

(Debt seems to jump up then drop slowly maybe up a little and down a little for days--repeat. Last report showed a big jump up that took place at the end of the year, the quarter of course (Q1 for FY'10: the first quarter in an only-Obama budget), and the decade as well. So today begins the smaller ups and downs. Good day all.)

= Held by the Public + Intragovernmental(FICA)
= 7,803,905,887,172.98 + 4,486,332,271,084.15
DOWN 7,102,898,314.32 + DOWN 14,008,620,940.58

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 308-Million person America.
If every American, man, woman and child puts in $3.24 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.73, ABOUT TEN BUCKS for a 1B$ 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 10 seconds we net gain another American, so at the end of the workday of the report, there should be 308,383,518 people in America.
http://www.census.gov/population/www/popclockus.html ON 11/07/2009 08:19 -> 307,879,272
Currently, each of these Americans owe $39,853.75.
A family of three owes $119,561.24. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 20 reports in the last 30 to 31 days.
The average for the last 20 reports is 10,139,701,835.41.
The average for the last 30 days would be 6,759,801,223.60.
The average for the last 31 days would be 6,541,743,119.62.
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$/day.
There were 174 reports in 253 days of Obama's part of FY2009 averaging 7.33B$ per report, 5.07B$/day so far.
There were 249 reports in 365 days of FY2009 averaging 7.57B$ per report, 5.16B$/day.
There were 64 reports in 96 days of FY2010 averaging 5.94B$ per report, 3.96B$/day.
Above line should be okay

PROJECTION:
There are 1,112 days remaining in this Obama 1st term.
By that time the debt could be between 13.8 and 19.6T$.
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)
01/04/2010 12,290,238,158,257.13 BHO (UP 1,663,361,109,344.05 so far since Obama took office.)

FISCAL YEAR DEBT CHANGE, Sep 30 prior year to Sep 30 named year:
(One "* " for each 40B$ reached)
FY1994 +0,281,261,026,873.94 ------------* * * * * * * WJC
FY1995 +0,281,232,990,696.07 ------------* * * * * * * WJC
FY1996 +0,250,828,038,426.34 ------------* * * * * * WJC
FY1997 +0,188,335,072,261.61 ------------* * * * WJC
FY1998 +0,113,046,997,500.28 ------------* * WJC
FY1999 +0,130,077,892,735.81 ------------* * * WJC
FY2000 +0,017,907,308,253.43 ------------WJC
FY2001 +0,133,285,202,313.20 ------------* * * C&B
01-WJC +0,053,598,528,417.78 ------------* WJC 31% of FY, 40% of FY-Debt
01-GWB +0,079,686,673,895.42 ------------* GWB 69% of FY, 60% of FY-Debt
FY2002 +0,420,772,553,397.10 ------------* * * * * * * * * * GWB
FY2003 +0,554,995,097,146.46 ------------* * * * * * * * * * * * * GWB
FY2004 +0,595,821,633,586.70 ------------* * * * * * * * * * * * * * GWB
FY2005 +0,553,656,965,393.18 ------------* * * * * * * * * * * * * GWB
FY2006 +0,574,264,237,491.73 ------------* * * * * * * * * * * * * * GWB
FY2007 +0,500,679,473,047.25 ------------* * * * * * * * * * * * GWB
FY2008 +1,017,071,524,649.92 ------------* * * * * * * * * * * * * * * * * * * * * * * * * GWB
FY2009 +1,885,104,106,599.30 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * B&O
09GWB +0,602,152,152,000.60 ------------* * * * * * * * * * * * * * * GWB 31% of FY, 32% of FY-Debt
09-BHO +1,282,951,954,598.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO 69% of FY, 68% of FY-Debt
FY2010 +0,380,409,154,745.40 ------------* * * * * * * * * BHO
Endof10 +1,446,347,307,104.91 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
12/11/2009 +000,041,027,768.14 ------------*******
12/14/2009 -012,123,818,214.95 - Mon
12/15/2009 +058,799,676,220.27 ------------**********
12/16/2009 +000,348,253,057.33 ------------********
12/17/2009 -036,492,539,788.22 -
12/18/2009 +000,710,260,980.35 ------------********
12/21/2009 -000,155,813,757.66 --- Mon
12/22/2009 +002,618,578,973.78 ------------*********
12/23/2009 +000,459,596,007.01 ------------********
12/24/2009 -001,979,240,244.32 --
12/28/2009 +000,088,095,190.64 ------------******* Mon
12/29/2009 -015,034,724,927.64 -
12/30/2009 +007,596,599,767.56 ------------*********
12/31/2009 +083,831,281,729.66 ------------**********
01/04/2010 -007,102,898,314.32 -- Mon

81,604,334,447.63 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power JUST BEFORE fiscal year end.
Bush admin borrowed $962,245,245,654.01 in those last 124 days in office crossing two fiscal years.
$360,093,093,653.42 in last 12 days of FY2008, and $602,152,152,000.59 in subsequent 112 days before leaving office.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock
http://www.usdebtclock.org/

(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=4210587&mesg_id=4210623

[Festivito]

40. Debt: 01/05/2010 12,303,300,925,702.18 (UP 13,062,767,445.05) (Tue)

Debt: 01/05/2010 12,303,300,925,702.18 (UP 13,062,767,445.05) (Tue)
(Debt seems to jump up then drop slowly maybe up a little and down a little for days--repeat. Good day all.)

= Held by the Public + Intragovernmental(FICA)
= 7,804,260,234,037.82 + 4,499,040,691,664.36
UP 354,346,864.84 + UP 12,708,420,580.21

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 308-Million person America.
If every American, man, woman and child puts in $3.24 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.73, ABOUT TEN BUCKS for a 1B$ 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 10 seconds we net gain another American, so at the end of the workday of the report, there should be 308,392,158 people in America.
http://www.census.gov/population/www/popclockus.html ON 11/07/2009 08:19 -> 307,879,272
Currently, each of these Americans owe $39,894.99.
A family of three owes $119,684.96. (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 10,278,895,435.86.
The average for the last 30 days would be 7,195,226,805.10.
The average for the last 32 days would be 6,745,525,129.78.
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$/day.
There were 174 reports in 253 days of Obama's part of FY2009 averaging 7.33B$ per report, 5.07B$/day so far.
There were 249 reports in 365 days of FY2009 averaging 7.57B$ per report, 5.16B$/day.
There were 65 reports in 97 days of FY2010 averaging 6.05B$ per report, 4.06B$/day.
Above line should be okay

PROJECTION:
There are 1,111 days remaining in this Obama 1st term.
By that time the debt could be between 13.8 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)
01/05/2010 12,303,300,925,702.18 BHO (UP 1,676,423,876,789.10 so far since Obama took office.)

FISCAL YEAR DEBT CHANGE, Sep 30 prior year to Sep 30 named year:
(One "* " for each 40B$ reached)
FY1994 +0,281,261,026,873.94 ------------* * * * * * * WJC
FY1995 +0,281,232,990,696.07 ------------* * * * * * * WJC
FY1996 +0,250,828,038,426.34 ------------* * * * * * WJC
FY1997 +0,188,335,072,261.61 ------------* * * * WJC
FY1998 +0,113,046,997,500.28 ------------* * WJC
FY1999 +0,130,077,892,735.81 ------------* * * WJC
FY2000 +0,017,907,308,253.43 ------------WJC
FY2001 +0,133,285,202,313.20 ------------* * * C&B
01-WJC +0,053,598,528,417.78 ------------* WJC 31% of FY, 40% of FY-Debt
01-GWB +0,079,686,673,895.42 ------------* GWB 69% of FY, 60% of FY-Debt
FY2002 +0,420,772,553,397.10 ------------* * * * * * * * * * GWB
FY2003 +0,554,995,097,146.46 ------------* * * * * * * * * * * * * GWB
FY2004 +0,595,821,633,586.70 ------------* * * * * * * * * * * * * * GWB
FY2005 +0,553,656,965,393.18 ------------* * * * * * * * * * * * * GWB
FY2006 +0,574,264,237,491.73 ------------* * * * * * * * * * * * * * GWB
FY2007 +0,500,679,473,047.25 ------------* * * * * * * * * * * * GWB
FY2008 +1,017,071,524,649.92 ------------* * * * * * * * * * * * * * * * * * * * * * * * * GWB
FY2009 +1,885,104,106,599.30 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * B&O
09GWB +0,602,152,152,000.60 ------------* * * * * * * * * * * * * * * GWB 31% of FY, 32% of FY-Debt
09-BHO +1,282,951,954,598.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO 69% of FY, 68% of FY-Debt
FY2010 +0,393,471,922,190.40 ------------* * * * * * * * * BHO
Endof10 +1,480,590,222,675.22 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
12/14/2009 -012,123,818,214.95 - Mon
12/15/2009 +058,799,676,220.27 ------------**********
12/16/2009 +000,348,253,057.33 ------------********
12/17/2009 -036,492,539,788.22 -
12/18/2009 +000,710,260,980.35 ------------********
12/21/2009 -000,155,813,757.66 --- Mon
12/22/2009 +002,618,578,973.78 ------------*********
12/23/2009 +000,459,596,007.01 ------------********
12/24/2009 -001,979,240,244.32 --
12/28/2009 +000,088,095,190.64 ------------******* Mon
12/29/2009 -015,034,724,927.64 -
12/30/2009 +007,596,599,767.56 ------------*********
12/31/2009 +083,831,281,729.66 ------------**********
01/04/2010 -007,102,898,314.32 -- Mon
01/05/2010 +000,354,346,864.84 ------------********

81,917,653,544.33 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power JUST BEFORE fiscal year end.
Bush admin borrowed $962,245,245,654.01 in those last 124 days in office crossing two fiscal years.
$360,093,093,653.42 in last 12 days of FY2008, and $602,152,152,000.59 in subsequent 112 days before leaving office.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock
http://www.usdebtclock.org/

(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=4212144&mesg_id=4212164

[ozymandius]

11. Silicon Valley ‘Bloodbath’ Leaves Buildings Empty

Jan. 5 (Bloomberg) -- Silicon Valley is beset by the biggest office property glut since the dot-com bust, leaving the U.S. technology hub with empty high-rises and office parks that make it impossible for landlords to sustain average rents.

More than 43 million square feet (4 million square meters) -- the equivalent of 15 Empire State Buildings -- stood vacant at the end of the third quarter, the most in almost five years, according to CB Richard Ellis Group Inc. San Jose, Sunnyvale and Palo Alto have 11 empty office buildings with about 3 million square feet of the best quality space....

Unemployment in the San Jose-Sunnyvale-Santa Clara metro area that includes Silicon Valley was 11.8 percent in November, down from the August record of 12.1 percent, according to California’s Employment Development Department. Applied Materials Inc. and Sun Microsystems Inc. in Santa Clara and Adobe Systems Inc. in San Jose announced more than 5,000 job cuts since October amid falling sales of computer chips, software and equipment.

Commercial property foreclosures will at least double in 2010 and job growth won’t return for two years after that, held back by U.S. consumers who are saving more and “getting back in line with sustainable spending habits,” Haveman said....

About 21 percent of Silicon Valley’s Class A office space is vacant, as is 20 percent of low-rise so-called flex or research and development space for offices or manufacturing, CB Richard Ellis said.

http://www.bloomberg.com/apps/news?pid=20601109&sid=atW.R8bB4S3A&pos=11

---

And the story says that developers are building more space since the CRE implosion began.

[ozymandius]

13. on a related CRE note

Reis: Strip Mall Vacancy Rate Hits 10.6%, Highest on Record

From Reuters: US shopping center vacancies hit records - report

Strip malls ... had a vacancy rate of 10.6 percent in the fourth quarter, surpassing the high set in 1991, Reis economist Ryan Severino said in a report released on Wednesday...

"Our outlook for retail properties as a whole is bleak," Severino said in a statement. "... we do not foresee a recovery in the retail sector until late 2012 at the earliest."

"Late 2012 at the earliest" ... ouch!

more at Calculated Risk

[ozymandius]

12. Limiting the destruction wrought by irrational exuberance in a one-party state

by Edward Harrison

As a writer, Matt Taibbi is a lot more vitriolic than I am. He curses, makes some pretty over-the-top personal attacks, and divines a policymaker’s intent where I don’t think he can. But, this goes mostly to style. Substantively speaking, he has a lot to say and we should take notice.

I wanted to highlight a piece he wrote yesterday called Fannie, Freddie, and the New Red and Blue. The crux of his argument is this: The partisan rhetoric is on full display in the dust-up over the unlimited liabilities coming from Fannie and Freddie thrust upon taxpayers on Christmas Eve. This rhetoric is not just beside the point, it is specifically designed to obscure the point, namely that both Democrats and Republicans, private industry and the government are culpable in the shambles our economic system has become.

Taibbi says:

Over the Christmas holiday a nasty thing happened: Tim Geithner’s Treasury Department decided to lift the cap on aid to the Government-Sponsored Entities, Fannie Mae and Freddie Mac, apparently in response to Obama administration fears that the two agencies would become insolvent. The cap was raised from $200 billion on each and government backstopping of the mortgage market will apparently now extend into infinity for at least three years, through 2012.

The move has already inspired a mini-firestorm, with several outlets delving deeply into the recent history of the GSEs and uncovering some disturbing new facts…

What worries me is that we’re… starting to see fault lines develop, where one side blames the government while another side blames Wall Street for the messes of the last two decades…

Everyone was involved in the mortgage scam. At the lender level the deceptions were myriad; liar’s loans, fraudulent income documentation, negative amortization loans, HELOCs, etc. The rush to get as many loans written as possible and then get those hot potatoes moved to the next sucker in the line was furious and extended from coast to coast, sinking one lender after another in Ponzoid debt and indictments….

Everyone had a hand in the bubble, from the congressmen who killed regulatory initiatives to the regulators who snoozed at the wheel to the GSEs to the Fed to the banks to the ratings agencies to the lenders. I don’t think it’s really controversial to say that, but it does seem like there’s an argument brewing about what that across-the-board complicity means.

This is kleptocracy, of course. Crony capitalism. And by that I mean the system Taibbi lucidly breaks down for us is one of privatized gains and socialized losses. Incumbent politicians and policymakers retain power by looking the other way and allowing special interests an unfair profit advantage. Usually, this goes to excess. Irrational exuberance takes over and losses ensue – losses which are not borne by the economic actors but taxpayers. That is how it always happens, but in this case it happened on a grander scale. And both Democrats and Republicans were complicit.

The question is: what can be done? Can we really spot this kind of ‘irrational exuberance” when it permeates the entirety of the social fabric? Barring another Great Depression, I don’t think any one President or one party is going to be the agent of change – Barack Obama has demonstrated this quite effectively. Both major political parties have too much at stake in the status quo. So, if the question goes to the whole Red/Blue partisan back and forth, Taibbi is right that this is a side-show. We effectively have a one-party system when it comes to investment in the present economic, power, and wealth structure.

http://www.nakedcapitalism.com/2010/01/limiting-the-destruction-wrought-by-irrational-exuberance-in-a-one-party-state.html

---

Edited to add: Read the part about Harrison's assessment of restructured regulation:

1. Commercial banks as utilities model. One view says to firewall sectors of the economy, particularly the financial sector in a way that maintains its core function but allows peripheral ‘innovative’ functions to suffer with the swings in the economy. This is the Paul Volcker view.

2. Regulation-Heavy model. Another view says to forget about the firewalls as they will be ineffective at best and retarding to growth at worst. Regulate the heck out of all actors and constrain their ability to be reckless. This is the Geithner view.

3. Regulatory and Resolution model. A third view says we should allow the actors to do as they wish but set up robust bankruptcy resolution process for all private sector companies, especially in the financial sector and including hedge funds and too-big-to-fail institutions.

There is quite a lot to digest here.

[Demeter]

26. The Only Way to Get Change On the National Level Is to Inflict Pain on the Elected

and the would-be elected. The only way to inflict pain is by prosecution, conviction, and cutting off contributions by prosecution and conviction of lobbyists and corporations who are violating what laws we have left.

And then we have to write real election campaign reform and enforce it.

[amandabeech]

35. I think that real campaign finance reform is going to take a well-crafted Constitutional Amendment.

I don't think that will happen unless and until the public gets so nauseated that even all the taxpayer money dumped into Wall Street won't make a difference.

I'd say we have at least another 3 years for that to happen.

[Demeter]

38. And the Devolution of Corporations

Corporations are going to have to lose their "personhood" and any rights granted them by the Supreme Court, as well as their immortality and de facto immunity to prosecution.

[snot]

36. We need all 3; but historically, nothing's worked long without #1.

[ozymandius]

14. Have a nice day, everyone.

:donut: :donut: :donut:

Time to head out.

:hi:

[Po_d Mainiac]

15. KD perspective ....Iceland says FU

http://market-ticker.org/categories/8-Editorial

For your coddling of the banker cabal, that is.

Dutch Finance Minister Wouter Bos would not be drawn into speculation on steps against Iceland. "But this can't go on forever. We want our money back. We negotiated reasonably."

Mr. Bos, go perform an indecent act on yourself.

You, along with the rest of the "western world", were complicit in and willing partners with the criminal banking cabal that ripped off the entire world with their worthless securities.

You "negotiated" for the right to steal even more after you failed to lock up the banksters for their criminal conduct - for intentional concealment and fraud in their "marketing" of these securities to investors worldwide.

You, just as with those here in Washington DC, were fully complicit in the looting of the public that took place over the last decade and more.

YOUR GOVERNMENT has allowed institutions in your nation (and elsewhere) to claim that "debt is output" and that speculation constitutes GDP. That's a willful, knowing lie.

<snip>

Start locking up the jackasses who did this to the global economy instead of kneeling before Zod for yet more obscenities. You know who they are. Just walk down any of your much-vaunted "streets" in "The City" and where you see a $5,000 suit apply a pair of handcuffs.

If you won't and don't I predict that it will not be long before the reaction of the Icelandic people spreads - including to the UK.

Whether the people of your country will give you the opportunity to do the right thing when, not if that sentiment spreads is something you may wish to ponder.

Key phrase: "to claim that debt is output and that speculation constitutes GDP.

When will this spread to our shores? :FRSP:

[Tansy_Gold]

17. Wow. GMTA.

:hi:

[Po_d Mainiac]

21. And a frosty good morning back at ya

:toast:

[Tansy_Gold]

16. Who has the money? Seriously. I asked this yesterday. . ..

but it was later in the evening when most of the SMWers are safely tucked in bed. ;-) I just wanted it to get a little more play and then I'll shut up. (yeah, right)

It was in reference to the collapse of the Icelandic IceSave investment scheme that collapsed and left the Icelandic people holding the bag to cover $5B in losses.

That money went somewhere. Where did it go? Who has it?

"In 2008, thousands of Dutch citizens and city corporations saw their savings vanish into thin air when the Icelandic bank IceSave collapsed."

There was money at one point, the money that the Dutch citizens and city corporations had saved. It didn't "vanish into thin air." It went somewhere. Into someone else's bank account? Whose?


No one seems to be asking that question.

Here's the thing. If the scheme was fraudulent to begin with, then the fraudsters ought to be on the hook for it. If they bamboozled the Icelandic government into backing their scheme, that doesn't make it okay. It's still a fraud.

Robbien was awake late enough to respond to me:

The money went to the same players

that the lost money in US/UK/European/Asian/Etc banks went to. Banksters got some, hedges got some, venture capitalists got some, of course the other elites and politicians got some.

The combined net worth of the Forbes 400 was $738 billion on September 1, 1998. By June 2008 these rich guys were worth 1.57 trillion. And that's just the money which can be counted, not secreted away in some offshore account or squirreled away in secret trusts, foundations etc.

And that's just the top 400. There are several million of these rich elites floating around the planet with extra cash in their pockets from this game of bank/investment fraud and deceit. {By the way, the median net worth of the American household held steady during the decade.)



I see Iceland as just a smaller version of what happened here. The only difference being Iceland doesn't have a printing press or a federal treasury with which to bailout their banks. The people of Iceland are being asked to directly bail them out.

Okay, if the Forbes 400 were worth $750B (round numbers) in 1998 and $1.5T by 2008, that's only a doubling of their money. Even considering RE values going up and down, stock markets going up and down, that's not all that huge an increase over a decade. Not for the top 400. And I'm not going to do the research to pick on individuals, but that's still roughly an average of $2B net worth (not income) to $4B.

Given the trends, my personal opinion is that the increase was much, much higher and the money is indeed hidden. There will be no (peaceful) change because the power has become too concentrated.

Until the flares become torches and the glow from Reykjavik spreads, the consolidation of wealth and power will continue. We can resist, but we cannot peacefully alter the situation.



Tansy Gold

[Po_d Mainiac]

18. yup

The only difference being Iceland doesn't have a printing press or a federal treasury with which to bailout their banks. The people of Iceland are being asked to directly bail them out.

When will America turn off the reality shows and face "reality"......The Fed is just the middle man. It's still going to be Joe/Jane Sixpack that end up "having sex done to them/us" by bailing out the gentry

It's time to connect the dots! :grr:

[Tansy_Gold]

20. I expect the MSM will not be telling us very much about

what is happening in Iceland. . . . ..



Tansy Gold, who has been there once, briefly, a long time ago.

[AnneD]

27. Tansy ....

your damn skippy they will keep this story on the back of the business section along with the public announcement in 6 font type. You are asking perhaps the most pertinent question. And I hope more of us start giving the same heart felt response they are giving in Iceland.

AnneD, who has never gone to Iceland but has always wanted too. If we are elected, our first action should be to go on a fact finding mission to Iceland. :evilgrin:

[Tansy_Gold]

32. Only in the summer! n/t

[DemReadingDU]

22. When will America turn off the reality shows?

When they have no more unemployment checks, no other income nor savings, nor credit cards, no food, and are kicked out of their home/apartment for not paying the bills.

[Coes]

24. can I guess?

hmmm

Icesave was the internet-branch of the Icelandic bank 'Landsbanki'. It was a new branch, and it offered people a return of 5.25% (!) on their deposits. Five point twenty-five, yes.

Being a bank from Iceland, the Iceland currency 'Krona' comes into play.

Now move back to 2008, in Iceland. One of the first banks to go down on the financial crisis, was the ICELAND bank 'Glitner'. This caused the Krona to devaluate ~ 30%.

Landsbanki was at that point already in trouble because of their failed Yen Carry Trade.

And now my guess: Landsbanki set up Icesave with that overeager return of 5.25% on deposits, to get an injection of much needed new money. Icesave actually was very succesfull at first: lots and lots of people and organisations and local authorities came hoarding their money at Icesave.

And what happened end of 2008: Landsbanki sets its Icesave-branch up for sale! A good buy by the looks of it: new customers coming in every day, and lots of money in that bank. Except that it never got sold: the Dutch National Bank blocked the sale.

So Landsbanki does not end up with the money of the sale of their internet-branch, but instead has to keep finding enough return elsewhere to keep that 5.25% deposit-return flowing, and is feeling the pain of the declining Krona, and is also on the wrong side of the Yen Carry Trade...

I am not claiming to tell the absolute truth here, I don't even work in the financial world. It's just that the complete picture cannot be found, so people just puzzle around a bit...

[Demeter]

28. I think A Lot of that Money Never Existed

It got disappeared in the Derivatives scams. Paper gains turned to paper losses, which exceeded the value of initial investments.

That's why AIG is such a scandal. The Fed and Treasury converted these phantom losses into real gains, and then rewarded the criminals who stole the money for bonuses in the first place.

[Tansy_Gold]

29. But apparently with IceSave, there was some real money,

in the form of the deposits from the Dutch (at least) individuals and communities. As the value of the investments was driven up to bring in more cash, someone absconded with the $5B, leaving the Icelanders to cough it up.

In my book, that's out and out theft.




Tansy Gold

[Demeter]

31. Or they bought Derivatives

which was out and out fraud.

[Robbien]

33. Value never existed, but as accountants always say, for every debit there is a credit

So the trillions of fake investments created by the global banking system created both debits and corresponding credits. The elite got the "assets" while the public companies got stuck with the corresponding liabilities.

Last night when responding to Tansy's question I used the Forbes 400 as an example of where I am assuming the actual money was going. But the Forbes only counts money which people claim they have. The bulk of the money the elite have is in secret offshore accounts.

It is hard to say exactly how much is in these secret accounts but to give you an idea of what we are looking at, a quick google search gives me this statement: In 2005, Tax Justice Network (an NGO which campaigns for greater financial transparency in the world's seventy-odd tax havens) estimated that approximately $11.5 trillion of assets are held offshore by high-net-worth individuals.

And that amount is before the big CDO boom years. Hedges and Venture Capital firms also have the bulk of their money in secret offshore accounts (and remember Goldman, JPMorgan etal have their own multiple venture capital funds). I would guess we are talking many trillions here also.

By the way, glancing through that Tax Justice Network site makes one's blood boil.

[Dr.Phool]

25. Denninger: Where's the Recovery? Tax receipts down in Dec.

http://market-ticker.denninger.net/

From The Wall Street Examiner:

Month to date tax receipts are now in for the entire month of December. They’re down 7.7% from December 2008, which is exactly the same rate of decline as November’s. We know that the TBAC and Treasury officials were not anticipating that in their debt sales forecast for the first quarter. They had assumed that a recovery was taking root and would continue to do so.

But I thought that we were in the midst of a strong economic recovery? So say all the pundits, all the Tout TV folks, everyone...

So how come I can't find it in the sales tax receipts of the states, and I also can't find it in the Federal tax receipts?

Doesn't recovery mean more spending, some hiring, or at least people getting more hours even if they don't have new jobs?

If this is all happening, as we're being told incessantly on ToutTV, shouldn't tax receipts be going up?

Remember, last December was pretty much the bottom, or so the pundits have told us. We keep hearing that sales are improving, durable goods are improving, employers aren't firing any more (and indeed many people are looking for a positive employment number for December and a positive revision to +ve for November) - and yet none of that makes any sense - especially employment turning to an actual positive number - if Treasury tax receipts are actually down on a y/o/y basis from last December.

(snip)

[Demeter]

30. What What Happens, Not What Is Said

There is no recovery, there hasn't been a recovery since 1999, and the way the boys from GS are running things, there never will be a recovery.

If anybody wants a real recovery, they are going to have to pry the crooks off the levers of power, strip them of their ill-gotten gains, and imprison them.

Then maybe the rest of us can start filling the grave these bastards dug for us.

[Demeter]

37. I Meant, "Watch What Happens..."

Not enough sleep last night.

[Dr.Phool]

39. Now, it makes sense.

[tclambert]

42. What, what, pip, pip, cheerio!

Indeed.

[tclambert]

44. December '09 auto sales numbers.

Ford +32.78% (compared to December '08)
Toyota +32.34%
American Honda +24.46%
Nissan +18.2%
BMW +9.21%
Chrysler -3.66%
GM -6.07%

GM was dragged down by the abandoned brands Hummer, Saturn, Pontiac, and Saab. And of course December '08 was a very bad month, down 30% - 53% from December '07. So an improvement over terrible represents "less bad." http://www.autoblog.com/2010/01/05/by-the-numbers-december-2009-strong-finish-edition/

[tclambert]

46. Auto sales for '09 compared to '08

Ford -15.39%
Nissan -19.05%
American Honda -19.46%
Toyota -20.18%
BMW -20.27%
GM -30.07%
Chrysler -35.9%

http://www.autoblog.com/2010/01/05/by-the-numbers-2009-up-and-down-year-ends-down-for-most-editi/

[tclambert]

47. And here's a cool car video.

http://www.youtube.com/watch?v=w_F7QrR4Ur8&feature=player_embedded

With pothole season coming up, and no money to fix the roads, we'll need cars with this kind of articulation up here in Michigan.

[DemReadingDU]

50. That is amazing!