STOCK MARKET WATCH, Wednesday January 20

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday January 20, 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 19, 2010

Dow... 10,725.43 +115.78 (+1.09%)
Nasdaq... 2,320.40 +32.41 (+1.42%)
S&P 500... 1,150.23 +14.20 (+1.25%)
Gold future... 1,141 +10.00 (+0.89%)
10-Yr Bond... 3.69 +0.02 (+0.44%)
30-Year Bond 4.59 +0.01 (+0.17%)

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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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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. Market Observation

In Banksters We Trust
BY BILL FLECKENSTEIN

...Now I'd like to touch on the subject of "banksters," a name coined by Dylan Rattigan for the employees in command of financial institutions who've marched off with massive bonuses. One aspect of this current controversy that no one has really discussed is the fact that these profits are a function of managements' judgment -- essentially the honor system (the very same honor system that led the banks to leverage themselves up 40 or 50:1 on worthless/illiquid assets and let them grade themselves on their Level II and III assets).

Now they would have us believe that all their assets are correctly and prudently marked; that their leverage also is not excessive; and that given their "rock-solid" balance sheets, they now intend to bonus out massive amounts of money that these organizations will not need for their businesses. Color me skeptical.

However, if these financial institutions had reduced their leverage to a saner manageable level (a number to be determined by future debates -- see below), and if they'd marked to market all of their assets (especially real-estate-related ones of all stripes) and associated securitized products that flowed from those asset classes, then perhaps we could say, well, you know, these institutions have healed themselves and they're not going to be a problem for us down the road, so they should feel free to distribute the profits as they see fit.

But as it is, we do know that these financial institutions are practicing forbearance (i.e., letting folks stay in their homes despite being unable to make payments); and that these financial institutions are loathe (in most cases) to make modifications or recognize losses in general.

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

[Demeter]

16. There Comes a Point in Fraud Where Observers Become Complicit

I think we have passed that point. Capitol Hill, and more significantly, the White House, have no excuses left. All the fallout will be their responsibility.

[Tansy_Gold]

40. And that point, imho, was 11/24/08

with the appointment of Geithner as Treas. Secy.

I woke up really angry today. First of all, I went to the Asian buffet and ate way too much last night. Second, I didn't finish the tasks I'd set for myself yesterday. We did get a nice heavy rain last night that we sorely needed, so that was good. But the Brown victory in MA was just another example of how totally and completely inept the Obama/Rahm puppet show has become.

Obama is indeed a puppet, every bit as Bush was, and they have pretty much the same puppetmasters -- THE FILTHY IDLE RICH. The same class as was FRSPed in 1789+ Paris. Obama isn't exactly Citoyen Capet yet, but the disconnect is almost identical.

HCR as presented right now is a joke, and it's being watered down more. To kill it will be to change very little, because it does very little. Oh, yes, it promises much will change in four years, but so will the presidency. Whether Obama is re-elected or ousted doesn't matter; he will be a lame duck or he will be gone.

He had a year to "get things done." He didn't get 'em done. He didn't even really get 'em started. Oh, the troops are coming home from Iraq, and they're going to Afghanistan. I've got a friend who's dealing with her PTSDed son home from Iraq and their greatest fear is that he'll get sent to Afghanistan and never come home again. We have as many contractors in Afghanistan as "soldiers" and no one is counting the cost, no one is doing the cost analysis on how it's supposed to save the taxpayers money by privatizing war and generating obscene profits for a few. I USED TO MAKE MY LIVING AS A COST ANALYST AND IT DON'T WORK THAT WAY, FOLKS.

Okay. So much for that.

The reason the Dems lost in MA -- based on my observations here in AZ -- is that the Democratic Party leadership -- and I use THAT term loosely -- has completely lost touch with the electorate. And if you want my ITYS opinion, they lost that connection when they allowed/encouraged Obama to win. They knew he had star quality -- he did and does -- and they knew he was electable -- he was -- and they knew he had no fucking clue how to lead.

There, I said it, and it isn't the first time and it won't be the last.

Ted Kennedy, for whatever reasons and I assume they were sincere, broke his ties to the Clintons and supported Obama over Hillary. I have no problem with that. But the Democratic Party -- and I include asswipes like Harry Reid and Ben Nelson and Max Baucus and all the other puke-lite vermin -- abandoned the ideals of Ted Kennedy before he was cold in his grave. And those were the ideals of the party. Those were the ideals Obama spouted in the campaign and then forgot the day after the election. He forgot them because he was never a leader. He was A Star.

I expect to see Barack Obama a much different looking man in another year or two. I think the pressure of the job has already taken its toll on him physically, and it's going to get worse.

Much worse.

The question is, how much?


Tansy Gold

[Demeter]

46. Not Enough, Tansy, Not Enough

The capacity for denial in this country, and in the people running the country, is unsurpassed in history. Perhaps it IS 1789 all over again. If so, I will be on the barricades, after I send the kids to Canada.

I'm having an equally awful time. My condolences.

[fasttense]

50. President Obama is a very intelligent man

Maybe, just maybe, he can see what is happening and make an about face. He needs to change now.

[Tansy_Gold]

53. My college roommate was intelligent, too

Brilliant in fact. She had a nearly photographic memory.

Think fall semester, 1967. She starts dating a string of really loser guys. Drunks. Druggies. Non-students who are hangin' around campuse trolling for college girls.

I warned her about them, but she was "smarter" than I and knew better.

Never mind that I, at barely 19, was the person half the dorm came to for information -- not advice, information -- on sex, contraception, etc. Never mind that I, at barely 19, was probably the most experienced and most knowledgeable on those subjects.

She knew more than I did. Proud of her virginity and determined to give it only to someone "worthy" of it, she came back to our tiny little dorm room one Saturday night/Sunday morning about 2 A.M. with the stealth of someone who has just "done it" for the first time. In the dark, after she had undressed and crawled into her little bed, she began a conversation --


She -- Are you awake?

I -- yeah, sort of.

She -- Can I ask you a question?

I -- Yeah. Might not have an answer, but you can ask.

She -- (pause) How effective is douching as a contraceptive?

I -- Uh, well, not very. (Thinking She has resorted to the popular shaken bottle of 7-Upm I add) Depends on what you use.

She -- (longer pause) What if you use rubbing alcohol?



Moral of the story -- Even really intelligent people can do really, really stupid things.


I -- Well, it might sting a bit.




Tansy Gold, true story

[UpInArms]

72. was looking something up earlier and ran across this Bill Clinton quote:

November offered two examples of sound policy and questionable politics. After Al Gore plainly bested Ross Perot in a heavily watched TV debate in NAFTA, it passed the House, 234-200. Three days later the Senate followed suit, 61-38. Al and I had called or seen two hundred members of Congress, and the cabinet had made nine hundred calls. President Carter also helped, calling members of Congress all day long for a week. We also had to make deals on a wide range of issues; the lobbying effort for NAFTA looked even more like sausage making than the budget fight had. Our whole team had won a great economic and political victory for America, but like the budget, it came at a high price, dividing our party in Congress and infuriating many of our strongest supporters in the labor movement.
Source: My Life, by Bill Clinton, p.557 Jun 21, 2004

Now, I'm going to repeat part of that quote:

it came at a high price, dividing our party in Congress and infuriating many of our strongest supporters in the labor movement.

and say - these people think that it's okay to destroy their "strongest supporters".

I say - fuck 'em all - I support none of them. They are traitors to humanity, to our country and to everything that we hold dear.

[Dr.Phool]

76. Seconded.

[Tansy_Gold]

82. thirded

[fan of the arts]

85. Fourthed

I use the word "traitor" because that is exactly what people are who conspire to commit war, set up torture camps, kill civilians and rig elections, illegally manipulate America's markets and use profuse propaganda to support all their treason.

[Dr.Phool]

87. And welcome to DU and the SMW thread.

:hi:

[UpInArms]

88. welcome to DU and to the SMW, fan of the arts!

come here every day and see the heart and soul of DU (if I do say so, myself)

:grouphug:

:hi:

[DemReadingDU]

91. FIFTH!

[UpInArms]

94. okay ...

or

[DemReadingDU]

17. Fleckenstein's first wrap-up

http://www.financialsense.com/Market/fleckenstein/archive.html

Nice to see another viewpoint in the daily financial observations

[ozymandius]

2. Today's Reports

08:30 Building Permits Dec
Briefing.com 590K
Consensus 580K
Prior 584K

08:30 Housing Starts Dec
Briefing.com 545K
Consensus 575K
Prior 574K

08:30 Core PPI Dec
Briefing.com 0.1%
Consensus 0.1%
Prior 0.5%

08:30 PPI Dec
Briefing.com 0.0%
Consensus 0.0%
Prior 1.8%

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

[UpInArms]

28. 8:30 reports:

U.S. Dec. building permits up 10.9% to 653,000
8:30 a.m. Today

U.S. Dec. homes under construction record-low 511K
8:30 a.m. Today

U.S. 2009 starts fall 39% to record-low 554,000
8:30 a.m. Today

U.S. Dec. single-family building permits up 8.3%
8:30 a.m. Today

U.S. Dec. housing starts fall 4% to 557,000 pace
8:30 a.m. Today

Energy costs fell, food costs rose in December
8:30 a.m. Today

Core PPI flat in December
8:30 a.m. Today

Producer prices edged up 0.2% in December
8:30 a.m. Today

[ozymandius]

3. Oil falls to near $78 amid China, inventory fears

...Benchmark crude for February delivery fell 76 cents to $78.26 a barrel at late afternoon Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract rose $1.02 to settle at $79.02 on Tuesday. ...

A rise in inventories would suggest demand for oil remains weak. The Energy Department's Energy Information Administration plans to announce its inventory report later Wednesday.

Another negative cue for crude came from Asian stock markets which mostly fell Wednesday amid reports that China had ordered some banks to cease lending for the rest of January after exceeding credit limits. That raised fears China's economic recovery and demand for crude could wane. ...

In other Nymex trading in February contracts, heating oil fell 1.8 cent to $2.027 a gallon, while gasoline dropped 1.3 cent to $2.046 a gallon. Natural gas futures rose 4.3 cents to $5.60 per 1,000 cubic feet.

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

[ozymandius]

4. China to curb lending binge, regulator says

HONG KONG – China will slow its massive lending spree and step up monitoring of banks as it tries to prevent speculative bubbles in real estate and other assets while keeping the country's economic recovery on track, a top regulator said Wednesday.

China's banking system is healthy despite last year's explosive growth in credit and regulators could manage the risks, said Liu Mingkang, chairman of the Chinese Banking Regulatory Commission. ...

After handing out some 9.5 trillion yuan ($1.39 trillion) in loans last year, banks were expected to scale back lending to roughly 7.5 trillion ($1.09 trillion) in 2010, Liu said. ...

By most measures, Chinese banks are among the world's healthiest at the moment. Not only are they flush with cash, but their bad loans, known as non-performing loans, stand at just 1.6 percent.

http://news.yahoo.com/s/ap/20100120/ap_on_bi_ge/as_china_economy

[Demeter]

18. I Guess They Mean Internal Lending

judging by the lack of screaming coming out of the southeast....

[Po_d Mainiac]

24. China does have that other incentive to prevent fraud

The cranial lead injection, vs. chopper's injection of liquidity.

Not sure where I read it, but there was an article about the lack of "synthetic" financial instruments on Chinese investors books. Seems if they couldn't understand what they were being offered, they walked on the deal.
:donut:

[ozymandius]

5. Senate may vote on Bernanke as early as Friday-aide

WASHINGTON (Reuters) – The U.S. Senate may vote as early as Friday on whether to confirm Ben Bernanke to a second term as chairman of the Federal Reserve, a senior Democratic party aide said on Tuesday. ...

While there have been a number "holds" on the nomination by individual senators, Democratic leaders are expected to muster the 60 votes needed in the 100-member chamber to clear Bernanke for anticipated confirmation. ....

Bernanke faces an unusually high level of opposition, reflecting backlash against a painful financial crisis and anger at government bailouts for large financial firms amid high levels of unemployment and home foreclosures.

http://news.yahoo.com/s/nm/20100120/pl_nm/us_usa_fed_bernanke

---

Senator Dodd (D-Idiot) wants Bernanke confirmed because unless he is confirmed by January 31 then he will cease to be chairman. The circular logic is just astounding.

[Dr.Phool]

10. Does anyone have the nerve to filibuster this incompetent idiot.

What's in the water up in Connecticut? Are Dodd and Liebermoron competing with Inhofe and Coburn to see which state can send the dumbest Senators to Washington?

[Po_d Mainiac]

27. Little doubt who owns Ct's Senate seats

When they clean out Dodd's office closet, I wonder how many worn out knee pads they'll find under the bones?

[fasttense]

12. Replacing Bernanke and Giethner would go a long way to

getting the populist voting for Democratic leaders instead of nude male models.

[Demeter]

19. Bet the Complicit Are Sweating Bullets

what with losing the magical "60 votes" which probably only exist in Rahm's fevered imagination anyway.

[ozymandius]

6. It's 2 Years In the Red As Citi Logs A Large Loss

Citigroup Inc., still limping along, posted a $7.6 billion net loss in the fourth quarter as its investment bank missed out on the resurgence that has lifted many rival firms.

The loss dragged Citigroup to its second unprofitable year in a row, reinforcing lingering questions among some analysts and investors about the New York company's strategy.

The bulk of the fourth-quarter net loss stemmed from accounting charges related to Citigroup's repayment of $20 billion of federal bailout funds late last year. But excluding that hit, the results still were lackluster. Revenue of $5.4 billion was down about 4% compared with a year earlier. ...

Citigroup's transaction-services business, which moves money around the world for governments, major corporations and other organizations, remained lucrative. And the company's retail-banking businesses outside the U.S. appear to be rebounding, especially in Asia and Latin America. ...

In the U.S., the company painted a bleaker picture, even though losses on consumer loans are showing tentative signs of flattening. But revenue from its U.S. retail-banking and credit-card operations remained depressed due to the weak U.S. economy and new federal restrictions on credit-card practices.

http://online.wsj.com/article/SB20001424052748703837004575012672906098044.html

[Demeter]

21. Bank of America's quarterly loss widens on TARP payback

http://www.marketwatch.com/story/bank-of-america-loss-grows-on-tarp-payback-2010-01-20?siteid=YAHOOB

Bank of America Corp. reported a more than $5 billion fourth-quarter loss as it got out from under some Washington oversight, including salary restrictions, by paying back its TARP investments at the end of 2009.

... reported on Wednesday that the loss available to common-share holders widened to $5.2 billion, or 60 cents a share, from $2.4 billion, or 48 cents, in the final quarter of 2008.

Revenue rose 60% to $25.08 billion from $15.68 billion.

Excluding the $4 billion of costs to repay TARP, the fourth-quarter loss was $194 million, versus a comparable loss of $1.8 billion a year-earlier.

Analysts had expected a loss of 43 cents a share and revenue of $27 billion, according to a survey by FactSet Research.

Bank of America...said that net interest income fell from 2008 due to lower asset-liability management portfolio levels and lower loan demand.

Noninterest income rose on improved trading and investment and brokerage services, equity investments and investment banking, the bank said.

....Bank of America shares rose 1.2% in pre-open trade.

[Roland99]

23. "new federal restrictions on credit-card practices"

Those aren't in place yet, are they?

[Demeter]

26. Don't think So

[Roland99]

29. But banks will have no problem using that as an excuse even while they jack interest rates up to 30%

[Demeter]

33. Citigroup reports $7.6bn loss on domestic difficulties

http://www.ft.com/cms/s/0/f0b0dc60-04ff-11df-aa2c-00144feabdc0.html


...Citi, which derives almost 70 per cent of its revenues from outside the US, said that after improvements in the credit environment in Asia and Latin America, it had increased investments in those markets and would continue to devote resources to fast-growing emerging economies.

The global transaction services unit, which moves cash on behalf of companies and governments, was also in line for more investment, Citi said.

“We will continue to invest in areas such as Asia and Latin America, where economic recovery and growth is already taking hold,” John Gerspach, the group’s finance chief, told Wall Street analysts.

However, Citi said losses in its US credit card and consumer business could weigh on results in 2010. Forthcoming changes to credit card rules could cost Citi up to $600m this year, Mr Gerspach said.

Citi’s increased focus abroad could trigger political criticism in Washington because the US government holds a 27 per cent stake in the lender. Vikram Pandit, chief executive, said the struggling US retail bank, which barely broke even in the fourth quarter, remained a core business...

[ozymandius]

7. Souring Mortgages, Weak Market Force FHA to Walk a Tightrope

David Stevens bought his first home almost 25 years ago, paying just 3% down with a loan backed by the Federal Housing Administration. "I had no money in the bank," he says. "If it weren't for the FHA, I wouldn't have gotten that home."

Now, as FHA commissioner, Mr. Stevens has to decide how many others to let through that door. Souring FHA-insured mortgages are threatening the agency's finances. Congress is pressuring him to tighten the easy-money standards that once helped people like him, and he is expected to announce revisions as early as this week. ...

The dilemma puts the 52-year-old former mortgage banker squarely in the middle of the debate over how much the government should do to prop up the housing market, and how much risk taxpayers should take on to do it. ...

Mr. Stevens is finalizing possible revisions to credit standards. Options include raising the minimum down payment, establishing a minimum credit score, increasing the amount that borrowers have to pay for mortgage insurance, and reducing the amount of money sellers can kick in for closing costs.

http://online.wsj.com/article/SB10001424052748704586504574654710172000646.html

[Dr.Phool]

8. Good Morning Comrades!

It looks like more change we can make believe in this morning. As usual TPTB are learning the wrong lesson from yesterdays ass whupping. Every conservative Dem is running away from HCR as fast as they can. Liebermoron says we have to move more to the right.

Citi is still a zombie. The only thing that will save them is billions more in subsidies, and billions more in bonuses!

[ozymandius]

9. Good morning.

If the lesson taken here is that we need to move more to the right... Lemme see if I can remember the letters. :wtf:

Coakley ran a horrible campaign. Look at this picture: Brown had 66 campaign appearances after the primary. Coakley mustered a pitiful 19 appearances. Who ran to win?

As for Lieberman - who lost the Democratic primary in Connecticut?

[Po_d Mainiac]

30. Ayuh..They got a performance based bonus, and are clueless as to why. n/t

[ozymandius]

11. Gotta go.

I've spent most of the morning reading while finding little of relevance and interest to post here. So I will take my leave and avoid hearing from self-flagellating Democrats mount a full-on retreat over the election loss in Massachusetts. If I were to run across one of these cowards, so help me, the urge to pick them up by the lapels and give them a good shake would be difficult to resist.

I swear these idiots miss the point way too much. The loss of this election was a local issue. Not a national one.

[Demeter]

20. The Consequences Are National

but I have to think if Obama had given Massachusetts a reason to vote for Democrats, Cloakley would have won. He didn't, she didn't, and I hope this stupid excuse for reform is DEAD DEAD DEAD!

Massachusetts voters know indifference when they see it.

[bread_and_roses]

31. I'm with you

I also have to disagree with Ozy: I think this election was ALL about national issues. But I sure am with him on not wanting to hear either the self-flagellation or the gloating on MSM. I'll be listening to classical music instead of Morning Edition on the radio on the way to work.

[Hugin]

42. It would seem my self-imposed exile from Corporate Media comes at a fortuitous time.

Now, if I can only avoid the Persecution of the Progressives, which I'm sure is well under way in GD and GD:P. It may turn out to be a livable day.

Okay, the Corp-o-Dems are in control and we are losing elections again... Go figure! It would seem nobody can tell the difference. Really puts the Quo in Status-Quo, doesn't it?

It's the Mandates, stupid! (Note: Not directed at present company)

MA has been trending Country-club Conservative for awhile now... I hope they enjoy their one seat. Maybe, Brown and Lieberman can get together and caucus sometime.

[Roland99]

22. Which is why EVERY race in EVERY district is important. It's time to think nationally, act locally.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x7511469

[Hugin]

43. Yep, 50 State Strategy all the way, baby.

In-spite of what Rahm may believe.

The reason it works is because the 'Pubes can't afford to compete on every front... Way too expensive and they're cheapskates to boot.

[Roland99]

44. Dean needs to be the top Dem strategist. He's meant for this time.

[Hugin]

45. I agree, completely.

Look at all of the resources the Republocrats spent to get the Holy Grail of Teddy's seat. Now, scale that up to a National Election... It can't happen.

Unless, we let it happen.

A little Leadership and Conviction is needed.

[DemReadingDU]

13. Chris Whalen - A "Bloodbath" By Any Other Name: More Pain Ahead for Big Banks

click link for video

1/19/10 A "Bloodbath" By Any Other Name: More Pain Ahead for Big Banks, Whalen Says

A big week of bank earnings accelerates midweek with results expected from Morgan Stanley, Bank of America, US Bancorp and Wells Fargo on Wednesday, followed by Goldman Sachs, American Express and Capital One Financial on Thursday.

So what should investors expect? More revenue disappointments, such as those already posted by JP Morgan and Citigroup, according to Chris Whalen of Institutional Risk Analytics.

"Right now the total egg - credit -- is shrinking," Whalen says. "The bank side is not a source of growth. Can you pull it out on the capital market side? Maybe, but I'm not sure where that comes from" given many of the big banks have loaded up on low-risk securities in the aftermath of 2008's bloodbath.

Speaking of "bloodbaths", I asked Whalen if he's sticking by the gruesome forecast he made here back in October. The answer is "yes", albeit with some caveats.

"Loss rates for the industry will be very high," Whalen says, forecasting record charge-off rates, higher loan loss reserves and a lot of "minus signs" for banks' bottom lines.

Still, the Fed's program of buying toxic securities means "everyone gets a pass on market-to-market," with the biggest banks getting a disproportionate benefit, he says.

click link for video

http://finance.yahoo.com/tech-ticker/a-%22bloodbath%22-by-any-other-name-more-pain-ahead-for-big-banks-whalen-says-406689.html?tickers=MS,BAC,GS,JPM,USB,WFC,C&sec=topStories&pos=9&asset=&ccode=

[DemReadingDU]

14. Citigroup Isn't Out of the Woods Yet, Says Bank Analyst Chris Whalen

click link for video

1/19/10 Citigroup Isn't Out of the Woods Yet, Says Bank Analyst Chris Whalen

Citigroup shares are trading higher today after the bank reported fourth-quarter EPS in line with estimates. Investors appear undeterred by the bank's tenth-consecutive quarterly loss and disappointing revenue, choosing to take a positive view on Citi's results, as did CEO Vikram Pandit.

Bank analyst Christopher Whalen of Institutional Risk Analytics isn't as positive as the rest of the market. He maintains a "negative" outlook on the stock.

Whalen worries credit losses will remain high; forcing Citi to increases loan-loss reserves. "If your clients aren't doing well, you’re not doing well," he says, citing both Citi and JPMorgan's weak revenue figures.

"I don't see this as a great value story," Whalen tells Aaron in the accompanying clip. That goes for all the large banks. "Remember they've lost more money than they've made in the last half century," he states.

click link for video

http://finance.yahoo.com/tech-ticker/citigroup-isn%27t-out-of-the-woods-yet-says-bank-analyst-chris-whalen-406602.html;_ylt=ApAYveH4lAgaX97bc_t0zupl7ot4;_ylu=X3oDMTEzNmE3aTg1BHBvcwMxMwRzZWMDYXJ0aWNsZQRzbGsDd2hhbGVuc2FuYWx5?tickers=c,bac,jpm,xlf,gs,wfc,ms

[DemReadingDU]

38. Chris Whalen: a mess for Bernanke, it's a mess for the banks

click link for video

1/20/10 "We're a Mess": What the Backlash Over Bonuses and AIG's Bailout Says About America

With big banks revealing massive 2009 bonuses, Fed chairman Ben Bernanke now supporting a "full review" of AIG's bailout, and Treasury Secretary Tim Geithner due to testify on the same, this is shaping up to be a watershed month in the bailout backlash department.

"This whole situation is a mess for Bernanke, it's a mess for the banks ultimately and I'm not sure how we get out of it because the public wants blood," says Christopher Whalen, managing director at Institutional Risk Analytics, and a longtime and critic of both Bernanke and Geithner.

Whether either regulator loses his job over this remains to be seen but Whalen says politicians are slowing awakening to the public's outrage, with election setbacks proving a big wake-up call to the Democrats. "They're sniffing the wind and realizing they weren't gauging the electorate correctly, maybe they weren't in harmony with what the voters were thinking on these issues, even though nobody understands AIG," he says.

If AIG is the most galling symbol of the government's inept response to the financial crisis, Goldman Sachs is viewed as the most cunning beneficiary. Later this week, Goldman is expected to report robust fourth-quarter results and a bonus pool approaching $20 billion. (On Tuesday, Reuters reported Goldman delayed telling its U.K. employees details about their bonuses, amid reports the Financial Services Authority (Britain's SEC) has raised concerns about the plans.)

"Despite the money, despite the supposed political savvy of Goldman, they still don't know how to manage their public image," Whalen says.

A former Congressional staffer, Whalen laments the politicizing of these events because the theatrics mask the bigger issue: "We can't control ourselves in terms of the fiscal functions of our government," he says. "We're a mess. We can't even have a process in place that is transparent and easy for people to understand. That's why we have a problem - this was all done in the dead of night."

click link for video

http://finance.yahoo.com/tech-ticker/%22we%27re-a-mess%22-what-the-backlash-over-bonuses-and-aig%27s-bailout-says-about-america-406874.html?tickers=^DJI,^GSPC,AIG,GS,XLF,JPM,SKF&sec=topStories&pos=9&asset=&ccode=

[Festivito]

15. Debt: 01/15/2010 12,319,326,469,724.43 (UP 60,781,440,809.19) (Fri)

(Big up. Debt seems to jump up big then drop slowly maybe up a little and down a little for days--repeat. I want my MA MA. Good day all.)

= Held by the Public + Intragovernmental(FICA)
= 7,813,183,812,102.39 + 4,506,142,657,622.04
UP 57,080,501,160.91 + UP 3,700,939,648.28

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 308,478,558 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 $39,935.76.
A family of three owes $119,807.29. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 to 31 days.
The average for the last 22 reports is 8,379,814,224.06.
The average for the last 30 days would be 6,145,197,097.65.
The average for the last 31 days would be 5,946,964,933.21.
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$/day.
There were 73 reports in 107 days of FY2010 averaging 5.61B$ per report, 3.83B$/day.
Above line should be okay

PROJECTION:
There are 1,101 days remaining in this Obama 1st term.
By that time the debt could be between 13.8 and 18.9T$.
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)
01/15/2010 12,319,326,469,724.43 BHO (UP 1,692,449,420,811.35 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 +0,409,497,466,212.70 ------------* * * * * * * * * * BHO
Endof10 +1,396,883,880,071.36 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ------------********
01/06/2010 +000,123,816,367.19 ------------********
01/07/2010 -022,790,950,811.50 -
01/08/2010 -000,177,723,158.27 ---
01/11/2010 -000,226,209,166.36 --- Mon
01/12/2010 +000,163,748,521.92 ------------********
01/13/2010 -000,144,326,167.15 ---
01/14/2010 -025,105,278,682.17 -
01/15/2010 +057,080,501,160.91 ------------**********

76,677,038,130.99 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=4231354&mesg_id=4231394

[Festivito]

90. Debt: 01/19/2010 12,322,107,592,352.96 (UP 2,781,122,628.53) (Tue)

(Debt seems to jump up big then drop slowly maybe up a little and down a little for days--repeat. Good day all.)

= Held by the Public + Intragovernmental(FICA)
= 7,812,890,993,527.48 + 4,509,216,598,825.48
DOWN 292,818,574.91 + UP 3,073,941,203.44

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 309-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: $9.72, ABOUT TEN BUCKS for a 1B$ 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 308,513,118 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 $39,940.3.
A family of three owes $119,820.91. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 20 reports in the last 30 to 32 days.
The average for the last 20 reports is 11,206,221,549.32.
The average for the last 30 days would be 7,470,814,366.21.
The average for the last 32 days would be 7,003,888,468.32.
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$/day.
There were 74 reports in 111 days of FY2010 averaging 5.57B$ per report, 3.71B$/day.
Above line should be okay

PROJECTION:
There are 1,097 days remaining in this Obama 1st term.
By that time the debt could be between 13.8 and 20.0T$.
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)
01/19/2010 12,322,107,592,352.96 BHO (UP 1,695,230,543,439.88 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 +0,412,278,588,841.20 ------------* * * * * * * * * * BHO
Endof10 +1,355,690,855,198.54 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ------------********
01/06/2010 +000,123,816,367.19 ------------********
01/07/2010 -022,790,950,811.50 -
01/08/2010 -000,177,723,158.27 ---
01/11/2010 -000,226,209,166.36 --- Mon
01/12/2010 +000,163,748,521.92 ------------********
01/13/2010 -000,144,326,167.15 ---
01/14/2010 -025,105,278,682.17 -
01/15/2010 +057,080,501,160.91 ------------**********
01/19/2010 -000,292,818,574.91 --- Tue

78,363,459,800.40 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=4233228&mesg_id=4233316

[UpInArms]

25. dollar watch

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

Last trade 78.180 Change []b+0.680 (+0.87%)

US Dollar: Can the Greenbacks Rally Survive Risk Appetite and 4Q Earnings?

http://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/daily_fundamentals/2010-01-20-0209-US_Dollar__Can_the_Greenbacks.html

The US dollar rallied through the Asian and European session hours Tuesday as the scent of fear wafted through the market. Speculative interests were put on the defensive starting in the early hours of the new trading session after a Japanese airline filed for bankruptcy protection in the nation’s fourth largest failure in history. Heading into London and Frankfurt hours, a survey of European investor sentiment reflected confidence among speculators was not as robust as many had expected with the global economy’s still young recovery. Finally, adding to bearish sentiment just before US markets came online, Citigroup reported a hearty $7.6 billion loss for the fourth quarter. All told, these unfavorable events would bolster the appeal of the save haven dollar long enough to push the currency to the verge of a meaningful breakout before risk appetite eventually stabilized. When New York liquidity descended on the market, traders would find their bearings and reverse their bearish position – subsequently preventing the greenback from taking the final step towards a meaningful breakout and potential trend. Reflecting how close the dollar would come to developing a trend, EURUSD would break the bottom of its month-long rising trend channel before stalling at a 200-day moving average and range low.

Outside the flippant nature of risk appetite, US-based fundamentals were a mixed bag. The disappointing earnings numbers for Citigroup – the world’s largest bank – held its obvious implications for investor sentiment. However, looking beyond the tone this sets for the fourth quarter earnings season, this accounting data in particular is evidence of the impact that the withdrawal of government aid and stimulus can have on the markets. Much of the quarter’s losses can be assigned to the approximately $6 billion in expenses to repay the US government for its bailout. What’s more, looking beyond the costs to banks; the roll back of the market’s safety net will no doubt dampen confidence, weigh on liquidity and perhaps even reduce credit availability as lenders become more conscious of their exposure. Looking at tomorrow’s listings, Bank of American, Wells Fargo, Morgan Stanley and US Bancorp are all scheduled to release their fourth quarter numbers. This round along with Thursday’s hearty list represents the height of the earnings season for the financial sector.

Turning to macro data, the November TICS data showed global demand led to a net $126.8 billion purchase of US equities, notes and bonds. Interest in government debt was particularly robust with buying private investors buying a record $87.1 billion of the low-yield, safe haven Treasuries. However, this is not a trend that is likely to subsist through the long-term. Efforts to diversify reserves away from the US dollar are gaining momentum. And, those leading the charge say the value of the US dollar and its assets is eroded by the government selling record amounts of debt and printing money to fill its deficit. On deck for Wednesday, earnings reports will be mixed with factory-level inflation figures and construction data. Upstream price pressures and the stability of the housing market can certainly weigh on interest rate speculation.

...more...

USD Graphic Rewind 01.20

http://www.dailyfx.com/forex/fundamental/article/usd_graphic_rewind/2010-01-20-0717-USD_Graphic_Rewind_01_20.html



...more...

[Demeter]

32. Credit Suisse unveils UK staff bonus cuts

http://www.ft.com/cms/s/0/80df2362-052f-11df-a85e-00144feabdc0.html

Credit Suisse is to cut planned bonus payouts to senior UK staff by more than a third, becoming the first bank to pass on the bulk of a British supertax on bonuses to bankers.

The move, which follows last week’s announcement from JPMorgan that its fourth-quarter compensation ratio fell from 37 per cent to 33 per cent and which coincides with an overhaul of pay at Citigroup, goes against the consensus view in the City of London that banks would absorb most of the controversial 50 per cent supertax.

Credit Suisse told its 400 managing directors in the UK on Tuesday that they would get a 30 per cent lower bonus than originally planned. There will also be a 5 per cent reduction in the global bonus pool, applicable to anyone among the bank’s 47,400 staff who is due to receive a bonus.

“Credit Suisse aims to align its compensation policies with the interests of our stakeholders, including regulators, shareholders and employees,” the bank said in a statement.

Details of the 2009 bonus pool will not be disclosed until Credit Suisse unveils its full-year results next month.

Some bankers did not believe the cuts to be anything more than a public relations exercise. The size of the pool from which the deductions are to be made is unlikely to be disclosed. “I don’t believe for a moment that they’ve really cut their pool by 30 per cent for London MDs. It would be victimisation,” said one senior executive at a rival European investment bank...



Perchik: Money is the world's curse.
Tevye: May the Lord smite me with it. And may I never recover.

[Demeter]

34. Fed makes ‘a killing’ on AIG contracts

http://www.ft.com/cms/s/0/a70659d4-0543-11df-a85e-00144feabdc0.html

The Federal Reserve is sitting on billions of dollars in paper profits from its controversial effort to unwind credit insurance contracts that AIG provided to banks such as Goldman Sachs, people familiar with the matter said.

The Fed rescue has generated criticism because the banks received 100 cents on the dollar for credit insurance they bought from AIG on collateralised debt obligations – financial instruments that promise the buyer cash flows from pools of bonds or loans. This had led to claims that AIG’s rescue was a “backdoor bail-out” of big banks.

However, the central bank is in a position to reap profits from this part of the rescue, which involved the purchase of the underlying CDOs by a New York Fed-financed vehicle, called Maiden Lane III, so that the insurance contracts written on them could be terminated.

At the time of their purchase, the CDOs had a face value of $62.1bn and a market value of $29.6bn. Now, the estimated market value of the CDOs is at least $45bn (£27.5bn), according to several people with direct knowledge of the portfolio.

“With the rally in the credit markets and tightening spreads, the Fed has made a killing – on paper,” said one person familiar with the portfolio.

The people familiar with the portfolio said that it would be difficult to sell all the CDOs because they are generally illiquid. A rapid sale of CDOs could also depress their prices.

At the time of the Fed intervention, the value of the CDOs insured by AIG was falling dramatically and AIG was facing a credit downgrade. AIG was being forced to post more collateral with the banks to which it sold credit insurance and the Fed feared that these demands would wipe out the insurer.

Following the rescue, the value of the CDOs in Maiden Lane III continued to fall, sinking to $20.7bn by March 31 2009. The portfolio’s value rose to $22.4bn by the end of September, the last date for which official statistics are available.

Maiden Lane III was funded with a $24.3bn loan from the New York Fed and $5bn in equity from AIG. Because the CDOs have continued to throw off cash, the balance on the Fed loan is now about $17bn, people familiar with the matter said.

If the CDOs in Maiden Lane III were sold, the proceeds would pay off the Fed loan first, followed by the AIG investment. The Fed would receive 67 per cent of any additional profits, and AIG 33 per cent.

The improvement in the Maiden Lane III portfolio comes as Fed officials face continuing controversy over the circumstances of the bail-out.

US Treasury secretary Tim Geithner, who was New York Fed president at the time of the AIG rescue, is set to testify at a hearing on the matter by The House Oversight and Government Reform Committee on January 27.

AIG declined to comment.

[UpInArms]

51. the Fed does not translate to "taxpayers" -

it is a privately owned entity

[Demeter]

60. Whose "Profits" Supposedly All Return to the Treasury

you can stop laughing now. It isn't that funny.

[Demeter]

35. A Growing Underclass

http://economix.blogs.nytimes.com/2010/01/14/a-growing-underclass/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+creditwritedownsnews+



Slowly but surely, longer-term unemployment seems to be becoming the norm.

While layoffs are slowing, the number of job openings relative to the unemployed population were still at a record low in November.

That means that those who have already been laid off must spend longer and longer periods looking for work. Take a look at the make-up of the unemployed last month, compared with a year earlier:



In December 2008, 22.9 percent of the unemployed had been out of work for at least 27 weeks. A year later, that portion rose to 39.8 percent. That translates to having about 4 percent of the total civilian work force categorized as long-term unemployed.

Here’s a look at how many weeks the average jobless person has been jobless for:


Source: Bureau of Labor Statistics

The average person who was unemployed in December had been out of work for 29.1 weeks. By contrast, when the recession began two years earlier, the average unemployed person had been out of work for 16.5 weeks.

I would guess that these numbers might even understate the portion of Americans who lost their jobs long ago and have not been able to find work, as many of the laid-off have most likely dropped out of the labor force altogether after months of discouraging job searches.

These are bad trends.

Initially the labor market imperative facing Washington was cushioning the blow of layoffs with safety-net programs like unemployment benefits, so that the newly jobless could still put food on the table and make their car payments. Now the problem is figuring out what to do with this growing army of idle workers.

After all, all things being equal, the longer unemployed workers stay out of work, the less likely they may be to subsequently find work, for two reasons.

First, their skills may deteriorate or become obsolete — especially if they are in a dynamically changing industry like high technology.

Second, the stigma — both internal and external — of their unemployment grows. Studies have linked job loss to declines in self-worth and self-esteem, meaning these people will probably make less compelling job candidates.

Besides that, long-term unemployed workers will have a marketing problem: Even if their skills have not deteriorated, employers are going to worry about that big, gaping hole on their résumés anyhow.

If given the choice between a job candidate who’s been unemployed for a month and a candidate who somehow hasn’t been able to get hired for a year, wouldn’t you choose the former?

In other words, unemployment insurance benefits may tide these workers over for a few months. But eventually we will have to figure out a way to transition the long-term jobless back into the work force, whether through training or therapy or tax incentives or public service announcements or something more drastic. And for the two reasons above, the longer Washington waits, the tougher the transition for this growing underclass will probably become.

[Demeter]

36. Wall Street Poltergeist: The Return of Robert Rubin By Mike Whitney

http://www.informationclearinghouse.info/article24341.htm

Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone." John Maynard Keynes

January 06, 2009 "Information Clearing House" -- There's no denying that the economy is getting better, but will it last? Many economists don't think so, including experts at opposite ends of the ideological spectrum, like Paul Krugman and Martin Feldstein. They think the economy will begin to fizzle sometime in the latter part of 2010 when Obama's $787 billion fiscal stimulus runs out and consumers are forced to pick up the slack in demand. That's a safe bet, too, considering that unemployment will still be somewhere in the neighborhood of 9 percent and households will still be digging out from the $13 trillion they lost during the crisis. And the fact that the Fed is planning to end its quantitative easing (QE) program in early April, doesn't help either. That will just suck more liquidity out of the system and push long-term interest rates higher. When that happens, housing prices will fall, inventory will rise, and a surge in foreclosures will put more pressure on the banks balance sheets. That's why the pros are so glum, because they know the economy needs a second dose of stimulus to stay on track, but the politicos are dead-set against it. Congress is afraid of the backlash from voters in the upcoming midterm elections. They'd rather drive the economy back into recession then risk losing their jobs.

Despite the propaganda in the media, stimulus works. In fact, Goldman Sachs attributes all of last quarter's (positive) growth to Obama's stimulus. Here's how Nobel prize winning economist Joseph Stiglitz sums it up in his China Daily article "Harsh lessons we may need to learn again":

"Keynesian policies do work. Countries, like Australia, that implemented large, well-designed stimulus programs early emerged from the crisis faster. Other countries succumbed to the old orthodoxy pushed by the financial wizards who got us into this mess in the first place.

Whenever an economy goes into recession, deficits appear, as tax revenues fall faster than expenditures. The old orthodoxy held that one had to cut the deficit - raise taxes or cut expenditures - to "restore confidence." But those policies almost always reduced aggregate demand, pushed the economy into a deeper slump, and further undermined confidence."

When consumers are forced to cut back on spending, because they're too far in debt or worried about their jobs, the government has to step in and make up the difference or the economy goes into a tailspin. The deficits need be big enough to maintain aggregate demand while the private sector regains its footing. Otherwise, consumer spending declines, which lowers earnings and forces businesses to lay off more workers. It's a viscous circle. But if the stimulus is distributed wisely, multipliers kick in and help to lift the economy out of the doldrums. Here's a good breakdown of how it works from an article in the New York Times:

"Every dollar of additional infrastructure spending means $1.57 in economic activity, according to Moody’s, and general aid to states carries a $1.41 "bang" for each federal buck. Even more effective are increases for food stamps ($1.74) and unemployment checks ($1.61), because recipients quickly spend their benefits on goods and services.

By contrast, most temporary tax cuts cost more than the stimulus they provide, according to research by Moody’s. That is true of two tax breaks in the stimulus law that Congress, pressed by industry lobbyists, recently extended and sweetened — a tax credit for homebuyers (90 cents of stimulus for each dollar of tax subsidy) and extra deductions for businesses’ net operating losses (21 cents). " ("New Consensus Sees Stimulus Package as Worthy Step " Jackie Calmes and Michael Cooper, New York Times)

So far, the stimulus has done exactly what it was designed to do; give the economy a big enough boost to get through a deflationary rough patch. Unemployment is flattening out, manufacturing is expanding again, the stock market keeps climbing higher, and a recent survey of individual investors shows the highest ratio of bulls-to-bears since 2007. That's a good start, but the economy is still weak and needs more help. So why are policymakers so eager to take the patient off the ventilator before he can breathe on his own again?

Politics, that's why.

The congress is worried about voter rage at the ballotbox, but that doesn't explain why Obama has started moaning about slashing deficits in the middle of a severe slump. The administration's agenda is entirely different than congress's. The White House economics team is trying to garner support for policies that will strap the faltering economy into a fiscal straightjacket and pound the green shoots into mush. All the railing against deficits is just empty blather backed by junk economics.

Here's ex-Treasury Secretary Robert Rubin--one of the chief architects of the global financial crisis--articulating the position of his proteges at 1600 Pennsylvania Ave.


Robert Rubin: "Putting another major stimulus on top of already huge deficits and rising debt-to-GDP ratios would have risks. And further expansion of the Federal Reserve Board's balance sheet could create significant problems.... Today's economic conditions would ordinarily be met with expansionary policy, but our fiscal and monetary conditions are a serious constraint, and waiting too long to address them could cause a new crisis....


First, there must be sound fiscal and monetary policies. The United States faces projected 10-year federal budget deficits that seriously threaten its bond market, exchange rate, economy, and the economic future of every American worker and family. Those risks are exacerbated by the context of those deficits: a low household-savings rate, even after recent increases; large funding requirements for federal debt maturities every year; heavy overweighting of dollar-denominated assets in foreign portfolios; worsened fiscal prospects in the decades after the current 10-year budget period; and competing claims for capital to fund deficits in other countries." ("Getting the Economy back on track" Robert Rubin, Newsweek)

Interesting. Rubin admits that the recession "would ordinarily be met with expansionary policy", but suggests that he has a better remedy than stimulus. Does that make sense? After all, it was Keynes counter-cyclical public spending (stimulus) that just produced positive GDP for the first time in 4 quarters, whereas, it was Rubin's deregulation of the financial system that pushed the global economy to the brink of disaster. There's no question of whose theory is more credible or likely to work. Even so, it's worth considering what Rubin has to say, because it clarifies the views of Obama's chief economics advisors Geithner and Summers. After all, the trio is joined at the hip.

Rubin again: "The American people are growing increasingly concerned about deficits, creating a public environment more conducive to political action. And the Obama administration, in my view, has a deep understanding of the critical importance of addressing this issue..... "

Indeed. So, Obama has already joined the ranks of the deficit terrorists.

Rubin again: "As President Obama and the other G20 leaders warned, restrictive trade measures in response to the current crisis could lead to highly destructive trade wars. For the long run, we should continue pursuing the open markets that the Peterson Institute for International Economics, a Washington think tank, estimates have added $1 trillion to America's current GDP."

So Rubin is working for Peterson? That explains everything. Here's an excerpt from a Dean Baker article which appeared in the UK Guardian this week:

"Peter Peterson is a Wall Street billionaire and former Nixon administration cabinet member who has been trying to gut Social Security payments and Medicare for at least the last quarter of a century. He has written several books that warn of a demographic disaster when the baby boomers retire. These books often include nonsense arguments to make his case. For example, in one of the books making his pitch for cutting social security as matter of generational equity, Peterson proposes reducing the annual cost of living adjustment." (U K Guardian)

Ah ha! So, the real goal is to slash spending to impose onerous austerity measures that will lay the groundwork for dismantling critical social programs, like Social Security, Medicaid and Medicare. That's why Rubin is working hand-in-hand with his allies in and out of the White House. It has nothing to do with what's best for the country. It's another looting operation spearheaded by the same band of Wall Street pirates who just blew up the financial system.

Rubin again: "For American workers, sustained growth is the most powerful force for higher wages and greater personal economic security....The dynamism of American society, its flexible labor and capital markets, its entrepreneurial spirit and the sheer size of its economy, are great strengths for succeeding in a rapidly transforming global economy....Finally, in an increasingly interdependent world, transnational issues key to all of us can only be addressed through effective global governance."

Yada, yada, yada. More free trade, more outsourcing, more off-shoring, more lost jobs, more structural adjustment (at home, this time) more privatization, more screwball globalist Utopianism. It's all right out of the Neoliberal playbook, corporate America's sacred text. And it looks President Moonbeam is marching in lockstep with the rest of the hucksters.

Face it; the Obama administration is less interested in engineering a strong recovery than they are with micromanaging a protracted downturn. That's because a long drawn-out mini-Depression puts the Rubin troupe right where they want to be---with one hand choking the life out of the economy while the other steals whatever is left in the national vault. They're all scoundrels. Obama, too.

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52. Minsky to Bernanke: "Size Matters!" By Mike Whitney

http://www.informationclearinghouse.info/article23890.htm

November 03, 2009 "Information Clearing House" -- Size matters. And it particularly matters when the size of the financial system grossly exceeds the productive capacity of the underlying economy. Then problems arise. Surplus capital flows into paper assets triggering a boom. Then speculators pile in driving asset prices higher. Margins grow, debts balloon, and bubbles emerge. The frenzy finally ends when the debts can no longer be serviced and the bubble begins to unwind, sometimes violently. As gas escapes; credit tightens, businesses are forced to cut back, asset prices plunge and unemployment soars. Deflation spreads to every sector. Eventually, the government steps in to rescue the financial system while the broader economy slumps into a coma.

The crisis that started two years ago followed this same pattern. A meltdown in subprime mortgages sent the dominoes tumbling; the secondary market collapsed, and stock markets went into freefall. When Lehman Bros flopped, a sharp correction turned into a full-blown panic. Lehman tipped-off investors that that the entire multi-trillion dollar market for securitized loans was built on sand. Without price discovery, via conventional market transactions, no one knew what mortgage-backed securities (MBS) and other exotic debt-instruments were really worth. That sparked a global sell-off. Markets crashed. For a while, it looked like the whole system might collapse.

The Fed's emergency intervention pulled the system back from the brink, but at great cost. Even now, the true value of the so-called toxic assets remains unknown. The Fed and Treasury have derailed attempts to create a public auction facility--like the Resolution Trust Corporation (RTC)--where prices can be determined and assets can be sold. Billions in toxic waste now clog the Fed's balance sheet. Ultimately, the losses will be passed on to the taxpayer.

Now that the economy is no longer on steroids, the financial system needs to be downsized. The housing/equities bubble was generated by over-consumption that required high levels of debt-spending. That model requires cheap money and easy access to credit, conditions no longer exist. The economy has reset at a lower level of economic activity, so changes need to be made. The financial system needs to shrink.

The problem is, the Fed's "lending facilities" have removed any incentive for financial institutions to deleverage. Asset prices are propped up by low interest, rotating loans on dodgy collateral. While household's have suffered humongous losses (of nearly $14 trillion) in home equity and retirement savings; the financial behemoths have muddled through largely unscathed. The Fed handed Wall Street a golden parachute while ordinary working stiffs were kicked to the curb. That's why household spending has plunged while the big brokerage houses are gearing up. Here's an excerpt from an article by former Morgan Stanley analyst Andy Xie which explains what's really going on:

"First, let’s look at the most basic objective of deleveraging the financial sector. Top executives on Wall Street talk about having cut leverage by half. That is actually due to an expanding equity capital base rather than shrinking assets. According to the Federal Reserve, total debt for the financial sector was US$ 16.5 trillion in the second quarter 2009 — about the same as the US$ 16.6 trillion reported one year earlier. After the Lehman collapse, financial sector leverage increased due to Fed support. It has come down as the Fed pulled back some support, creating the perception of deleveraging. The basic conclusion is that financial sector debt is the same as it was a year ago, and the reduction in leverage is due to equity base expansion, partly due to government funding." (Andy Xie, "Why One Good Bubble Deserves Another", Caijing.com)

See? The financial Goliaths are still leveraged to their eyeballs.

Fed chair Ben Bernanke has bent-over-backwards to preserve the system in its present form. That's why the lending facilities should be viewed with a degree of skepticism. They weren't set up merely to rescue the system from disaster, but to keep asset prices artificially high so institutions could continue to maximize profits via risky investments. And, it's worked, too. The S&P 500 is up over 60 percent since March 9. Still, even though Bernanke has succeeded in resuscitating the flagging financial sector, investors remain pessimistic. According to Bloomberg News:

"An eight-month, 68 percent rally in global stocks failed to convince investors and analysts that it’s time to take on more risk or dispel their concerns about U.S. economic policies and its banking system.

Only 31 percent of respondents to a poll of investors and analysts who are Bloomberg subscribers in the U.S., Europe and Asia see investment opportunities, down from 35 percent in the previous survey in July. Almost 40 percent in the latest quarterly survey, the Bloomberg Global Poll, say they are still hunkering down. U.S. investors are even more cautious, with more than 50 percent saying they are in a defensive crouch.

“The doubt and the pessimism just won’t go away,” says James Paulsen, who helps oversee $375 billion as chief investment strategist at Wells Capital Management in Minneapolis." (Bloomberg News)

Few people seem to believe in the much-ballyhooed economic recovery. And even though the media triumphantly announced the "end of the recession" last week (when GDP came in at 3.5 percent) a closer look at the data, leaves room for doubt. Goldman Sachs analysts put it like this:

"How much of the rebound in real GDP was due to the fiscal stimulus, and where do we stand in terms of the effects of stimulus thus far? Although precise answers are impossible at this juncture, several aspects of the report are consistent with our estimates that the fiscal package enacted in mid-February as the American Recovery and Reinvestment Act (ARRA) would have accounted for virtually all of the growth reported for the third quarter." ( http://www.zerohedge.com/article/hedging-their-bets )

Positive growth is an illusion created by government spending. In fact, the economy is still flat on its back. Consumer spending and credit are in sharp decline. Unemployment is steadily rising (although at a slower pace) and wages are flatlining with a chance of falling for the first time in 30 years. Deflationary pressures are building. The talk of a "jobless recovery" is intentionally misleading. Jobs ARE recovery; therefore a jobless recovery merely points to asset-inflation brought on by erratic monetary policy. Surging stocks shouldn't be confused with a real recovery.

Bernanke is a scholar of the Great Depression. He is familiar with Hyman Minsky and Minsky's "Financial Instability Hypothesis" (FIH), which states that, "A fundamental characteristic of our economy is that the financial system swings between robustness and fragility and these swings are an integral part of the process that generates business cycles."

Boston Globe Correspondent, Stephen Mihm, summarized Minsky's theory in his article "When Capitalism Fails":

"In the wake of a depression, he noted, financial institutions are extraordinarily conservative, as are businesses. With the borrowers and the lenders who fuel the economy all steering clear of high-risk deals, things go smoothly: loans are almost always paid on time, businesses generally succeed, and everyone does well. That success, however, inevitably encourages borrowers and lenders to take on more risk in the reasonable hope of making more money. As Minsky observed, “Success breeds a disregard of the possibility of failure.”

As people forget that failure is a possibility, a “euphoric economy” eventually develops, fueled by the rise of far riskier borrowers - what he called speculative borrowers, those whose income would cover interest payments but not the principal; and those he called “Ponzi borrowers,” those whose income could cover neither, and could only pay their bills by borrowing still further. As these latter categories grew, the overall economy would shift from a conservative but profitable environment to a much more freewheeling system dominated by players whose survival depended not on sound business plans, but on borrowed money and freely available credit.

Once that kind of economy had developed, any panic could wreck the market. The failure of a single firm, for example, or the revelation of a staggering fraud could trigger fear and a sudden, economy-wide attempt to shed debt. This watershed moment - what was later dubbed the “Minsky moment” - would create an environment deeply inhospitable to all borrowers.

The speculators and Ponzi borrowers would collapse first, as they lost access to the credit they needed to survive. Even the more stable players might find themselves unable to pay their debt without selling off assets; their forced sales would send asset prices spiraling downward, and inevitably, the entire rickety financial edifice would start to collapse. Businesses would falter, and the crisis would spill over to the “real” economy that depended on the now-collapsing financial system." (When Capitailsm Fails, Stephen Mihn, Boston Globe)

Stability leads to instability. By zeroing in on capitalism's genetic flaws, Minsky countered the prevailing orthodoxy that markets are fundamentally efficient and rational. He not only showed that capitalism was inherently crisis-prone, but also, that it was most vulnerable during those periods which seemed to be most stable. (like during Greenspan's "Great Moderation") Stability invites speculation and risk-taking. Investors are buoyed by market euphoria and fat returns; borrowing to purchase dodgy equities turns into a mania which distorts prices and leads to massive credit bubbles. Eventually, the foundation cracks and debts cannot be rolled over. Then markets tumble.

The point is, Bernanke knows that a bloated financial system poses unnecessary risks to the economy; just as he knows he should wind-down existing lending programs (which just encourage more speculation) and focus on rebuilding household balance sheets. The only way to put the economy back on a solid foundation is by helping struggling workers get back on their feet so they can create more demand. The objective should be full employment and broad, sustained wage growth, which is precisely what Minsky's recommended.

Stephen Mihm again: "The government - or what Minsky liked to call 'Big Government' - should become the 'employer of last resort,' he said, offering a job to anyone who wanted one at a set minimum wage. It would be paid to workers who would supply child care, clean streets, and provide services that would give taxpayers a visible return on their dollars. In being available to everyone, it would be even more ambitious than the New Deal, sharply reducing the welfare rolls by guaranteeing a job for anyone who was able to work. Such a program would not only help the poor and unskilled, he believed, but would put a floor beneath everyone else's wages too, preventing salaries of more skilled workers from falling too precipitously, and sending benefits up the socioeconomic ladder." ("Why Capitalism Fails, by Stephen Mihm, Boston Globe)

Minsky's analysis not only sheds light on the causes of the current crisis, but also provides a practical way to fix the system. Too bad Bernanke's not paying attention.

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37. Fannie Mae to allow borrowers in foreclosure to lease back homes

http://articles.latimes.com/2009/nov/06/business/fi-fannie6

The mortgage giant's move is part of an attempt by lenders to keep a wave of foreclosed properties from slamming a housing market that has shown some signs of recovery.
November 06, 2009|Alejandro Lazo

Mortgage giant Fannie Mae said Thursday that it would throw a lifeline to some people losing their homes to foreclosure by allowing them to lease those properties back for up to a year at market rental rates.

The move is the latest in a series of steps by lenders trying to manage inventories of foreclosed homes on their books in an attempt to keep a wave of properties from slamming a housing market that has shown some signs of recovery...

[Demeter]

39. U.S. Joblessness May Reach 13 Percent, Rosenberg Says (Update3)

http://www.bloomberg.com/apps/news?pid=20601087&sid=aHmxIMR1DFq0

The U.S. unemployment rate may rise to a post-World War II high of 13 percent in the aftermath of the recession, said David Rosenberg, chief economist at Gluskin Sheff & Associates Inc. in Toronto.

“This is going to be the mother of all jobless recoveries,” Rosenberg, one of the first to forecast the recession in his former position as chief North American economist at Merrill Lynch & Co. in New York, said today in an interview on Bloomberg Radio. “At the beginning of the year, who was calling for unemployment to go up to 10 percent?”

Rosenberg said the recession, the deepest since the Great Depression, “is truly secular in nature” and said the economy is “in a post-bubble credit collapse.”

A 13 percent unemployment rate would be the highest since monthly records began in January 1948, according to Labor Department data. The previous postwar high was 10.8 percent in December 1982. Yearly records, which began in 1929, show joblessness climbed to almost 25 percent in 1933 during the Great Depression.

The rate exceeded 10 percent last month for the first time in more than a quarter century. The Labor Department reported Nov. 6 that unemployment increased to 10.2 percent in October, the highest since 1983, and payrolls dropped by 190,000 workers.

Under-Employment Rate

Additionally, the so-called under-employment rate, which includes part-time workers who’d prefer a full-time position, and people who want work and have given up looking, reached 17.5 percent last month, the highest level since records began in 1994.

Companies aren’t “cash constrained to hire workers,” and instead are being “cautious about economic bellwethers,” Rosenberg said. “It just comes down to the economic outlook,” he said.

The economy has lost 7.3 million jobs since the recession began in December 2007.

Commenting on the third quarter’s surge in worker productivity, Rosenberg said “we are producing more with fewer average hours worked -- how sustained is that is anyone’s guess.”

Productivity, a measure of worker output per hour, increased at a 9.5 percent annual rate from July to September as labor costs registered a record decline, the Labor Department reported Nov. 5.

Japan Comparison

The economy in the U.S. could rival Japan’s so-called “lost decade” of the 1990s, Rosenberg said. “This has some prints of Japan in many respects,” where growth stagnated for years and prices fell in the aftermath of speculation in real estate and equities, he said.

In the U.S., “20 percent of private credit is coming out of the system -- and on a semi-permanent basis,” as reflected in the record eight consecutive monthly declines in consumer credit through September, Rosenberg said.

Credit card, auto and other installment debt declined $14.8 billion, or 7.2 percent at an annual rate, to $2.46 trillion, according to Federal Reserve data released Nov. 6. The consecutive declines were the most since records began in 1943.

More Training

Government stimulus plans, such as the “cash-for- clunkers” auto rebates and tax credits for home buying, are “short-term policies that promote excess spending,” Rosenberg said. Growth in the third quarter would have been “barely above zero” without the government stimulus, he said. Spending on education and job training would be a wiser investment, Rosenberg said.

Moreover, the Treasury is “on an unsustainable fiscal path irrespective of where the economy is going,” Rosenberg said. The government reported a record budget deficit of $1.42 trillion in the fiscal year that ended Sept. 30.

In the third quarter, gross domestic product expanded at a 3.5 percent annual rate after a yearlong contraction, Commerce Department figures showed Oct. 29. Household purchases increased 3.4 percent, the most in two years.

I ASSUME THAT 13% WILL BE THE AMOUNT THAT CANNOT BE OBFUSCATED--MEANING THAT THE REAL RATE WILL BE IN THE RANGE OF 20-25%

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41. U.S. Treasuries Post Worst Performance Among Sovereign Markets

http://www.bloomberg.com/apps/news?pid=20601087&sid=awoGuEcrPK2k

Treasuries were the worst performing sovereign debt market in 2009 as the U.S. sold $2.1 trillion of notes and bonds to fund extraordinary efforts to bolster the economy and financial markets.

Investors in U.S. debt lost 3.5 percent on average through Dec. 30, according to Bank of America Merrill Lynch indexes, the biggest annual slide since at least 1978. The 10-year Treasury yield reached its highest level in six months yesterday before a Labor Department report next week forecast to show payrolls were unchanged in December after the U.S. economy lost jobs in every month since January 2008.

“The financial system has survived,” said Ray Remy, head of fixed income in New York at Daiwa Securities America Inc., one of 18 primary dealers that trade directly with the Federal Reserve. “Now the market has to deal with other issues like deficit spending, tremendous issuance, the weakness in the dollar. How significant is this recovery, and what happens when you take away some of the government stimulus.”

The yield on the benchmark 10-year note climbed to 3.84 percent from 2.21 percent at the end of 2008, according to BGCantor Market Data. The yield touched 3.91 percent yesterday, the highest level since June 11.

Two-year note yields rose to 1.14 percent from 0.76 percent.

‘The Big Gamble’

“I expect Treasury yields to rise 30 to 40 basis points across the curve in the first half of next year,” said David Keeble, head of fixed-income strategy at Calyon in London. “The end of the of the Fed’s quantitative easing program will hurt the market. We also have to cope with a lot of supply. It doesn’t get smaller.”

The 10-year yield will rise to 4.01 percent at the end of 2010, according to the median of 60 economists surveyed by Bloomberg News. The two-year note yield will climb to 1.96 percent, according to the median response in a separate Bloomberg survey.

The government may say on Jan. 8 that payrolls were unchanged in December, according to the median estimate of economists in a Bloomberg News Survey. The unemployment rate rose to 10.1 percent from 10 percent, according to a separate survey.

President Barack Obama is borrowing unprecedented amounts for spending programs. U.S. marketable debt increased to a record $7.17 trillion in November from $5.80 trillion at the end of last year.

“This is the year of the big gamble,” said Michael Cheah, who manages $2 billion in bonds at SunAmerica Asset Management in Jersey City, New Jersey. “It’s about restoring confidence. Nobody knows whether confidence is enough by itself. But we have seen how a lack of confidence has allowed the Japanese economy to be uninteresting for two decades.”

Banking, Autos

Japanese government debt has returned 20 percent since 1999 after rallying 90 percent in the 10 prior years as the bursting of bubbles in the nation’s real estate and stock markets led to 20 years without significant growth for the economy or financial markets. Japan’s Nikkei 225 stock index fell 44 percent since 1999.

Treasuries have risen 82 percent in the past decade as collapses in the markets for stocks, real estate and risky debt assets have led investors to seek guaranteed return of their assets. The S&P 500 declined 24 percent in the past 10 years to 1,115.10.

Bailouts of the banking and automotive industries from the Obama administration, and the Fed’s decision to hold interest rates near zero through all of 2009, have helped bolster asset prices.

‘Likely Loser’

The Standard & Poor’s 500 Stock Index rose 24.5 percentage points this year compared with a 3.5 percentage point decline in Treasuries. The gap in performance is the most since at least 1978 and contrasts with the 52 percentage point advantage Treasuries achieved in 2008 when they climbed 14 percentage points and the S&P 500 plunged 38 percentage points.

Yields on investment-grade debt fell on Dec. 30 to within 2.85 percentage points of yields on government securities of similar maturity, the narrowest gap since April 2008, according to Merrill bond indexes. The yield difference was 6.56 percentage points in December 2008.

The 3.5 percent drop in Treasuries is the most this year among G-7 countries, followed by U.K. gilts, which lost 1.7 percent and Canadian debt’s 1.5 percent slump, Bank of America- Merrill Lynch bond indexes show. Holders of Italian debt gained the most, adding 8.1 percent.

‘Likely Loser’

Treasuries of all maturities lost 2.4 percent last month through Dec. 30, their worst performance since January, according to Merrill indexes, after a report showed the U.S. economy shed fewer jobs than forecast in November.

“Massive government intervention through conventional and unconventional means restored the animal spirits of the market,” said Colin Lundgren, head of institutional fixed income for RiverSource Institutional Advisors in Minneapolis, which manages $93 billion in fixed-income. “The likely loser in all this is Treasuries.”

The gap between U.S. 2- and 10-year yields, a barometer of the health of the U.S. economy, steepened to a record this month as investors bet an accelerating recovery will fuel inflation and hurt demand during unprecedented government debt sales.

Inflation Outlook

The yield curve widened to 2.88 percentage points on Dec. 22, from 1.45 percentage points at the start of the year. It was at 2.70 percentage points yesterday.

The U.S. sold a record-tying $118 billion in notes this week. The government sold $2.109 trillion of notes and bonds in 76 auctions in 2009 after selling $922 billion in 2008.

Fed Chairman Ben S. Bernanke has cited a tame inflation outlook as a reason for keeping the target rate for overnight loans between banks at a record low zero to 0.25 percent. Treasury Inflation Protected Securities, or TIPS, a gauge of trader expectations for consumer prices, show the improving economy may change sentiment and spark further bond declines.

The gap between yields on Treasuries and TIPS due in 10 years, a measure of the outlook for consumer prices, expanded to 2.44 percentage points on Dec. 29, the widest since July 2008.

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47. CUT WALL STREET OUT! HOW STATES CAN FINANCE THEIR OWN RECOVERY

http://www.webofdebt.com/articles/cut-wallstreet.php

Pouring money into the private banking system has only fixed the economy for bankers and the wealthy; it has not done much to address either the fundamental problem of unemployment or the debt trap so many Americans find themselves in.

President Obama's $787 billion stimulus plan has so far failed to halt the growth of unemployment: 2.7 million jobs have been lost since the stimulus plan began. California has lost 336,400 jobs. Arizona has lost 77,300. Michigan has lost 137,300. A total of 49 states and the District of Columbia have all reported net job losses.

In this dark firmament, however, one bright star shines. The sole state to actually gain jobs is an unlikely candidate for the distinction: North Dakota. North Dakota is also one of only two states expected to meet their budgets in 2010. (The other is Montana.) North Dakota is a sparsely populated state of less than 700,000 people, largely located in cold and isolated farming communities. Yet, since 2000, the state's GNP has grown 56 percent, personal income has grown 43 percent and wages have grown 34 percent. The state not only has no funding problems, but this year it has a budget surplus of $1.3 billion, the largest it has ever had.

Why is North Dakota doing so well, when other states are suffering the ravages of a deepening credit crisis? Its secret may be that it has its own credit machine. North Dakota is the only state in the Union to own its own bank. The Bank of North Dakota (BND) was established by the state legislature in 1919, specifically to free farmers and small businessmen from the clutches of out-of-state bankers and railroad men. The bank's stated mission is to deliver sound financial services that promote agriculture, commerce and industry in North Dakota.
The Advantages of Owning Your Own Bank

So, how does owning a bank solve the state's funding problems? Isn't the state still limited to the money it has? The answer is no. Chartered banks are allowed to do something nobody else can do: They can create credit on their books simply with accounting entries, using the magic of "fractional reserve" lending. As the Federal Reserve Bank of Dallas explains on its web site:

"Banks actually create money when they lend it. Here's how it works: Most of a bank's loans are made to its own customers and are deposited in their checking accounts. Because the loan becomes a new deposit, just like a paycheck does, the bank ... holds a small percentage of that new amount in reserve and again lends the remainder to someone else, repeating the money-creation process many times."

How many times? President Obama puts this "multiplier effect" at eight to ten. In a speech on April 14, he said:

"lthough there are a lot of Americans who understandably think that government money would be better spent going directly to families and businesses instead of banks - 'where's our bailout?,' they ask - the truth is that a dollar of capital in a bank can actually result in eight or ten dollars of loans to families and businesses, a multiplier effect that can ultimately lead to a faster pace of economic growth."

It can, but it hasn't recently, because private banks are limited by bank capital requirements and by their for-profit business models. And that is where a state-owned bank has enormous advantages: States own huge amounts of capital, and they can think farther ahead than their quarterly profit statements, allowing them to take long-term risks. Their asset bases are not marred by oversized salaries and bonuses; they have no shareholders expecting a sizable cut, and they have not marred their books with bad derivatives bets, unmarketable collateralized debt obligations and mark-to-market accounting problems.

The Bank of North Dakota (BND) is set up as a dba: "the State of North Dakota doing business as the Bank of North Dakota." Technically, that makes the capital of the state the capital of the bank. Projecting the possibilities of this arrangement to California, the State of California owns about $200 billion in real estate, has $62 billion in various investments and has $128 billion in projected 2009 revenues. Leveraged by a factor of eight, that capital base could support nearly $4 trillion in loans.

To get a bank charter, specific investments would probably need to be earmarked by the state as startup capital; but the startup capital required for a typical California bank is only about $20 million. This is small potatoes for the world's eighth largest economy, and the money would not actually be "spent." It would just become bank equity, transmuting from one form of investment into another - and a lucrative investment at that. In the case of the BND, the bank's return on equity is about 25 percent. It pays a hefty dividend to the state, which is expected to exceed $60 million this year. In the last decade, the BND has turned back a third of a billion dollars to the state's general fund, offsetting taxes. California could do substantially better than that. California pays $5 billion annually just in interest on its debt. If it had its own bank, the bank could refinance its debt and return that $5 billion to the state's coffers; and it would make substantially more on money lent out.

Besides capital, a bank needs "reserves," which it gets from deposits. For the BND, this too is no problem, since it has a captive deposit base. By law, the state and all its agencies must deposit their funds in the bank, which pays a competitive interest rate to the state treasurer. The bank also accepts deposits from other entities. These copious deposits can then be plowed back into the state in the form of loans.
Public Banking on the Central Bank Model

The BND's populist organizers originally conceived of the bank as a credit union-like institution that would free farmers from predatory lenders, but conservative interests later took control and suppressed these commercial lending functions. The BND is now chiefly a "bankers' bank." It acts like a central bank, with functions similar to those of a branch of the Federal Reserve. It avoids rivalry with private banks by partnering with them. Most lending is originated by a local bank. The BND then comes in to participate in the loan, share risk and buy down the interest rate.

One of the BND's functions is to provide a secondary market for real estate loans, which it buys from local banks. Its residential loan portfolio is now $500 billion to $600 billion. This function has helped the state to avoid the credit crisis that afflicted Wall Street when the secondary market for loans collapsed in late 2007. Before that, investors routinely bought securitized loans (CDOs) from the banks, making room on the banks' books for more loans. But these "shadow lenders" disappeared when they realized that the derivatives called "credit default swaps" supposedly protecting their CDOs were a highly unreliable form of insurance. In North Dakota, this secondary real estate market is provided by the BND, which has invested conservatively, avoiding the speculative derivatives debacle.

Other services the BND provides include guarantees for entrepreneurial startups and student loans, the purchase of municipal bonds from public institutions and a well-funded disaster loan program. When the city of Fargo was struck by a massive flood recently, the disaster fund helped the city avoid the devastation suffered by New Orleans in similar circumstances; and when North Dakota failed to meet its state budget a few years ago, the BND met the shortfall. The BND has an account with the Federal Reserve Bank, but its deposits are not insured by the FDIC. Rather, they are guaranteed by the State of North Dakota itself - a prudent move today, when the FDIC is verging on bankruptcy.
The Commercial Banking Model: The Commonwealth Bank of Australia

The BND studiously avoids competition with private banks, but a publicly-owned bank could profitably engage in commercial lending. A successful model for that approach was the Commonwealth Bank of Australia, which served both central bank and commercial bank functions. For nearly a century, the publicly-owned Commonwealth Bank provided financing for housing, small business, and other enterprise, affording effective public competition that "kept the banks honest" and kept interest rates low. Commonwealth Bank put the needs of borrowers ahead of profits, ensuring that sound investment flows were maintained to farming and other essential areas; yet, the bank was always profitable, from 1911 until nearly the end of the century.

Indeed, it seems to have been too profitable, making it a takeover target. It was simply "too good not to be privatized." The bank was sold in the 1990s for a good deal of money, but it's proponents consider it's loss as a social and economic institution to be incalculable.

BUT WAIT! THERE'S MORE! SEE LINK

[Demeter]

48. Life & Debt

http://www.informationclearinghouse.info/article23860.htm

Life and Debt is a feature-length documentary which addresses the impact of the International Monetary Fund, the World Bank, the Inter-American Development Bank and current globalization policies on a developing country such as Jamaica.

Life & Debt is a woven tapestry of sequences focusing on the stories of individual Jamaicans whose strategies for survival and parameters of day-to-day existence are determined by the U.S. and other foreign economic agendas. By combining traditional documentary telling with a stylized narrative framework, the complexity of international lending, structural adjustment policies and free trade will be understood in the context of the day-to-day realities of the people whose lives they impact.

SEE VIDEO AT LINK

[Demeter]

49. 20 reasons America has lost its soul and collapse is inevitable

http://www.informationclearinghouse.info/article23866.htm


Death of 'Soul of Capitalism': Bogle, Faber, Moore By Paul B. Farrell

November 02, 2009 - ARROYO GRANDE, Calif. (MarketWatch) Oct. 20, 2009 -- Jack Bogle published "The Battle for the Soul of Capitalism" four years ago. The battle's over. The sequel should be titled: "Capitalism Died a Lost Soul." Worse, we've lost "America's Soul." And, worldwide, the consequences will be catastrophic.

That's why a man like Hong Kong contrarian economist Marc Faber warns in his Doom, Boom & Gloom Report: "The future will be a total disaster, with a collapse of our capitalistic system as we know it today." No, not just another meltdown, another bear-market recession like the one recently triggered by Wall Street's too-greedy-to-fail banks. Faber is warning that the entire system of capitalism will collapse. Get it? The engine driving the great "American Economic Empire" for 233 years will collapse, a total disaster, a destiny we created.

OK, deny it. But I'll bet you have a nagging feeling that maybe he's right, that the end may be near. I have for a long time: I wrote a column back in 1997: "Battling for the Soul of Wall Street." My interest in "The Soul" -- what Jung called the "collective unconscious" -- dates back to my Ph.D. dissertation, "Modern Man in Search of His Soul," a title borrowed from Jung's 1933 book, "Modern Man in Search of a Soul." This battle has been on my mind since my days at Morgan Stanley 30 years ago, witnessing the decline.

Has capitalism lost its soul? Guys like Bogle and Faber sense it. Read more about the soul in physicist Gary Zukav's "The Seat of the Soul," Thomas Moore's "Care of the Soul" and sacred texts.

But for Wall Street and American capitalism, use your gut. You know something's very wrong: A year ago, too-greedy-to-fail banks were insolvent, in a near-death experience. Now, magically, they're back to business as usual, arrogant, pocketing outrageous bonuses while Main Street sacrifices, and unemployment and foreclosures continue rising as tight credit, inflation and skyrocketing federal debt are killing taxpayers.

Yes, Wall Street has lost its moral compass. It created the mess, but now, like vultures, Wall Streeters are capitalizing on the carcass. They have lost all sense of fiduciary duty, ethical responsibility and public obligation.

Here are the Top 20 reasons American capitalism has lost its soul:

CONTINUES AT LINK

[mnhtnbb]

78. If the Great Depression 2 is coming by 2012, what actions do you take now?

Insiders have been selling...24 to 1

http://moneycentral.msn.com/community/message/thread.asp?board=MarketTalkwithJimJubak&threadid=1567018&boardname=Hide&header=SearchOnly&footer=Show&linktarget=_parent&pagestyle=money1

Time to dump gold before it becomes illegal to hold it?

Payoff the mortgage?

Buy land and build where you could keep a small farm going for food?

Unload all real estate except where you live?


Any thoughts from others?

[Warpy]

80. Get out of debt if you can

Take stock of skills and tools you have that can be valuable in barter.

Start that garden.

Hold onto your hat. You won't know what the right thing to do is until it's all over and everybody counts up what they have left, if anything.

[Demeter]

86. Make and Keep Connections

Identify your enemies and keep an eye on them. Strengthen family, social, community ties. Stockpile knowledge, resources, favors.

Learn not to sweat small stuff. Stay healthy and encourage those around you to do the same.

Get out of debt and stay out. Avoid crazy evil people. Move if you have to, want to, now, before it's impossible to move at all. Figure that wherever you are now, you might be there for the rest of your life, if nobody renditions you, and plan accordingly. Insulate. Get off the grid.

[DemReadingDU]

92. Good ideas from The Automatic Earth blog

Stoneleigh and Ilargi are the co-editors. To get started, build a 'lifeboat'
http://theautomaticearth.blogspot.com/2008/11/debt-rattle-november-30-2008-how-to.html

If you like their style of writing, here is their primer of primers for additional reading
http://theautomaticearth.blogspot.com/2009/07/july-23-2009-prime-rhyming-times.html


Top 100 Items to Disappear First During a National Emergency
http://baconreport.blogspot.com/2007/07/top-100-items-to-disappear-first-during.html

[hamerfan]

54. 2:30PM EST

Dow is down 188.
Nasdaq is down 46.
Easy come, easy go.....

[Hugin]

55. 2:30 ET?

Dude, step away from the TARDIS! :7

11:27AM EST

Dow 10,538.08 -187.35 (-1.75%)
S&P 500 1,131.79 -18.44 (-1.60%)
Nasdaq 2,276.86 -43.54 (-1.88%)

[Po_d Mainiac]

56. 11:30 is the same as 2:30....simple math 1+1=2 n/t

[Hugin]

58. Oh, it's some sort of math thing?

Cool. :thumbsup:

I'm all for math. :)

I could watch people doing math all day.

[Po_d Mainiac]

74. WTF are we thinking???

We asking for the closing numbers, at say about 3:45 EST geez do I feel dumb!!
:banghead: :banghead: :banghead: :banghead:

[Hugin]

79. Every day is Groundhog day!

No need to beat yourself up over it. :)

[Dr.Phool]

61. GMT?

[hamerfan]

69. Just seeing if you were paying

attention. Congrats, you were!
Actually I just got off an overnight shift, so I'm not the sharpest tack in the box right now... Thanks for the correction(s)!

[Demeter]

57. Look at those markets collapsing!

I guess Tansy and I are not the only grumpies this morning.

[Hugin]

59. The true story behind this realignment is probably in the sectors.

I betcha. ;)

[Demeter]

63. Or the Stars.

“The fault, dear Brutus, lies not in our stars, but in ourselves if we are underlings.”

More from Julius Caesar:

'Tis a common proof,
That lowliness is young ambition's ladder,
Whereto the climber-upward turns his face;
But when he once attains the upmost round,
He then unto the ladder turns his back,
Looks in the clouds, scorning the base degrees
By which he did ascend.."

If the shoe fits, Barry...

There is a tide in the affairs of men
Which taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.

[Hugin]

65. To make a long story short...

If you're at the bottom of the ladder looking up, all you see are a bunch of... Assholes.

Is that what Mr. Shakespeare was trying to say in pithy (but, eloquent) poetry?

[Demeter]

66. That's a 10-4 good buddy!

Not that the view improves in other directions...I am a complete misanthrope today.

[Hugin]

67. Seems to be going around.

:/

[Po_d Mainiac]

75. Chopper is just sending a message to the Senate about who's really in charge

[Robbien]

62. Investors sue New Frontier Bank's former officers, board members

Nearly 60 investors are suing nine former officers and board members of the failed New Frontier Bank in Greeley for more than $13 million they lost when the bank went belly up.

The civil lawsuit, filed Dec. 15 in Weld County District Court, alleges the defendants ignored warnings from regulators about unsound banking practices, profited from sweetheart deals, traded loans for investments in the bank and concentrated loans in volatile, cyclical industries that were susceptible to market changes, all of which contributed to the bank's demise.

Losses to the Federal Deposit Insurance Corp. might ultimately total $1 billion. The bank's failure rippled through Northern Colorado's business community from family farms and dairies to small businesses left with loans they couldn't refinance and without lines of credit to run their businesses.

The lawsuit names as defendants former bank President Larry Seastrom; former board members Robert Brunner, John Kammeier, Jack Renfroe, Timothy Thissen, Rodney Dean Juhl and Donald Lawler; as well as former bank officers Greg Bell and Jim Rutz, president of the Windsor branch.

The 11-year-old bank was shut down in April 2009, four months after the Federal Deposit Insurance Corp. issued a cease-and-desist order citing under-capitalization with respect to its loan-asset ratio, above average loan losses and over-reliance on agriculture and dairy loans.

The FDIC also ordered the bank to remove Seastrom as president and CEO and Bell from his job as chief lending officer.

. . .

The suit also claims Chicago-based HBI Private Equity Fund I and II LP, lost $4.38 million when their New Frontier stock became nearly worthless when the bank shut down.

The lawsuit details the bank's rapid growth from 1998 when Seastrom started it with $6 million from 181 investors to 2008 when it hit $2 billion in assets but amassed past-due loans and foreclosed real estate worth more than 100 percent of the bank's capital.

The board and officers encouraged bank personnel to extend as many loans as possible and "led to loans being made outside the bank's lending limits and far in excess was permitted by its capital reserves, the lawsuit alleges.

In 2008, Seastrom told the Coloradoan a $24 million real estate deal on the Western Slope had gone sour, accounting for declining bank ratings and questionable asset quality.

He also said the bank had moved more into the agriculture and dairy-lending business, which he classified as "extraordinarily stable" at that moment.

The markets changed dramatically as dairy prices plummeted and the real estate market tanked, leaving the bank with a high concentration of bad loans and "risky acquisitions, development and construction projects, agricultural loans and dairy loans," according to the lawsuit.

The bank's practices "created the perfect recipe for disaster," the lawsuit said.

"Defendants allowed the bank to issue numerous substandard loans to companies and individuals associated with particularly volatile industries that declined significantly as a result of the 2007 and 2008 recession. During this period of decline, the bank entered a capital crunch as a result of the foreseeable unavailability of its most heavily relied upon source of funding, noncore brokered deposits, ultimately leading to the failure of NFB."

Among other charges alleged in the lawsuit:

• Favorable loans: During the years, directors, officers and insiders received loans at favorable interest rates that would not have been available to noninsiders. Juhl, who served on the board for nine years until his resignation in late 2007, received nearly $8 million in loans - more than $3 million after he was convicted of mortgage fraud, and $4.8 million after he resigned from the board, according to the lawsuit,
(3 of 3)

• Conflict of interest: In 2004, New Frontier built a new building in Greeley. Rather than buy the land, the bank entered into a lease arrangement with Gateway Holdings LLC, owned by Seastrom, Brunner, Kammeier, Renfroe and Thissen. Throughout the course of the lease, the bank paid Gateway Holdings LLC more than $5 million, well above the market rate the bank would have paid to lease similar land, the lawsuit alleges.

The bank also hired Thissen Construction Corp., owned by Timothy Thissen, to build the new building. The contract was never put out to bid, nor did he negotiate the contract, the lawsuit alleges.

• Johnson Dairy: The suit alleges Bell created a financing agreement for Johnson Dairy that provided kickbacks to Bell and his family and created a sort of shell game to finance cow leases.

"Johnson would effectively borrow money from NFB paying double interest - interest to the lessor who was often a bank director, family member or friend of a bank officer, as well as interest on the lessor's loan from the bank," the suit alleges.

Johnson Dairy, which filed for bankruptcy last year, alleges the bank offered the dairy a $5 million loan if it used $1 million to buy stock in New Frontier.

It also alleges loans made to the dairy were conditional on the use of Thissen Construc-tion Corp. to expand the dairy and on Johnson Dairy buying its feed from Northern Feed & Bean, owned by Brunner.

The plaintiffs have requested a jury trial and damages to be determined at trial.

The failure and fallout from New Frontier Bank has led Sens. Mark Udall and Michael Bennet and U.S. Rep. Betsy Markey to call on the Justice Department for a full investigation.

http://www.coloradoan.com/article/20100120/LOVELAND03/100120003


The SEC and the Feds don't seem too eager to go after these execs and put them behind bars so it is nice to see investors not let them get off scott free with all the dough.

[Demeter]

64. Crony capitalism at Its best

[AnneD]

68. Morning Marketeers.......

:donut: and lurkers. So the Democrats lost a seat that they had held for 47 years to a Republican. And to make matters worse, it was Ted Kennedy's seat.

They are worried about that PPS Health Care Bill that they they are trying to pass off as a monument to Ted. The finger pointing and blame has already started but already they are going after the wrong message. And the GOP are reading the tea leafs wrong too.

The reason they lost dear friends is what we point at every day here in the SWT. So let me break it down for them just in case they are watching: to the GOP.THIS ELECTION IS NOT A MANDATE FOR YOUR IDEOLOGY. The Dem's have a majority in Congress and the Executive Branch because the nation felt you and your ideology was taking the country down a path we did not want to go down. This incident was not a revival-it was a warning salvo to the Democratic Party. The working class and the unions were letting the Dem's know that we will not accept a person with a D beside their names if the Dem's don't start living up to their heritage. Ted was always a Democrat with a capital D and yet he always had time to listen and help his district. He fought for the little guy against overwhelming odd. The country could got right or left, but he remained true to his democratic values. To the Dem's-this was a wake up call. IT'S ALL ABOUT THE ECONOMY STUPID!!!!!!Since when do crooks go unpunished. Since when do you punish crooks by giving them money. Since when do you put the crooks in charge. Your bailout is a piece of shit. The whole problem started with the mortgage crisis but tell me-how many home owners have you helped. I can tell you how much money these banking crooks got but we are hard pressed to say how much went to the consumer. And what about consumer protection against credit cards. I recommend truth in advertising and you name the Consumer Debt Relief Bill the KY Jelly Act. The Health Care Bill should be called No Insurance Company Left Behind. The market knows this-that is why Ins stocks have shot up. So Dem's....start prosecuting the guilty-just like you did in the S&L Scandal-don't coddle the bastards. Take FDR's mantle and tax the bastards and tighten the Immigration Laws-the Immigration Laws that make it easy for the business to run out of country with the money and the jobs.

Do I think the Dem's will listen-well they haven't yet. The Dem base is different from the GOP base. We don't walk in lock step and we have been warning them that they were losing us and they ignore us at their peril. And it happens even quicker with the independents.

Happy hunting and watch out for the bears.

[Demeter]

70. To Add Insult to Injury

the Massachusetts citizens have this kind of Health Care Plan in operation, and it's killing them. They know it's no good. The costs are skyrocketing.

[AnneD]

71. Don't piss on me...

and tell me it is raining.

[mbperrin]

77. I think that is the really relevant point being missed by the media!

The proposed federal plan is already in force in Mass, and it sux!

Too bad single payer folks got kicked away from the table right at the start.

[Tansy_Gold]

83. Absofuckinglutely

I caught about 30 seconds of NPR today while waiting for a long stop light, and some bozo was explaining WHY Brown won in terms of the issues, primarily health care, but not in terms of WHY those issues were treated wrong by the Dems.

Of course it's HCR. Because most people know that in the long term, and for most people, HCR is a catastrophe that doesn't even help much of anyone in the short term!! I mean, how much more fucked up can you get?

Secondarily, it's that the focus on HCR for the past YEAR has kept the focus off everything else. JOBS, JOBS, JOBS, JOBS. Bonuses to billionaire assholes whose attitude toward the working people is let 'em eat shit.

Thirdly, it's that the Dems never had 60 votes anyway. Baucus and Nelson and Lieberman fucked this issue up, but later on it'll be someone else who has a personal gripe or a pet project who demands to get his/her way or they'll take the ball and go home.

Fourthly, it's that the Dems have been more interested in appeased the RIGHT -- via this smarmy bipartisanship bullshit -- than in getting things done.

Barry-O needs to take a lesson from Lee Iacocca -- Lead, follow, or get outta the way.



Tansy Gold

[CatholicEdHead]

84. I heard that too on ATC this afternoon

What was missed was a discussion as to why EVERYTHING in the Senate needs 60 votes nowadays and the lack of bipartisanship. Why is EVERYTHING the Democratic Party puts forward needs to be filibustered, no exceptions. :crazy: This is no way to run a government.

[Coventina]

73. Sugar Climbs to Two-Decade High as India May Increase Purchases

http://www.bloomberg.com/apps/news?pid=20601091&sid=a5qTIScQLLls

Jan. 20 (Bloomberg) -- White sugar climbed to the highest price in at least two decades in London on speculation that India, Pakistan and other importers will purchase more of the sweetener as a supply deficit looms.

India, the world’s largest consumer, may import 2 million metric tons in the year ending Sept. 30, up from 225,000 tons in the previous 12 months, said R.L. Tamak, business head for sugar at the Indian unit of Olam International Ltd. White, or refined, sugar prices have more than doubled in the past year.

“Right now, few factories” have refining facilities during the off-season, Tamak said in a telephone interview. “White sugar has to be imported to meet the demand.”

White sugar for March delivery rose $6.10, or 0.8 percent, to $750 a ton on the Liffe exchange, the highest closing price since at least January 1989. The contract touched $760.10, the highest level in at least two decades, in intraday trading.

******************************************************

Posting FYI. It didn't seem to quite warrant a separate thread.

:hi:

[Dr.Phool]

81. Quick! Send them some high fructose corn syrup.

Pretty soon, they'll be too fat to work too.

[UpInArms]

89. hiya, Coventina!

It's great to see you here at the SMW :hi:

how about that sugar price - don't you just love how the commodities get to be played like harps?

[Coventina]

93. "Hi" back and thanks!

:hi:

Yeah, it's crazy. I don't think I would ever want to get into commodities. That's way over my little head! I just don't have the ovaries (or the funds) to play those games.