STOCK MARKET WATCH, Thursday January 21

[ozymandius]

Source: du

STOCK MARKET WATCH, Thursday January 21, 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 20, 2010

Dow... 10,603.15 -122.28 (-1.14%)
Nasdaq... 2,291.25 -29.15 (-1.26%)
S&P 500... 1,138.04 -12.19 (-1.06%)
Gold future... 1,113 -27.00 (-2.37%)
10-Yr Bond... 3.65 -0.05 (-1.25%)
30-Year Bond 4.53 -0.05 (-1.09%)

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

Market Conditions During Trading Hours

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

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Handy Links - Market Data and News:
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Handy Links - Videos:
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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

Market Tops Are a Process, Not an Event
BY CHRIS PUPLAVA

One financial axiom often quoted is “don’t fight the tape,” which goes hand in hand with another axiom, “the trend is your friend.” What the two phrases are essentially saying is to not be premature in anticipating market moves. The phrases advise staying long the market in a rising trend, so as to not miss out on further profits, and not to enter a market before a bottom is in ("catching a falling knife"). While the trend may be your friend, often individual sectors, stocks, or asset classes may already be falling while the broad market indices continue to rise. Therefore, looking for the signs often present at market tops may help investors to know when to fold and begin taking profits closer to the end of a trend. This then helps balance the ever present investment dance between risk and reward, of not taking profits too soon while also not becoming complacent, being the last person standing when the music stops. ....

Economic Breadth Remains Bullish

In a similar concept of deteriorating market breadth (NYSE 52-week high/low data) being used for determining a market peak, deteriorating economic breadth can help shed light on a potential coming recession which should begin to be discounted by the stock market in advance, which typically leads economic activity by six to nine months on average. Three economic breadth measures are highlighted below to determine if the economic health of the United States is deteriorating or not. If they are deteriorating then we can expect a likely deterioration in the stock market, while it would be hard to argue for a major market peak if all three economic breadth measures are improving.

First up is the Philly Fed Sate Coincident Index (PFSCI) that measures the economic health of the nation by measuring the economic activity of all 50 states of the US. The PFSCI has proven to be a great early warning indicator of a coming recession as it has deteriorated significantly before each of the last three recessions. Perhaps even more important for investors is the fact that it has deteriorated before the S&P 500 peaks prior to the onset of the last three recessions, serving as an earning warning for both stocks and the economy. As seen below, the PFSCI is rising strongly as nearly 70% of the 50 states are showing improving economic activity. Supporting the data from the PFSCI is Moody’s Economy.com state surveys which show significant improvement in most of the country while only one state remains in a recession. Unless the trend deteriorates and does an about face, it would appear premature to argue for either a stock market or economic peak ahead.

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

[ozymandius]

2. Today's Reports

08:30 Initial Claims 1/16
Briefing.com 457K
Consensus 440K
Prior 444K

08:30 Continuing Claims 1/09
Briefing.com 4495K
Consensus 4600K
Prior 4596K

10:00 Leading Indicators Dec
Briefing.com 0.5%
Consensus 0.7%
Prior 0.9%

10:00 Philadelphia Fed Jan
Briefing.com 15.7
Consensus 18.8
Prior 20.4

11:00 Crude Inventories 1/15
Briefing.com NA
Consensus NA
Prior 3.70M

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

[Po_d Mainiac]

24. The actual "initial claims" of 482K is gonna leave a mark.

Good thing we don't need no stinkin jobs to recover an economy based on 70% consumption, and 10% manufacturing.
:scared:

[ozymandius]

3. Oil near $78 in Asia on China's strong growth

KUALA LUMPUR, Malaysia – Oil prices hovered near $78 a barrel Thursday in Asia after China, a top oil consumer, declared it has recovered from the global crisis, allaying concerns over its recent crackdown on bank lending. ....

The February contract expired Wednesday, ending down $1.40 at $77.62.

China said its fourth quarter growth surged to 10.7 percent, exceeding most forecasts and lifting 2009's expansion to 8.7 percent. Chinese leaders say stimulus spending will continue but worry about inflation and have ordered banks to curb lending after a record surge in 2009. ....

The World Bank warned Thursday that the global economy would suffer the fallout from the financial crisis for years to come, with growth possibly wilting later this year as stimulus spending fades.

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

[Festivito]

4. 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. Hanna Bell offers a primer on the national debt, link at bottom. Aside, HB can be harder to take than me at times, but it seems a good primer. 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/
DUer primer on National debt

(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

[ozymandius]

6. Democrats propose $1.9T increase in debt limit

WASHINGTON – Senate Democrats on Wednesday proposed allowing the federal government to borrow an additional $1.9 trillion to pay its bills, a record increase that would permit the national debt to reach $14.3 trillion.

The unpopular legislation is needed to allow the federal government to issue bonds to fund programs and prevent a first-time default on obligations. It promises to be a challenging debate for Democrats, who, as the party in power, hold the responsibility for passing the legislation. .....

A White House policy statement said the increase "is critically important to make sure that financing of federal government operations can continue without interruption and that the creditworthiness of the United States is not called into question."

Less than a decade ago, $1.9 trillion would have been enough to finance the operations and programs of the federal government for an entire year. Now, it's only enough to make sure Democrats can avoid another vote before Election Day.

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

[Festivito]

74. Debt: 01/20/2010 12,327,380,804,696.82 (UP 5,273,212,343.86) (Wed)

(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)
= 7,814,389,191,716.30 + 4,512,991,612,980.52
UP 1,498,198,188.82 + UP 3,775,014,155.04

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 308,521,758 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 $39,956.28.
A family of three owes $119,868.83. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 33 days.
The average for the last 21 reports is 10,923,697,301.44.
The average for the last 30 days would be 7,646,588,111.01.
The average for the last 33 days would be 6,951,443,737.28.
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$/day.
There were 75 reports in 112 days of FY2010 averaging 5.57B$ per report, 3.73B$/day.
Above line should be okay

PROJECTION:
There are 1,096 days remaining in this Obama 1st term.
By that time the debt could be between 13.8 and 19.9T$.
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)
01/20/2010 12,327,380,804,696.82 BHO (UP 1,700,503,755,783.74 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 +0,417,551,801,185.10 ------------* * * * * * * * * * BHO
Endof10 +1,360,771,494,933.59 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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
01/20/2010 +001,498,198,188.82 ------------*********

79,773,562,798.58 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/
DUer primer on National debt

(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=4235273&mesg_id=4235289

[ozymandius]

5. Obama gets voters' message: It's jobs, jobs, jobs

...
The White House in the new year already had begun focusing greater attention on the nation's angst and anger over a range of economic issues, including unemployment persisting near 10 percent, government expansion, Wall Street excesses and federal deficits.

Officials said Wednesday that that shift will intensify now, an acknowledgment that Tuesday's stunning Senate election of Republican Scott Brown in the Democratic stronghold of Massachusetts requires at least some course correction in Obama's still-young presidency. ....

Obama and his top aides huddled with each other and Capitol Hill allies throughout Wednesday to plot how to rescue the health care legislation and to start mapping a way forward leading into this fall's midterm congressional elections.

Their conclusion was that the economy — jobs specifically and the broader topics of the nation's fiscal and financial health — must be priority No. 1. ...

He said as much in a first-year anniversary interview with ABC News, acknowledging that he had made a mistake in not making his aims clear to the American public — a failure he already had planned to correct but which now had become more imperative.

http://news.yahoo.com/s/ap/20100121/ap_on_bi_ge/us_obama_economy

---

Forget the Clue Stick. Did the whole damn Clue Tree fall onto the West Wing?

[Demeter]

14. I'll Believe It When and If I See It

The whole damn forest could fall, and Rahm would still be clueless. He'd just cuss out the trees.

[Po_d Mainiac]

21. I'm working the woodlot this time of year...He's invited to attend..if he misses the tree

The tractor will get his attention....and the need for Health Care
:donut:

[tclambert]

20. Obama needs a little anger, a little impatience.

He's been too tolerant, too accommodating. When people see you are willing to bend over backwards to try to make everybody happy, there are some who will keep pushing until your ears touch your heels.

At some point, he needs to say, "Enough! This is as far as we bend, and no farther." Bush would have done that before any discussion began. A little discussion is better. But at some point, a good leader must say, "We've talked enough. Now it's time to act." And he's got to say it with a little steel in his tone of voice.

My big criticism of Clinton was that he loved compromise too much. There are times and circumstances where you need to stop the compromising, stop dumbing down the policies into mediocrity. With Clinton, it was especially obvious in his role as Commander-in-Chief. The military doesn't respect compromise. They want a boss who will give orders. "Don't Ask Don't Tell" should have been "Gays Can Now Serve in the Military. That's an Order!" Over and done in two minutes.

With Obama, it's his dream of bipartisanship. He keeps compromising with right wingers, trying to please them, yet they still won't vote for his programs. Quit playing around. Demand health care! Demand jobs programs! Get it done already!

[Tansy_Gold]

23. Barry wants everyone to love him

If you've ever lived with or around someone like that, you know how frustrating they can be.

I don't know what it is with people like that, but they seem to be incapable of accepting the fact that sometimes, some people are just not gonna like you, and it's their problem, not yours. It's time to get over it and, to coin a phrase, move on and get things done. At the end of the game, no one will care who likes you and who doesn't, but whether or not you won.



Tansy Gold, glad to have her internet back after 16 hours without.

[tclambert]

60. 16 hours without the internet? Were you starting to twitch?

Rocking and moaning? Fingers kept reaching for an invisible keyboard? You weren't offering naughty favors to the local tech guy, I hope.

[Tansy_Gold]

61. I slept through 6 of the 16.

And I have plenty of work to keep me busy, though I admit I did miss the distraction.

And now, after this scotus decision, I almost wish I'd never heard of the internet.



Tansy Gold, angry beyond words

[Demeter]

28. Like This

[ozymandius]

7. GOP lawmaker: NY Fed must turn over AIG documents

...
Rep. Darrell Issa., R-Calif., said Wednesday that the New York Fed refused to provide documents related to the bailout of American International Group Inc. from before September 2008 or after May 2009. The committee already has received 250,000 documents from the period between those dates, said a spokeswoman for Rep. Edolphus Towns, D-N.Y., chairman of the House Committee on Oversight and Government Reform. ....

The committee wants details on the AIG bailout, which was managed by the New York Fed under Treasury Secretary Timothy Geithner. Lawmakers want to know more about Geithner's decision to funnel billions from AIG to other big banks to satisfy AIG's debts to them. An earlier watchdog report said Geithner's decision not to negotiate might have cost taxpayers billions.

The committee subpoenaed the New York Fed last week for documents including Geithner's phone logs and notes. It demanded all New York Fed documents related to the deals that paid off AIG's debts to banks including Goldman Sachs Group Inc. Geithner is scheduled to testify at a committee hearing next Wednesday. ....

Top officials from the New York Fed, Treasury and AIG will testify along with Geithner next week.

http://news.yahoo.com/s/ap/20100121/ap_on_bi_ge/us_aig_new_york_fed

[ozymandius]

11. AIG Took Four Tries on Filing as Fed Asked to Withhold Data (The coverup reeks!)

...“American International Group Inc. submitted four rounds of regulatory filings in six months, with more than 1,000 redactions, as the Federal Reserve Bank of New York pressed the insurer to withhold data about bailout payments to banks.

The insurer made an initial filing on Dec. 2, 2008, about Maiden Lane III, the taxpayer-funded vehicle that bought assets from AIG’s trading partners. After the Securities and Exchange Commission asked for more information, AIG amended December filings three times. The last set of amendments, in May 2009, included more than 400 redactions, and the SEC granted the company permission to withhold the omitted data until 2018. ....

“This has been terribly mishandled,” said James D. Cox, a professor of corporate and securities law at Duke University School of Law. “There’s this pattern that emerges that the New York Fed, for a variety of reasons including not causing nervousness about who was an AIG counterparty, covered up its rather heavy-handed approach to the bailout.”

....

AIG filings on Dec. 2, 2008, and Dec. 24, 2008, refer to, while not including, a so-called Schedule A, which identifies the banks that bought credit-default swaps from the New York- based insurer to guard against losses on holdings tied to subprime mortgages. The Schedule also lists collateral AIG was forced to surrender as the securities declined in value.

AIG said in a draft of the Dec. 24 filing that it paid banks “100 percent of the par value” for securities tied to the swaps. The New York Fed crossed out the wording in the draft, Bloomberg News reported this month.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aRexIMpLtIL4&

[Demeter]

15. It's Really Beginning to Look Like Covering Up an Indictable Offense

Nothing like having a Fed Reserve run by a guy with rubber morals,

[ozymandius]

16. Zero Hedge suggests broadening the scope of the inquiry.

1. All documentation, reports, presentations, phone records, voice mails, facsimiles and all other relevant information between AIG, the Federal Reserve and Weil Gotshal, alleged bankruptcy counsel to AIG;

2. All documentation, reports, presentations, phone records, voice mails, facsimiles and all other relevant information between AIG, the Federal Reserve and Davis Polk, legal advisor to NY Fed;

3. All documentation, reports, presentations, phone records, voice mails, facsimiles and all other relevant information between AIG, the Federal Reserve and Morgan Stanley, financial advisor to NY Fed;

4. All documentation, reports, presentations, phone records, voice mails, facsimiles and all other relevant information between AIG, the Federal Reserve and Simpson Thacher, legal advisor to AIG Board;

5. All documentation, reports, presentations, phone records, voice mails, facsimiles and all other relevant information between AIG, the Federal Reserve and Sullivan & Cromwell, legal advisor to AIG.

Only after all this information has been compiled and disclosed can you and your committee hope to make an informed decision on all the conflicts of interest inherent in the decision leading to the AIG bail out and that of its counterparties.

http://www.zerohedge.com/article/darrell-issa-accuses-frbny-contempt-selective-document-disclosure

[ozymandius]

8. Home construction falls; wholesale prices edge up

WASHINGTON – The housing market remains a significant risk to the economy, data Wednesday showed, as bad weather across much of the country hammered the construction industry.

Along with icy storms, the real estate recovery is facing man-made headwinds. On Wednesday, the government said buyers will face higher fees and tougher standards for home loans backed by the Federal Housing Administration, a popular source of loans for first-time buyers. ...

Construction of new homes and apartments fell 4 percent in December to a seasonally adjusted annual rate of 557,000 from an upwardly revised 580,000 in November, the Commerce Department said. Applications for future projects, however, increased strongly as the industry ramps up for the spring selling season. ...

Meanwhile, inflation pressures at the wholesale level eased in December as a drop in energy prices offset a big jump in food costs.

http://news.yahoo.com/s/ap/20100120/ap_on_bi_go_ec_fi/us_economy

[ozymandius]

9. Stock futures point lower ahead of Goldman results

(Reuters) - Stock index futures pointed to a lower open on Thursday, ahead of a slew of earnings news, with futures for the S&P 500 down 0.04 percent, the Dow Jones industrial average 0.1 percent lower and the Nasdaq 100 futures down 0.2 percent.

Before the bell, investors will be braced for fourth-quarter numbers from Goldman Sachs, with analysts in a Reuters survey forecasting the company to earn $5.19 a shares compared to a loss of $4.97 a year ago. Goldman Sachs shares in Frankfurt advanced 1.2 percent.

After the market close, investors will eye Google's fourth-quarter earnings, with analysts in a Reuters survey expecting the company to earn $6.48 a share compared to $5.10 a year ago.

Other companies due to report include American Express, Xerox, Capital One and UnitedHealth Group.

http://www.reuters.com/article/idUSTRE6030ZW20100121

[ozymandius]

10. Obama to target excessive financial risk-taking

WASHINGTON (Reuters) - President Barack Obama, reeling from an election defeat in the Senate, will propose stricter limits on financial risk-taking on Thursday in a move that may recall Depression-era curbs on banks.

The president will announce a series of measures to cut down on excessive risk-taking as part of a revamp of the country's financial regulatory system, a senior Obama official said on Wednesday. ...

REINSTATING 1930S LIMITS

The Obama official did not provide details of the plan, which would require congressional approval. But U.S. lawmakers are already reviewing measures that, in some cases, recall the scope of financial reform enacted after the Great Depression.

Democratic Senator Jeff Merkley told Reuters earlier this week that there should be a firewall to separate risky trading activities and normal bank-lending.

A more aggressive proposal was put forth last month by former Republican presidential nominee John McCain and Democratic Senator Maria Cantwell. Their measure would reinstate the 1930s-era Glass-Steagall limits on banking by barring large banks from affiliating with securities firms and being in the insurance business.

http://www.reuters.com/article/idUSTRE60K0RW20100121

[ozymandius]

13. Obama Proposes Volcker-Style Financial Reform

From Economist's View:

It looks like the political winds have shifted away from Tim Geithner/Larry Summers and toward Paul Volcker/Elizabeth Warren:

The president, for the first time, will throw his weight behind an approach long championed by Paul A. Volcker... The proposal will put limits on bank size and prohibit commercial banks from trading for their own accounts — known as proprietary trading. ...

Mr. Volcker flew to Washington for the announcement on Thursday. His chief goal has been to prohibit proprietary trading of financial securities, including mortgage-backed securities, by commercial banks using deposits in their commercial banking sectors. ...he concern is a new type of activity in which financial giants like Citigroup, Bank of America and JPMorgan Chase ... operate on two fronts. On the one hand, they are commercial banks, taking deposits, making standard loans and managing the nation’s payment system. On the other hand, they trade securities for their own accounts, a hugely profitable endeavor. This proprietary trading, mainly in risky mortgage-backed securities, precipitated the credit crisis in 2008 and the federal bailout.

link here

---

This blog post adds more of the Volcker angle to the original news item. As for the shift away from the ruinous direction of Geithner and Summers - I'll reserve my opinion until I see specific legislation - less the pretty words we've become accustomed to hearing from Obama.

[DemReadingDU]

32. It's like they'll see how receptive people are to Volcker-Style Reform

before there might be some legislation. Rather than enact the laws and prosecute those involved with financial fraud.

[Demeter]

37. If Volker's Honest, He'll Push for Good Reforms

He wants a legacy.

[Robbien]

55. The Faces Of Larry Summers And Paul Volcker Say It All

Pictures at
http://www.businessinsider.com/look-whos-smiling-now-2010-1


have Volcker beaming and Summers not so much.

The same site has an article up which says Obama's plan was leaked to banks yesterday which is why smaller banks have not taken such a big hit in this selloff.

http://www.businessinsider.com/some-traders-has-inside-scoop-on-obamas-new-banking-regulation-2010-1


But I agree, this seems to be too anti-capitalistic for Obama's usual stance. Lets see the legislation.

[Demeter]

69. "Life is Strange, A Man Can Change

the years may find me basking in the sun.
But all the same, I'll dress for rain"





from "It was always you", of the musical Carnival.

[ozymandius]

12. “President Obama: It’s Not Just the Words!”

Posted at Naked Capitalism:

The post-mortems following the Massachusetts Senate by-election are coming in fast and furiously, but by far the most instructive remarks come from the President himself. He clearly doesn’t get it.

A majority of Obama voters who switched to Brown said that “Democratic policies were doing more to help Wall Street than Main Street.” A full 95 percent said the economy was important or very important when it came to deciding their vote. Surprise, surprise, policies do matter. ...

Having persuaded himself that his powers of oratory can solve any problem (even minus the teleprompter?), the President patronizingly suggests that his “change” policies were not the problem, but that he failed in the presentation of them. It’s more likely that people were profoundly upset that with the “stuff” that the President and Congress were getting done, and his failure adequately to address the immediate crises that he faced in his first year in office.

When Obama continued the Bush/Paulson moves on the bank bailouts, that was the beginning of the end of his “change” Presidency. Health care was simply the confirmation as large proportion of his base was prepared to cut him slack waiting to see what he would do with the issue. In the end, we got a terrible bill, and no amount of salesmanship or nice speeches will change the substance. It does not even deliver on the promise that got most people prepared to hold their collective noses and vote for it, that of eliminating the practice of rescinding policies on the basis of “pre-existing condition”. Read the bill. As Yves Smith has highlighted, it allows an out for fraud. Guess what? Not telling your insurer of a preexisting condition, EVEN ONE YOU DID NOT KNOW ABOUT, is fraud! Unbeknownst to most, fraud is the means under current law that insurers deny coverage. The bill preserves the status quo here. A nursing organization with 150,000 members opposed the bill for this very reason. ....

How is further enriching insurers and Big Pharma (which the bill does) going to solve the cost problem? Similarly, how has throwing ample financial subsidies at Wall Street, helped the average citizen on Main Street?

http://www.nakedcapitalism.com/2010/01/president-obama-its-not-just-the-words.html

[Tansy_Gold]

25. I need to go off somewhere and scream into a pillow for about an hour

While I'm doing that, can someone keep an eye on

[Demeter]

29. Sending You Virtual Chocolate

[Dr.Phool]

40. And dirt.

[Tansy_Gold]

56. thanks, but i already have 1.25 acres of dirt, now turned into sucking soggy

mud by about 4 inches of rain in the past three days.

the dogs aren't crazy about it, although i have to admit it's kinda funny to watch 75 pounds of aussie shepherd tiptoeing through the puddles to pee. he does NOT like wet feet.




tansy gold, very depressed over the scotus decision and everything else in general

[Robbien]

39. So Obama is doing great things but we are so dumb to understand and all he's got to do is

explain it better to us peons.

Just justification for his plan of continuing to do the same things as before but putting the blame for its failure on us for our ignorance.

[Demeter]

17. Good Morning, Ozy and Friends!

It's up to 22F and the last of the snow is old and crusty. I heard a bird singing, claiming nesting territory. Maybe winter is leaving early?

I think Reality is sinking in at last. All the chart-watchers are seeing that "historical trends" don't mean a thing: if there's no change on the ground, there will be no change in the data.

And since Change was what was marketed, people have a perfect right to be disappointed, livid and rebellious. Policies matter, especially the bad ones.

Oh! And I've been reading my eyes out, and I'm down below 100 emails!

[AnneD]

22. Morning Marketeers...

:donut: I am going to do a test and I bet I can guess your age within 10 years. How many of you remember the phrase...Banned in Boston. When I was a young sprout the phrase banned in Boston assured a writer that he had a best seller on his hands. Houston has now reached those hallowed grounds. A religious group in Amarillo is asking folks to boycott Houston because 1) We voted an openly gay mayor in office 2) Planned Parenthood is building a 6 story building. The comparisons to San Francisco abound. Now I have been to San Francisco. While there are a few similarities, and it is flattering-San Francisco we are not. They even made a website WWW.boycotthouston.com. I hate to tell the Rev. but we had to enlarge the center to accommodate all the women coming in to us from Abilene and outlying states.Most of the floors are office space because our center handles so much work as it is the only abortion service provider for many nearby states. In a perverse way we are proud of this designation-we are nothing if not honest. And as a Houstonian, we are very happy with our mayor and don't cotton to someone else telling us what to do or what is best for us.

On another note, we are going through a bunch of bureaucratic turmoil. They have withheld a promised bonus from the teachers and staff at the school. They are accusing our staff and old principal of cheating on the damn Taks. This was investigated and dismissed last year. Well we have a new superintendent and this school is a strong union school and he wants to make an example of us. They are looking at everything with a fine tooth comb. I will do very little posting until lunchtime to avoid any complaints. How bad is it...I went out and bought a tape recorder for my protection. God I hate to do this juvenile crap but I am note going to be a patsy either,:eyes:. Gee, why do they make it so hard to do your job.

Happy hunting and watch out for the bears.

[Demeter]

26. I Don't Know Why, But It Happens Here, Too

I have a teacher friend who helped the Kid enormously. She works in Special Ed. for psychopaths (bosses, not the kids). She photocopies and hides all the documentation pertaining to her very vulnerable kids, since it has a habit of "disappearing" if she's out sick-- the Boss is always looking for a reason to fire her.

[AnneD]

73. They are conducting a McCarthy style investigations.....

they got rid of my first principal and today got rid of the HS principal-the best one I ever worked for. It is a total set up on the district level.It is a union busting land grab. It was so bad that I went out last night and got a digital recorder to protect myself. I have already used it. Seems they took away the "bonus" for the staff for for last year for an incident that happened this year. Folks are so angry.

With out even a discussion, the board vote to accept the New Superintendent proposal to use students poor Taks results as an excuse to fire a teacher. Everyone is up in arms about it. All I see ahead is lawsuits. We don't tend to strike but we may.

[TalkingDog]

43. Birds. There's a reason February 14th is Valentine's Day.

Our feathered friends need a certain amount of light in order for their hormones to be at the proper level for...ahem...procreating. So do we for that matter, but our systems aren't so finely attuned as the birdies.

By the 14th, good old Sol has returned with enough force that mating can commence. So yes, they are staking out mates and territories, nesting behavior for the utterly accurate lack of a better term.

And in the utterly comprehensible way of things (people really don't give our ancestors enough credit) along about Easter (Eostre relating to east/dawn/light) time, there is a profusion of eggs and bunnies.

Stock cycles and trends should be so tied to a natural rhythm. But, abominations will happen.

[Demeter]

54. If it actually WERE Feb. 14th, that would be normal

this is 3-4 weeks way too early. And it's not warm here, either.

[Dr.Phool]

57. I think the robins are on their way back to you.

For the last few weeks, my yard and trees were full of them. Hundreds and hundreds of them. Since the weather broke, they're all gone. Unless it got too cold here, and they headed for Cuba. The little Commies.

[TalkingDog]

58. They wear those dull gray feathers on top, but it doesn't hide

all that Red.

[TalkingDog]

59. Haven't you ever heard of flirting?

Or Blirting in this case....I guess.....

[Demeter]

18. China's economy expands 8.7% in 2009, exceeding target

http://www.marketwatch.com/story/chinas-economy-expands-87-in-2009-2010-01-20?siteid=YAHOOB

Chinese data released Thursday showed economic growth powered higher in the fourth quarter, putting the full-year figure above forecasts, while inflation surprised to the upside, suggesting recovery is continuing but fiscal and monetary policy may need to be tightened.

China's economy expanded 8.7% in 2009, slightly ahead of expectations and exceeding the official growth target of 8% for the year, as massive fiscal stimulus and bank lending helped the economy escape recession in spite of a drop in global trade.

The full year growth rate was also ahead of consensus expectations for an on-year rise of 8.5%, but below the 9.6% recorded in 2008, according to data released by the National Bureau of Statistics.

Hong Kong bureau chief Peter Stein speaks with Asia M&A reporter Rick Carew about how draft guidelines might affect the way yuan-denominated private equity funds set up by the likes of Blackstone Group and Carlyle Group do business in China.

For the fourth quarter, China's gross domestic product expanded 10.7% from a year earlier, slightly missing expectations for a 10.8% expansion in poll by Dow Jones Newswires, and 10.9% growth in a separate survey by Reuters...

Prices up

The data also showed inflationary pressures increasing, with the consumer price index rising 1.9% in December, while the monthly producer price index also ended a year-long declining trend to grow 1.7%.

The figures were well above forecasts for a CPI gain of 1.7% and a PPI rise of just 0.5%, according to average estimates from the Dow Jones Newswires survey.

"Price pressures appear to have a reasonable degree of autonomous momentum," said SocGen Asia-Pacific economist Glenn Maguire in Hong Kong.

He added that China's growth in the first half should benefit from buoyant fixed-asset investment as government infrastructure projects move forward, while the weak comparison base last year should have a "flattering" effect on a range of economic numbers this year, but also signal heighten inflation. SocGen estimates that investment accounts for about 45% of China's GDP.

The upside surprise for inflation sent stocks lower in many markets across Asia on fears Beijing would rein in new bank lending.

For the full-year, however, CPI declined 0.7%, while PPI dropped at a steeper 5.4%...

MY FASCINATION WITH CHINA IS BECAUSE CHINA IS BIG ENOUGH TO EAT EVERYBODY'S LUNCH AND STILL FEEL HUNGRY. SORRY IF IT'S GETTING ON NERVES.

[Demeter]

19. Crash of 2008 winner says bear market is back

http://www.marketwatch.com/story/crash-of-2008-winner-says-bear-market-is-back-2010-01-21?siteid=YAHOOB

Proponents of a weird investment theory say another crash is coming. Even weirder: they were right last time.

I wrote my first MarketWatch column on Robert Prechter and his family of investment letters devoted to the esoteric Elliott Wave theory. ( See April 26, 2002 column.)

It got a lot of very angry email. Prechter's superbearishness was very unpopular, and that time very unprofitable. I judiciously pointed out that Prechter was trying to spot junctures, the hardest of all market tricks, and noted "the prize for calling one of these epochal shifts is enormous, as it was in the early 1980s" -- when Prechter had been an early bull.

It took a long time. But it happened during the Crash of 2008, during which the Elliott Wave Financial Forecast was one of the very few letters to make money. ( See Dec. 18, 2008 column.)

For a while, it looked as if the Elliott Wave was on a roll (if waves can be on rolls). EWFF was one of the first letters to call for a stock market rebound. ( See March 4, 2009 column.) In mid-summer, it argued that the Dow could reach 10,000 -- but that the bear market would then resume, ending in devastating deflation. ( See June 29, 2009 column.)

Well, the Dow did reach 10,000. What now?

EWFF didn't benefit fully from its prescience because it bailed out too soon. ( See Aug. 31, 2009 column.) Over the past 12 months, EWFF is down 5.05% by Hulbert Financial Digest count, versus a 28.3% gain for the dividend-reinvested Wilshire 5000 Total Stock Market Index.

Note, though, that over the past three years, the letter is up 3.8% annualized versus a negative 5.25% annualized loss for the total return Wilshire 5000. And over the past ten years, the letter is up an annualized 1.39%, versus negative 0.27% annualized for the total return Wilshire 5000. Many more popular letters have done much worse.

What happens now could hardly be worse, according to EWFF. It says: "2010 is the year when the bear market in stocks returns in full force." It compares the situation to the short-lived rebound after the initial break in 1929, and says that "a meaningful close" below 10,489 should see a similar collapse to new bear market lows.

EWFF also expects the spread between high and low-grade bonds to experience "a record widening" and thinks gold will fall "below $680." It does expect a rally in the dollar, but that is merely an aspect of deflationary forces getting out of control. Prechter argues, referring readers to his recent book "Conquer The Crash," that the yield on Treasury bills might actually become negative and for that reason advocates holding greenbacks.

It's difficult to summarize quite why all this is going to happen because Prechter and his colleagues explain it in terms of their complex cycle theory -- which, however, is subject to readjustments and reinterpretation. This is one reason that Elliott Wavers are so roundly disliked by so many investors.

Some good news, though: Prechter says his cycle work suggests that stocks and gold will finally bottom in nominal terms in 2014. After that, gold will outperform stocks. This, he writes, "may indicate a political decision, to be made at that time, to force inflation through currency printing."

Elliott Wavers place a lot of faith in parallel social developments. EWFF writes that gold, which it describes as "a bull market sport," is going into decline although those involved don't realize it...

[Demeter]

27. Rampant fraud in short sales By Edward Harrison of Credit Writedowns

http://www.nakedcapitalism.com/2010/01/rampant-fraud-in-short-sales.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29


CNBC’s Diana Olick has the breaking story on alleged fraud in the mortgage industry. She has been writing about this for a few days now. See Big Banks Accused of Short Sale Fraud – Realty Check with Diana Olick at CNBC’s website.

Basically, second liens on properties like home equity loans have a blocking interest that can prevent a home from being sold for less than its mortgage value – a so-called short sale. If they refuse to agree to a primary mortgage holder’s short sale, they can send a homeowner into foreclosure. This sets up a conflict between the primary mortgage holder and the secondary liens.

However, these piggy back mortgages and HELOCs get wiped out in a foreclosure or bankruptcy. So, some second lien holders are therefore now taking cash settlements from the homebuyers or agents on the side as blackmail, threatening to derail the short sale. This is also known as fraud.

Why are these guys doing this? Two reasons. Money and fear.

See What are the legal rights of lenders and homeowners in foreclosure? for a case where the holder of the secondary lien was stiffed because MERS (the central repository which tracks changes in mortgage ownership and servicing rights) was not notified of foreclosure as it was not deemed a “contingently necessary party.” That’s the fear side.

The money side of things is simple. Banks like Bank of America, JPMorgan Chase, Citigroup and Wells Fargo have enormous exposure to HELOCs. That’s why banks were cutting HELOCs in the lead up to the crisis in 2008 and have not increased them since. And from a Tier 1 capital perspective, many regional banks are worse.

By the way, Olick finished a second post and Short Sale ‘Fraud’ Follow yesterday saying:

I also went on another real estate Web site that specializes in Realtor blogs, and there was a huge string/conversation of real estate agents explaining to each other how to keep second lien payments in short sales off the HUD settlement statements. Right there, in black and white, on the web.

I hope someone in regulation land is listening!


VIDEO AT LINK

OTHER SUPPORTING LINKS:

http://www.cnbc.com/id/34877347

...About 12 percent of all home sales by the end of 2009 were short sales, according to the National Association of Realtors....

http://www.cnbc.com/id/34937452

...Due to some technical difficulties on air Friday, I was unable to show a couple of MLS listings that were sent to me that clearly, on the public listing, demanded cash to the second lien holder outside of settlement as part of the transaction. Just so you know, that's illegal. Yes, a second lien holder can demand payment on the loan, but it has to be documented as part of the sale....

http://www.creditwritedowns.com/2009/10/what-are-the-legal-rights-of-lenders-and-homeowners-in-foreclosure.html

....All of these questions arise because of the convoluted process we have for mortgages as a result of the mortgage-backed security market. These questions have only become acute because the rise in foreclosures has made them a serious issue....

http://en.wikipedia.org/wiki/MERS

[Demeter]

30. Whoa Nellie! Looks Like We're Tobogganning Without a Sled Again

No snow, either. DOW down 122 at 10:30

[Robbien]

53. It is funny that before the election Wall Street commentators

were saying that it looks as if Dems would lose, therefore buy healthcare stocks since the healthcare bill would be in trouble.

How do they keep their jobs? Promoting the idea that healthcare stocks would rise in price if the bill doesn't pass.

[Demeter]

31. So Why is the Fed So Desperate to Keep Maiden Lane III Details Secret?

http://www.nakedcapitalism.com/2010/01/so-why-is-the-fed-so-desperate-to-keep-maiden-lane-iii-details-secret.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29


You will hear much more about this topic (AIG and Fed secrecy) here on Friday, but Bloomberg reports the lengths to which the Fed has gone to try to keep the details of Maiden Lane III, the entity created to buy drecky CDOs from AIG counterparties who received 100% credit default swap payouts.

Get a load of this, the Fed was arguing that info IN THE PUBLIC DOMAIN should be treated as confidential! The Ministry of Truth in action:

After media reports that month named some of AIG’s counterparties, AIG executives wrote a draft of a letter to the SEC saying that it intended to withdraw its January request for confidential treatment. Later that March, the New York Fed sent edited versions of another request for confidentiality and provided arguments to help AIG make the case. The SEC granted confidential treatment in May of 2009.

This whole affair puts the Fed in a bad light indeed. The article details how the AIG, pushed by the Fed, made four efforts with the SEC to get information regarding the AIG payouts and Maiden Lane III purchases redacted. AIG seems reluctant, and the SEC, to its credit, did not roll over (although one can argue it in the end conceded too much ground).

And the arguments made by the Fed are rubbish:

On March 5, 2009, Fed Vice Chairman Donald Kohn testified before Congress that disclosure of the counterparties’ names would harm the insurer’s ability to do business. That month, AIG executives told regulators they had no objection to disclosing counterparty names

Yves here. So let’s be clear, the Fed lied to Congress. If there was the potential for this disclosure to damage AIG, they’d be the first to be keen for any excuse to preserve confidentiality.

So then this becomes Iraq, new excuses being offered for a dubious course of action:

“If such information were to become available to traders in such securities, traders would be able to use such information to their advantage, and undercut the ability of Maiden Lane III to sell those assets for the maximum total return, to the detriment of taxpayers and AIG,” the New York Fed said in its Jan. 19 statement.

Yves here. This is illiquid, bespoke paper. If Maiden Lane were to try to sell it, any buyer is going to make an assessment of its fundamental value. And the reports I have gotten is that there is no appetite for CDOs, and for reasons that are unlikely to change. They are too costly to evaluate relative to the potential bargains that might be available. You can do rough pricing using proxies for the various types of collateral, but if you are wrong, you can wind up with an instrument that really is worthless. Why bother taking the risk, particularly given how illiquid the paper is?

In the end, the Fed sought over 1000 redactions and got in excess of 400.

So we have the specter of one regulator pushing a public company to operate in a way it clearly is not comfortable with, to get another regulator to bend the rules. If this isn’t further proof the Fed needs to be leashed and collared, I don’t know what is.

OH, BUT THE FED'S MADE SO MUCH MONEY OFF THESE! BILLIONS AND BILLLIONS! AND IT'S GONNA TURN THE PROFITS OVER TO US TREASURY, YES, INDEED!

I'M READY FOR MY MEDICATION, NOW, NURSE.

[Demeter]

41. FT As Shameless Fed-Booster, Runs Incredible Claims re Results on AIG Assets

http://www.nakedcapitalism.com/2010/01/ft-joins-ranks-of-shameless-fed-boosters-runs-front-page-story-with-incredible-claims-re-aig-cdos.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Time Magazine still gets first prize for shameless pandering to the interests of the elites (in my childhood, it was called the Establishment) with its designation of Bernanke as “Person of the Year” and the fawning accompanying story. But the FT has a piece tonight that is almost as bad, because unlike Time, the FT knows better.

It starts with the headline: “Fed makes ‘a killing’ on AIG contracts“. Huh? That says the Fed made money, a lot of money. But read the article, and the claim is patently ridiculous:

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….

Yves here. So who are these people? Presumably at the Fed, or BlackRock, the asset manager. Hardly independent, in other words. But when you dig, the representation is vastly worse than even this lame bit of cheerleading suggests.

The way this deal worked is the Fed paid 100% of the notional value of CDS written by AIG on AAA to AA- rated CDO tranches held by various banks. The Fed then took the CDOs, which were worth a good bit less, and stuffed them in Maiden Lane III, which is an off balance sheet vehicle of the Fed. Sorta like Gitmo, “assets” go in and nothing will ever come out (or maybe not, as we discuss in due course).

Those CDOs were initially valued at $29.6 B. Now mind you, this stuff is all marked to model, so the idea that its model value will be realized is a stretch to begin with. Recall when Merrill Lynch tried to unload some CDOs. They wound up with a hedge fund, Lone Star. The deal was widely reported as yielding Merrill 20 cents on the dollar. Wrong. Merrill got only 5.5 cents in cash, the rest of the “proceeds” went back loan to Lone Star, secured by the CDO! (the transactions were netted, but this gives you a better picture). That means if the CDO does badly, Lone Star will simply default, and Merrill will get a worthless CDO back.

Now this is what we get from the Financial Times:

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.

Now even if this were true, this turn of events hardly constitutes a “killing” That expression implies a large profit. At best, this is the reduction of a loss. The claim is that the Fed initially lost $32.5 billion; now, if you believe this plant, the losses have been shaved to $17 billion.

But that is inconsistent with everything the Fed has reported officially. Per its H.4.1 release of January 14, 2010 :

SEE TABLE AT LINK

The table shows a value of $22.4 billion. That’s a far cry from $45 billion. Let’s do some very basic forensics. First, let’s look at the portfolio as of June 30. Note it comes to a total of $20.8 billion; Maiden Lane LLC as of then held about $1.6 billion in cash, which is not reflected in this tally. Look at the ratings columns:

GRAPH AT LINK

It does not take much in the way of powers of observation to see that the Fed is claiming that securities rated BB- or lower have a value worth 69% of the portfolio. Recall that CDS written by AIG were against CDOs originally rated AAA to AA-. This stuff is largely, if not entirely, toxic sludge. I can’t comment on these particular vintages, but most AAA ABS CDOs that have been this severely downgraded are trading for somewhere between 20 cents on the dollar and zero. And the “high grade” label is more than a bit misleading. “High grade” CDOs did start with higher quality assets than “mezz” CDOs (high grades used AA and A subprime tranches, mezz used BBB), but high grade structures were much more aggressive (lower loss cushions, much higher percentages of lower rated CDO tranches permitted, much lower quality “other” collateral tolerated), and so tended every bit as bad, if not worse, losses than “mezz” subprime CDOs.

But note, in the AAA column, that it claims that 16.9% of the portfolio value is in AAA instruments, and that is almost entirely commercial real estate CDOs (16.7%). Frankly, this stuff is probably the only stuff worth anything…. you’d think its percent of the total would be higher.

Now notice the commercial real estate CDOs look to be in pretty good shape, ratings-wise…but that was then. Now let’s look at Sept 30. This time, the Fed reports a fair value of roughly $23.5 billion, which includes a tad over $500 million in cash. That gives us net value of $22.9 billion for the instruments. That’s already noteworthy, the Fed is claiming a 10% gain in a mere quarter. But look what happened to the commercial real estate CDOs:

GRAPH AT LINK


Before, 16.7% of the “fair value” of the portfolio was commercial real estate CDOs; most have apparently been downgraded. That amount has fallen to 1.9%. And the amount of A rated CDOs has increased, from 3.0% to 17.9%.

Now this looks really peculiar. It would be reasonable to think that that much moving form AAA to A would also have an impact on the value of the assets. Yet it appears that 14.8% of the portfolio was simply moved from the AAA to A bucket with no meaningful revaluation (in fact, 14.8%, the reduction of the AAA bucket, plus 3.0% is actually 17.8%. so they decided to say it was worth more, or this may be a function of rounding. Note the AA commercial real estate CDOs percentage remained unchanged.) This outcome is simply absurd, particularly given that the portfolio is also alleged to have increased in value over this period.

Why is that contention utterly unbelievable? And the one we highlighted in from the FT, that the assets were worth $45 billion, even more absurd? While AAA subprime bonds have rallied, the toxic sludge (and per the Fed’s own admission, 75% of the portfolio is toxic sludge), has not moved much. Here are the values for Markit’s ABX 06-1, which would approximate the collateral value of a good chunk of the CDOs, and which is much more credit sensitive:

12/20/07: 34.5%
9/18/08: 9.03%
6/25/09: 4.00%
10/1/09: 4.23%
1/15/10: 4.28%

Do you see any 100%, or even 10%, price appreciation in this series? And we’ve looked at some of the initial marks on the AIG exposures we can identify, and as of November 2007, they correspond pretty well with the ABX, so that appears to be not a bad proxy.

So we have every reason to believe the values reported to date have been high, and absolutely no reason to believe these probably inflated values are actually half the “real” value, as the FT’s sources claim.

There’s another curious item here. The FT reports, which partially confirmed with the Fed’s reports, that:

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.

The Fed’s reports on AIG and its H.4.1 reports do show a principal balance for the loan to Maiden Lane that is now $17 billion, which implies a substantial paydown. But the idea that those came merely from “throwing off cash” is quite a stretch.

If you look at the March quarter report, it shows a loan repayment of $304 million. It also shows an increase in cash and cash equivalents of $1.1 billion. That is already peculiar.

AAA and AA CDOs, whether cash or synthetic, have very low yields, say 20-30 basis points over Libor. So even if these deals were all paying interest, Libor is now at record lows, a mere 25 basis points for three month Libor on January 20. If you go back a full year, it was 1.13%, but six months ago, was 50 basis points. So if you assume $62 billion, and even the value of Libor a full year ago, plus 30 bp, you get about $900 million in interest, or about $225 million a quarter. That is as good as it gets. And Libor has fallen sharply since then.

Well, you might say, principal repayments! Good guess, but wrong. The high-grade CDOs consisted to a large degree of AA suprime paper. Any principal payments on subprime bonds are still going mainly to the AAA tranches. Any payments to AA tranches would be not high at all.

So the only explanation is that the Fed, or BlackRock, the asset manager, is liquidating the CDOs, which calls the valuation of the remaining holdings even more into question. But liquidation is consistent with the rising payouts in a deteriorating real estate environment.

The June 30 report shows a $1.6 billion repayment, as well as an increase in cash and cash equivalents of over $100 million. The September 30 report shows a repayment of $2.8 billion. Since cash and cash equivalents dropped by $1.1 billion, we still have $1.7 billion coming from somewhere, and that somewhere does not appear to be readily explained by interest and principal payments.

I’d love to hear any other ideas as to how these CDOs are paying down the loans (from people who know CDOs, this is pretty specialized terrain), but I discussed this with Tom Adams, a former monoline executive (which means he is familiar with vagaries of how these deals were structured and perform) and he is at a loss for an explanation.

[Demeter]

33. Consumer boost for US banks

http://www.ft.com/cms/s/0/4569ca1a-05bd-11df-88ee-00144feabdc0.html

Leading banks on Wednesday provided evidence that the US consumer recession is abating as they reported that losses on credit cards, mortgages and other loans were starting to moderate.

A series of lenders including Bank of America, Wells Fargo and US Bancorp reported quarterly results that revealed they were seeing signs of a turn in the credit cycle thanks to an economic recovery fuelled by huge government stimulus.

Executives said they expected the improvement to carry on into 2010 but warned that high unemployment and slow economic growth would continue to keep consumers under pressure.

US banks have lost billions of dollars since the beginning of the credit crisis as the recession prompted over-indebted Americans to default on credit cards, mortgages and home equity loans.

“We are encouraged by signs the economy is improving,” said Brian Moynihan, chief executive of BofA, the largest bank in the US. “ economic conditions remain fragile and we expect high unemployment levels to continue”.

BofA saw its first quarter-on-quarter decline in net charge-offs – loans that banks consider unrecoverable – in nearly four years, while its provision for credit losses was also lower in the fourth quarter than in the previous three months.

Wells, which became a national banking powerhouse with the acquisition of Wachovia in 2008, also saw provisions decline from the previous quarter for the first time in a year.

Howard Atkins, Wells’ finance chief, said that Wells had predicted consumer credit losses would peak in the first half of this year but recent results suggested they might start falling before then.

Analysts said Wednesday’s comments by Wells and BofA echoed remarks by JPMorgan Chase and Citigroup in recent days and suggested the financial health of US consumers was slowly improving.

They noted that credit costs at the banks remained high as consumers were still reeling from the worst recession since the Great Depression. However, the improvements reported on Wednesday were a positive surprise...

I'LL BE IT WAS

[Demeter]

34. General Re fined $92m for alleged sham sales

http://www.ft.com/cms/s/0/37629880-0620-11df-8c97-00144feabdc0.html

General Re, a division of Warren Buffett’s Berkshire Hathaway, has agreed to pay more than $92m to settle allegations related to sham transactions with insurers American International Group and Prudential Financial.

The company will pay $19.5m to the US Postal Inspection Service Consumer Fraud Fund and $12.2m to the US Securities and Exchange Commission, regulators said on Wednesday.

It also agreed to pay $60.5m to AIG’s shareholders.

“Gen Re arranged to sell financial products to AIG and Prudential for the sole purpose of enabling those companies to manipulate their accounting results,” said Andrew Calamari, associate director of the SEC‘s New York office.

Wednesday’s settlements allow the reinsurance group to avoid criminal prosecution.

Gen Re, which neither admitted nor denied wrongdoing in its SEC settlement, previously forfeited about $5m in fees to the government over the AIG scheme.

The SEC claimed that Gen Re engaged in two sham reinsurance transactions to make it look as though AIG had increased its loss reserves in the final quarter of 2000 and the first quarter of 2001 by $500m.

Gen Re also allegedly entered into sham contracts with Prudential’s property and casualty division that allowed Prudential to improperly recognise more than $200m in revenues in 2000, 2001 and 2002.

In 2006, the SEC charged AIG with securities fraud and improper accounting.

The company settled by paying more than $800m without admitting wrongdoing.

An AIG spokesman could not be reached.

The commission charged Prudential with financial reporting violations in 2008.

Prudential said there was no finding of fraud and it had settled without paying penalties.

As part of the resolution with the Justice Department announced on Wednesday, prosecutors said Gen Re admitted that its most senior management engaged in a scheme to falsely inflate AIG’s reported loss reserves.

Five people have been convicted of criminal fraud for AIG’s transactions with Gen Re.

In 2008, a US court determined that AIG’s shareholders lost between $544m and $597m because of the scheme.

Attorneys representing Gen Re were not immediately available for comment.

Regulators noted that Gen Re conducted an independent review of its operations and cooperated with prosecutors and the SEC.

THE CONVICT OF OMAHA!

[Demeter]

35. Goldman halves bonus pool to $16.2bn

http://www.ft.com/cms/s/0/b00fe5da-0693-11df-b952-00144feabdc0.html

Goldman Sachs on Thursday became the latest US bank to bow to pressure over pay, slashing compensation as it reported stronger than expected fourth-quarter profits.

The Wall Street bank said it would pay $16.19bn in bonuses to staff, a drop of almost 50 per cent from the previous year and the lowest pay-out as a ratio of net revenues since Goldman became a public company in 1999.

Confirmation of the big drop in bonus payments at Goldman came just hours before President Barack Obama was set to outline tough regulations on investment banks. Mr Obama is expected to announce limits on the size of proprietary trading operations in the second broadside against banks this month.

“There is no doubt that Goldman’s performance has been stimulated by quantitative easing and stimuli packages,” said David Buik, an analyst at BGC partners. “It will be interesting to see how Goldman’s share price reacts to President Obama’s legislation to rein in risk-taking.”

Goldman reported bumper earnings for the fourth quarter of $4.95bn, or $8.20 a share, compared with a loss of $2.12bn or $4.97 a share a year before. The earnings beat estimates by Wall Street analysts who predicted profits of $5.20 a share. Revenues were $9.62bn during the latest quarter...


On the year, Goldman Sachs recorded profits of $13.39bn on revenues of $45.17bn. During the fourth quarter, revenues were fuelled by investment banking fees, which surged by 58 per cent compared with the same quarter a year ago.

OKAY, HOW CAN THEY PAY OUT BONUSES THAT EXCEED THEIR NET PROFITS??? ANYONE, ANYONE, BUELLER?

MUST BE STOCK WARRANTS, IF THE QUESTION IS A TECHNICAL ONE

BUT MORALLY?? OR EVEN FINANCIALLY??

[DemReadingDU]

36. $32,000 in cash reportedly stolen from man’s home

1/21/10 $32,000 in cash reportedly stolen from man’s home

DAYTON - Burglary squad detectives are looking for at least one burglar who broke into an elderly man’s home Tuesday, Jan. 19, and allegedly walked away with $32,000 in cash.

George Hicks told officers he owns a local laundromat and had $2,000 in rolled dimes and another $30,000 in bills between his mattress that was missing, according to a police report.

Hicks said he returned home in the 2500 block of East Fifth Street about 6 p.m. and noticed a glass door had been broken out and someone had been in his home, the report stated.

He checked around his home and noticed the money, including bills kept in a manila envelope between his mattress, was missing, the report stated.

Hicks said the money was in a locked bedroom of the home. The man’s neighbors said they heard nor saw anything out of the ordinary while Hicks was gone.

There are no suspects at this time, police said. Anyone with information about the burglary is urged to call 333-COPS.

http://www.daytondailynews.com/blogs/content/shared-gen/blogs/dayton/daytoncrime/entries/2010/01/21/man_claims_burglar_stole_32000.html


Hiding money between mattress is not always a safe place.

[TalkingDog]

38. Mr. Toad's Wild Ride looks rather perilous today.

[hamerfan]

50. Dow is down 190

at 12:13PM today.
Hoping my math is a little better today.....

[Demeter]

52. 220 at 12:32

Guess the PPT is holding its fire.

Or they are all in the bathrooms, because they can't hold their water.

It looks really bad when a day like this is suddenly made "all better" in a half an hour at the market's close. Suspicious, even.

[Robbien]

42. BlackRock Proposes New Consumer Bankruptcy Option

Jan. 21 (Bloomberg) -- Consumers need a new type of bankruptcy that would better aid homeowners and be fairer for mortgage-bond investors than the existing U.S. loan-modification program, BlackRock Inc. Vice Chairman Barbara Novick said.

BlackRock, the world’s largest asset manager, proposes creating a bankruptcy option under which terms of a consumer’s mortgage can be eased, though only after other debts are eliminated, Novick said in a telephone interview. Judges would need to follow a formulaic approach, she said.

. . .

The current treatment of junior-ranking home-equity debt may do more to undermine the confidence of investors in the U.S. mortgage-bond market, making financing more costly for borrowers in the future when private sources of capital are needed to replace government-backed loans now accounting for almost all new debt, Novick said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a7wj7oPG.2K8&pos=7


Blackrock only watches out for Blackrock. I expect the last paragraph in the article is the clue as to why Blackrock is now seeking new bankruptcy rules. Blackrock wants second and third mortgages to be factored in the negotiations of homeowner debt. Under current bankruptcy laws the junior ranking debt is discharged. Now how would changing laws strengthening rights of junior ranking debt "aid the homeowner"?

Blackrock holds a lot of debt instruments based on junior ranking homeowner debt.

[Demeter]

45. Yup

See post on short sales above...

I doubt that they could pull it off in time for this Depression--but it will be ready for the next one, for sure! Just as the revision of bankruptcy lay in wait this time around.

[Robbien]

46. So what is currently called fraud, Blackrock wants to make legal standard operating procedure

all to aid the homeowner of course.

[Demeter]

47. Standard Operating Procedure

Legitimize the crooks, punish the honest people. Welcome to 1984

[Demeter]

44. Pirates get record ransom for Greek supertanker

http://rawstory.com/news/afp/Pirates_get_record_ransom_for_Greek_01182010.html

$9+ MILLION IN CASH

"Ecoterra added that pirates reportedly bragged about generously giving 500 dollars to each crew member -- 16 Filipinos, nine Greeks, two Ukrainians and a Romanian -- "for good cooperation"."

The total of around nine million dollars exceeds the eight million believed to have been paid for the release a year ago of the Sirius Star, a Saudi-owned supertanker of roughly the same size...

Always paid in cash to avoid modern transaction monitoring, large ransoms have often been parachuted from small planes directly onto the deck of the hijacked ship.

In the Maran Centaurus' case, such an operation was facilitated by the fact that its deck can hold three football pitches.

According to Ecoterra, the pirates still hold at least 11 ships and around 270 seamen hostage.

[Robbien]

48. Another sleazy bankruptcy. Regency has $1 mil in assets but $183 mil in unsecured loans

this time the lender is suing the exec directly for fraud.

Second fraud lawsuit filed against former Regency exec James Myers

Former Regency executive James Myers has been accused of defrauding a private lender of $1.5 million in a civil complaint filed in Myers' bankruptcy proceeding.

Attorneys for Steven Nichols, his wife, Gayle, and the couple's trust, claim in documents filed Monday that Myers, as a partner in an investment company known as Westwood Partners LC, obtained the $1.5 million loan in December 2006 and used the money for purposes other than what Myers had promised.

The complaint says Myers has refused to provide a credible explanation for why the money borrowed from the Nicholses appeared to be sent to other Myers-controlled operations. The lawsuit alleges that Myers "has concealed and/or failed to keep or preserve recorded information that relates to his financial condition or business transactions."

"James Michael Myers, by false pretenses and false representation, caused Westwood Partners to obtain money ... with no intention to repay," the complaint says.

The filing is the second complaint against Myers since he filed for bankruptcy protection in October, citing $1.1 million in assets and $183 million in liabilities.

. . .

Bankruptcy records show Myers and other business partners have been sued at least 40 times.

http://www.desmoinesregister.com/article/20100121/NEWS/1210352/1007/news05/Second-fraud-lawsuit-filed-against-former-Regency-exec-James-Myers

[Demeter]

49. Ominous lessons of the 1930s for Europe By Paul De Grauwe

http://www.ft.com/cms/s/0/18f5f38e-0386-11df-a601-00144feabdc0.html



The Great Depression taught us several lessons. The first one is that central banks must be ready to provide ample liquidity to save the banking system. Present-day central banks did exactly that. They did not repeat the mistakes of the 1930s when their predecessors tightened money in the face of a banking crisis. The second lesson is that governments should not try to balance the budget when economic activity collapses. Governments today did not repeat the mistakes made by many governments in the 1930s that desperately tried to balance their books when the economy crashed.

There is one area of policymaking where authorities may not have learned the lessons of history and are in the process of repeating the same mistakes. During much of the 1930s a number of continental European countries, the so-called gold bloc countries (France, Italy, Belgium, the Netherlands and Switzerland) kept their currencies pegged to gold. When in the early 1930s Great Britain and the US went off gold and devalued their currencies, the gold bloc countries found their currencies to be massively overvalued. This had the effect of depressing their exports and of prolonging the economic depression in these countries.

It is remarkable to see that the same mistakes are being repeated today involving some of the same countries as during the 1930s. This time it is again the continental western European countries tied together in the eurozone that have seen their currency, the euro, become strongly overvalued. The two countries that in the 1930s responded to the crisis by devaluing their currencies, the US and the UK, today have also allowed their currencies to depreciate significantly. Since the start of the financial crisis the pound has depreciated against the euro by about 30 per cent. After having strengthened against the euro prior to the banking crisis of October 2008, the dollar has depreciated against the euro by close to 20 per cent.

Thus, as in the 1930s, the dividing line is the same. The US and the UK have allowed their currencies to depreciate; the continental European countries tied in the euro area have allowed their currency to become significantly overvalued. Even the numbers are of the same order of magnitude. During the 1930s the overvaluation of the gold-bloc currencies amounted to 20 to 30 per cent. Today, the euro is overvalued by similar percentages against the dollar and the pound. Why do the euro area countries repeat the same policies as the gold bloc countries in the 1930s? The answer is economic orthodoxy. In the 1930s it was the orthodoxy inspired by the last vestiges of the gold standard. Today the economic orthodoxy that inspires the European Central Bank is very different, but no less constraining. It is the view that the foreign exchange market is better placed than the central bank to decide about the appropriate level of the exchange rate. A central bank should be concerned with keeping inflation low and not with meddling in the forex market. As a result, the ECB has not been willing to gear its monetary policy towards some exchange rate objective.

Just as in the 1930s, the euro area countries will pay a price for this orthodoxy. The price will be a slower and more protracted recovery from the recession. This will also make it more difficult to deal with the internal disequilibria within the eurozone between the deficit and the surplus countries that Martin Wolf described so vividly in these pages.

One could object to this analysis that the central bank is powerless to affect the exchange rate. This is a misconception. A central bank can always drive down the value of its currency by a sufficiently large increase in its supply. And that is what the US and the UK have done with their policies of quantitative easing that have gone farther in flooding the US and UK money markets with liquidity than in the euro area. True, since the start of the crisis, the ECB has injected plenty of liquidity in the euro money markets to support the banking system. Yet it has been much more timid than the US Federal Reserve and the Bank of England in creating liquidity. While the latter more than doubled the size of their balance sheets since October 2008 and thereby more than doubled the supply of central bank money, the ECB’s balance sheet increased by less than 50 per cent.

Such an imbalance in the expansion of central bank money inevitably spills over in the foreign exchange markets. The massive supply of dollars and pounds created by the US and UK monetary authorities was transmitted to other financial markets in search of higher yields and in so doing put upward pressure on the value of the euro. Thus the greater timidity of the ECB in providing liquidity is an important factor explaining why the euro has rallied since the start of the banking crisis and why it is now excessively overvalued.

Ultimately a central bank has to make choices. The Fed and the Bank of England have opted for massive programmes of liquidity creation, attaching a low weight to the possible inflationary consequences of their actions. The ECB has been more conservative in its liquidity, creating programmes attaching a low weight to the consequences for the exchange rate and to the chances of a quick recovery. The future will tell us which of these choices was right.

The writer is professor of economics at the University of Leuven

I'M NOT CONVINCED THE EU IS WRONG. THIS MAY NOT BE A BAD THING. THE QUESTION IS: WHO IS SUFFERING? IN THE US AND UK, IT'S PEOPLE.

[Demeter]

51. Where the Jobs Are (WARNING: NOT FOR THE DIGESTIVELY IMPAIRED)

http://www.financialarmageddon.com/2010/01/where-the-jobs-are.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+financialarmageddon+%28Financial+Armageddon%29&utm_content=Google+Feedfetcher

OK, I admit it. Maybe I've been too pessimistic. I know I've said the ranks of the long-term jobless continue to grow. I've also noted the fact that, based on past history, high levels of unemployment tend to linger for quite awhile in the wake of financial crisis-linked downturns. Moreover, I've pointed out that many employers are seeking to boost their bottom lines by squeezing more out of current employees rather than taking on new staff.

But that's not the whole story. There are jobs out there for individuals with plenty of experience. There are opportunities for Americans with skills and training that might have cost tens of thousands of dollars and required many, many hours to acquire. There are ways for unemployed professionals and white-collar workers to be productive again. In "Census Staff's Cream of Crop," the Cincinnati Enquirer tells us all about it.

The U.S. Census Bureau suddenly is finding itself with the most highly skilled, highly educated workforce in its 220-year history - thanks in part to a struggling economy that's produced millions of jobless people eager to work.

Locally, the bureau already has recruited engineers, former corporate vice presidents, college professors and radio disc jockeys to help manage the 2010 census, which will attempt to count everyone in the country beginning in March.

"The horrible recession has benefited us in an indirect way - our applicant pool contains a set of people with experience and background and training that is unprecedentedly rich," said Robert Groves, director of the Census Bureau.

"If you visit our local census offices that are being staffed right now, you'll see people with skills and teamwork experience that we will benefit from, the country will benefit from in the decennial census. So the high unemployment rate has helped us."

Take Eleanor Hicks, who's helping the census bureau count immigrant communities.

Hicks, 66, of North Avondale, has a Ph.D. in political science from Columbia University. She speaks French, Arabic, Thai, Spanish, Italian and German.

In her career at the U.S. State Department, she was tapped at age 29 to run the American consulate in Nice, France - gaining diplomatic celebrity as she dined with Princess Grace of Monaco and had a side career as a recording artist.

She's a former University of Cincinnati political science professor, and the scholarship that goes to the top female graduate student in arts and sciences bears her name. She ran the Cincinnati office of the Federal Reserve Bank, chaired the region's transit authority and now owns an international multicultural consulting business whose clients have included Procter & Gamble and Delphi Automotive.

Now, she's working as a partnership associate for the U.S. Census Bureau - a temporary, part-time job in which she gets paid by the hour to work with minority groups, immigrant communities and neighborhood leaders to educate them on the importance of the 2010 census.

Is she over-qualified?

"I don't think of it in those terms," she said. "If I was looking for a career, that's a separate thing. But it's a temporary job. It serves a civic duty."

The economy, she said, was just one factor.

"It was primarily the flexibility. It was an additional source of income without having to make a choice with my primary source of income," she said.

Advanced degrees

Hicks is not typical, but she does represent what census officials say is a clear trend: More applicants, especially for the office jobs, have advanced degrees, a corporate background and a history of accomplished careers in the private sector.

But hiring overqualified people has its drawbacks, too. Highly skilled applicants for temporary census jobs are more likely to leave if a permanent job comes along.

Two weeks ago, census officials pointed to the manager of the Covington office as an example of the kind of highly educated talent the bureau was able to recruit for this census. Days later, the man left the government for a full-time job as a civil engineer. The office is now run by Holly Black, 39, of Taylor Mill, who came to the census bureau as a recruiter in 2008 after being laid off as a human resources associate.

Still, the turnover so far has been less than the Census Bureau anticipated.

Todd J. Zinser, the inspector general of the U.S. Department of Commerce and a Price Hill native, reported last month that the Census Bureau had an $88 million cost overrun last year in its address canvassing operation - an overrun partly explained, he said, by a less-than-anticipated employee turnover rate. The Census Bureau expected workers to leave for better jobs - but they didn't.

"We saw things we never saw before," said Wendy Button, the chief of decennial recruiting for the Census Bureau. "The acceptance rate of positions was much higher. The people who showed up for training - that number was way higher than expected."

"We've never had to recruit - or entered into a census - where we've had the record high unemployment rates like we have now," she said.

Younger, jobless

In decades past, the enumerators - field workers whose main job is to follow up with households that haven't mailed back their forms - tended to be older. Many were retired, or worked part time and took a census job to supplement their income.

Now, they're more likely to be younger and jobless, increasingly common as the local unemployment rate hovers around 10 percent. Local census officials say they're also seeing stay-at-home moms returning to the workforce, retirees looking to replenish their decimated savings, and college students who need money for rising tuition.

After four days of paid training, they'll work mostly afternoons, evenings and weekends - since that's when people are most likely to be home. Pay depends on the local market, ranging from a starting wage of $12.25 an hour in southeastern Indiana to $16 in the city of Cincinnati.

The qualifications for that job are minimal: Enumerators must have a valid driver's license, have a clean criminal record (generally, no felonies), and pass a 26-question basic skills test demonstrating an ability to read a map and follow procedures.

After that, the most important factor in getting a census job is where you live.

The Census Bureau's philosophy is this: people are more likely to answer questions from someone who lives in their neighborhood. So field workers are assigned to work in the same community - and often the same census tract - where they live.

Extra income

Rob Ervin took a temporary census job as operations manager in the West Chester office to supplement an income from freelance writing and substitute teaching. He had been producer of the Gary Burbank Show on WLW for 12 years before losing that job when Burbank retired in 2007.

Ervin never foresaw the beating the economy would take when he left radio. If he had known, he said, "I would have spent more time trying to figure out my future in a post-Burbank life."

Last year, he got hired as an address canvasser, verifying addresses to mail census surveys to.

Now, he manages "a mountain of paper" that comes through the West Chester office - a good job, Ervin said, that will last only until the office packs up by the end of summer.

"There's two sides to the census," said Ervin, 44, of Hamilton. "You have the cold, statistical, counting numbers paperwork side. Then you have the other side of it, which is, let's go into the neighborhoods and meet our neighbors. I'm getting to do both."

It's a much different role than he had on the Burbank show. There, one of his many duties was to help write questions for the "Senseless Survey" - a bit in which an officious-sounding "Riley Girt" would call unsuspecting people to ask a series of increasingly bizarre "census" questions.

"People are asking me about that a lot," Ervin said. "There's 10 questions on the census this year, and I don't think any of them are, 'Who put the bop in the bop-she-bop?'"

[icee]

62. Obama's action today officially ended the stock market rally

and sent us into a major decline which imo will result in a multi-year deflationary depression. Whether one likes Wall Street or not, a President should never make sudden adjustments in a still nascent recovery.

[Demeter]

70. Frankly, My Dear, I Don't Give a Damn

If they wouldn't stop fraud on their own, the govt. must act.

[bread_and_roses]

72. oh really?

even i, less than a mouse among elephants here in SMW, could disabuse you of the assumptions in that post, among them the myth that we are in a recovery. However, I'm too tired to do even the little I could do. And the Banksters could all be rotting in jail and we would all be just fine, thank you very much.

[tclambert]

63. From the "Oh, Hell, no!" dimension comes the Supreme Court decision that ends democracy.

Supreme Court Campaign Finance Ruling Overturns Campaign Finance Limits

The Supreme Court campaign finance decision came down today. In the end, the Supreme Court campaign finance ruling all but ended spending limits. For the likes of Citizens United and other conservatives, the decision is a win for free speech. For some on the left, it is another blow to
Supreme Court Campaign Finance Ruling Overturns Campaign Finance Limits
democracy and more proof of corporate rule over America. But the Supreme Court campaign finance decision also means that 2010 election mudslinging will be through the roof.

The case of Citizens United v. Federal Election Commission was over a 2008 film against Hilary Clinton. Citizens United is a company 'dedicated to restoring our government to citizen's control' and to that extent, they produced an anti-Hilary Clinton movie during the 2008 primaries.

The Federal Election Commission argued that it violated McCain-Feingold and other laws that limit campaign finance by corporations. The case went up to the Supreme Court, and today's campaign finance ruling went 5-4 for Citizens United.
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more at: http://www.associatedcontent.com/article/2616679/supreme_court_campaign_finance_ruling.html


Various reactions at: http://www.washingtonpost.com/wp-dyn/content/article/2010/01/21/AR2010012102654.html Among them:

"With its ruling today, the Supreme Court has given a green light to a new stampede of special interest money in our politics. It is a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans. ... We are going to talk with bipartisan congressional leaders to develop a forceful response to this decision." - President Barack Obama.

"I am disappointed by the decision of the Supreme Court and the lifting of the limits on corporate and union contributions." Sen. John McCain, R-Ariz.

"With today's monumental decision, the Supreme Court took an important step in the direction of restoring the First Amendment rights of these groups by ruling that the Constitution protects their right to express themselves about political candidates and issues up until Election Day." - Senate Republican leader Mitch McConnell of Kentucky.
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That's right, McCain and Obama are essentially in agreement. Then there's Senator McConnell (Idiot-Kentucky).

I made a joke a week back about wealth-based democracy. Welcome to my nightmare. The Supreme Court ruled that every dollar has an equal right to voice its opinion. In one ruling, they undid all campaign finance reform.

[Tansy_Gold]

64. "We are going to talk with bipartisan congressional leaders to develop a forceful response..."

STOP WITH THE BIPARTISAN BULLSHIT, BARRY! THEY DON'T FUCKING CARE!!!!


Good Goddess, Obama, get your head out of your ass and listen to someone other than the rumblings of your own bloated gut.

The Republicans(sic) are NOT going to work with you. They aren't going to work with Nancy or with Harry. Joe Lieberman is not going to work with you. John McCain is not going to work with you.

They have what they WANT, man. Don't you get it? DON'T YOU? Mitch McConnell loves this decision! He is not going to do anything to help overturn it.

ARE YOU DEAF? ARE YOU BLIND?



Tansy Gold, who needs to stop or she's gonna have a stroke

[Dr.Phool]

65. You forgot DUMB!

[Tansy_Gold]

66. scary thing is, they're even starting to get it in GD=P

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=433x143365

[Dr.Phool]

67. There's still a few in there that are off their meds.

They think it's a shrewd political chess move. I'd have that clown on ignore, except for the entertainment value.

[Tansy_Gold]

68. Ugh, I read the replies. You're correct.

"Smooth move, Ex-Lax" indeed.



:puke:

[bread_and_roses]

71. they are? wonders never cease

i didn't go read there - I'll take you're word - because when I venture in there i start frothing at the mouth - any time i succumb to temptation, i regret it. But it THEY'RE starting to get it over there, maybe there is "hope" after all.