STOCK MARKET WATCH, Wednesday January 27

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday January 27, 2010

Bush Administration Officials Convicted = 2
Name(s): David Safavian, James Fondren

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 26, 2010

Dow... 10,194.29 -2.57 (-0.03%)
Nasdaq... 2,203.73 -7.07 (-0.32%)
S&P 500... 1,092.17 -4.61 (-0.42%)
Gold future... 1,100 +3.20 (+0.29%)
10-Yr Bond... 3.62 0.00 (-0.11%)
30-Year Bond 4.55 +0.01 (+0.13%)

---

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

Market Conditions During Trading Hours

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

---

Handy Links - Market Data and News:
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    Google Finance    Bank Tracker    Credit Union Tracker    Daily Job Cuts

Handy Links - Economic Blogs:
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    Brad DeLong    Bonddad    Atrios    goldmansachs666

Handy Links - Government Issues:
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Handy Links - Videos:
The Coming Collapse of the Middle Class    Charlie Rose talks with Roubini    Charlie Rose talks with Krugman    William Black: This Economic Disaster    Bill Moyers with Kevin Drum and David Corn

---

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. Jeebus! DU was tough to load this morning.

Is the server sick?

[hamerfan]

2. Morning, Ozy!

No problems here getting on. Maybe I was just lucky....
Watch Apple (AAPL) today, the iPad gets announced.

[ozymandius]

4. Just happened again.

All other sites seem fine. Just DU gives me fits.

[boomerbust]

17. Ford (F) stock also

Should explode today due to Toyota news.

[Mojorabbit]

40. It was not loading at all

around 2:30 am when I was up with insomnia.

[ozymandius]

3. Market Observation

The Next Leg Down Grips Markets
BY ROBERT MCHUGH

....We are doing some long-term phi mate research right now that suggests a major crash leg could take place late in 2010. Any decline now may not have the magnitude initially that several other legs of this coming decline will. But keep in mind, this supercycle degree wave (C) down could see the Industrials drop 10,000 points before bottoming. The late 2010 plunge should be one for the ages. There could be several plunges throughout the developing wave (C) down leg of grand Supercycle wave {IV} in addition to the massive one we expect toward the end of 2010. There could be mini-crashes between now and then. The larger declines will come as 2011 approaches, continuing into at least late 2012. The totality of these down-legs should wipe out most of the value of stock market indices world-wide.

We have found huge Head & Shoulders Top patterns in formation for the U.S. Dow Industrials, the Dow Transportation Index, the U.S. Russell 2000 small cap index, Germany’s DAX, Japan’s Tokyo NIKK, and Australia’s SPASX200. These patterns are not yet confirmed, but will be with declines below their horizontal necklines. Once/if those necklines have been broken, there is a high probability that the downside targets will be approached. Those downside targets are close to zero, believe it or not. This is horrific if in fact these patterns confirm.

These patterns add to the body of evidence that a catastrophic wave (C) down is next, and may be starting. This tells us that catastrophic wave (C) down will have world-wide impact, and most likely be accompanied by terrifying news events. What those events would be are anyone’s guess at this point.

We can only hope these patterns will not be confirmed, which would require a drop in prices of about 30 percent from here. Unfortunately, these patterns are forming well to this point, and there is increasing risk we will see 30 percent declines over the next year or two.

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

[bread_and_roses]

15. well, THAT sure puts a different spin on the ad I see regularly at the bottom of this page

"Stock market set to explode!!!!"

[ozymandius]

33. Maybe they mean that in a bad way.

Kinda like a car full of gasoline going over a cliff. :shrug:

[tclambert]

42. Mythbusters tested that. They couldn't get a car to explode until they put a bomb in it.

It was even hard to get them to burn. Their first attempt didn't rupture the gas tank. When they sabotaged it so the gas tank would fail, it just leaked and burned.

Hollywood loves that old cliche, though. I've seen cars in movies go over a cliff into a body of water explode into flames. It always cracks me up when the car explodes in midair, BEFORE it hits bottom. That must be the "Over Cliff Sensor" activating the "Burst Into Flame Circuit."

[ozymandius]

49. Really, very funny.

I love the cliché even though it has no basis in fact. It sure is an image we all can conjure, though.

[Loge23]

38. Jeez, would you pass the Zanax please!

Yikes! "catastrophic waves....terrifying news events..."
This guy is so freaked out I actually feel better - and I'm a total depressive lately!

[ozymandius]

5. Today's Reports

10:00 New Home Sales Dec
Briefing.com 345K
Consensus 368K
Prior 355K

10:30 Crude Inventories 1/22
Briefing.com NA
Consensus NA
Prior -0.471M

14:15 FOMC Rate Decision 1/27
Briefing.com 0.25%
Consensus 0.25%
Prior 0.25%

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

[ozymandius]

32. Good morning. Here's a drive-by posting of report data.

10:00 New Home Sales Dec
actual 342K
briefing.com 345K
consensus 366K
prior 370K
revised from 355K

10:30 Crude Inventories
actual -3.89M
prior -0.471M

[UpInArms]

45. Fed holds steady, but is not unanimous

http://www.marketwatch.com/story/fed-holds-steady-but-is-not-unanimous-2010-01-27

WASHINGTON (MarketWatch) -- The Federal Reserve kept official interest rates unchanged on Wednesday, leaving in place low borrowing costs it sees as essential to supporting the economy as it emerges from the deepest recession since the 1930s.

But the vote wasn't unanimous for the first time in a year, suggesting that a faction of the central bank's top policy committee wants a faster exit from the ultra-low interest rate policy to avoid any risk of inflation.

The rate-setting Federal Open Market Committee left the federal funds rate between 0 and 25 basis points and said that these low rates were likely to remain for an "extended" period. Economists had expected little change from the Fed.

<snip>

The political firestorm over Ben Bernanke's nomination for a second four-year term as Fed chairman was one factor behind the central bank's decision to lay low, analysts said.

Bernanke appears to have survived a determined effort by the most conservative and most liberal members of the Senate to unseat him, but Fed watchers will be watching the crucial vote in the Senate set for Thursday. Support for Bernanke has solidified this week.

...more...

[ozymandius]

6. Oil falls in Asia ahead of US inventory report

KUALA LUMPUR, Malaysia – Oil prices fell to near $74 a barrel Wednesday in Asia amid concerns that energy demand isn't recovering as quickly as expected.

Benchmark crude for March delivery was down 24 cents to $74.47 a barrel at late afternoon Kuala Lumpur time in electronic trading on the New York Mercantile Exchange. The contract fell 55 cents to settle at $74.71 on Tuesday.

Trading was lackluster ahead of a weekly oil inventory report by the Energy Department's Energy Information Administration that is expected to show demand remains weak despite another cold snap in the U.S. ...

In other Nymex trading in February contracts, heating oil fell 0.2 cent to $1.9485 a gallon while gasoline gained 0.1 cent to $1.968 a gallon. Natural gas futures fell 1 cent to $5.475 per 1,000 cubic feet.

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

[ozymandius]

7. Toyota halts US sales of Camry, 7 other models

TOKYO – The faulty gas pedals that prompted Toyota to suspend U.S. sales of eight of its most popular models — including the Camry, America's best-selling car — are also in its vehicles sold in Europe, an official with the automaker said Wednesday.

Toyota Motor Corp. announced late Tuesday the unprecedented sales suspension to fix gas pedals that could stick and cause acceleration without warning. Last week, Toyota issued a recall for the same eight models involving 2.3 million vehicles.

Toyota is also halting production at six North American car-assembly plants, beginning the week of Feb. 1, and gave no date on when production could restart. ...

The automaker said the U.S. sales suspension includes the following models: the 2009-2010 RAV4, the 2009-2010 Corolla, the 2007-2010 Camry, the 2009-2010 Matrix, the 2005-2010 Avalon, the 2010 Highlander, the 2007-2010 Tundra and the 2008-2010 Sequoia.

http://news.yahoo.com/s/ap/20100127/ap_on_bi_ge/as_toyota_recall

[FarCenter]

31. The faulty pedals are made by CTS Corporation

http://www.ctscorp.com/automotive/pedal/technology.htm

http://finance.yahoo.com/q?s=cts

http://finance.yahoo.com/echarts?s=CTS#symbol=CTS;range=3m

[tclambert]

43. . . . and at the bell, Toyota down 8%, Ford up 3%

Now I'm wondering if there's an opportunity here. People tend to overreact to such dramatic news. Toyota will start selling those 8 models again soon. Will their stock go back up then? Or will the hit to Toyota's reputation linger? Hmm. Think I'll stay tuned.

[ozymandius]

8. Stiglitz ‘Negative Value’ on Bankers Means No Davos Happiness

Jan. 27 (Bloomberg) -- The one-time masters of the universe may need to become masters of self-delusion if they hope to find happiness along with their paychecks.

Bankers created “negative value” with innovations such as mortgages that homeowners couldn’t afford, said Nobel laureate Joseph E. Stiglitz, who is speaking today at the World Economic Forum in Davos, Switzerland, on the economics of happiness. ...

The psyche of bankers and the subject of executive pay will be on the examining table at this year’s gathering of the world’s power-brokers in the Swiss ski resort -- as they have been in boardrooms and on newspaper front pages since the start of the worst financial crisis in 70 years. Two sessions related to compensation are scheduled for today. ...

The question of whether bigger bonuses can make bankers happier will be on the menu at the economics of happiness dinner. Behravesh, the IHS economist, cites the so-called Easterlin paradox, named for University of Southern California economics professor Richard Easterlin, who in 1974 wrote that after certain basic needs are met, happiness does not necessarily increase with wealth. Easterlin argued that income relative to those around you was more important to people than so-called absolute income.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aVYY24_A2SHA&pos=12

---

I volunteer to hand out hairshirts and self-flagellating whips to those banksters who are doing "God's Work."

[Po_d Mainiac]

35. Has there ever been a time

That so many have toiled and sacrificed for the benefit of so few?? :pissed off past the grr emocon:

[snot]

37. I just got this e-mail out of the blue from the "World Economic Forum"; can't find an Onion byline

. . . but it seems completely incredible:

World Leaders Pledge Strategy To End Poverty Now

Selected pre-interview policy statements from notable WEF guests to the 40th anniversary of the Forum's Annual Meeting in Davos, drawing leaders from business, government and civil society
Klaus Schwab, Founder and Executive Chairman, announces key goals and strategies
Key world leaders adopt cogent and actionable set of initiatives to eliminate poverty in the near term: http://www.we-forum.org/initiatives
For complete statements click here: http://www.we-forum.org/annualmeeting
Davos, Switzerland, 27 January 2010 – In preparation for the 40th anniversary annual meeting of the World Economic Forum, several key world leaders have pledged to develop, by the end of this year's meeting, a cogent and actionable plan to end global poverty.

"In light of the recent tragedy in Haiti, which was already on the brink due to free-market policies, it is clear that taking a new tack to end poverty is morally necessary," said Founder and Executive Chairman Klaus Schwab. (See video here.).

In a series of pre-recorded policy statements, which can be viewed on the Davos Annual Meeting 2010 website, President Sarkozy of France, Chancellor Merkel of Germany, CEO Patricia Woertz of Archer Daniels Midland, and several other political and business leaders note the failures of a system that has been more intent on using poor countries as supply-houses for raw materials than in bringing them out of poverty.

"Today, we are at a moment of societal crisis when dramatic change is inevitable," said Chancellor Merkel. "The only question is: will we help to usher in that change, or will we be its victims?" (See video here.)

The leaders support a refreshingly simple plan that will end poverty, protect the environment, and allow developing countries to choose their own futures, unchained from onerous debt obligations and unbalanced trade policies.

"Our government is committed to helping end old colonial patterns that continue today, and that have only worsened under neoliberalism," said Queen Elizabeth II, during a pre-taped message issued from Parliament that focused on the similarities between European powers' colonial policies and modern trade policies. "Now is the time to rebuild." (See video here.)

"Nobody wants a catastrophe," said Canadian Prime Minister Stephen Harper. "Canadians don't want that reputation." (See video here.)

Above all, the new policy statements are indicative of significant change of direction by some of the most powerful people in the world. The testimonials augur a watershed week during which the leading powers of Davos will be striking at the heart of policies and structures that, while contributing to economic growth for businesses, have created the conditions for poverty and have threatened the very survival of humankind.

The Forum's bold change of direction comes after an exhaustive internal survey by the Forum's Leadership Council, as well as extensive consultation with anti-poverty leaders and campaigners in the developing world. Among the statistics presented:
In 1820, the gap between the richest and poorest country was 3 to 1. In 1950, it was 35 to 1. Today, it is nearly 80 to 1 (source).
In 1970, 434 million people were suffering from malnutrition. Today, that number is approaching 900 million (source).
Since 1960, Third World countries have suffered a 70% drop in the price of agricultural exports compared to manufactured imports (source).
The developing world spends $13 on debt repayment for every $1 it receives in grants (source).
It is estimated that USD$11.5 trillion of untaxed "black money" is being held in global "tax havens" (source), with as much as USD$1 trillion in unmarked Swiss bank accounts (source). The United Nations has estimated the cost of ending world hunger at about USD$30 billion a year (source).
The World Bank reports that spreading global economic crisis is set to trap up to 53 million more people in poverty in developing countries, bringing the total of those living on less than $2 a day to over 1.5 billion (source).
"We have to look at this year's meeting in the context of what's happening in the world," said Professor Schwab. "We just killed the Copenhagen Summit, we crashed many economies in 2009. Clearly the present system of rampant capitalism is not worthy of salvaging. This is the reason why our Annual Meeting this year is tailored around the need to end poverty once and for all." (See video here.)

Professor Schwab noted that the need to end poverty is felt especially strongly this year, with an earthquake-ravaged Haiti foremost on people's minds. A series of protracted pre-conference discussions were held by Forum members in response to the recent gaffe by the International Monetary Fund, in which the Fund's loan to Haiti, bearing a number of onerous conditions, became the target of popular uproar, forcing the Fund to commit the monies in the form of a grant instead.

In a refreshing taste of things to come, Forum members resolved to supplement the IMF grant with a much larger, multi-billion dollar unconditional grant to Haiti, to be excised from the more than USD$60 billion that New York's financial sector awarded themselves in bonuses this year.

"It is by now universally understood that many of our institutions were directly responsible for the collapse of housing value, not to mention massive unemployment and misery, in the United States and much of the rich world," said Lloyd Blanfein, Chair of the New York Financial Caucus, and current Chief Executive Officer of Goldman Sachs.

"But it is equally true that we in the financial sector bear much responsibility for Haiti's poverty, which has made it impossible for them to even begin to deal with the current tragedy," added Blankfein. "The least we can do to repay our moral debt is to immediately lift up the collapsed Haitian economy, and not by making usurious loans through the IMF, either."

[Demeter]

46. Somewhere on their Webpage it says "Satire"

I've been fooled by them before. Blankfein would never say any such thing. His God is an Old Testament, fire and brimstone and burning in hell, type.

[snot]

50. thank you!

[Festivito]

9. Debt: 01/25/2010 12,303,736,486,568.45 (UP 1,270,998,651.11) (Mon)

(Not much of a move. Debt seems to jump up big then drop slowly maybe up a little and down a little for days--repeat. There are some reports that the last budget borrowed 1.4T$ rather than 1.8T$ that debt to the penney would show. I believe they are using Bush budget figures that do not include the war spending in order to get a lower figure for Bush that thy then compare to Obama's war inclusive numbers. And the Republicans STILL SPENT AND BORROWED MORE even with the skewed numbers to their own favor. Good day all.)

= Held by the Public + Intragovernmental(FICA)
= 7,783,116,255,564.44 + 4,520,620,231,004.01
DOWN 41,466,126.01 + UP 1,312,464,777.12

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 308,564,958 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 $39,874.06.
A family of three owes $119,622.17. (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 10,123,193,380.47.
The average for the last 30 days would be 6,748,795,586.98.
The average for the last 32 days would be 6,326,995,862.79.
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$/day.
There were 78 reports in 117 days of FY2010 averaging 5.05B$ per report, 3.37B$/day.
Above line should be okay

PROJECTION:
There are 1,091 days remaining in this Obama 1st term.
By that time the debt could be between 13.8 and 19.2T$.
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)
01/25/2010 12,303,736,486,568.45 BHO (UP 1,676,859,437,655.37 so far since Obama took office.)

FISCAL YEAR DEBT CHANGE, Sep 30 prior year to Sep 30 named year:
(One "* " for each 40B$ reached)
FY1994 +0,281,261,026,873.94 ------------* * * * * * * WJC
FY1995 +0,281,232,990,696.07 ------------* * * * * * * WJC
FY1996 +0,250,828,038,426.34 ------------* * * * * * WJC
FY1997 +0,188,335,072,261.61 ------------* * * * WJC
FY1998 +0,113,046,997,500.28 ------------* * WJC
FY1999 +0,130,077,892,735.81 ------------* * * WJC
FY2000 +0,017,907,308,253.43 ------------WJC
FY2001 +0,133,285,202,313.20 ------------* * * C&B
01-WJC +0,053,598,528,417.78 ------------* WJC 31% of FY, 40% of FY-Debt
01-GWB +0,079,686,673,895.42 ------------* GWB 69% of FY, 60% of FY-Debt
FY2002 +0,420,772,553,397.10 ------------* * * * * * * * * * GWB
FY2003 +0,554,995,097,146.46 ------------* * * * * * * * * * * * * GWB
FY2004 +0,595,821,633,586.70 ------------* * * * * * * * * * * * * * GWB
FY2005 +0,553,656,965,393.18 ------------* * * * * * * * * * * * * GWB
FY2006 +0,574,264,237,491.73 ------------* * * * * * * * * * * * * * GWB
FY2007 +0,500,679,473,047.25 ------------* * * * * * * * * * * * GWB
FY2008 +1,017,071,524,649.92 ------------* * * * * * * * * * * * * * * * * * * * * * * * * GWB
FY2009 +1,885,104,106,599.30 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * B&O
09GWB +0,602,152,152,000.60 ------------* * * * * * * * * * * * * * * GWB 31% of FY, 32% of FY-Debt
09-BHO +1,282,951,954,598.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO 69% of FY, 68% of FY-Debt
FY2010 +0,393,907,483,056.70 ------------* * * * * * * * * BHO
Endof10 +1,228,856,677,911.93 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ------------*********
01/21/2010 -031,161,420,148.11 -
01/22/2010 -000,070,049,877.74 ----
01/25/2010 -000,041,466,126.01 ---- Mon

-27,892,529,922.86 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=4242843&mesg_id=4242854

[Festivito]

44. Debt: 01/26/2010 12,308,886,504,801.94 (UP 5,150,018,233.49) (Tue)

(Not much of a move. 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)
= 7,784,089,436,840.31 + 4,524,797,067,961.63
UP 973,181,275.87 + UP 4,176,836,957.62

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 308,573,598 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 $39,889.63.
A family of three owes $119,668.89. (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 9,886,375,516.33.
The average for the last 30 days would be 6,920,462,861.43.
The average for the last 33 days would be 6,291,329,874.03.
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$/day.
There were 79 reports in 118 days of FY2010 averaging 5.05B$ per report, 3.38B$/day.
Above line should be okay

PROJECTION:
There are 1,090 days remaining in this Obama 1st term.
By that time the debt could be between 13.8 and 19.2T$.
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)
01/26/2010 12,308,886,504,801.94 BHO (UP 1,682,009,455,888.86 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 +0,399,057,501,290.20 ------------* * * * * * * * * BHO
Endof10 +1,234,372,779,414.61 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ------------*********
01/21/2010 -031,161,420,148.11 -
01/22/2010 -000,070,049,877.74 ----
01/25/2010 -000,041,466,126.01 ---- Mon
01/26/2010 +000,973,181,275.87 ------------********

-19,816,450,332.67 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=4244562&mesg_id=4244578

[ozymandius]

10. AIG and NY Fed under fire for hiding bailout facts

...The New York Fed, one of the primary overseers of AIG's $181 billion bailout, was headed by current Treasury Secretary Timothy Geithner when the counterparty transactions in question were made.

The Oversight Committee will hold a hearing on the matter on Wednesday at 10 a.m. ET. Barofsky, Geithner, former Treasury Secretary Henry Paulson and the lead attorneys for the New York Fed and AIG are all slated to testify at the hearing.

According to an advanced copy of his testimony, Barofsky will try to determine if there was "any misconduct relating to the disclosure or lack thereof" concerning the counterparty transactions. Barofsky will also announce an investigation into whether the Federal Reserve fully cooperated with his office in its audit of AIG (AIG, Fortune 500).

The probe follows an audit on AIG issued in November by Barofsky. That audit found that the New York Fed, then under the direction of Geithner, failed to use its clout to negotiate concessions from AIG's business partners. ...

http://money.cnn.com/2010/01/26/news/companies/aig_investigation/index.htm

[ozymandius]

11. Geithner: Dead Man Walking?

As the pile of revelations regarding the NY Fed’s bailout of AIG gets deeper and uglier, the sense that Treasury Secretary — and former NY Fed President — is a short timer.

On the interview with Jim Bianco, he mentioned Geithner was a dead man walking — and He has been for sometime. The White House is just waiting for the right time to dump him.

That might be true — and changing the preserve the status quo parts of the Economic team is a good idea.

http://www.ritholtz.com/blog/2010/01/geithner-dead-man-walking/

[Demeter]

13. Any time would be just fine--the Sooner the Better!

as long as he doesn't put Summers, Dimon, Rubin...

Bet he's having a hard time finding a replacement. After you've nominated an internationally known failure(IMF) and tax cheat, where do you go from there?

Five more Days on Tenterhooks for Bernanke Watchers!

[Po_d Mainiac]

18. Some more heat

Goldman Sachs Approached AIG To Scrap Contracts Months Before Being Paid In Full By NY Fed
http://www.huffingtonpost.com/2010/01/26/goldman-sachs-approached_n_437041.html
:popcorn:
But instead of bargaining with Goldman and AIG's other counterparties to resolve the billions of dollars in souring derivatives contracts, the regional Fed -- then led by current Treasury Secretary Timothy Geithner -- ended up paying 100 cents on the dollar for toxic assets -- "an amount far above their market value at the time," according to a scathing November 2009 report by the TARP watchdog, the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

[Demeter]

20. Finance: The hindered haircut

http://www.ft.com/cms/s/0/3e18cd5c-0ab2-11df-b35f-00144feabdc0.html

It was mid-2008 and a little-noticed wrangle was taking place that will be of particular interest to the US congressional committee that is on Wednesday due to grill Tim Geithner, US Treasury secretary, over the rescue two months later of AIG, America’s biggest insurer.

On one side of the earlier negotiations stood a group of banks that included Merrill Lynch of the US and France’s Société Générale. On the other: Security Capital Assurance (SCA), a Bermuda-based bond insurer that had run into difficulties as the US subprime mortgage market imploded. At stake was how much money the banks should receive on insurance contracts that SCA provided for complex pools of mortgage securities known as collateralised debt obligations, or CDOs.

Among other reasons, the banks had bought the insurance – called credit default swaps, or CDSs – to protect themselves against a panic just like the one sweeping the markets at that time. But SCA lacked sufficient capital to pay the claims in full and the banks feared that if the insurer went under, they would receive nothing.

Something had to give. After heated talks, Merrill agreed that July to cancel its CDS contracts for a pay-out of 14 cents on the dollar – a severe “haircut”, in market parlance. The other banks also reduced their original claims. At the conclusion of talks that dragged on until May 2009, not a single lender was paid in full.

That is potentially awkward for Mr Geithner, who before joining the administration of President Barack Obama was president of the Federal Reserve Bank of New York, the most important regional component of the US central banking system. What Congress, and perhaps historians, will have to decide is: did the government, through collusion or mistakes, take billions of dollars from the taxpayers’ purse and put them into the coffers of some of the world’s largest banks without forcing them to accept much lower payments? Why, in other words, did the counterparties of AIG wind up with so better a deal than those of SCA did – some of which were the same banks?

His inquisitors on the House of Representatives oversight committee will want to take him back to the apocalyptic month when the world’s financial system came close to meltdown. September 2008 brought not only the collapse of Lehman Brothers on Wall Street but a flurry of rescues that included staving off bankruptcy at AIG. It is the terms of the AIG bail-out that members of the congressional committee will want to examine, amid growing concern that not only might the taxpayer have been made to foot a higher bill than necessary but that details of a deal done in secret are to be kept under wraps for a decade.

INCREDIBLY MUCH MORE AT LINK...

[Demeter]

21. Is Bernanke Hiding A Smoking Gun?

http://www.huffingtonpost.com/2010/01/26/is-bernanke-hiding-a-smok_n_437509.html

A Republican senator said Tuesday that documents showing Federal Reserve Board Chairman Ben Bernake covered up the fact that his staff recommended he not bailout AIG are being kept from the public. And a House Republican charged that a whistleblower had alerted Congress to specific documents provide "troubling details" of Bernanke's role in the AIG bailout.

Sen. Jim Bunning (R-Ky.), a Bernanke critic, said on CNBC that he has seen documents showing that Bernanke overruled such a recommendation. If that's the case, it raises questions about whether bailing out AIG was actually necessary, and what Bernanke's motives were.

A letter Bunning sent Monday to Banking Committee Chairman Chris Dodd (D-Conn.) also refers to an "mail exchange regarding restructuring of assistance to AIG, initiated by Treasury Secretary Timothy Geithner" in March 2009.

Senators will be voting on Bernanke's confirmation for a second term in the coming days. But only senators on the Banking Committee have had access to documents that illuminate just what decisions he made and how he made them. And that access only came after Bunning publicly complained that Dodd and Sen. Richard Shelby (R-Ala.) were the only members of the committee could see them.

Meanwhile, Rep. Darrell Issa (R-Calif.), who has been investigating the AIG bailout in his role as ranking Republican on the House Oversight and Government Reform Committee, said that a whistleblower has informed him of "troubling details" of Bernanke's role in the bailout.

There may be nothing incriminating in the documents, but without access to them, the Senate will be voting to confirm him in the dark.

Senators from both parties who say they will vote to confirm Bernanke credit him with deft actions that averted a second Great Depression. Those actions, they argue, outweigh what blame he deserves for causing the crisis in the first place.

"He's done a very good job in the last year. And but for his work, we would be in a very different position in this country today," said Dodd Monday. "Now that's hard to prove a negative. But the fact of the matter is, our entire financial system might have collapsed but for his leadership."

On Monday, Bunning sent a letter to Dodd, asking him to subpoena the emails and other documents. Bunning and other committee members have thus far had to view the documents at the Federal Reserve and are bound by confidentiality from revealing their contents. "He thinks that all members of the Senate should have access to the documents he's seen," said Bunning spokesman Mike Reynard.

Issa, in a letter to his committee's chairman, Ed Towns (D-N.Y.), asked for a similar subpoena and even specified exactly which documents he wants: Those tagged electronically as "sb-aig-01000092 to sb-aig-010000125" and "Draft Memo on AIG.pdf."

Towns spokeswoman Jenny Rosenberg said that Towns would decide on a subpoena after Wednesday's hearing on the AIG bailout.

Bunning, in his letter to Dodd, is equally specific, citing nine particular documents that the Senate should review before voting to confirm Bernanke:

1. Agenda and materials for 11/12/2008 meeting of the Board of Directors of AIG (containing minutes of previous board meetings).

2. Agenda and materials for 1/14/2009 meeting of the Board of Directors of AIG (containing minutes of previous board meetings).

3. Memo "Issues Related to Possible IPC Lending to American International Group" presented to the Board of Governors for approval of lending to AIG, dated 9/15/2008.

4. Email from Chairman Bernanke including a draft of the memo to be presented to the Board of Governors for approval of lending to AIG, dated 9/15/2008.

5. Memo "Proposed Securities Lending Facility for American International Group, Inc. ("AIG")" presented to the Board of Governors for approval of the securities lending facility for AIG, dated 10/6/2008.

6. Memo "Proposed Steps to Stabilize American International Group, Inc." presented to the Board of Governors for approval of restructuring assistance to AIG and creation of Maiden Lane II & III, dated 11/6/2008.

7. Spreadsheet describing the assets purchased by Maiden Lane II and Maiden Lane III.

8. Spreadsheet listing derivative transactions and counterparties for Maiden Lane III.

9. Email exchange regarding restructuring of assistance to AIG, initiated by Treasury Secretary Timothy Geithner, dated 03/01/2009.

[Demeter]

23. Today's Gospel Lesson (Obama please take note):

If your right eye makes you stumble, tear it out and throw it from you; for it is better for you to lose one of the parts of your body, than for your whole body to be thrown into hell.

Matthew 5:29 New American Standard Bible (©1995)

[Po_d Mainiac]

24. Fireman of the year!!!

Senators from both parties who say they will vote to confirm Bernanke credit him with deft actions that averted a second Great Depression. Those actions, they argue, outweigh what blame he deserves for causing the crisis in the first place.

:grr: Wunner if the gentry would feel as generous if Helo Ben had torched their houses instead of ours :grr:

[Demeter]

27. Rather Like an Arsonist/Fireman

those adrenalin junkies who drum up business for themselves...

[Tansy_Gold]

28. A second "Great Depression" would not/could not have been

created or averted by the actions of one person.

A 'great depression' is, imho, a reaction to a systemic problem, one that destroys or at least weakens the entire structure of the economy. The problems of the U.S. economy in, say 2006-2008, were many and extreme, from the housing bubble to the rising unemployment caused by offshoring of manufacturing jobs to the massive tax cuts of the reagan, booosh, and booosh administrations to the repeal of Glass-Steagall and the encouragement of investment house gambling.

Anyone -- ANYONE -- who thinks Ben Bernanke alone caused and/or prevented the meltdown is five sandwiches short of a picnic.




Tansy Gold

[Demeter]

41. Bernanke just added fuel to the supply

He had LOTS of help setting up the conflagration...he just did nothing to prevent it or mitigate it.

[Demeter]

25. Another Nugget from FT article:

“By not granting the transparency they are basically conspiring to not inform either Congress or the public so that they could, in fact, go about their business in secrecy and the public would not be wise until 2018 when these counterparties are due to become public,” says Darrell Issa, a Republican representative who has pushed Congress to investigate the AIG payments. The question is whether the efforts amounted “to nothing less than a backdoor bail-out of AIG’s creditors, including Goldman Sachs, Merrill Lynch, Société Générale and Deutsche Bank”.

Mr Geithner’s supporters say he was part of a team that responded pragmatically to prevent the collapse of the global financial system. But criticism of payments made to AIG – seen variously as a deliberate attempt to funnel public money to creaking banks or a negligent failure to safeguard the public interest – has been fuelled by e-mails showing New York Fed officials attempting to keep details of the transaction from the public....

Like SCA, AIG had provided credit insurance on CDOs that were falling in value and it, too, found itself facing a group of banks looking for compensation. Under agreements with its counterparties, AIG had to post collateral as the value of the CDOs it insured fell. AIG had pledged some $35bn but was still struggling.

As was the case with SCA, something had to give – only this time around, neither the banks nor the insurer would end up doing the giving. Instead, the New York Fed arrived bearing an early Christmas present for the banks. Fearing that the collateral calls on the CDSs were quickly sapping the $85bn (€60bn, £53bn) it had agreed to lend AIG to nurse it through the crisis, Mr Geithner’s operation opened secret negotiations with the banks and agreed to buy underlying CDOs with a face value of $62bn from them.

No haircut was required. Instead, the Fed provided most of the $27bn in financing needed to make up the difference between the face value of the CDOs and the collateral AIG had posted, which the banks were allowed to keep.

The central bank wound up with a portfolio of CDOs of uncertain value – now residing in Maiden Lane III, a special purpose vehicle named after the New York Fed’s location – and a political headache with few parallels in the history of US finance. The $62bn transfer has become a cause célèbre for politicians, bankers and conspiracy theorists clamouring to know what really happened in those fraught few days when the financial system was on the brink...

People familiar with the matter maintain that the officials were confronting a classic “run on the bank”. The difference was that instead of depositors lining up outside bank branches to get back their savings, banks were lining up at an insurer demanding collateral to cover the payments owed to them.

Had AIG failed to meet collateral calls, these people argue, the rating agencies would have downgraded it, sparking a cascade of claims for more collateral from parties that had bought credit insurance on AIG itself.

Bill Dudley, Mr Geithner’s successor at the New York Fed, said last month: “From the moment the US government made it clear that its goal was to prevent AIG’s bankruptcy in order to stem a broader collapse of the financial system, this undercut the ability to obtain concessions from AIG’s counterparties .”

The rules of the rating agencies were crucial to the decision to pay out 100 cents on the dollar, say people familiar with the process. Under these rules, a company loses its investment grade rating if it does not pay out 100 cents on the dollar on such contracts. “No matter at what level in the market debt trades, if you don’t pay par, the rating agencies say it is coercive and you get downgraded,” says one.

Regulators also say they were worried that they might be accused of “bullying” the banks to accept less than the full value of the insurance contracts. “We had to accept the sanctity of the contracts,” says another person familiar with the matter.

In the wake of the decision to let Lehman go only days before, regulators were uncertain about whether Wall Street could withstand the shock of losing money on the $62bn of credit protection – even though the banks had already received some collateral from AIG and had sold some of these CDOs to customers. Critics of the Fed, and of Mr Geithner, argue that the regulators did not try hard enough to extract concessions from the banks.

According to a government investigation into the affair, when the Fed telephoned the banks, Goldman and Merrill refused to accept any discount. The French banks also ruled that out, backed by their regulator, the Commission Bancaire, which “forcefully asserted that, under French law, absent an AIG bankruptcy, the banks could not agree to less than par value”, the report notes. The only bank to volunteer a deal was UBS – which said it might accept a discount of just 2 per cent.

[Demeter]

26. And the Conclusions:

What the AIG drama exposes is that much of the recent innovation on Wall Street was dedicated to creating assets that barely traded and whose values were determined almost exclusively by computer models used by the banks and rating agencies.

In this 21st-century hall of mirrors, it has been possible for tens of billions of dollars of value to vanish or reappear at the click of a computer button – or at the behest of the rating agencies or through a change in accounting rules. That in turn makes it hard for the US government to explain whether the taxpayer really got “value for money” by bailing out AIG – or whether Americans will ever get back all the billions already spent.

The longer the finger of suspicion continues to swirl around AIG, the harder it could be for the Obama administration to lance the boil of voter anger – or, in a world where values could appear illusory, to prove that it spent taxpayers’ money wisely.

Little wonder, then, that Mr Barofsky, the Tarp overseer, warned late last year that “the lesson that should be learnt is that whenever government funds are deployed in a crisis to support markets or institutions the public is entitled to know what is being done with government funds”. Mr Geithner now has his work cut out for him.

[Robbien]

30. Darrell Issa is like a rabid dog with a bone and the bone has got Geithner's name on it

Even though I believe Issa is a big tool of the rabid right, it is great he is the one pushing the oversight committee to keep on this.

[Demeter]

12. Oliphant

http://imgsrv.gocomics.com/dim/?fh=857d9180b313eb03009685fc353c79c3&w=750.0

Rachel Maddow sure tore him a new one:

http://www.youtube.com/watch?v=ToSumz4QQvM

Rachel gives a rundown on the SOTU that I can't quite agree with--it covers up a lot of sins....puts positive spin on the rest.

[Demeter]

14. Good Morning Ozy and Gang!

Winter is back with a vengeance, 15F, windchill of 4F. and tomorrow, when I throw papers, expected to be worse. Think warm thoughts!

[MARALE]

29. I am tired of winter already!

We had a surprise blizzard the other day and another day off for the kids. they will be going well into June and not learning much in that warm weather, if this snow ever melts. Also, we may be set for more flooding in the spring with all the moisture that we have gotten over the winter. Sigh...

[AnneD]

16. Morning Marketeers...

:donut:and lurkers. Between our board passing the the recommendation that teachers being fired if they don't raise the students test scores, the 12th hour allegation that teachers helped kids cheat (TEA had already approved the results), the district withholding the release of the aspire bonus money less than a week before it's release to the teachers, and releasing the videos of staff 'stealing' equipment from the school (the custodian was opening the door for the ex principal in one and the computer teacher was unpacking computers for the class room and taking boxes out)-folks around her are pissed as hell with the district and depressed. In addition to wearing my badge every day-I carry my digital recorder in my pocket. All hell has broken out. The kids are not stupid. They think the world believes that because they live in the ghetto-the only way they can pass a standardized test is to cheat-and that is the worst of all. These kids work their butts off and pour their hearts out and because folks in charge want to engage in a union busting turf war-they feel free to smear the kids accomplishment. I am buying my time back for retirement. I thought it would take 5 years but actually I looked at my receipt book and may do in less than 2. My other Nurse friend at the high school that is being investigated said she just had 3 years til she is eligible for full retirement. We are really thinking that we will retire and go back to the University hospital for a few years to boost out retirement salary and then retire permanently. Life is too short to put up with this shit.

Hubby and I had our annual (or is that anal) budget meeting. I alway get after him for not paying attention. Well, now that he is not working OT, he couldn't figure out why he was losing money from his checking account. He was victim of so many of Wells Fargo's victim fees (a checking fee, a fee to handle his IRA-THAT HE NO LONGER HAD THERE!!!!!!, etc). He was thinking that the banks here operated like they did in India-if you put in $80, you have $80. I then told him about our credit union where I MADE him put his business account. I am happy to say he will be moving his money. Because of the automatic deposits and deductions is will take a while as we are determined that they get no more money. I told him the money he paid was his stupid tax but not to worry, we all pay stupid tax until we learn our lesson. It just makes him sick and angry when he thinks of how much they soaked him for. He was a loyal customer for over 10 years (at over $150 in normal fees a year-not counting any overdrafts). He told me that he learned his lesson, and I quote "whenever you tell me to do something-I promise to do it right then. I will never ignore your advice or request. That was music to this family accountants ears.:loveya:

Happy hunting and look out for the bears. I will post in the mornings but I dare not even look at this page while I am at work anymore.

[ozymandius]

34. I am really sorry you folks are having such a rough time Anne.

The work situation really sucks. As your description really underlines: the admins are reaping a bitter harvest among their precious students. Really, it sounds like a con job. Certainly - even if the politicos get everything they want from shafting the personnel - any victory will be a pyrrhic one. That certainly is no way to build confidence and enthusiasm among the staff in their organization's leadership.

Your husband finally seeing the light with his bankster organization is welcome news. A pox on all their houses - those thieves. Great work on your part!

[Roland99]

19. Oh what a great toon!

[DemReadingDU]

22. ditto!

[Johnny Harpo]

36. Take Heart..There Will Be 'Green Jobs' Tomorrow...Why Does That Remind Me Of....

an old Popeye cartoon where Wimpy always says 'I shall gladly pay you on Tuesday for a hamburger today'.

Only now it's more like....'Please pay us today for a hamburger on Tuesday'.


Just like all the sports teams who have a bad season...'Wait Till next year'.

[DemReadingDU]

39. Suspending Money Market Redemptions Is Now Legal

1/27/10 Suspending Money Market Redemptions Is Now Legal;
SEC Approves New Money Market Regulation In 4-1 Vote

Zero Hedge discussed a month ago the disastrous prospects of what would happen if the new proposal contemplated by the SEC, which would allow the suspension of redemptions from Money Market Funds, were to pass. Well, in a nearly unanimous vote, Money Market Funds now have the ability to suspend redemptions, courtesy of the SEC's just passed 4-1 vote. This explains the negative rate on bills: at this point, should there be another meltdown, money market investors will not, repeat not, be able to withdraw their money purely on the whim of Mary Schapiro. As the SEC noted: "We understand that suspending redemptions may impose hardships on investors who rely on their ability to redeem shares." Too bad investors' hardships considerations ended up being completely irrelevant.

more...
http://www.zerohedge.com/article/suspending-money-market-redemptions-now-legel-sec-approves-new-money-market-regulation-4-1-v

[Demeter]

47. Republicans make new claim about Bernanke and AIG

http://www.marketwatch.com/story/republicans-make-new-claim-about-bernanke-and-aig-2010-01-27?siteid=YAHOOB

Republican politicians made a new claim Wednesday about Federal Reserve Chairman Ben Bernanke's involvement in the 2008 bailout of insurance giant American International Group, one day before a vote on his re-nomination for a second term at the central bank.

Sen. Jim Bunning, a member of the Senate Banking Committee, said he read documents that show Fed staff recommended against bailing out AIG /quotes/comstock/13*!aig/quotes/nls/aig (AIG 24.95, +0.04, +0.16%) , leaving the insurer to file for bankruptcy like Lehman Brothers /quotes/comstock/11i!lehmq (LEHMQ 0.07, -.00, -3.03%) .

"His staff didn't agree with him," Bunning said, according to a transcript of a Tuesday interview with CNBC. "I'm talking about an e-mail that he sent his staff after his staff recommended that the Federal Reserve not touch AIG just like Lehman Brothers."

The government ended up committing more than $100 billion to save AIG in multiple bail outs that have become among the most controversial aspects of the financial crisis.

Rep. Darrell Issa, R-Calif. said his office received "important information from a whistleblower" confirming Sen. Bunning's comments, according to a letter Issa sent on Tuesday to Rep. Edolphus Towns, chairman of the Committee on Oversight and Government Reform.

"According to the whistleblower, the documents reveal troubling details about Federal Reserve Chairman Ben Bernanke's personal involvement in the original decision to bail out AIG in September 2008," Issa wrote.

A spokesman at the Fed didn't immediately return a phone message and email left seeking comment on Wednesday.

Issa said his staff tried to get the documents, but Fed staff didn't return their phone calls. Issa also asked Towns to subpoena the Fed to obtain the documents.

The claims come as the Senate prepares to vote on the re-nomination of Bernanke to a second term as Fed chairman. Several senators have said they will vote against him, increasing concern about his position. Bernanke's term as Fed chairman expires on Jan. 31.

[Demeter]

48. Geithner draws fire defending Fed on AIG bailout

http://news.yahoo.com/s/ap/20100127/ap_on_bi_ge/us_aig_probe

Democrats and Republicans alike pummeled Treasury Secretary Timothy Geithner on Wednesday over his role in the $180 billion bailout of insurance giant AIG Inc., venting public anger over Wall Street's return to prosperity while 10 percent of Americans are still jobless.

Geithner, one of the original architects of the government's 2008 response to the financial crisis as president of the Federal Reserve Bank of New York, defended the use of taxpayer money as necessary to head off "potentially catastrophic damage to the economy."

But members of the House Committee on Oversight and Government Reform hammered away at why regulators allowed American International Group to pass on billions of the bailout money to big Wall Street banks that were business partners.

"In effect, the taxpayers were propping up the hollow shells of AIG by stuffing it with money. And the rest of Wall Street came by and looted the corpse," committee chairman Edolphus Towns, D-N.Y., told Geithner.

Geithner, whose last job was president of the New York Fed, clearly was getting no cover from committee Democrats on the day that President Barack Obama was to give a State of the Union address intended to assure Americans he shares their economic priorities.

Rep. Marcy Kaptur, D-Ohio, suggested Geithner was more beholden to banking interests than to taxpayers when he ran the New York Fed and cut him off abruptly when he tried to deny it.

"You are suggesting that the people involved in this were not acting in the public interest and you are suggesting they were working for the private interest, and that is not true," he told her.

Both Geithner and Federal Reserve Chairman Ben Bernanke have recently found themselves on the defensive, both targets of political discontent and rising voter anger sweeping the nation.

Bernanke had to scramble for support for confirmation for a second term. And Geithner faced speculation over whether his influence was fading after Obama reset his economic priorities to go with a far more aggressive attack on Wall Street and large banks and began paying more attention to advice from former Fed Chairman Paul Volcker.

But if Geithner risked being hung out to dry by the administration, it was not obvious in his testimony, in which he tied to deflect repeated congressional criticism and vigorously defended his record.

"Deciding to support AIG was one of the most difficult choices I have ever been involved in, in over 20 years of public service. The steps that were taken were motivated solely by what we believed to be in the public interest," Geithner said.

He also repeated an insistence that he played no direct role in AIG deals with business partners or in withholding information about them from the public.

When Obama picked him for the Treasury post on November 24, 2008, "I withdrew from monetary policy decisions ... and day to day management of the New York Fed," Geithner testified. "I don't think there was a better alternative available."

AIG eventually received an aid package from the government of more than $180 billion. At issue is the part of this money to repay banks that were its business partners, known as counterparties, and alleged efforts to cover up details of the payments.

The committee subpoenaed 250,000 pages of documents from the Fed.

Lawmakers are concerned with revelations about efforts to keep details of the AIG deals secret. Officials from the Treasury Department and the New York Fed worked to keep the public from learning details about those deals and other AIG decisions.

"I played no role in those decisions," Geithner said. "I will take complete responsibility for decisions I played a role in shaping," he said.

But lawmakers expressed skepticism.

"Many people, including people of this committee, have a hard time believing Secretary Geithner entered into an absolute cone of silence," California Rep. Darrell Issa, the committee's top Republican, said. Issa said he had "lost confidence" in Geithner.

Democrats and Republicans took turns lambasting the Treasury secretary.

"Either you made a bad decision there, or there was the attempt to cover up one of the biggest bailouts, backdoor bailouts, in history," Rep. John Mica, R-Fla., told him.

Recalling the early controversy over Geithner's failure to pay some personal income taxes, Mica said: "You gave lame excuses then, you are giving lame excuses now. Why shouldn't we ask for your resignation as secretary of the Treasury?"

"You have a right to your opinion," Geithner said.

Rep. Stephen Lynch, D-Mass., told Geithner: "It just stinks to the high heaven what happened here."

Lynch said later that Geithner's reputation "has been hurt greatly."

Bernanke also said Wednesday he was "not directly involved in negotiations" involving payments from AIG to its business partners including Goldman Sachs and other Wall Street firms. Those negotiations were handled primarily by the staff of the New York Fed, he said.

Bernanke made the comments in written responses to questions posed by Issa.

Although Bernanke and Geithner have taken the most heat, the government's bank rescue effort began under former President George W. Bush and Henry Paulson, his Treasury secretary.

Paulson, who followed Geithner at Wednesday's hearing, defended his own role. "An AIG failure would have been devastating to the financial system and the economy," he said. "AIG could not be effectively wound down."

Rep. Elijah Cummings, D-Md., asked Paulson if he didn't realize how angry people were at wealthy bankers and Wall Street barons who he said play golf together and are always "looking out for themselves" while the rest of the country suffers.

"I'm not a golfer but I sure know that's how people feel. Congressman, you've got it. People are very, very angry. And rightfully so ... They don't recognize that what was done wasn't done for the banks" but to save the nation's financial system and economy.