STOCK MARKET WATCH, Friday January 29

[ozymandius]

Source: du

STOCK MARKET WATCH, Friday January 29, 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 28, 2010

Dow... 10,120.46 -115.70 (-1.13%)
Nasdaq... 2,179.00 -42.41 (-1.91%)
S&P 500... 1,084.53 -12.97 (-1.18%)
Gold future... 1,085 -1.20 (-0.11%)
10-Yr Bond... 3.63 -0.01 (-0.38%)
30-Year Bond 4.55 -0.01 (-0.31%)

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

Market Conditions During Trading Hours

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

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

Read more: du

[ozymandius]

1. Market Observation

same as yesterday

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

[DemReadingDU]

37. still same as yesterday, and it's been two more hours

:shrug:

[ozymandius]

2. Today's Reports

08:30 GDP-Adv. Q4
Briefing.com 6.8%
Consensus 4.7%
Prior 2.2%

08:30 Chain Deflator-Adv. Q4
Briefing.com 1.3%
Consensus 1.3%
Prior 0.4%

08:30 Employment Cost Index Q4
Briefing.com 0.2%
Consensus 0.4%
Prior 0.4%

09:45 Chicago PMI Jan
Briefing.com 55.0
Consensus 57.2
Prior 58.7

09:55 University of Michigan Sentiment Jan
Briefing.com 72.4
Consensus 73.0
Prior 72.8

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

[UpInArms]

47. Cooked Books Reports GDP @ 5.7% (Siss! Boom! Bah!)

U.S. 4Q GDP up 5.7%, vs. 5.4% expected
8:30 a.m. Today

U.S. 4Q GDP up 0.1% vs. 4Q 2008
8:30 a.m. Today

U.S. 2009 GDP falls 2.4%, most in 63 years
8:30 a.m. Today

U.S. 4Q GDP boosted by change in inventories
8:30 a.m. Today

U.S. 4Q business investment up 2.9%
8:30 a.m. Today

U.S. 4Q consumer spending up 2.0%
8:30 a.m. Today

U.S. 4Q final sales up 2.2%
8:30 a.m. Today

U.S. fourth-quarter gross domestic product up 5.7%
8:30 a.m. Today

Employment costs up record low 1.5% in '09
8:30 a.m. Today

U.S. Q4 employment cost index up 0.5%
8:30 a.m. Today

[UpInArms]

48. U.S. 4Q GDP up 5.7% on swing in inventories

http://www.marketwatch.com/story/us-4q-gdp-up-57-on-swing-in-inventories-2010-01-29

WASHINGTON (MarketWatch) - Coming out of the worst recession in generations, the U.S. economy grew at the fastest pace in six years during the fourth quarter of 2009, even as consumer spending and business investment remained tepid, according to data released Friday by the Commerce Department. Real gross domestic product increased at a 5.7% seasonally adjusted annual rate in the final three months of the year. About two-thirds of the growth came via the swing in inventories. The 5.7% increase was in line with the 5.4% gain expected by economists surveyed by MarketWatch. Even with healthy growth in the second half of the year, the economy shrank 2.4% in 2009, the worst drop since the 10.9% decline in 1946

[Ghost Dog]

84. Uff.

:again scratching head.

:SHRUG:

[UpInArms]

61. Crack Smokers Unite! Consumer sentiment hits 2-year high, UMich says

http://www.marketwatch.com/story/consumer-sentiment-hits-2-year-high-umich-says-2010-01-29?siteid=bnbh

WASHINGTON (MarketWatch) -- U.S. consumer sentiment improved in January, as a closely followed survey rose to its highest level in two years. The Reuters/University of Michigan consumer sentiment index rose to 74.4 in January from 72.5 in December, according to media reports. It's the highest since January 2008. The preliminary mid-month reading was 72.8. Economists were expecting an increase to 73.0 in the final numbers. The index has been little changed in the past five months after falling to 55.3 in November 2008.

[ozymandius]

3. Oil hovers below $74 as traders eye dollar, stocks

...Benchmark crude for March delivery was up 10 cents to $73.74 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 3 cents to settle at $73.64 on Thursday, the lowest since Dec. 14 when crude dropped to $73.46.

Oil has skidded about 12 percent since reaching $84 a barrel earlier this month as investors eye a stronger dollar and slumping equities. Traders often buy commodities such as oil as a hedge against inflation and a weaker dollar and sell them when the U.S. currency rises. ...

Investors are also looking at U.S. crude demand, which has so far not rebounded strongly from a slide last year. ...

In other Nymex trading in February contracts, heating oil rose 0.47 cent to $1.92 a gallon, while gasoline gained 0.90 cent to $1.93 a gallon.

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

[ozymandius]

4. Occidental Petroleum doubles profit in 4Q

NEW YORK – As oil prices surged last year, Occidental Petroleum Corp. cranked up crude production and doubled its fourth-quarter earnings, the company said Thursday.

The Los Angeles oil company pumped 645,000 barrels of oil and gas in 2009, more than ever before. The decision turned out to be a good one as crude prices rallied from $34 to $82 a barrel during the year. ...

For the full year, Occidental earned $2.92 billion, or $3.58 a share. In 2008, when oil prices spiked above $147 a barrel, Occidental earned $6.86 billion, or $8.34 a share.

Occidental plans to increase capital spending by 19 percent to $4.3 billion this year. Irani didn't provided details about where the company would invest the money except to say that he would look at projects "that will stimulate our continuous growth."

Occidental also will continue developing oil fields in Iraq and Kern County, California.

http://news.yahoo.com/s/ap/20100128/ap_on_bi_ge/us_earns_occidental_petroleum_3

[ozymandius]

5. Fed chief Bernanke wins 2nd term in closest vote

WASHINGTON – Embattled Federal Reserve Chairman Ben Bernanke won confirmation for a second term Thursday, but only by the closest vote ever for the crucial post and after withering criticism from lawmakers for bailing out Wall Street while other Americans suffered in recession.

The Senate confirmed Bernanke for a new four-year term by a 70-30 vote, a seemingly solid majority but 14 votes worse than the closest previous vote for a Fed chairman. ...

The battle over Bernanke's confirmation has been a test of central bank independence, a crucial element if the Fed is to carry out unpopular but economically essential policies. Its decisions on interest rates can have immense consequences, from the success or failure of the largest companies to the typical home-buyer's ability to get an affordable loan to the price of cereal at the grocery or gas at the corner station. ...

Supporter Chuck Schumer, D-N-Y., worried that the bitter fight over the nomination would send "the message that the Federal Reserve and its monetary policy decisions are under the thumb of Congress. Businesses will be faced with the prospect that the Fed might not be able to do what's necessary for the economy because of pressure from Congress." ...

In the final vote, 11 Democrats and an independent joined 18 Republicans against Bernanke. They included senators facing potentially difficult re-elections this year, such as Democrats Arlen Specter of Pennsylvania and Barbara Boxer of California. Seven Democrats stuck with their party's majority on the vote to overcome the filibuster, but then switched to vote against confirmation. Both party leaders — Democrat Harry Reid of Nevada and Republican Mitch McConnell of Kentucky — voted to confirm. John McCain, the 2008 Republican presidential candidate, voted against him.

http://news.yahoo.com/s/ap/20100129/ap_on_bi_ge/us_bernanke_senate

---

I think the Senate has collectively lost its mind.

[ozymandius]

6. Bernanke May Have Harder Fight Defending Fed After Confirmation

Jan. 29 (Bloomberg) -- Ben S. Bernanke, who won Senate approval for a second term as Federal Reserve chairman over a record number of opponents, may now have a tougher fight against threats to the central bank itself.

Lawmakers are considering legislation to remove a shield from congressional audits of monetary policy and strip the Fed of bank-supervision powers, measures that Bernanke opposes. ...

Dodd and Alabama’s Richard Shelby, the panel’s top Republican and a Bernanke opponent, both want to strip the Fed of bank-supervision powers.

“We should seriously consider, and we’re talking about, taking the regulatory power away from the Fed, let them concentrate on monetary policy,” Shelby told reporters yesterday. “There’s a lot of unrest in the country, and a lot of people do not believe that the Fed should have been the central intervener in too-big-to-fail” financial firms. ...

Lawmakers are also aiming to reduce the influence of regional Fed presidents or gain more say over their appointments, which are currently made by private boards of directors and approved by Fed governors in Washington.

http://www.businessweek.com/news/2010-01-29/bernanke-may-have-harder-fight-defending-fed-after-confirmation.html

[Demeter]

8. Mind, Direction, Souls, Credibility

We could sell individual Senators as "Loss Leaders"....oh,wait, just did that! Now we should see great opportunities opening up in electioneering!

[ozymandius]

11. "The chair recognizes the Senator for Mr. Bubble."

There is your "campaign-in-a-box" shelf ready for any candidate.

[tclambert]

29. Pretty soon it will be "the planet Earth, a subsidiary of Super Megacorp."

[Po_d Mainiac]

23. The middle class wept....n/t

[Ghost Dog]

55. . . n/t

/... http://www.youtube.com/watch?v=iqIP5CeEK_c

[Robbien]

68. seven senators wanted to be seen opposing Bernanke but didn’t actually want to stop his confirmation

they wanted a campaign talking point, not an actual fight.

Simple maneuver: As with most business in the Senate, Bernanke’s confirmation only required 51 votes. But before getting to the final vote, the Senate must first vote to cut off debate. Cloture, it’s called.

Seven senators, including six Democrats, voted aye on cloture and then flipped to nay on the motion to confirm:

Six Dems: Barbara Boxer (Calif.), Al Franken (Minn.), Tom Harkin (Iowa), Kaufman (Del.), Sheldon Whitehouse (R.I.), and Byron Dorgan (N.D.)

One GOPer: George LeMieux (Fla.)

http://blogs.reuters.com/rolfe-winkler/2010/01/28/splitting-hairs-on-the-bernanke-vote/

[ozymandius]

7. DAVOS: Bank Of America Is Not Too Big, Says CEO (rotten tomatoes alert)

Bank of America (BAC) Chief Executive Officer Brian Moynihan said Friday that the bank wasn't too big, and that forcing the divestment of trading activities in big banks wouldn't prevent financial crises.

Speaking to CNBC television at the World Economic Forum in Davos, Moynihan said that banks must have good risk management, something that a lot of institutions failed to do ahead of the financial crisis.

http://online.wsj.com/article/BT-CO-20100129-705036.html?mod=WSJ_latestheadlines

-very short-

Raving lunatic. Concentration of wealth in institutions led by idiots such as Moynihan create financial crises. Bidness 101 teaches most people that the job of the CEO is to recognize threats and opportunities. As for threats: the job of the CEO is to avoid them. Not chart a course directly into the iceberg.

[ozymandius]

15. Ackermann, Gruebel, Moynihan Plot Regulatory Response in Davos

Jan. 29 (Bloomberg) -- Brian Moynihan, Oswald Gruebel and Josef Ackermann, leaders of some of the world’s biggest banks, met during the World Economic Forum in Davos, Switzerland, to plot how to reassert their influence with regulators and governments.

Chief executive officers including Bank of America Corp.’s Moynihan, UBS AG’sGruebel and Deutsche Bank AG’s Ackermann convened yesterday, a week after U.S. President Barack Obama shocked financiers with plans that may force large banks to limit their size and curb investments in hedge funds and private equity. ...

Moynihan said that much of the discussion was about tactics, such as who the executives should approach and when. He said the bankers were concerned that too much regulation could hamper economic growth and that conflicting national approaches need to be avoided.

Executives interviewed after the meetings said they understand that new rules are inevitable and urged national regulators to coordinate through the Group of 20 or other international bodies.

Some executives said they think the biggest challenge for the industry is overcoming public anger about bonuses and compensation.

http://www.bloomberg.com/apps/news?pid=20601108&sid=aXaiaICHCOu0

---

Their biggest challenge is "overcoming public anger about bonuses and compensation"? These people simply do not get it. Their activities have thrown millions of people out of work, cratered retirement portfolios and caused governments around the world to accrue massive deficits. But these parasites are worried about their PR campaign over bonuses and compensation.

Fuck them.

[Demeter]

35. The Biggest Challenge Is Reducing The Financial Industry By a Factor of Ten

to its historical and appropriate size of 4% of economic activity, vs. the 40% it ballooned into these last few decades...

[ozymandius]

9. Stock Tax May Reduce Volume 90%, Interactive Brokers CEO Says

...A transaction tax was first discussed in February and revived in December, when Iowa Senator Tom Harkin and Oregon Representative Peter DeFazio said it is the “most painless way” to fund the government’s deficit and curb speculation. French President Nicolas Sarkozy said Jan. 27 that a European debate on the subject is unavoidable. ...

Sending a fee to the government for every transaction would hurt asset managers, brokerages and so-called high-frequency traders, a group that accounts for 61 percent of volume, according to New York-based research firm Tabb Group LLC. Interactive Brokers handles about one-seventh of U.S. options that change hands.

An average of 10 billion shares has traded each day on U.S. exchanges since the beginning of 2009, according to data compiled by Bloomberg. ...

The proposals from Harkin and DeFazio, both Democrats, would impose a fee on transactions of stocks and derivatives, aiming to raise money for economic stimulus plans. The U.S. government’s budget deficit in the fiscal year that ended Sept. 30 was a record $1.42 trillion. ...

DeFazio’s proposal would put a tax of 0.25 percent on stock transactions and 0.02 percent on derivatives including futures, options, swaps and credit-default swaps. A transaction of 200 shares at $40 each would result in a $20 tax, compared with a commission of $1 for active traders at Interactive Brokers, Peterffy said.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aUFMGaqiHYaA&pos=15

---

I can see some benefits to taxing trades. Although I have not explored this proposal to the extent that it would leave me gasping in protest as it has done with the Tabb Group.

Curb speculation? Yes. The 401(k) might then have some meaning as an intended vehicle for retirement in contrast to being a retirement scam today. Bottom line: markets are irrational. If some aspects of irrationality could somehow be removed from trading based on the performance of a company, rather than the irrationality of the "greater fool" theory, then I am partisan to thoughtfully prescribed measures.

[Hugin]

28. "I am partisan to thoughtfully prescribed measures."

Ditto, Ozy. :)

... and yes, it would be nice to bring back some semblance of long-term investment to the Speculation Market.

[Demeter]

10. Greetings from Ann Arbor. Where It's a Toasty 6F

It's risen 4 degrees in an hour! So when it's time to leave at 9:30, it might be a sweltering 16F! The weatherman says only 7F at that time. We'll see.

With regards to craziness, when everyone around you has lost his/her mind, it's a lonely sanity. But this country lost its mind when the Alzheimer President took office, and recovery still hasn't occurred, a generation and a half later.

Is sanity ever going to return? I think that if we want sanity, we are going to have to dismantle the corporate superstructure and get down to some real basic productive labor: farming without Monsanto's mad scientists and lawyers; manufacturing without Chinese competition, or anybody else, for that matter; government without any GOP.

[ozymandius]

12. You might try taking salt tablets.

And drink plenty of liquids.

Sorry. Just being cheeky.

7º hurts. I admire your fortitude in dealing with cold like that.

[Demeter]

14. Salt Is Supposed to be Very Useful in This Situation

By raising the blood pressure, salt helps push warmth to the extremities, preventing frostbite. So I'm told...

[ozymandius]

16. Really? I did not know that.

That's fascinating. So I seriously reiterate my formerly cheeky suggestion.

[Demeter]

18. Yes, Well, Moderation in All Things, of Course

and if your doctor proscribes it, listen to the doctor.

But that's the only justification I can find for things like pickles, sauerkraut, and other Central European high-salt delicacies....

[Ghost Dog]

25. ...it would seem that we are all negligent.

Although it stands to reason that a samurai should be mindful of the Way of the Samurai, it would seem that we are all negligent. Consequently, if someone were to ask, "What is the true meaning of the Way of the Samurai?" the person who would be able to answer promptly is rare. This is because it has not been established in one's mind beforehand. From this, one's unmindfulness of the Way can be known.

Negligence is an extreme thing.

The Way of the Samurai is found in death. When it comes to either/or, there is only the quick choice of death. It is not particularly difficult. Be determined and advance. To say that dying without reaching one's aim is to die a dog's death is the frivolous way of sophisticates. When pressed with the choice of life or death, it is not necessary to gain one's aim.

...

In the judgment of the elders, a samurai's obstinacy should be excessive. A thing done with moderation may later be judged to be insufficient. I have heard that when one thinks he has gone too far, he will not have erred. This sort of rule should not be forgotten.

/... http://exhibita.com/Misc/hagakure/

[InkAddict]

56. LOL - Traitor - That is Bushido code...LMAO...

Life was far better before Quality Circles, TQM, and Six Sigma - just look at Toyota's fate as applied...

[Ghost Dog]

65. What can I say?

http://www.youtube.com/watch?v=dmDDyDH1JAo

[AnneD]

34. The Russian Prophylactic for the cold....

Bite a pickle before taking a shot of vodka. Makes the vodka taste sweet then you feel the heat. The hair it puts on your chest keeps you warm.:spray:


A little thing I picked up at a World Science Fiction Convention long ago and far far away.

[tclambert]

24. "There is no bad weather, just bad clothes."

A friend in Ann Arbor shared that Russian proverb with me. He walks to work and back all year, any weather. To deal with cold, you wear layers. I've worn as many as seven at a time.

[Demeter]

36. Yes, But Then One Rolls, Instead of Walking

I have gone as high as four layers, but then I couldn't get in and out of the car....

[tclambert]

39. The weather's good for ice-fishing.

I see about a dozen shanties out on Walled Lake. They lo-ove sitting out there in the cold with a bottle of peppermint Schnapps.

[Po_d Mainiac]

71. ROFLMAO!!...Salting your beer works faster tho

:beer: :spray: :spray: :spray: :rofl: :rofl:

[Po_d Mainiac]

26. Same here...with a ton of wind

gonna be a gopher day........toss some wood into the stove, and gopher more.

[Demeter]

30. We Had that Wind Yesterday

Stay warm!

[Tansy_Gold]

62. The sun is finally out, currently 51, predicted high of 68

Tomorrow should reach 70.

This is why I don't complain of the heat in July and August.

:D


Tansy Gold, who needs to pack the car for the GC Marketplace arts & crafts event tomorrow for which she has made virtually no new inventory. . ... .

[Po_d Mainiac]

69. Winter in Maine....u get used to it....

[Demeter]

73. Or Move

[ozymandius]

13. Toyota U.S. Dealers May Lose $2.47 Billion a Month (Update1)

Jan. 29 (Bloomberg) -- U.S. dealers who sell Toyota Motor Corp.’s namesake brand could lose as much as $2.47 billion in combined monthly revenue because of the halt of sales of eight models, including the popular Camry and Corolla sedans.

The 1,234 Toyota brand dealers would miss out on $1.75 million to $2 million a month in revenue from new and used versions of the models that aren’t allowed to be sold, said John McEleney, the chairman of the National Automobile Dealers Association and owner of McEleney Toyota in Clinton, Iowa. ...

Hyundai Motor Co. yesterday joined Ford Motor Co. and General Motors Co. in offering discounts to lure Toyota owners, while consumer Web site Edmunds.com said fewer shoppers are aiming to buy Toyotas. The company’s U.S. market share may fall to 14.7 percent in January, its lowest since March 2006.

At the same time, dealers are preparing to replace accelerator pedals in 2.3 million recalled vehicles that have a part that may be defective. The pedal flaw also triggered recalls of models in Europe and China.

http://www.bloomberg.com/apps/news?pid=20601109&sid=a38ip_CkN12w&pos=10

[fasttense]

17. This defect in the accelerator pedals has killed people.

Now if corporations are people too, than Toyota must be prosecuted for murder and if they are found guilty they should get the death sentence. In the US that would mean Toyota should never again be allowed to sell an automobile in the US of A.

[tclambert]

27. "Corporations have no soul to save and no body to incarcerate."

I forgot who said it. I think it was a former Prime Minister of Britain.

On Law & Order (bonk, bonk), they would occasionally try to penetrate the corporate veil and prosecute some irresponsible executive for manslaughter when he "recklessly endangered" the lives of his customers.

Isn't the whole purpose of corporations to avoid personal responsibility?

[tclambert]

33. Toyota lost about $2 per share yesterday.

79.77 to 77.67, or 2.6%.

Ford did NOT go up on the news. Went down about 10¢.

[ozymandius]

19. "Paulson and Geithner got their asses kicked."

What Congress missed at AIG-Geithner hearing

Stammering Hank Paulson and Tim "Dead Man Talking" Geithner couldn't wait to get out of the witness chair yesterday when they appeared before the House Oversight Committee.
The former and current Treasury secretaries were grilled separately, in one of the few bipartisan events since President Obama took office. ...

As a matter of course, one congressman yesterday brought up Geithner's past tax troubles. And everyone mentioned the apparent conflict of interest that occurred when AIG was bailed out by taxpayers and Goldman Sachs -- Paulson's old firm -- just happened to score enormous benefits.

But Paulson and Geithner were very lucky that their interrogators really didn't know what they were doing, so they took their inquisition down a dead end.

What do I mean? The main line of questioning is about AIG, the insurance company that invested in risky stuff and needed taxpayers to save its behind.

[Demeter]

20. Such a tease, Ozy! Here's the Meat of His Argument:

AIG is a dead end. The culprits can argue that they were under a lot of pressure and even if mistakes were made, they were honest ones.

But there's nothing honest about Paulson's habit of phoning up friends on Wall Street when he got the itch. There is nothing Paulson and someone like Lloyd Blankfein, his successor at Goldman, could have spoken about -- six times, for instance, on Sept. 18, 2008 -- that would not have been inside information.

If others are prosecuted for having information that the public doesn't, why is it that Goldman had a hot line to the Treasury?

Was this very profitable financial institution suddenly invested with certain quasi-government powers?

If you look through Paulson's phone logs, there are dozens upon dozens of calls made between Blankfein and Paulson during the latter's tenure as Treasury secretary.

And those calls don't even include ones likely made on cell phones. One congressman said during yesterday's hearing that Geithner also made hundreds of calls to Goldman Sachs during the AIG timeframe. Or, as he put it, 103 calls to Goldman and 100 calls to Fed Chairman Ben Bernanke.

I'd be shocked if Tim Geithner, lasts much longer as Treasury Secretary.

His mouth keeps moving, but Geithner continues to say incredibly stupid things -- like, insisting again yesterday that he in herited today's financial problems when in fact he was head of the New York Fed when this mess started. [e-mail]

Read more: http://www.nypost.com/p/news/business/what_congress_missed_at_aig_geithner_H1rhDxyH4vrcOMONwmkjxO#ixzz0e0Bj0Zwn

[Po_d Mainiac]

49. I want to see Cassano spin his tale/tail..n/t

[Demeter]

21. EU signals last-resort backing for Greece

http://www.ft.com/cms/s/0/866e1246-0c43-11df-8b81-00144feabdc0.html

The European Union made clear on Thursday it would not abandon Greece and let Athens’ mounting debt crisis jeopardise the eurozone, even as Germany and France played down suggestions they had already formulated an emergency rescue plan.

“It’s quite clear that economic policies are not just a matter of national concern but European concern,” José Manuel Barroso, European Commission president, told reporters in Brussels.

According to high-level EU officials, Greece would in the last resort receive emergency support in an operation involving eurozone governments and the Commission but not the International Monetary Fund....

[Demeter]

32. Greece part of unfolding sovereign debt story

http://www.ft.com/cms/s/0/2fa3be90-0caa-11df-b8eb-00144feabdc0.html

Global investors worldwide are starting to pay more attention to what is unfolding in Greece. Yet most still think of Greece as an isolated case, just as they did for Dubai a few months ago.

With time, they will see Greece as part of a much larger investment theme that is a direct outcome of the global financial crisis: the 2008-09 ballooning of sovereign balance sheets in advanced economies is consequential and is becoming an important influence on valuations in many markets around the world.

As realisation spreads of this key sovereign investment theme, it is important to be clear about what Greece is, and what it is not.

At the simplest level, think of Greece as Europe’s big game of chicken, with the operational question for markets being two-fold: who will blink first, the Greek authorities, donors or both; and will they blink in time to avoid truly disorderly debt and market dynamics that also entail significant contagion risk.

Let us start with Greece where, under any realistic scenario, a meaningful internal adjustment is needed.

There is no solution to the country’s debt issues without a deep and sustained policy effort. Yet, given the initial conditions (including the size and maturity profile of its debt) and the existing policy framework (anchored on adherence to a fixed exchange rate via the euro), such adjustment is difficult and not sufficient.

If unaccompanied by extraordinary external assistance, it would entail such contractionary fiscal measures as to raise legitimate socio-political problems.

External assistance is needed to support the meaningful implementation of internal policies. And it has to be consequential in scale and durability, as well as timely and well-targeted.

Understandably, such assistance faces headwinds on account of donors’ moral hazard concerns (vis-à-vis Greece and beyond); of donors’ understanding that a Greek bail-out would not be a one-shot deal; and of donors’ own domestic budgetary considerations.

Because of this, I suspect that at least three of the following four conditions are needed to force the hand of European donors, and that is assuming that Greece provides them at least with the fig leaf of commitment to meaningful internal policy actions.

• First, evidence that Greek markets are being severely impacted by funding concerns. With the recent surge in borrowing costs and the disruptions in the normal functioning of government and corporate markets, this condition is clearly already met.

• Second, evidence that other peripherals in Europe – such as Ireland, Italy, Portugal and Spain – are also being impacted. This is happening, as signalled by the gradual widening in market risk spreads.

• Third, evidence that other providers of capital are sharing the burden of financing Greece. Tuesday’s €8bn bond issuance to private creditors is consistent with this.

• Fourth, evidence that the Greek financial disruptions are starting to undermine core European countries. Evidence here is limited to the weakening of the euro, which, as yet, cannot be viewed as disruptive (indeed, some view it as helpful for Europe).

Notwithstanding this last condition, we are much closer today to the point where donors’ hands will be forced. Yet investors should remain wary, as this would offer, at best, only a short-term tactical opportunity. Greater clarity as to what Greece can deliver in internal adjustment should remain the primary driver for long-term investment opportunities.

Investors should also remember that “market technicals” remain tricky and now constitute a meaningful marginal price setter. The shift in the investment characterisation of Greece, from being primarily an interest rate exposure to a credit exposure, has happened in such a way as to allow for little orderly repositioning. Many investors are trapped and the phenomenon has been accentuated by the recent evaporation of market liquidity.

Where does all this leave us?

Over the next few days, we are likely to get some combination of Greek and European donor announcements aimed at calming markets, reducing volatility, and reducing contagion risk. But the impact on markets is unlikely to be sustained as both sides face multi-round, protracted challenges which contain all the elements of complex game dynamics.

No matter how you view it, markets in Greece will remain volatile and more global investors will be paying attention. In the process, this will accelerate the more general recognition that sovereign balance sheets in many advanced economies are now in play when it comes to broad portfolio positioning considerations.

Mohamed El-Erian is chief executive of Pimco, the bond investor

[UpInArms]

51. Does Sound Money Feed Credit Excesses?

http://online.barrons.com/article/SB126476788393537031.html?mod=BOLFeed

Yet, there remains a notion that sound monetary policy is necessarily associated with sound fiscal policy. It seems logical the two virtues should go together. As the old Sammy Cahn-Jimmy Van Heusen song, "Love and Marriage," goes, "You can't have one without the other."

Or can you? Consider the heresy of the opposite: that sound money can lead to fiscal excesses; that low and stable inflation encourages lenders to provide credit on increasingly generous terms. Borrowers, of course, take advantage of lenders' overconfidence and ultimately get too deep into hock. Why? Because they could.

Such musings are brought to the surface by the deepening crisis in Greece's debt market, which saw yields shoot higher again Thursday. Yields on 10-year Greek government bonds soared 40 basis points (0.4 percentage points), to 7.15%, nearly twice that of benchmark German bunds. That's significant because both Greek and German bonds are denominated in euros and therefore have the same currency risk.

The difference in yields reflects the market's assessment of the Athens government's ability or willingness to pay its debts. On that score, the cost to insure Greek government debt for five years jumped nearly 13% Thursday, to 422,490 euros per 10 million euros principal amount, according to CMA Datavision, a unit of CME group that tracks credit-default swaps.

Greece appeared to have stabilized its listing fiscal ship earlier in the week with the (apparently) successful sale of 8 billion euros of bonds. But, according to one well-placed market source, the demand for the Greek bonds mainly represented buying at depressed prices by hedge funds -- to cover previous short sales. With that source of buying sated, the downward spiral of the Greek fiscal crisis continues.

Which comes back to the question of how the crisis came about. Let me proffer a hypothesis about the euro: the adoption of the common currency across the Continent (and Ireland) was an attempt to gain the advantages of the strong German deutschemark.

Italy, for instance, was able to go from high interest rates resulting from the unstable lira to low German rates. In the run-up to the adoption of the euro in 1999, fortunes were made in the "convergence trade," in which hedge funds would borrow deutschemarks at low interest rates to buy high-yielding Italian or Spanish bonds, whose yields would necessarily fall close to those of German bunds.

[Demeter]

74. More Like "Unsound Bankers" IMO

[Demeter]

22. JPMorgan to launch global corporate bank unit

http://www.ft.com/cms/s/0/e5dfb65e-0c56-11df-8b81-00144feabdc0.html

JPMorgan Chase is launching a global business aimed at selling loans and commercial banking services to multinational corporations, pitting the US bank against Citigroup and HSBC.

The creation of a global corporate banking unit, which has not been announced, will see JPMorgan invest substantial resources and hire hundreds of bankers in an effort to win a bigger slice of international business.


People close to the situation said that the new business, which will sell products ranging from loans and commodities trading to cash management services, would initially focus on fast-growing economies such as China, India and Brazil.

The UK, Germany and Switzerland will also be in the first wave of countries to be targeted, with a view to expanding the unit’s reach to the rest of the world over the years...

JPMorgan executives said that the launch was aimed at reducing reliance on the slow- growing US economy and taking advantage of a weakened Citi. The US accounts for about three-quarters of JPMorgan’s revenues....

[FarCenter]

63. They do that all already

The predecessor Chase Manhattan Bank operated all around the world.

[Demeter]

75. It's Cannibalism

Having eaten all the small fish, the predators are going after each other.

[FarCenter]

77. JPMC should be able to chew off big chunks of Citi's business

But there are a lot of other big competitors out there. Most likely this is a realignment of existing business units and some expansions.

[Demeter]

31. Samsung takes top spot from HP

http://www.ft.com/cms/s/0/c48d477a-0c3b-11df-8b81-00144feabdc0.html

Samsung Electronics has overtaken Hewlett-Packard as the world’s biggest technology company by sales, a sign of how strongly some South Korean companies have bounced back from the economic downturn...

The company, which also announced a return to operational profit in the fourth quarter, was once dismissed as a copy-cat manufacturer and poor cousin to its Japanese rivals.

But Samsung surprised many when its market capitalisation overtook Sony’s in 2002. This year analysts forecast that Samsung’s net profit will surpass that of the leading 15 Japanese technology companies combined in the fiscal year to March 2011, according to Bloomberg data.

Samsung is the world’s leading maker of memory chips and liquid crystal displays. It is second only to Nokia in mobile handsets. Some 48 per cent of the company’s equity is held by foreign investors....

[Demeter]

38. Jobless Non-Recovery details from Bill Bonner of DailyReckoning.com

This slump is worse than any since World War II because it is correcting an expansion that dates all the way back to 1945! Credit began increasing right after the war. It kept increasing until 2007. Then, in the private sector, it began going the other way....



It makes sense from a theoretical point of view, too. Every big credit expansion is followed by a big credit contraction. As credit expands, more and more mistakes are made. You can see how this works by looking at the mortgage industry. The first borrowers were solid. Subsequent borrowers were not-so-solid, but they were still generally reliable. The last borrowers - at the height of the frenzy in 2006 - often had no jobs, no income, and no plausible way of repaying their mortgages. Those mistakes are now being corrected.

Overall, credit is still expanding - thanks to the US federal government. But credit is contracting sharply in the private sector...where it counts most. Business lending is falling at a 16.6% rate... the steepest plunge since 1948 (when businesses stopped borrowing for war production). But government borrowing is more than making up for the shortfall in private borrowing. Overall, credit- market debt is up 5.5% in the seven quarters since the business cycle peak in December 2007.

[InkAddict]

57. So, now American IT-worker genocide is a correction of a wrong?

"The first borrowers were solid. Subsequent borrowers were not-so-solid, but they were still generally reliable. The last borrowers - at the height of the frenzy in 2006 - often had no jobs, no income, and no plausible way of repaying their mortgages. Those mistakes are now being corrected.."


Substitute manufacturing, IT, and customer service workers of America, whose creditworthiness went the way of the dodo as they were downsized, right-sized, out-sourced, reorged, in-sourced, and merged, all at the whims of the corporate pigs with the blessing of the banks too big to fail who are still reaping big bonunes from essentially fake big-buck transactions, and thereby littering the landscape w/the formerly creditworthy.

And just for good measure, let's hand 'em all a noose called non-dischargeable Student Loans that workers obtained in order to gain their perfectly worthless skills in the New American Century.

[tclambert]

67. Nicely worded.

[Demeter]

40. Chavez writes off Haiti's oil debt to Venezuela

http://story.irishsun.com/index.php/ct/9/cid/2411cd3571b4f088/id/593414/cs/1

President Hugo Chavez has announced that he will write off the undisclosed sum Haiti owes Venezuela for oil as part of a regional bloc's plans to help the impoverished Caribbean nation after the devastating Jan 12 earthquake.

'Haiti has no debt with Venezuela, just the opposite: Venezuela has a historical debt with that nation, with that people for whom we feel not pity but rather admiration, and we share their faith, their hope,' Chavez said after the extraordinary meeting of foreign ministers of the Bolivarian Alliance for the Americas, or ALBA.

He also announced that ALBA has decided on a comprehensive plan that includes an immediate donation of $20 million to Haiti's health sector, and a fund that, Chavez said, will be at least $100 million 'for starters'.

Oil-rich Venezuela is the economic heart of ALBA, which also includes Cuba, Bolivia, Ecuador, Nicaragua, Dominica, Antigua and Barbuda, and St. Vincent and the Grenadines. Haiti is among several countries that send observers to ALBA meetings.

Chavez said one part of ALBA assistance to Haiti would consist of fuel distribution via 'mobile service stations' set to be up and running within a few weeks.

The ALBA plan of aid for Haiti includes support for such sectors as agriculture, production, food imports and distribution, and immigration amnesty for Haitians living illegally in the bloc's member-states.

Cuba and Venezuela sent assistance and aid workers to Haiti within days of the magnitude-7.0 temblor that left over 100,000 dead and 1.5 million people homeless.

[Demeter]

50. The Kidnapping of Haiti By John Pilger

http://www.informationclearinghouse.info/article24519.htm

The theft of Haiti has been swift and crude. On 22 January, the United States secured “formal approval” from the United Nations to take over all air and sea ports in Haiti, and to “secure” roads. No Haitian signed the agreement, which has no basis in law. Power rules in an American naval blockade and the arrival of 13,000 marines, special forces, spooks and mercenaries, none with humanitarian relief training.

The airport in the capital, Port-au-Prince, is now an American military base and relief flights have been re-routed to the Dominican Republic. All flights stopped for three hours for the arrival of Hillary Clinton. Critically injured Haitians waited unaided as 800 American residents in Haiti were fed, watered and evacuated. Six days passed before the US Air Force dropped bottled water to people suffering thirst and dehydration.

The first TV reports played a critical role, giving the impression of widespread criminal mayhem. Matt Frei, the BBC reporter dispatched from Washington, seemed on the point of hyperventilation as he brayed about the “violence” and need for “security”. In spite of the demonstrable dignity of the earthquake victims, and evidence of citizens’ groups toiling unaided to rescue people, and even an American general’s assessment that the violence in Haiti was considerably less than before the earthquake, Frei claimed that “looting is the only industry” and “the dignity of Haiti’s past is long forgotten.” Thus, a history of unerring US violence and exploitation in Haiti was consigned to the victims. “There’s no doubt,” reported Frei in the aftermath of America’s bloody invasion of Iraq in 2003, “that the desire to bring good, to bring American values to the rest of the world, and especially now to the Middle East … is now increasingly tied up with military power.”

In a sense, he was right. Never before in so-called peacetime have human relations been as militarised by rapacious power. Never before has an American president subordinated his government to the military establishment of his discredited predecessor, as Barack Obama has done. In pursuing George W. Bush’s policy of war and domination, Obama has sought from Congress an unprecedented military budget in excess of $700 billion. He has become, in effect, the spokesman for a military coup

For the people of Haiti the implications are clear, if grotesque. With US troops in control of their country, Obama has appointed George W. Bush to the “relief effort”: a parody surely lifted from Graham Greene’s The Comedians, set in Papa Doc’s Haiti. As president, Bush’s relief effort following Hurricane Katrina in 2005 amounted to an ethnic cleansing of many of New Orleans’ black population. In 2004, he ordered the kidnapping of the democratically-elected prime minister of Haiti, Jean-Bertrand Aristide, and exiled him in Africa. The popular Aristide had had the temerity to legislate modest reforms, such as a minimum wage for those who toil in Haiti’s sweatshops.

When I was last in Haiti, I watched very young girls stooped in front of whirring, hissing, binding machines at the Port-au-Prince Superior Baseball Plant. Many had swollen eyes and lacerated arms. I produced a camera and was thrown out. Haiti is where America makes the equipment for its hallowed national game, for next to nothing. Haiti is where Walt Disney contractors make Mickey Mouse pjamas, for next to nothing. The US controls Haiti’s sugar, bauxite and sisal. Rice-growing was replaced by imported American rice, driving people into the cities and towns and jerry-built housing. Years after year, Haiti was invaded by US marines, infamous for atrocities that have been their specialty from the Philippines to Afghanistan.

Bill Clinton is another comedian, having got himself appointed the UN’s man in Haiti. Once fawned upon by the BBC as “Mr. Nice Guy … bringing democracy back to a sad and troubled land”, Clinton is Haiti’s most notorious privateer, demanding de-regulation of the economy for the benefit of the sweatshop barons. Lately, he has been promoting a $55m deal to turn the north of Haiti into an American-annexed “tourist playground”.

Not for tourists is the US building its fifth biggest embassy in Port-au-Prince. Oil was found in Haiti’s waters decades ago and the US has kept it in reserve until the Middle East begins to run dry. More urgently, an occupied Haiti has a strategic importance in Washington’s “rollback” plans for Latin America. The goal is the overthrow of the popular democracies in Venezuela, Bolivia and Ecuador, control of Venezuela’s abundant oil reserves and sabotage of the growing regional cooperation that has given millions their first taste of an economic and social justice long denied by US-sponsored regimes.

The first rollback success came last year with the coup against President Jose Manuel Zelaya in Honduras who also dared advocate a minimum wage and that the rich pay tax. Obama’s secret support for the illegal regime carries a clear warning to vulnerable governments in central America. Last October, the regime in Colombia, long bankrolled by Washington and supported by death squads, handed the US seven military bases to, according to US air force documents, “combat anti-US governments in the region”.

Media propaganda has laid the ground for what may well be Obama’s next war. On 14 December, researchers at the University of West England published first findings of a ten-year study of the BBC’s reporting of Venezuela. Of 304 BBC reports, only three mentioned any of the historic reforms of the Chavez government, while the majority denigrated Chavez’s extraordinary democratic record, at one point comparing him to Hitler.

Such distortion and its attendant servitude to western power are rife across the Anglo-American corporate media. People who struggle for a better life, or for life itself, from Venezuela to Honduras to Haiti, deserve our support.

[Demeter]

52. The Politics of Rice Video Report By Al Jazeera

In 2008, in the midst of the global food crisis, we travelled to Haiti to look at the politics of rice - how such a fertile country became dependent on food aid. In the wake of this current disaster, that dependence is - initially - going to deepen. But as relief efforts slowly turn to plans for reconstruction, it is important to look back at the policies that brought Haiti to the brink in the first place, and the people who had their own vision of self-sufficiency all along.

Avi Lewis talks about the US role in the development of Haiti with PJ Crowley, the spokesman at the US state department, and Emira Woods, the co-director of Foreign Policy In Focus at the Institute for Policy Studies and an expert on US foreign policy.

VIDEOS AT LINK:

http://www.informationclearinghouse.info/article24520.htm

[amandabeech]

72. Another example of how unrestrained globalism doesn't work

to the benefit of people.

It's not working for people here, and it's not working for people in Haiti.

[Demeter]

76. It Doesn't Work for "People" Anywhere

It works for crooks with no allegiance, conscience, love of country, whatever. It works for John Gault, assuming he could get his nose out of the air long enough to interact with humans on any level.

[amandabeech]

78. We are in complete agreement.

The list of crooks would be an evergreen thread here on DU.

[bread_and_roses]

58. I am sickened beyond words (n/t)

[Demeter]

41. Record foreclosure filings threaten housing recovery

http://mortgage.freedomblogging.com/2010/01/27/foreclosure-warnings-hit-record-10500/24871/



The total of outstanding foreclosure auction notices on Orange County homes hit 10,513 at the end of December, the highest in this housing downturn, reports ForeclosureRadar.com.


The total has more than doubled in the nine months since March, when it was 4,573.

ForeclosureRadar tracks outstanding notices of trustee’s sale, which announce a house or condo will be sold at auction. Such notices are usually good for only one year.

Sean O’Toole, head of ForeclosureRadar, said although foreclosure filings overall decreased at the end of 2009, the backlog of delinquent loans keeps growing.

He said only a portion of borrowers are getting loan modifications enabling them to avoid foreclosure.

“It is clear that political pressure on lenders to delay foreclosure is working,” O’Toole said. He went on via email:

I think it is postponing a real, long term, sustainable recovery. As a nation we simply have too much of our income going to housing debt, to have a meaningful recovery in a consumer driven economy. That said … we are seeing quite a few positive trends in housing currently … even if they have been artificially created by holding back (or “preventing”) foreclosures, lowering interest rates and offering tax credits. Whether you call it “helping families save their homes”, or “extend and pretend”, I don’t foresee a change in course anytime soon.

As for the percentage that end up successful loan mods that really depends on what happens with principal balance reductions. Right now our country is pretty divided on that issue. Some are yelling from the rooftops that it is the only solution, others are ready to tar and feather any politician that even considers giving their neighbor a bailout. This will be one of the most interesting housing debates of 2010.

Note: ForeclosureRadar did not provide data from past corrections, but I would guess December’s total of outstanding NTS is the highest ever.

[FarCenter]

64. Mortgage modifications are not necessarily good for the borrower

It may turn a non-recourse mortgage that the borrower can walk away from because it is secured only by the property, into a mortgage where the borrower is personally liable for the entire balance of the mortgage regardless of the value of the property.

People should consult their lawyer for details.

[Demeter]

42. Record number of young Americans jobless

http://www.reuters.com/article/idUSTRE60P0Z620100126

The U.S. economic recession has taken a particularly heavy toll on young Americans, with a record one out five black men aged 20 to 24 neither working nor in school, according to research released on Tuesday.

U.S.

Teenagers have found it significantly harder to get a job since the recession began in late 2007, with black youths and young people from low-income families faring the worst, wrote Andrew Sum of Northeastern University in Boston, a employment researcher commissioned by the Chicago Urban League and the Alternative Schools Network.

"Low-income and minority youth, who depended on part-time jobs as a significant stepping stone to future employment, have been forced out of the job market and economically marginalized," Herman Brewer of the Chicago Urban League said in a statement.

Overall, 26 percent of American teenagers aged 16 to 19 had jobs in late 2009, said the report, which was based on U.S. Census Bureau data. That figure is a record low since statistics began to be kept in 1948, the researchers said.

Employment counts the number of people with a job as a percentage of the entire work force. By contrast, the unemployment rate -- which stood at 10 percent in December in the United States -- does not include people who have grown discouraged and stopped looking for work.

Joblessness was particularly rife among high school dropouts aged 16 to 24 who were neither in school nor holding a job, the report said. Family income also had a influence on joblessness.

Only 13 percent of low-income black teenagers in Illinois held a job in 2008 compared with 48 percent of more affluent white, non-Hispanic teens.

The "disconnection rate" -- Americans aged 20 to 24 who were neither in school nor working -- jumped to 28 percent last year from 17 percent in 2007.

"If you included those in prison it would be a couple of points higher," the report's co-author Joseph McLaughlin of Northeastern.

Among the proposals the report supported were government-funded jobs programs directed at the young, additional funding to help re-enroll school dropouts, and government-funded expansions of work internships.

[Robbien]

60. Obama to Propose $33 Billion Tax Credit to Create Jobs---More money to the fat cats

President Barack Obama will propose a $33 billion tax credit to encourage small businesses to hire workers and raise wages in 2010, an administration official said on Thursday.

Democrat Obama will announce the plan on Friday at a small business in Baltimore en route to speak to a retreat there for House of Representatives Republicans, a bipartisan mission he is undertaking as he tries to rally from the damage done to his popularity by 10 percent unemployment.

The plan was previewed by Obama in the State of the Union address, where he made jobs priority number one. It will grant a $5,000 tax credit for every net new worker hired in calendar 2010. The amount will be capped at $500,000 per firm to make sure that the bulk of the benefits go to small businesses.

The official said the proposal had much in common with other plans being discussed on Capital Hill and the White House was ready to work with both parties to "get something done."

http://www.cnbc.com/id/35135371


So if Ford hires back those 1,200 employees at half the wage it paid before the layoff, Ford would be in line for that $500,000 tax credit, plus half the wages it won't be paying to the new hires. Exec bonuses will be so very good this year.

[Hawkowl]

82. Clueless

Obama is absolutely clueless. Tax credits? He just can't get his tiny little brain around the fact that neo-conservative bullshit tax solutions are the main cause of the national debt and the resultant hamstringing of the federal government.

He reminds me more of Herbert Hoover every day. He just can't think out of the little box that Rahm, the rethuglicans, and the corporate media have drawn for him.

[UpInArms]

43. dollar watch

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

Last trade 79.024 Change +0.120 (+0.15%)

Daily Sound Bites

http://www.dailyfx.com/forex/fundamental/article/daily_sound_bites/2010-01-29-1000-Daily_Sound_Bites_01_29.html



...more...

As Risk Continues to Recede, the Dollar Rallies and Dow Tumbles

http://www.dailyfx.com/forex/fundamental/article/carry_trade_basket/2010-01-29-0349-As_Risk_Continues_to_Recede_.html



• As Risk Continues to Recede, the Dollar Rovers and Dow Tumbles
• Financial Cracks Multiple: Greek Deficit, Japanese Credit, UK Banks
• A Drop in Sentiment Comes amid a Recovery in Economic Activity

It may seem a contradiction in theory; but in practice, a general slump in risk appetite can occur while economic indicators are pointing towards a slow but steady recovery. This is the scenario that is currently playing out; and the dichotomous situation is a reflection of how markets can grow to be over- or under-valued. What we are seeing at this stage in the game, is the adjustment of one to the other. Under different circumstances, speculative interests could have been held up by an influx of investment capital long enough for yields and growth forecasts to catch up to the market’s prevailing level of ‘fair value.’ However, as it is, the recovery in economic activity and expected returns is running at too measured a pace to keep up with capital markets that have forged their most aggressive advance on record. And, considering the vast number of financial cracks that are opening up just beneath the market’s seemingly smooth surface, there is ample reason for traders to worry. And, worry they have these past few weeks. Last week, the Dow Jones Industrial Average and the US dollar made their opposing moves as the winds of risk aversion started to pick up. The former has definitively cleared a two-month, 300-point rising trend channel in a nearly 6 percent plunge that has ushered the benchmark to two-and-a-half month lows. As the speculative capital is drawn out of relatively risky positions, the capital that was borrowed to fund these outlays is being repatriated. With a benchmark market rate that has held at a discount to event its Japanese counterpart (a historical funding currency) since late August, the US dollar was a prominent source of funds for leverage and loans. As fading sentiment encourages this reversal in capital flows, we will see the greenback advance. However, long-term traders will ask: how long will the dollar be a funding currency?

Despite the recent pull back in yield-bearing and risky positions, there is still a measure of doubt that this is not merely a mild correction. Technically, this is an easy argument to make. From a fundamental perspective, on the other hand, the evidence is there for an extended retracement as the markets seek out a fundamentally justified level of fair value. The initial catalysts for the current correction were broad and varied – helping to overwhelm the comfortable rut the steady build in risk appetite had dug out throughout 2009. Perhaps the most poignant tremor was the steps China took to cool its rapidly growing economy and markets. Chinese Policy officials are keenly aware of the asset bubble that has formed with new loan growth surging to a record and benchmark capital markets leveling off after soaring post-global crisis. Whether they are able to avert a bursting bubble is a serious question market for the global markets. In the meantime, other regions are facing their own troubles. After US 4Q earnings disappointed, President Obama proposed limits be put on the size and risk-taking allowances of the nation’s largest banks. While such a step may help to correct the ‘too-big-to-fail’ problem; it will also reduce market volatility and liquidity. Europe, the traditional ‘alternative’ to the United States has seen its clout fall as well. The Greek deficit is only one of the prominent troubles that the Euro Zone faces. Economic struggles and budget shortfalls will either weigh the region down or encourage a country to abscond. Either scenario is a concern. And, in Japan, the lost decade seems to never have ended. The government has said that it may extend its emergency stimulus programs; but that hasn’t seemed to stoke the fires of recovery or fend off deflation. With this in mind Standard & Poor’s downgraded its outlook for the nation’s credit. If these are obvious problems playing out now; what issues have not yet been uncovered or come under the scrutiny of the markets?

...more...

[Demeter]

44. BlackRock profits soar on new fund inflows

And yet, they couldn't make their mortgage payment?

http://www.ft.com/cms/s/0/b932e018-0b7a-11df-8232-00144feabdc0.html

...Mr Fink said he was confident about BlackRock’s business model amid the debate over future financial regulation which might hit the earnings of other financial institutions. “We employ little leverage on our balance sheet and do no proprietary trading,” he said.

Moreover, he said the firm has never paid out more than 36 percent of its revenues in compensation, far less than the general practice on Wall Street.

However, BlackRock suffered a recent setback. The money manager and its partner Tishman Speyer said this week they were returning the keys of New York real estate project Stuyvesant Town to creditors. Mr Fink said on the call with investors that he had written BlackRock’s $112m investment to zero over the past two years.

Revenues jumped 45 per cent in the fourth-quarter to $1.54bn. Earnings per share surged from 39 cents to $1.62. Shares in BlackRock were trading 2.25 per cent lower at $219.65 by mid-afternoon in New York.

[bread_and_roses]

45. I'd a thought that with O's SOTU utterly soaked and dripping with Neo-Liberal

talking points and the Fed still in the same clutches the market would have bounded upward like a springbok in mating season. Spending freezes! Tax cuts! "The true engine of jobs will always be America's businesses"! (never mind that the engine has sputtered to a halt after spewing noxious clouds of outsourcing and union-busting and wage-depression....)

But hey, I'm sure he sounded quite mellifluous. (I didn't watch - never have, never will - why should I spend an hour on a text I can read in a few minutes? Of course, I miss all the theatrics in the audience, but it's a small price)

[Robbien]

59. Exactly

I also only read the SoTU and it read as if Clinton, Reagan or Bush could also have given it.

And it was of no surprise to see that all of DU (other than the SMWer thread) was going apeshit in admiration for the speech. Obama sure does talk pretty.

[Demeter]

46. Ford swings back into profit

http://www.ft.com/cms/s/0/96e9f1bc-0c0c-11df-96b9-00144feabdc0.html

Ford Motor on Thursday said it had swung back into the black in 2009 with a full-year net profit of $2.7bn, making it the first of Detroit’s three carmakers to emerge from years of financial losses.

The return to profitability comes at least a year earlier than the company had previously indicated, and will support a growing view among many analysts that Ford will be one of the net beneficiaries of the car industry’s ongoing global crisis. Ford reported a net loss of $6.9bn in 2008....

The company cautioned, however, that its big improvement in profit was due mainly to improved pricing and volumes, and reflected a debt restructuring implemented in March and April. The drop in production volumes earlier in the year also held down payables.

In spite of the improved operating performance, Ford remains heavily burdened by debt. It is the only one of the three Detroit carmakers that did not go through a bankruptcy restructuring last year, or accept a government bail-out...

[Demeter]

53. Slavery in US Prisons Interview with Robert King & Terry Kupers

http://www.informationclearinghouse.info/article24521.htm

"Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction." --13th Amendment, 1865.

http://www.youtube.com/watch?v=8crPbPH428c&feature=player_embedded

An 18,000-acre former slave plantation in rural Louisiana, the infamous Louisiana State Penitentiary at Angola is the largest prison in the U.S. Today, with African Americans composing over 75% of Angola's 5,108 prisoners, prison guards known as "free men," a forced 40-hour workweek, and four cents an hour as minimum wage, the resemblance to antebellum U.S. slavery is striking. In the early 1970s, it was even worse, as prisoners were forced to work 96-hour weeks (16 hours a day/six days a week) with two cents an hour as minimum wage. Officially considered (according to its own website) the "Bloodiest Prison in the South" at this time, violence from guards and between prisoners was endemic. Prison authorities sanctioned prisoner rape, and according to former Prison Warden Murray Henderson, the prison guards actually helped facilitate a brutal system of sexual slavery where the younger and physically weaker prisoners were bought and sold into submission. As part of the notorious "inmate trusty guard" system, responsible for killing 40 prisoners and seriously maiming 350 between 1972-75, some prisoners were given state-issued weapons and ordered to enforce this sexual slavery, as well as the prison's many other injustices. Life at Angola was living hell -- a 20th century slave plantation.

Black Panthers Robert Hillary King, Albert Woodfox, and Herman Wallace are known as the "Angola Three." Woodfox and Wallace were co-founders of a Black Panther Party chapter at Angola in the early 1970s. These Panthers saw life at Angola as modern-day slavery and fought back with non-violent hunger strikes and work strikes. Prison authorities were outraged by the BPP's organizing, and retaliated by framing these three BPP organizers for murders that they did not commit. Woodfox and Wallace were both framed for the 1972 stabbing death of white prison guard Brent Miller, and have now spent over 37 years in solitary confinement. King was framed for a 1973 murder of another prisoner, and spent 29 years in solitary confinement until he was released from in 2001 after his conviction was overturned.

This new video released by Angola 3 News is the third part of an interview conducted with Robert King and Terry Kupers in October 2009, in Oakland, CA. when King was in town for Black Panther History Month. In the first two parts King and Kupers discussed the psychological impact of imprisonment (watch here). In this new video, Robert King and Dr. Terry Kupers, argue that slavery persists today in Angola and other U.S. prisons, citing the 13th Amendment to the U.S. Constitution, which legalizes slavery in prisons as "a punishment for crime whereof the party shall have been duly convicted." As King says: "You can be legally incarcerated but morally innocent."

Dr. Terry Kupers, M.D., M.S.P. wrote the introduction to Robert King's 2008 autobiography entitled From the Bottom of the Heap: The Autobiography of Robert Hillary King, and is Institute Professor at The Wright Institute in Berkeley, California. Dr. Kupers is a psychiatrist with a background in psychoanalytic psychotherapy, forensics and social and community psychiatry. His forensic psychiatry experience includes testimony in several large class action litigations concerning jail and prison conditions, sexual abuse, and the quality of mental health services inside correctional facilities. He is a consultant to Human Rights Watch, and author of the 1999 book entitled Prison Madness: The Mental Health Crisis Behind Bars and What We Must Do About It.

This video features archival photos from the Pulitzer Prize-winning book by Wall Street Journal editor Douglas A. Blackmon, entitled Slavery By Another Name: The Re-Enslavement of Black Americans from the Civil War to World War II.

[snot]

70. Cruel if not unusual punishment.

[Demeter]

54. This WEEKEND We Review

The State of the Union

Groundhog Day

and anything else our little hearts or twisted minds are attracted to. Join Weekend Economists tonight in the Editorial forum.

[Robbien]

66. Bank sues customer who was a victim of $800,000 cybertheft

In twist, Texas bank sues business customer, claiming cybertheft not its fault

What constitutes adequate security for a bank? PlainsCapital Bank in Lubbock, Texas says what it currently has is enough, and if after all that some crooks still manage to steal your money, it's not the bank's fault. The bank has preemptively sued a business customer, Hillary Machinery, to absolve itself from any liability on what it couldn't get back from the more than $800,000 that was stolen by foreign hackers last November.

PlainsCapital argues that it uses every reasonable security method to protect its customers' assets, and it points out that the attackers used valid login credentials. In fact, in the lawsuit the bank argues that it "accepted the wire transfer orders in good faith," shifting the responsibility entirely over to Hillary Machinery.

. . .

Troy Owen, a vice president at the company, says the transactions were different enough from the company's regular activity that they should have raised multiple red flags at the bank They all happened in rapid succession, the payments were being sent overseas to payees Hillary had never done business with, and some of them were for amounts much larger than Hillary usually made.

http://consumerist.com/2010/01/bank-sues-victim-to-avoid-replacing-200k-in-stolen-funds.html


New Golden Rule: Banksters never do wrong

[Festivito]

79. Debt: 01/27/2010 12,301,772,321,038.04 (DOWN 7,114,183,763.90) (Wed)

(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. Went to A2 twice today. Good day all.)

= Held by the Public + Intragovernmental(FICA)
= 7,784,152,852,860.25 + 4,517,619,468,177.79
UP 63,416,019.94 + DOWN 7,177,599,783.84

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 308,582,238 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 $39,865.46.
A family of three owes $119,596.37. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 to 34 days.
The average for the last 22 reports is 9,113,622,821.77.
The average for the last 30 days would be 6,683,323,402.63.
The average for the last 34 days would be 5,897,050,061.15.
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$/day.
There were 80 reports in 119 days of FY2010 averaging 4.90B$ per report, 3.29B$/day.
Above line should be okay

PROJECTION:
There are 1,089 days remaining in this Obama 1st term.
By that time the debt could be between 13.8 and 18.7T$.
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)
01/27/2010 12,301,772,321,038.04 BHO (UP 1,674,895,272,124.96 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 +0,391,943,317,526.30 ------------* * * * * * * * * BHO
Endof10 +1,202,179,083,168.91 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ------------********
01/27/2010 +000,063,416,019.94 ------------*******

-20,107,381,177.57 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=4246297&mesg_id=4246351

[Festivito]

81. Debt: 01/28/2010 12,274,431,428,037.28 (DOWN 27,340,893,000.76) (Thu)

(Down a good bit. 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)
= 7,759,907,274,242.18 + 4,514,524,153,795.10
DOWN 24,245,578,618.07 + DOWN 3,095,314,382.69

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 308,590,878 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 $39,775.74.
A family of three owes $119,327.23. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 to 31 days.
The average for the last 22 reports is 7,726,827,893.80.
The average for the last 30 days would be 5,666,340,455.45.
The average for the last 31 days would be 5,483,555,279.47.
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$/day.
There were 81 reports in 120 days of FY2010 averaging 4.50B$ per report, 3.04B$/day.
Above line should be okay

PROJECTION:
There are 1,088 days remaining in this Obama 1st term.
By that time the debt could be between 13.8 and 18.2T$.
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)
01/28/2010 12,274,431,428,037.28 BHO (UP 1,647,554,379,124.20 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 +0,364,602,424,525.50 ------------* * * * * * * * * BHO
Endof10 +1,108,999,041,265.06 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ------------********
01/27/2010 +000,063,416,019.94 ------------*******
01/28/2010 -024,245,578,618.07 -

-44,476,776,162.83 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=4248260&mesg_id=4249113

[RUMMYisFROSTED]

80. Let's huddle around 10.

I'm thinking of selling the silver in my teeth. Your wedding band must be worth something.

[Ghost Dog]

83. Do you have any idea of the price of a pile

of camel shit, when you most need to keep warm (and play, like, chess) this winter? in Sáhara?

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

[RUMMYisFROSTED]

85. I have not priced that commodity.