STOCK MARKET WATCH, Tuesday March 2

[ozymandius]

Source: du

STOCK MARKET WATCH, Tuesday March 2, 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 March 1, 2010

Dow... 10,403.79 +78.53 (+0.76%)
Nasdaq... 2,273.57 +35.31 (+1.58%)
S&P 500... 1,115.71 +11.22 (+1.02%)
Gold future... 1,118 -0.60 (-0.05%)
10-Yr Bond... 3.61 -0.01 (-0.22%)
30-Year Bond 4.56 0.00 (-0.02%)

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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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Read more: du

[ozymandius]

1. Today's Reports

14:00 Auto Sales Feb
Briefing.com NA
Consensus NA
Prior 3.8M

14:00 Truck Sales Feb
Briefing.com NA
Consensus NA
Prior 4.4M

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

[ozymandius]

2. Oil hovers below $79 amid mixed US data

SINGAPORE – Oil prices hovered below $79 a barrel Tuesday in Asia as investors mulled mixed signals about the strength of the U.S. economy. ...

On Monday, U.S. economic figures reflected a slow but steady recovery. Manufacturing output expanded in February for a seventh straight month, but it slowed compared with January and fell short of expectations.

Personal spending rose slightly more than expected in January while construction spending fell for a third straight month. ...

In other Nymex trading in April contracts, heating oil was up 0.2 cent at $2.025 a gallon, and gasoline gained 0.54 cent to $2.161 a gallon. Natural gas rose 3.2 cents to $4.711 per 1,000 cubic feet.

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

[Festivito]

3. Debt: 02/26/2010 12,440,068,020,714.47 (UP 6,406,428,439.02) (Fri)

(Up some. Debt seems to jump up big then drop slowly maybe up a little and down a little for days--repeat. Ending my workday, good daytime to all.)

= Held by the Public + Intragovernmental(FICA)
= 7,936,671,001,094.13 + 4,503,397,019,620.34
UP 7,974,774,874.74 + DOWN 1,568,346,435.72

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: $9.71, ABOUT TEN BUCKS for a 1B$ 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 308,841,438 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 $40,279.79.
A family of three owes $120,839.37. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 31 days.
The average for the last 23 reports is 5,703,544,170.11.
The average for the last 30 days would be 4,372,717,197.08.
The average for the last 31 days would be 4,231,661,803.63.
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$/day.
There were 101 reports in 149 days of FY2010 averaging 5.25B$ per report, 3.56B$/day.
Above line should be okay

PROJECTION:
There are 1,059 days remaining in this Obama 1st term.
By that time the debt could be between 13.9 and 17.9T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
02/26/2010 12,440,068,020,714.47 BHO (UP 1,813,190,971,801.39 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 +0,530,239,017,202.70 ------------* * * * * * * * * * * * * BHO
Endof10 +1,298,907,659,590.51 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
02/05/2010 -000,081,816,346.60 ----
02/08/2010 +000,119,837,978.11 ------------******** Mon
02/09/2010 +000,368,016,270.35 ------------********
02/10/2010 -000,056,577,287.25 ----
02/11/2010 +007,265,093,186.33 ------------*********
02/12/2010 -000,104,736,856.82 ---
02/16/2010 +030,097,605,306.92 ------------********** Tue
02/17/2010 +000,408,694,886.67 ------------********
02/18/2010 +015,224,901,067.79 ------------**********
02/19/2010 +000,114,262,910.59 ------------********
02/22/2010 -000,206,249,204.22 --- Mon
02/23/2010 +000,404,218,476.39 ------------********
02/24/2010 -000,081,552,792.52 ----
02/25/2010 +034,823,775,896.06 ------------**********
02/26/2010 +007,974,774,874.74 ------------*********

96,270,248,366.54 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=4287836&mesg_id=4288136

[Festivito]

56. Debt: 03/01/2010 12,507,536,462,861.04 (UP 67,468,442,146.57) (Mon)

(Up big. New higher limit in effect for a few days now. Debt seems to jump up big then drop slowly maybe up a little and down a little for days--repeat. Have to see if that pattern continues after the new debt limit unfetters further borrowing for a while. Good day all.)

= Held by the Public + Intragovernmental(FICA)
= 8,024,927,072,288.80 + 4,482,609,390,572.24
UP 88,256,071,194.67 + DOWN 20,787,629,048.10

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: $9.71, ABOUT TEN BUCKS for a 1B$ 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 308,867,358 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 $40,494.85.
A family of three owes $121,484.54. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 20 reports in the last 30 to 28 days.
The average for the last 20 reports is 7,903,643,889.68.
The average for the last 30 days would be 5,269,095,926.45.
The average for the last 28 days would be 5,645,459,921.20.
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$/day.
There were 102 reports in 152 days of FY2010 averaging 5.86B$ per report, 3.93B$/day.
Above line should be okay

PROJECTION:
There are 1,056 days remaining in this Obama 1st term.
By that time the debt could be between 14.0 and 18.5T$.
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)
03/01/2010 12,507,536,462,861.04 BHO (UP 1,880,659,413,947.96 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 +0,597,707,459,349.30 ------------* * * * * * * * * * * * * * BHO
Endof10 +1,435,284,359,621.68 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
02/08/2010 +000,119,837,978.11 ------------******** Mon
02/09/2010 +000,368,016,270.35 ------------********
02/10/2010 -000,056,577,287.25 ----
02/11/2010 +007,265,093,186.33 ------------*********
02/12/2010 -000,104,736,856.82 ---
02/16/2010 +030,097,605,306.92 ------------********** Tue
02/17/2010 +000,408,694,886.67 ------------********
02/18/2010 +015,224,901,067.79 ------------**********
02/19/2010 +000,114,262,910.59 ------------********
02/22/2010 -000,206,249,204.22 --- Mon
02/23/2010 +000,404,218,476.39 ------------********
02/24/2010 -000,081,552,792.52 ----
02/25/2010 +034,823,775,896.06 ------------**********
02/26/2010 +007,974,774,874.74 ------------*********
03/01/2010 +088,256,071,194.67 ------------********** Mon

184,608,135,907.81 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=4289801&mesg_id=4289806

[ozymandius]

4. Senate talks close in on deal for Wall Street regs

WASHINGTON – More than a year after Lehman Brothers' collapse set off a financial panic, Senate negotiators appear close to resolving a narrow dispute that was holding up broad legislation to set new rules for Wall Street.

At issue was whether a government consumer watchdog should be free from bank regulators to write rules that govern everything from credit card and overdraft fees to payday loans and mortgages.

After a flurry of offers and counterproposals over the past three days, the Senate Banking Committee was closing in on a deal that would house a government consumer entity inside the Federal Reserve but give it autonomous power to write regulations, three people familiar with the talks told the Associated Press Monday night. ...

If the latest Senate plan were to hold, it would represent a remarkable turnaround for the Fed, which has been criticized for failing to adequately protect consumers as part of its regulation of state-chartered banks and bank holding companies.

Consumer advocates prefer the House-passed financial regulation bill.

http://news.yahoo.com/s/ap/20100302/ap_on_bi_ge/us_financial_overhaul

[ozymandius]

20. Yves Smith says, "Bad. Bad. Bad. Idea."

Banksters Win Yet Again: Dodd Proposes Putting Consumer Protection Agency at the Fed

Putting the proposed consumer financial services watchdog in any existing agency, save perhaps the FDIC, no matter what the professed logic is, is really a plan to neuter it (ironically. Richard Shelby, who was the original moving force against having the proposed new agency be independent, wanted to house it at the FDIC; it is the Democrats who are now responsible for the further devolution of this plan). The Treasury, Fed, and Office of the Comptroller of the Currency are notoriously bank friendly. Think they are gonna do anything to seriously inconvenience their charges? Not on your life. The sole reason the FDIC could be a viable choice is that it is the only Federal bank regulator that is serious about enforcement. And that is due to the simple fact that if they mess up on enforcement, they wind up with more dead banks, which is embarrassing, costly, and a ton more work for them than preventing train wrecks in the first place (to the extent they can).

This is the central idea. It struck me as an odd thing that Congress could place a regulatory agency that is insulated from the outside.

[wordpix]

55. the real question: does Goldman Sachs approve this?

You've got to have their approval for these types of things. :evilgrin:

[ozymandius]

5. Fed's No. 2 to depart

...
In a letter to Obama released on Monday, Kohn, who has served as the Fed's No. 2 since June 2006, said he will depart when his four-year term as vice chairman expires on June 23.

Kohn's departure gives Obama the opportunity to fill a top slot at the U.S. central bank in addition to two long-vacant governor positions, at a time when the central bank faces two big challenges: communicating how it will exit from its extraordinary easy money policies and defending its role in overseeing banks. ...

Obama's selections could influence how quickly the Fed raises interest rates and how aggressively it takes on its post-crisis regulatory responsibilities. ....

Kohn's departure will leave three seats vacant on the normally seven-person Fed board, giving Obama broad latitude to shape the central bank at a time lawmakers are considering lessening its power after the most damaging financial crisis in generations.

http://news.yahoo.com/s/nm/20100301/bs_nm/us_usa_fed_kohn

[ozymandius]

7. Geithner, Summers Leading Search for Successor to Fed’s Kohn

March 2 (Bloomberg) -- The search to fill vacancies at the Federal Reserve is being led by President Barack Obama’s Treasury secretary and chief economic adviser, indicating Chairman Ben S. Bernanke will get support for his policies as he tries to support growth while withdrawing monetary stimulus. ...

Geithner, 48, has proposed expanding the Fed’s oversight of large financial firms in a regulatory overhaul, while Summers, 55, said in an interview last month that the Fed’s independence is “crucial” to keeping inflation low and maximizing job growth. Obama’s nominees are likely to back Bernanke, said former Fed governor Lyle Gramley. ...

Possible Kohn successors, according to Fed watchers and former officials, include Fed Governor Daniel Tarullo, 57, who’s backed tougher bank regulation; Christina Romer, 51, an architect of the administration’s 2009 fiscal stimulus; and San Francisco Fed President Janet Yellen, 63, one of the central bank’s top advocates of lower interest rates.

http://www.bloomberg.com/apps/news?pid=20601068&sid=a6kDhLnSfF8w

[Demeter]

8. All Right, WHY Haven't the Other Two Seats Been Filled?

Larry run out of friends and lackeys? Rubin still on vacation?

Sometimes it's a blessing NOT to have anybody in office, if they get picked by corrupted, traitorous fools.

Oh, TIMMY'S in charge? Say no more. the best we can hope for is inaction.

[ozymandius]

10. Agreed.

I figure the reason these seats are still open is because Cheney is no longer president and the financial crises blew up during the previous administration's watch.

Good morning. :donut: :donut: :donut:

[Demeter]

12. What a Terrifying Thought

It's amazing there's any country left after Cheney, but Obama's fixing that.

[ozymandius]

6. Senate Democrats Propose Plan to Reinstate Jobless Benefits

March 2 (Bloomberg) -- Senate Democrats are proposing to reinstate unemployment benefits that expired Feb. 28 as part of a $150 billion measure intended to boost the economy.

The legislation would spend $81 billion to extend the unemployment benefits, including so-called Cobra subsidies to help the jobless buy health insurance, for the rest of this year. It also would send $25 billion to state governments to help prevent layoffs.

Jobless benefits for thousands of Americans expired after Senator Jim Bunning, a Kentucky Republican, blocked a one-month continuation designed to keep checks from being interrupted. Bunning complained that the $10 billion cost would be tacked onto the $1.6 trillion budget deficit. ...

About 400,000 people will lose unemployment benefits in the next few weeks if Congress doesn’t act, according to the Department of Labor. The agency also estimated that 500,000 Americans will lose access to Cobra by the end of this month. The program allows the jobless to buy health insurance through their former employer, with the government paying 65 percent of the cost.

The Transportation Department said it was putting 2,000 employees on furlough because highway money included in the legislation blocked by Bunning was being delayed.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aYYOa2bZKIj4&pos=9

[Demeter]

9. And if THAT doesn't Work,

break out the pitchforks and torches.

[Demeter]

11. Good morning Ozy and Crew!

We are in full thaw here. The snow melt has been gushing off the roofs and mounds and piles in parking lots. Rumor has it the temperature hit 50F in Jackson yesterday, and we are going to be lucky all week. Might have a real Spring, this year.

[ozymandius]

14. Glad to hear the news!

We are expecting a fit of cold - possibly frozen stuff - then warmer weather. Yesterday was wonderful as was the weekend. Spring is trying really hard to supplant a bitter winter.

[Tansy_Gold]

34. Ah, I remember that feeling so well, Demeter!

Here we had pouring buckets of rain all day Sunday, but yesterday was sun sun sun.

It's March, and that must mean spring is on its way.

(And so is my mother, for a four day visit from Chicago, arriving Thursday.)



Tansy Gold, off to clean the guest quarters. . . .

[ozymandius]

13. How Goldman Sachs Bagged Clients (via McClatchy)

I found this over at Ritholtz's place. I have shortened his excerpted passages.

I keep finding these gems I missed while out for the holiday week. Here’s another fascinating reads — its a nice takedown of Goldman Sachs via McClatchy.

The article implies that GS and others knew they were selling paper that was going to create a giant loss to the buyer.

McClatchy:

McClatchy has obtained previously undisclosed documents that provide a closer look at the shadowy $1.3 trillion market since 2002 for complex offshore deals, which Chicago financial consultant and frequent Goldman critic Janet Tavakoli said at times met “every definition of a Ponzi scheme.”

The documents include the offering circulars for 40 of Goldman’s estimated 148 deals in the Cayman Islands over a seven-year period, including a dozen of its more exotic transactions tied to mortgages and consumer loans that it marketed in 2006 and 2007, at the crest of the booming market for subprime mortgages to marginally qualified borrowers.

Note that the implication in the full piece is not that these were possible losses, but rather, based upon what GS understood about the ways these papers were structured and then hedged (insured with the client), it was a sure loss. So rather than hold on to the money losing mortgage based securities, GS devised a way to sell it to clients!

http://www.ritholtz.com/blog/2010/03/goldman-sachs-bagged/

---

By comparing Goldman Sachs to Arthur Andersen - it would be a fine thing in the spirit of schadenfreude if the clients fled post haste and left this leviathan to dip below the waves.

[Demeter]

15. That's Got to Be Illegal--Can't We See Some Enforcement Around Here?

[wordpix]

54. huh? enforcement? When a guy close to the situation complains to SEC about Madoff

several times in a row and is ignored, you know enforcement be damned.

[UpInArms]

39. it all brings the Pirates of the Carribean to mind - do you remember

when all the treasuries were being sold - not to central banks or china or japan - but to the Carribean? (iirc this was back in 2003 and 2004)

[Demeter]

41. I was not in the loop then--care to reprise?

[UpInArms]

57. here's just a quick backward look

I'll look again later and will probably find more - but ... this one gives an idea

[UpInArms]

58. oops!

a link would have been nice, huh?

:blush:

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=1015399

[Demeter]

16. South Korea pushes for global swaps regime

http://www.ft.com/cms/s/0/b0dc5784-24e6-11df-8be0-00144feab49a.html

South Korea is pushing the G20 group of leading economies to support a system of international currency swaps in an effort to reduce global imbalances by lessening the need for countries to accumulate reserves.

Seoul has significant experience with currency swaps. In late 2008, international investors were worried about a liquidity crunch in South Korea until Japan, China and the US stepped in to provide more than $90bn of swaps.

“The idea is to take that swap system and make it global,” Shin Hyun-song, the South Korean president’s senior adviser on international economy told the Financial Times.

“Bilateral swaps are very effective, but they are negotiated individually at that moment. They are prisoners to circumstances.”

As president of the G20 this year, South Korea, which has emerged from the global financial and economic crisis faster than many western countries, wants to forge a legacy in post-crisis policy by pressing for the creation of financial safety nets.

South Korean officials say their proposal – which has been discussed informally with some G20 members – is only one element of an improved safety net aimed at encouraging nations to boost domestic demand and reduce their reliance on exports.

Given the haphazard nature of negotiating swaps, South Korea has preferred to take refuge behind large foreign exchange reserves.

Mr Shin conceded that there were obstacles to globalising swaps. He said the G20 would have to settle issues of moral hazard and the potential role of the International Monetary Fund. Asian nations have already set up the Chiang Mai initiative to arrange currency swaps regionally.

British and Japanese officials said the South Korean proposal deserved a sympathetic hearing. But they warned that the US might oppose the suggestion if there was no strong role for the IMF. They added that Washington would be unlikely to support any mechanism that put excessive demands on the US Federal Reserve.

Economists also cautioned that a global swaps scheme alone would not reduce the tendency for emerging market countries to accumulate reserves.

Frederic Neumann, Asia economist at HSBC, said reserves were “already well past precautionary”. Brian Jackson, senior strategist at Royal Bank of Canada, said Asian economies would probably only let reserves dwindle over five to 10 years as domestic demand strengthens.

South Korean officials stress that they are well placed to act as middlemen between the US and China, particularly amid difficult relations between the powers over issues such as the value of the renminbi and US arms sales to Taiwan.

“If you tell China to do something directly about its currency, China can do nothing without losing face,” said one senior Korean official.

“We have a good relationship with Chinese economy officials and can engage more on fundamental currency, like promoting domestic consumption.”

As president of the G20, South Korea is hosting a series of meetings this year, including a summit in Seoul in November.

[Demeter]

17. Judge backs Madoff trustee on repayment plan

http://www.ft.com/cms/s/0/2dbfc90c-256e-11df-9cdb-00144feab49a.html

A US judge on Monday ruled in favour of a plan by Irving Picard, the trustee in charge of tracking down losses from Bernard Madoff’s Ponzi scheme, to repay bilked investors based on how much money they originally invested in the fraud.

The ruling is a blow to investors who sued Mr Picard, along with the Securities Investor Protection Corporation, to change the formula to one that would allow losses to be recouped based upon investors’ final financial statements before the scheme unravelled in December 2008.

Investors who lost money with Mr Madoff are entitled to receive up to $500,000 through SIPC using Mr Picard’s “net equity” formula, depending on how much they originally invested and how much they withdrew.

Those who withdrew more than they first invested are considered “net winners”. They are unable to make claims on their “false profits” and could potentially face clawbacks. Mr Picard has received more than 12,000 claims and has allowed just 1,936.

In a 53-page ruling, US bankruptcy Judge Burton Lifland wrote: “The account statements are entirely fictitious, do not reflect actual securities positions that could be liquidated, and therefore cannot be relied upon to determine net equity”.

When using the final financial statements of Mr Madoff’s fraudulent fund as a measure, the scheme cost investors $65bn. However, based on the amount of money actually invested in the fund the number is closer to $21bn. Mr Picard has so far recouped $1.4bn.

John Coffee, a law professor at Columbia University, said Mr Lifland’s ruling was the only sensible one because a decision in favour of the investors’ “last statement” method would create a “feeding frenzy”.

Investors are likely to appeal Mr Lifland’s decision. Helen Chaitman, a lawyer representing the investors, did not return a request for comment.

Some Madoff investors have been fiercely critical of SIPC and Mr Picard. Last week, a separate group of investors filed fraud charges against SIPC for failing to repay $500,000 to each of them.

Stephen Harbeck, SIPC president, said he was “disappointed” that lawyers were pushing Madoff victims to “incorrectly direct their anger” at the trustee.

[Demeter]

18. Australian state government sells off lottery

http://www.ft.com/cms/s/0/15fba9a0-25a8-11df-9bd3-00144feab49a.html

The Australian state government of New South Wales has sold its lotteries business to Tatts Group for A$850m (US$764m) following an auction process that attracted domestic and international bidders.

Total proceeds from the sale will exceed A$1bn after A$160m of cash and other assets from NSW Lotteries are transferred to the government.

Tatts, which already operates lottery businesses in three Australian states and two territories, faced competition from a consortium led by Ontario Teachers Pension Plan. Intralot, the Greek operator, and Gtech, the US-based lottery unit of Italy’s Lottomatica, were also present in the final stages of the auction.

As part of the deal, Tatts Group has secured an exclusive 40-year licence to run public lotteries in NSW, Australia’s most populous state.

Dick Mcllwain, Tatts chief executive, said the acquisition was a logical expansion to its lottery businesses. In 2007, Tatts paid A$542m for Golden Casket, the Queensland lottery business, and Mr Mcllwain said both transactions were agreed on similar transaction multiples.

He added that consolidation of the group’s lottery operations would drive synergies as the group moved toward a single operating system.

The acquisition of NSW Lotteries was forecast to generate an additional A$120m of earnings before interest, tax, depreciation and amortisation by 2014, Tatts said.

However, Tatts shares fell 15 cents, or 6 per cent, to A$2.33 on concerns that the group may have paid too much for the business.

The NSW government last year planned to sell its lotteries business with a 30-year licence with market sources at that time suggesting a price tag of closer to A$600m.

The sale of NSW Lotteries comes as the state government continues to struggle with its much-delayed plans to offload its electricity generation and retail assets.

The NSW government was advised by Goldman Sachs JB Were, the Australian affiliate of the US investment bank.

[Demeter]

19. India’s mobile sector gets a reality check

http://www.ft.com/cms/s/0/bf1bf368-2554-11df-9cdb-00144feab49a.html

The number of Indian mobile phone users is up to 40 per cent lower than the official numbers suggest, industry figures and analysts estimate, raising questions over the true extent of India's telecoms boom and the valuations of its wireless operators.

Many Indian users are buying multiple Sim cards, a large number of which are “lifetime” cards that are considered to be active even when they are no longer being used.

Analysts say some newer operators are also sending Sims to retailers that have been activated even before they are sold to end users. All of this is inflating estimates of the total number of subscribers in India....

The creation of national mobile networks is also a rare infrastructure success story for a government still struggling to build enough roads, power stations and airports to support India’s swift economic expansion.

But the flood of the new operators, with up to 12 competing in some regions, has led to a price war that has driven prices down to a fraction of a US cent per minute.

This in turn is encouraging users to habitually switch operators in search of the best deal.

The lack of number portability in India, which prevents customers from keeping the same phone number while switching operators, means subscribers instead buy new Sim cards. The trend has been accelerated by the introduction last year of phones capable of handling more than one Sim...

[Demeter]

21. Goldman beats its record for $100m-plus days

http://www.ft.com/cms/s/0/a6ce91f6-256f-11df-9cdb-00144feab49a.html

Goldman Sachs made at least $100m in net trading revenues on 131 days last year – equivalent to once every other trading day, according to a filing with the Securities and Exchange Commission on Monday.

Goldman managed the result even as it took greater trading risks in 2009 than in the previous year. Its daily “value at risk” (VAR) – the most that the bank estimates that its traders could lose on a given day – was $218m in 2009, up from $180m during the previous fiscal year, which closed in November 2008.

Goldman earned a record $13.4bn in 2009 as net revenues more than doubled to $45.2bn and the bank reined in compensation costs amid a furore about bonuses earlier in the year.

Goldman’s 131 $100m-plus trading days in 2009 shattered its previous high of 90 days, set in 2008. In last year’s 263 trading days, the bank lost money 19 times, Goldman said in the filing. Its daily losses never exceeded $100m. “It’s impressive, but it’s not unexpected,” David Hendler, an analyst with CreditSights. “They were one of the few games in town in 2009.”

Goldman’s performance came during a year when the demise of several rivals left it and fellow survivors better able to capitalise on the flurry of debt and equity trading that followed the financial crisis.

The controversy over banks’ profits and compensation policies, and an uncertain outlook for both the markets and financial services regulation, could make it difficult for it to approach 2009’s performance any time soon, Mr Hendler said. And competitors had regained their footing. “It may have been a high-water mark.”

Trading and principal investments, which includes Goldman’s merchant banking activities, account for more than 75 per cent of its total net revenue.

The rise in Goldman’s daily VAR was “principally due to an increase in the interest rates category” as spreads widened, and a “reduction in the diversification benefit across risk categories”, the bank said. The bank’s VAR tied to commodities trading declined as energy prices fell.

The bank reports daily VAR at a 95 per cent confidence level, representing the one-day trading loss that it would expect to exceed only 5 per cent of the time.

Goldman shares finished 0.12 per cent higher at $156.54 in New York trading.

[Demeter]

31. Bloom Energy's new fuel cell

http://www.mercurynews.com/bay-area-news/ci_14462914?source=email&nclick_check=1

Sunnyvale clean-energy upstart Bloom Energy today showed off its new Bloom Energy Server, a solid oxide fuel cell that uses natural gas or other fuels to provide what the company describes as "a cleaner, more reliable, and more affordable alternative to both today's electric grid as well as traditional renewable energy sources."

Customers including Google, eBay and Walmart are using the much-hyped fuel cell, nicknamed the "Bloom Box," to generate electricity on site.

"Whether a customer wants to reduce its carbon footprint or its energy bills, or both, the Bloom Energy Server provides the solution," Bloom Energy CEO and co-founder KR Sridhar said in a statement. "Our foundation customers are industry leaders in their businesses as well as in environmental sustainability, representing companies who understand that responsible energy consumption and healthy profit margins need not be mutually exclusive."

According to the Merc's report, Sridhar was joined by Gov. Arnold Schwarzenegger, former Secretary of State Colin Powell and other big names at the unveiling at eBay offices in San Jose, where the Bloom Box was unveiled. EBay is using a 500-kilowatt system from Bloom Energy at its PayPal campus in North San Jose.

"We're meeting financial and environmental goals with the project while fueling a more energy efficient global marketplace. That's good for us, our customers and the planet," eBay CEO John Donahoe said in a statement.

THIS WILL GOOSE NATURAL GAS PRICES, IF IT WORKS

[Dr.Phool]

44. It was on 60 minutes last week.

You can power a house with a unit the size of a shoe box. Getting the cost down is the challenge. I guess they never heard of India or China. :sarcasm:

[Po_d Mainiac]

47. Why?

THIS WILL GOOSE NATURAL GAS PRICES, IF IT WORKS

Just vent the Repuke caucus rooms straight into a bank of those puppies.....That alone would juice the Eastern seaboard and crash NG prices. :evilgrin:

[Demeter]

48. It's that Navy Bean Soup in the Congressional Cafeteria

[ozymandius]

22. Short day for me.

I need to get some plans ready for my classes. Have fun watching the Casino.

:hi:

[Demeter]

23. Asian funds line up to back Pru deal

http://www.ft.com/cms/s/0/589b5486-251c-11df-a189-00144feab49a.html

Sovereign wealth funds from China and Singapore have been lined up to help fund Prudential’s $35.5bn purchase of AIA, the Asian arm of AIG, in a move that could give state-backed investors a substantial stake in the region’s biggest insurer.

The move is a sign that, after suffering big losses on their investments in western financial groups during the crisis, sovereign wealth funds are prepared to put their money to work in the sector, especially on deals in their core markets.

The participation of sovereign wealth funds in the acquisition of AIA would also entail a transfer of funds from state-backed Asian investors to US taxpayers, which stand to receive $25bn from AIG once the deal is completed.

People close to the situation said Prudential and its advisers were in talks with sovereign funds from China and Singapore over the provision of billions of dollars to support a planned $20bn share sale by the UK group.

The share offering – the biggest acquisition-related equity sale yet – is crucial to the completion of a deal that would transform Prudential’s business by giving it an unrivalled presence in Asia and enable AIG to repay some of the $80bn-plus it owes the US authorities.

Under the terms of the acquisition, announced on Monday, the UK company would pay AIG $25bn in cash, $5.5bn in stock, $3bn in mandatory convertible notes and $2bn in preferred stock. AIG said it would try to sell the securities after an unspecified lock-up period expired.

The $20bn share offering will be structured as a rights issue, giving existing Prudential shareholders the right to buy the shares first, so sovereign funds would only invest if investors refuse to take up the offer.

People close to the situation said the initial response from sovereign funds had been positive, although they had not made a final decision. About 10 large investors, representing about 30 per cent of the UK group’s shareholder base, had been briefed on the deal before the announcement and were supportive, insiders said.

Others, however, were less enthusiastic. One big investor said on Monday: “I am deeply underwhelmed. Long-suffering shareholders have been subjected to a series of dividend cuts and rights issues and zero returns and now they are being asked to stump up again.”

The offer has been fully underwritten by Prudential’s banks – JPMorgan Cazenove, Credit Suisse and HSBC, which stand to share fees of about $1bn for the deal. The structure will ensure that AIG receives the funds whether the share offering succeeds or not.

[Demeter]

24. Shell to sell LPG assets to buy-out groups

http://www.ft.com/cms/s/0/b253fff2-2493-11df-8be0-00144feab49a.html

Royal Dutch Shell, the oil and gas group, is selling assets including its European liquid petroleum gas business and fields in the North Sea to help meet the cost of its $28bn capital spending programme this year, according to people involved in the proposed deals.

The company plans to raise $2bn-$3bn this year from selling assets that are not central to its growth plans, particularly downstream assets such as refining and marketing operations in mature markets such as Europe.

It is also selling some mature oil and gas fields in the North Sea and Nigeria.

Buyers have been invited to submit indicative bids, expected to go up to about €1bn, for its French-based European LPG business, which sells bottled gas to rural homes and caravans, according to one person familiar with the situation.

...A buy-out of Shell’s LPG business would be one of the biggest private equity deals in the oil and gas sector since the financial crisis started. Indicative bids are due by March 22.

One person familiar with the auction said Shell’s LPG business was attractive to private equity because of its stable sales and low competition.

“It has a captive customer base and in some areas it is a quasi monopoly,” he said.

Shell abandoned the planned €2.5bn sale of its global LPG arm in 2005, claiming bids had not met its price target. Two years ago it sold parts of its LPG business in Spain, Switzerland, Germany, the Czech Republic and Bulgaria.

Aegis Logistics of India announced last December that it was buying Shell’s Indian LPG operations.

Separately, Shell has put up for sale North Sea fields connected to the Anasuria floating production, storage and offloading vessel off the coast of Aberdeen, and fields in the Southern gas basin.

Shell has about 50 North Sea fields and insists that the region remains an important part of its portfolio, but is managing its assets to focus on the reserves where it can add most value.

The Guillemot, Teal and Teal South fields linked to Anasuria are operated by Shell and half-owned by ExxonMobil, producing about 5,000 barrels of oil a day. The Cook field, also linked to Anasuria, produces just under 7,000 barrels of oil a day, and is co-owned by companies including Hess and Sumitomo.

No buyer has yet come forward, but the assets could be valued at several hundred million pounds, depending on demand, people with knowledge of the situation said.

Shell is also in talks with Essar of India to sell refineries at Stanlow in the UK and Harburg and Heide in Germany. It is reviewing its refining operations in Sweden, New Zealand and several other countries for possible sales.

Refining margins have been squeezed by global over-capacity, and many industry executives believes the market for oil-based road fuels in the developed world will never grow again, growing, because of improved fuel economy standards and competition from alternatives such as biofuels.

The sale of Shell’s downstream operations in Greece, including petrol stations and an LPG business, is under review by the European Commission.

On Tuesday BP will set out its latest thinking on strategy, with the outlook for downstream businesses expected to be a focus of investors’ attention.

[Demeter]

25. Emerging market rate risk unnerves investors

http://www.ft.com/cms/s/0/84635904-2497-11df-8be0-00144feab49a.html

Investors are pricing in big interest rate rises in emerging market economies this year, sparking fears of a stock market sell-off and prompting worries over the global recovery, which has been driven by the developing world.

Emerging market interest rate expectationsWith the withdrawal of cheap central bank money in the industrialised world coupled with the increasing tensions in the eurozone because of the Greek debt crisis, sharp rate rises in emerging markets could deliver a further blow to the growth outlook.

Investors are concerned that emerging market central banks might be forced to tighten monetary policy quickly to keep a lid on the build-up of inflationary pressures.

“Although central banks are right to introduce policies to restrain inflation, they must not tighten too far, too fast,” says Nigel Rendell, senior emerging market strategist at RBC Capital Markets.

Significant rate increases are being forecast in Brazil, Turkey, Mexico and India. Brazilian forward markets are pricing in a 256 basis point rate increase to 11.50 per cent by the end of the year.

Turkish markets, meanwhile, are pricing in a 186bp rise to 9.05 per cent and Indian markets a 119bp increase to 4.66 per cent. Mexican markets are currently pricing in a 115bp rise to 5.81 per cent by the year-end

In China, bank lending rates are not expected to rise sharply. But Beijing is restraining its economy by raising capital reserve requirements for commercial banks.

The renminbi is also expected to appreciate as much as 5 per cent against the dollar by the end of the year, slowing export growth.

A sharp tightening of monetary policy is normally seen as being bad news for equity investors as it takes the steam out of stocks.

Emerging market equities have rallied strongly in the past year, sharply outperforming the developed world, so many investors expect a correction.

Emerging market bond markets, which have seen spreads against US Treasuries tighten dramatically, could also suffer a pull-back.

However, fears that aggressive tightening could jeopardise the global recovery may be overdone, particularly as China is still forecast to grow by 10 per cent this year.

The expected monetary tightening should also boost Asian emerging market currencies.

This could in turn help the world economy as it makes US and European exports more competitive, boosting growth in the industrialised world.

Gary Jenkins, head of fixed income research at Evolution, says the emerging markets are pricing in big interest rate rises, bigger than many analysts expect.

But he adds: “The key point is that this is a return to more normal interest rate levels. We should not worry too much over aggressive tightening.”

[Demeter]

26. Demand dips for online films

http://www.ft.com/cms/s/0/63eb95a8-24a9-11df-8be0-00144feab49a.html


Hollywood’s hopes for a future built on digital film downloads have been severely undermined by research showing cooling consumer demand for movies online.

The film industry was banking on digital distribution eventually replacing the income it generates from sales of DVDs, which have been in steep decline for the past two years.

But while sales of digital films rose sharply in 2007 and 2008 growth stuttered in 2009, according to a report by Screen Digest.

The media research group had forecast total online movie sales in the US of $360m (€264m) for 2009, based on the sharp growth of 2007 and a near doubling of sales in 2008 to $219m.

Yet after a slowdown in the second half of the year, US revenues for 2009 were substantially lower than forecast at $291m.

“The market just cooled off,” said Arash Amel, a research director with Screen Digest. “This wasn’t caused by economic factors . . . the level of interest in digital downloads just isn’t there.”

He believes consumers have been deterred by an array of competing online platforms that prevent viewers from watching digitally downloaded films on the devices of their choice.

A consumer buying a film from Apple’s iTunes store is unable to watch it on their Microsoft Xbox console, for example.

“Digital downloading is characterised by its restrictions – it’s all about what viewers can’t do, rather than what they can do,” added Mr Amel.

Hollywood has moved to address problems associated with digital distribution yet the industry is divided on the best way forward.

Walt Disney has created Keychest, which it describes as “enabling technology” that allows consumers to buy a film once and watch it anywhere.

But the rest of the industry is supporting the rival Digital Entertainment Content Ecosystem coalition, which is backed by Sony Pictures.

With no immediate solution in sight, the Screen Digest report is likely to make grim reading in Hollywood.

The private equity and hedge fund money that poured into the industry fuelling a production boom has evaporated following the financial crisis, leaving the studios desperate for new revenue sources.

Studios have made efforts to cut the pay offered to top stars while the number of films going into production in 2009 fell almost 20 per cent to 520 and is forecast to fall again this year.

Screen Digest has slashed its growth forecasts for digital film sales by 30 per cent after the smaller-than-expected rise last year.

I WONDER IF THE ABYSMAL FILMS THAT HAVE BEEN TYPICAL OF THE PAST SEVERAL YEARS MIGHT HAVE SOMETHING TO DO WITH LACKLUSTER SALES...

[Demeter]

27. Iceland renews talks on €3.9bn debt dispute

http://www.ft.com/cms/s/0/f2cfeab2-249f-11df-8be0-00144feab49a.html

Iceland was scrambling on Sunday to find a last-minute solution to theIcesave debt dispute as the clock ticked down to a destabilising referendum on a deal to repay to Britain and the Netherlands €3.9bn ($5.3bn, £3.5bn) that was lost in the failed online bank.

Officials said “informal” exchanges took place at the weekend in a final effort to forge a compromise after negotiations with the UK and Dutch governments broke down in acrimony on Thursday.

Both sides played down the chances of a breakthrough before next Saturday’s plebiscite, at which Icelanders are expected to overwhelmingly reject a repayment plan agreed by the three sides last year. But Steingrimur Sigfusson, Iceland’s finance minister, urged all sides to keep “flexibility and open minds” to resolve a dispute that has delayed international aid to Iceland’s shattered economy and exposed flaws in European cross-border bank insurance rules.

Mr Sigfusson told the Financial Times: “It is very important that both sides keep lines open so we do not make this mess any bigger.”

A UK Treasury spokesman acknowledged that informal contact had continued with Iceland during the weekend but insisted that London was not discussing further concessions after its “best and final offer” was turned down last week.

Other people close to the situation insisted that the UK seemed open to more dialogue and there was enough hope for Iceland to send negotiators back to London on Saturday, less than 24 hours after they had returned to Reykjavik.

The dispute involves compensation paid out to more than 400,000 British and Dutch savers who lost money in Icesave, the online arm of Reykjavik-based Landsbanki, when the Icelandic banking sector collapsed in 2008.

British and Dutch depositors were reimbursed from their own countries’ bank deposit insurance schemes and the two governments are now trying to reclaim the money from Iceland.

The Icelandic parliament approved a repayment plan in December after months of debate but the legislation was blocked by Olafur Ragnar Grimsson, Iceland’s president, triggering a referendum. Opinion polls show most Icelanders are opposed to the deal, amid criticisms that the terms are too harsh and questions over Iceland’s legal obligation to cover foreign bank deposits.

Both sides offered concessions last week – Reykjavik floated an accelerated repayment schedule while the British and Dutch proposed lower interest rates – but each accused the other of not moving far enough.

People close to the situation said Reykjavik floated revised proposals during the weekend, under which Iceland would guarantee repayment of the full amount owed but at a lower interest rate than the one proposed by its counterparts.

Iceland last week rejected an improved offer from the British and Dutch involving a floating interest rate of 2.75 percentage points above Libor, the London interbank rate for short-term borrowing, arguing that the terms were still too harsh to win domestic support. Reykjavik has said that any premium above its counterparts’ cost of funding would represent “profiteering” at the expense of Icelandic taxpayers.

People close to the situation said it would become clear within 24 hours whether there was any prospect of avoiding the referendum.

Negotiations were complicated by the collapse of the Dutch government last week, raising doubts over Dutch officials’ authority to agree a deal. The Dutch were not represented in the weekend talks but were being kept informed of developments, with a view to them returning if formal negotiations resumed.

Mr Sigfusson refused to be drawn on whether Iceland’s left-leaning coalition government, which has staked his credibility on resolving the Icesave dispute, would survive a No vote. But he acknowledged that there was concern over potential political turmoil after the referendum. “We have problems enough in Iceland without adding political instability to them,” he said.

WHICH PART OF "NO" DON'T THEY UNDERSTAND?---ICELANDERS ASK

[Demeter]

28. Hedge funds prosper from Greek debt

http://www.ft.com/cms/s/0/a6b71b50-249f-11df-8be0-00144feab49a.html

Hedge funds have made large profits from Greek debt and providing insurance to overexposed European banks, it emerged on Sunday.

France signalled that private banks were likely to help in any rescue plan for Athens.

The hedge funds have been successful as traders anticipated that over-exposed European banks would drive a wave of selling against Greece, industry insiders told the Financial Times.

“There are a group of funds, perhaps three or four, that have played this as a huge sovereign basis trade, and made a lot,” said a strategist at one of London’s biggest hedge funds.

Paulson & Co, the $32bn fund, was identified by several industry participants as one of those involved. It declined to comment on specific investments.

“We have no physical presence in Greece or any other eurozone country and 90 per cent of our portfolio is in North America,” the fund said. “There are many better informed investors, economists and government regulators to comment on European fiscal matters.”

Christine Lagarde, France’s finance minister, tried to reassure Greece over its debt crisis, telling French radio: “I have no doubt that Greece will be able to refinance itself, using means which we are currently exploring and for which we have a number of proposals. It would involve private partners or public partners or sometimes both.”

The FT reported on Saturday that Germany’s biggest banks were looking at buying Greek debt backed by guarantees from the German government. The guarantees could be provided by KfW, the state-owned development bank.

With French banks reluctant to increase their exposure to Greek debt, one option for Paris would be to issue debt guarantees through state-owned Caisse des Dépôts, the French equivalent of KfW.

Greece is poised to announce a new round of austerity measures and a major bond issue this week. Olli Rehn, the European Union monetary affairs commissioner is visiting Athens for talks with the government, amid signs that the EU is crafting a multibillion euro plan to help the country fund its borrowing needs if needed.

European politicians last week stepped up attacks on hedge funds and the credit default swaps market, arguing that tougher regulation might be necessary. An estimated 95 per cent of Greek debt is held within the eurozone – most by European banks, according to Barclays research.

The hedge fund trade has worked because the funds involved were huge buyers of Greek sovereign bond default protection through the CDS market in 2009, when the price of such insurance was low, according to market participants.

Having bought insurance cheaply, the hedge funds are now in the market to buy the underlying Greek debt, the yield on which has risen significantly, or else write insurance against it for other market participants – in both instances netting out their existing positions but at a significant profit, industry insiders said.

The trade was calculated to succeed on the basis that European banks in particular would cause a blowout in Greek debt spreads and would be desperate to vacuum up CDS protection in the event of a deterioration in the Greek government’s economic standing, according to an insider at a large fund.

Greek CDS protection traded at 125bps in late October, equivalent to an annual payment of $12,500 for every $1m of protection acquired. The same CDS contract peaked early in February at 428bps, according to Bloomberg. The price on Friday closed at 364bps.

“There were a lot of smart guys who saw this coming,”“ at the amount of sovereign debt the ECB was pushing European banks to buy,” said the head of macro research at a large London hedge fund who declined to be named, “and you could see that the risks weren’t being considered.”

[Demeter]

29. Caterpillar moves to cut links with Iran

http://www.ft.com/cms/s/0/75f16576-248a-11df-8be0-00144feab49a.html

Caterpillar, the US building equipment group, has become the latest company to bow to a lobbyists’ “name and shame” campaign by announcing steps to sever trading links with Iran.

The company said it would bar its non-US subsidiaries from accepting orders for products that they knew were destined for delivery to Iran.

The New York-based United Against Nuclear Iran (UANI), which spearheaded a campaign against the Illinois company, greeted the announcement as its second victory in a month after Huntsman, the Texas chemicals manufacturer, announced in January that its foreign subsidiaries would suspend sales to Iran in view of the “reputational risk” posed to the company.

As western pressure mounts at the UN for a new round of global sanctions against Tehran over its nuclear programme, UANI and other lobbyists have targeted 200 US and foreign companies whose business with Iran is currently legal under US and international law. Companies have faced write-in campaigns and threats of divestment if they did not change their practices.

Lobbyists have also been active in drafting US legislation that would oblige Barack Obama, US president, to act against foreign companies, in spite of warnings from the state department against restricting the president’s diplomatic flexibility in seeking broad international consensus in dealing with Iran.

While the lobbyists have close connections with figures in the Obama administration and the Republican party, peace and human rights groups maintain that some campaigns act as a front for foreign policy hawks seeking to pursue a strategy of confrontation.

Other companies, forced to choose between their image in the US market and sometimes limited dealings with Iran, have already caved in to lobby pressure, or in anticipation of stricter measures from Congress.

UANI persuaded General Electric to sign a voluntary declaration that it would have no dealings with Iran. Siemens, Italy’s ENI oil company and German insurers Munich Re and Allianz are among others that have announced they were either pulling out of Iran or not renewing business there.

UANI’s database of targeted companies includes industrial brand leaders in Europe, Asia and elsewhere, and oil companies including Royal Dutch Shell, Total and Petrobras.

As part of the Caterpillar campaign, the pressure group this month erected a roadside billboard near the company’s headquarters in Peoria, Illinois that pictured one of the group’s earth diggers alongside a headshot of Mahmoud Ahmadi-Nejad, president of Iran, and the slogan “Today’s work, Tomorrow’s Nuclear Iran”. UANI said the billboard would be removed after a company statement late on Friday.

Caterpillar denied that it had extensive business in Iran, as the lobbyists claimed, and said it had no assets, operations or employees in that country. It acknowledged that Caterpillar products had reached Iran via third-party independent resellers as part of a secondary market which the company was unable to control.

UANI had sought to make a link between the activities of Lovat, Caterpillar’s Canadian tunnelling subsidiary that is engaged in a sewage project in Tehran, and Iran’s alleged use of tunnels to hide secret nuclear weapons facilities.

MORE BUSINESS FOR MOTHER RUSSIA--WE'VE SEEN THIS GAME BEFORE. SURE WOULD LIKE TO KNOW WHICH BATCH OF WARMONGERS IS BEHIND THIS IDIOCY.

[Demeter]

30. CHINA-CORPORATE BASHING HUMOR

http://www.youtube.com/watch?v=Vq8wbXAR4ZQ&feature=player_embedded

[tclambert]

38. That was great.

"Now when you buy, buy an American pie,
Your grandma didn't bake it, it was made in Shanghai,
Where they engineered the apples to be juicy not dry,
But the crust is made of cardboard and lye.
Don't feed it to your dog, he might die."

[DemReadingDU]

46. That's a good one!

More from the Capitol Steps. Visit them at www.CapSteps.com

videos
http://www.youtube.com/user/HerBunk

[Demeter]

49. The Truth Hurts

Airport security scan counts as an MRI under Obamacare, so there will be a $15 co-pay!

[Demeter]

32. FDIC Auctions $610.5 Million in Loans From Failed U.S. Lenders

http://www.businessweek.com/news/2010-02-27/fdic-auctions-610-5-million-in-loans-from-failed-u-s-lenders.html

The Federal Deposit Insurance Corp. is seeking bids for $610.5 million of unpaid loans it’s holding from failed U.S. lenders including IndyMac Bank, Silverton Bank and New Frontier Bank.

The loans are backed in part by land, developed lots and condominium construction projects, said Peter Tobin, managing director of New York-based Mission Capital Advisors LLC, the FDIC’s marketing agent and financial adviser for the offering. Most of the properties are in Colorado, California, Utah and Idaho, and about 78 percent of the debt is 90 days or more past due, according to a description on Mission Capital’s Web site.

The FDIC is disposing of real estate, soured mortgages and personal property ranging from tour buses to palm trees that once belonged to failed banks. More than 160 lenders collapsed since the start of 2009, and the tally may grow this year, with 702 firms on the FDIC’s “problem bank” list as of Dec. 31.

The sale ”is going to appeal to a broader investor class,” Tobin said. The winning bidder will take an interest in a limited liability company owning the assets in partnership with the FDIC. The auction may attract more bidders than previous sales because the portfolio is smaller, Tobin said.

The biggest piece of the package is from New Frontier, the Greeley, Colorado-based lender that failed in April. The portfolio lists $220.2 million in Frontier debt from 187 loans, with 91 percent at least 90 days overdue.

Silverton, IndyMac

The second-biggest component is from Silverton, the Atlanta-based lender that serviced about 1,400 banks in 44 states until it failed in May. The offering includes 23 Silverton loans showing balances of $85.3 million, with 81 percent behind by 90 days or more.

IndyMac’s share of the FDIC offering is a single overdue loan of $48,000, according to Mission Capital’s listing. Regulators seized Pasadena, California-based IndyMac in July 2008.

Bids for the latest FDIC auction are due April 6, Mission Capital said. David Barr, an FDIC spokesman, declined to comment.

The planned sale was reported earlier by Commercial Real Estate Direct on its Web site.

[Demeter]

33. Kansas tax collections decline by 27 percent for February

http://www.kansascity.com/2010/02/26/1776957/kansas-tax-collections-decline.html?story_link=email_msg

...It was the third consecutive month that collections fell short of expectations. The gap for the 2010 fiscal year through February is now $105 million, with total tax collections of $3.1 billion falling 3.3 percent short of expectations...

[Demeter]

35. Head of IMF Proposes New Reserve Currency

http://abcnews.go.com/Business/wireStory?id=9958995

Dominique Strauss-Kahn, the head of the International Monetary Fund, suggested Friday the organization might one day be called on to provide countries with a global reserve currency that would serve as an alternative to the U.S. dollar.

"That day has not yet come, but I think it is intellectually healthy to explore these kinds of ideas now," he said in a speech on the future mandate of the 186-nation Washington-based lending organization.

Strauss-Kahn said such an asset could be similar to but distinctly different from the IMF's special drawing rights, or SDRs, the accounting unit that countries use to hold funds within the IMF. It is based on a basket of major currencies.

He said having other alternatives to the dollar "would limit the extent to which the international monetary system as a whole depends on the policies and conditions of a single, albeit dominant, country."

Strauss-Kahn, a former finance minister of France, said that during the recent global financial crisis, the dollar "played its role as a safe haven" asset, and the current international monetary system demonstrated resilience.

"The challenge ahead is to find ways to limit the tension arising from the high demand for precautionary reserves on the one hand and the narrow supply of reserves on the other," he said.

Several countries, including China and Russia, have called for an alternative to the dollar as a reserve currency and have suggested using the IMF's internal accounting unit.

Strauss-Kahn said the IMF also needs to do a better job of tracing how risk percolates through the global economy.

"Here it will be essential to improve our ability to monitor several dozen large complex financial institutions that make up the `plumbing' through which global capital flows," he said, while leaving national regulators the job of monitoring the solvency of individual institutions.

LOTS OF LUCK WITH THAT...

[Demeter]

36. Pound under attack as debt worries grow

http://business.timesonline.co.uk/tol/business/economics/article7043834.ece

[Demeter]

37. Pound Could Collapse Within Weeks, Predicts Billionaire Financier Jim Rogers

http://media.einnews.com/article.php?pid=73800

I SMELL A SPECULATOR-RAT AND SOME CURRENCY BASHING

[burf]

45. Demeter, if it is a rat you smell,

a rat you shall have.

CAUGHT: The Man That Impersonated Jim Rogers And Called For The Pound To Collapse

Actually, Jim Rogers didn't say that the pound will collapse in the very near future...

It was all made up by this guy, to the right, whose company put out the following press release as what appears to have been a publicity stunt:

Photo and story at: http://theautomaticearth.blogspot.com/

Also at: http://www.businessinsider.com/this-is-the-man-that-impersonated-jim-rogers-and-called-for-the-pound-to-collapse-2010-2

[Demeter]

50. Thanks! Two VERY Interesting Additions to Our Info Stream

So, why is this guy still walking around? Wouldn't Jim Rogers slap him with a big wet lawsuit?

[burf]

52. The part that struck me as strange

was a quote from the business insider story: "Regardless, it was great exposure for his 'Trading Day Seminar' either way... and a ray of attention for this self-described renaissance man."

How does this BS artist have any credibility whatsoever? But I guess he's got a method to make his students a pile of money so pay no attention to anything else. Just like the other market geniuses al large and the house flippers.

My God, how far we have fallen!

[Ghost Dog]

53. Who does George Soros bet against? You?

Ilargi: Let me get this short and sweet, since it’s so darn simple.

You have George Soros, the man who makes whole governments shiver at age 821, betting against the Euro in deals where he stands to make 20+ times as much as he can lose. And they call that news. The rhyme was intended.

Well, there is no doubt the euro will have further to fall, so kudo’s Soros. For the next few days, George doesn’t need any Viagra. What’s more interesting for who still hasn't been paying attention is that what Soros is aiming for coincides perfectly with what the Germans seek. Or, if you’re in an adventurous frame of mind, that the Greek government itself may well be, as we speak, betting on the same odds Soros is. Let's see some hands here, how many of you thought of that one?

If only because it ain’t really betting. The Euro will sink versus the US dollar like a big mean stone unless, HA!, unless financial news out of the US keeps it from doing so. Ok, so we know Obama wants to raise US exports by 100% in the next 5 years (did you just spill your drink?), and we also know that ain't ever going to happen if the US dollar doesn’t lose value versus the Euro. So Soros attacks the Euro and thereby attacks the US. He helps Germany and thereby Greece, the very country he's supposedly attacking. And if you think that’s convoluted, you should read about Goldman Sacks aiding Greece in hiding its debts while at the same time betting against the very bets it helped hide. Illegal? Nah. Insane? Duh.

You can now feel free to make money on your own upcoming bankruptcy. Or that of your town, county, or nation. It’s the flavor of the day. Get rich off your neighbor’s impending misery. We over here call this good old capitalism. And if you don’t know which victim to pick next, I suggest Britain. Especially if you live there, you need something to make up for your upcoming losses. Soros doesn’t think Greece will go down, he just thinks Europe will pay him to quit betting against it. Either way he wins, he’s leveraged 20 to 1. Europe has that much more to lose.

But the entire world has that much more to lose, and the fact that Georgey-boy starts there might well mean his real targets lie elsewhere. How about Japan? How about California? Again, I would maybe think he’ll go after Britain again. But George, mind you, may well have his by now 822 year-old sights set on Beijing or, drumroll, Washington.

Don’t think so? Want to bet? George does. He understands that 99% of the people don’t know what he's betting against. And he likes those odds.

/... http://theautomaticearth.blogspot.com/2010/02/february-26-2010-who-does-george-soros.html

[Ghost Dog]

51. Britain’s lack of credibility hurts sterling

Willem Buiter
Published: March 1 2010 20:16 | Last updated: March 1 2010 20:16
The writer is Citigroup chief economist

Sterling has been weak and jittery recently, falling below $1.50 on Monday. Even with the euro weakening amid the sovereign debt tsunami about to engulf Greece – barring a rescue – the pound has dropped against the single currency.

There are good reasons for the weakness and volatility of sterling. Among industrial countries, Britain’s economic fundamentals are uniquely awful. As regards public debt and deficits, Britain’s true fiscal circumstances are about as bad as Greece’s reported situation, once we allow for the understatement of UK public debt through the off-balance-sheet accounting tricks of the past decade (the private finance initiative, unfunded public sector pensions, student loans and other Enron-like constructs).

The fiscal weakness of the UK is largely government-inflicted, rather than a result of the financial crisis and global contraction. During the long boom preceding the crisis, fiscal policy was relentlessly pro-cyclical, with public spending rising steadily as a share of gross domestic product. The size of the bank bail-out reflected failures of UK regulation that permitted the financial system’s balance sheet to pass 400 per cent of GDP.

Britain has four, inconsistent, features. It is a small, open economy, with a large, internationally-exposed financial sector, its own minor-league currency and limited fiscal spare capacity. This makes it uniquely vulnerable. Its central bank is limited in the liquidity support it can give banks with short-term foreign-currency liabilities. Its fiscal authorities may discover that major banks are not just too big to fail but also too big to save. The markets have recognised this, become nervous and started testing it.

When a government has credibility – its promises and commitments are believed by its citizens and by the markets – the best policy is not an immediate fiscal tightening. A credible government would implement an immediate fiscal stimulus of, say, 2 per cent of GDP and commit itself to sufficient future tightening to restore fiscal sustainability.

...

The crucial difference between Britain and Greece is in the political economy of fiscal tightening. Both need 8 to 9 per cent of GDP-worth of permanent fiscal tightening. Greece cannot deliver that without external support because its society and polity are deeply divided; its institutions of governance are weak and its government incapable of swift, dramatic actions.

The UK authorities, by contrast, should be capable of imposing a timely burden-sharing solution. This is an advantage of the UK’s “elected dictatorship” constitution: with a powerless second chamber, a first-past-the-post electoral system and no tradition of judiciary interference in economic affairs, there are no checks and balances constraining the executive when a single party has a parliamentary majority. Without a hung parliament, it is all but certain that the next government will impose early spending cuts and tax increases of sufficient size to calm the markets.

All bets are off, however, should there be a hung parliament. The British political class would have to learn the art of coalition politics. Fiscal tightening could be postponed. The markets would attack both sterling and gilts, threatening the triple A rating. Even this should be survivable, although it could cause Britain to relapse into recession.

/... http://www.ft.com/cms/s/0/d58ada72-256a-11df-9cdb-00144feab49a.html

[UpInArms]

40. dollar watch

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

Last trade 80.688 Change +0.030 (+0.04%)

Dollar Rally Fed by Flight to Safety Flows Away from Euro and Pound

http://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/daily_fundamentals/2010-03-02-0205-Dollar_Rally_Fed_by_Flight.html

Was investor sentiment rising or falling Monday? As the currency market’s primary safe haven, it would seem the dollar’s impressive advance through the morning hours of the US session was once again the product of this most influential fundamental theme. However, a greenback rally on risk aversion would directly conflict with the steady and progressive advance in equities throughout the day. Commodities would further complicate the situation as crude – the speculative bellwether for the asset class – fell on the day, with most of this selling momentum occurring at the same time the dollar itself would retrace its gains. This may seem like a tangled web of contradiction; but in fact, the fundamentals are intact and are relatively straightforward. A broad assessment of risk appetite suggests that sentiment was actually little changed through the end of Monday. This can be qualified by the preservation of obvious ranges for most of the favored benchmarks (EURUSD, the Dow and crude).

Yet, to explain the dollar’s strength, we can further look into the divergence between the major currency pairs. The greenback would establish a significant advance against the euro and British pound Monday – two of the most liquid pairings for the unit. On the other hand, the dollar would actually lose ground against the commodity currencies, which typically signifies an advance in risk appetite. Both USDCHF and USDJPY fit the bill as well; because the former is highly correlated to EURUSD and the latter treats the dollar as the ‘high yield’ currency. Altogether, this activity would fit the scenario of a modest advance in investor optimism (which is what we had seen in equities) with the notable discrepancies of the euro and sterling pairs. However, this too can be reconciled. This morning; both the European and British currencies were tumbling across the board due to their own respective fundamental backdrafts. Ultimately, the isolated flight-to-safety in these two specific pairs would establish the greenback’s primary move for the day by the mere fact that the combined influence of EURUSD and GBPUSD represents a bulk of the dollar’s liquidity.

As for standard scheduled event risk, the docket would further encourage the trends that developed behind the benchmark currency Monday. In the hours before the US market open, the government released positive personal income and spending figures. According to the data, spending grew a greater-than-expected 0.5 percent through January, notching a fourth consecutive monthly increase. As for the income number, the 0.1 percent pickup through the period fell short of the 0.4 percent rise projected; but when dividend and interest income were excluded from this reading, real wages and salary grew the most since April. A little later in the session, the disappointing data would catch up. The ISM Manufacturing activity survey for February slowed more quickly than expected with the biggest month-over-month drop in 14 months. Nonetheless, this reading maintains its positive bearing with a seventh consecutive month of overall growth for the sector – designated by a reading above 50. Taking stock of tomorrow’s fundamental offerings, the docket will hit its low point. With heavy-hitting event risk scheduled in following days, the responsibility of meaningful volatility (much less trend development) will fall once again to underlying risk trends.

...more...

Daily Sound Bites 03.02

http://www.dailyfx.com/forex/fundamental/article/daily_sound_bites/2010-03-02-1242-Daily_Sound_Bites_03_02.html



...more...

[Roland99]

42. Index Futures:WHEEEE!!!!

S&P 500 1,121 +6.10 +0.55%
DOW 10,432 47.00 0.45%
NASDAQ 1,854 +10.75 +0.58%

[Demeter]

43. Got a Good Slogan for Tansy's Presidential Campaign

We can have a wealthy nation, where no child starves, goes unclothed or unsheltered or uneducated, or we can have a wealthy elite.

Our ancestors all came, here, worked, fought and died for the nation, not for the Controlling Elite.