STOCK MARKET WATCH, Monday November 17

[ozymandius]

Source: du

STOCK MARKET WATCH, Monday November 17, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 64
WHERE'S OSAMA BIN-LADEN? 2580 DAYS
DAYS SINCE ENRON COLLAPSE = 2871
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

---

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

---

AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.
$1 USD = EUR 1.06678
$1 USD = JPY 116.6200

In recognition of those prescient of the Dow's precipitous return of Bush values (9/29/08): JuneBourder and AnneD

AT THE CLOSING BELL ON November 14, 2008

Dow... 8,497.31 -337.94 (-3.98%)
Nasdaq... 1,516.85 -79.85 (-5.00%)
S&P 500... 873.29 -38.00 (-4.17%)
Gold future... 742.50 +37.50 (+5.05%)
30-Year Bond 4.23% -0.10 (-2.38%)
10-Yr Bond... 3.75% -0.07 (-1.78%)






GOLD,EURO, YEN, Loonie and Silver

---

PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

---

Read more: du

[ozymandius]

1. Market WrapUp

Still Seeing Plenty of Red
BY MICHAEL PANZNER

This morning (Friday), the Commerce Department announced that October retail sales fell 2.8%, the fourth straight drop and the worst one-month decline since records began in 1992. Stripping out sales of autos and gasoline, the year-over-year total rose just 1.5%, less than the rate of inflation and the worst 12-month rate of change since February 2003.

....

One spending category that has seen a boom in comparative terms over the past several decades is durable goods, which includes items like automobiles and airplanes (to name a few). However, amid signs that Americans are tapped out and have already bought many of the “toys” they need (or want), it seems a good bet that demand for such goods has seen its peak, at least in the short-to-medium term.

....

One day after share prices staged a dramatic intraday upside reversal, stocks ended sharply lower, giving back a sizeable chunk of yesterday’s gains. Prices were dragged lower by a disappointing report on retail sales, as well as weakness in energy -- hurt by a sell-off in crude oil futures -- and technology shares.

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

[ozymandius]

2. Today's Reports

08:30 NY Empire State Index Nov
Briefing.com NA
Consensus -26.0
Prior -24.6

09:15 Capacity Utilization Oct
Briefing.com NA
Consensus 76.6%
Prior 76.4%

09:15 Industrial Production Oct
Briefing.com NA
Consensus -0.1%
Prior -2.8%

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

[UpInArms]

34. U.S. Nov. empire state index falls to record low -24.6

01. U.S. Nov. empire state index falls to record low -24.6
8:33 AM ET, Nov 17, 2008

[UpInArms]

39. U.S. Sept. industrial production revised down to -3.7% - Oct reported up (will it be rev'd downward?

08. U.S. Oct. industrial production rises 1.3% vs. 0.5% expected
9:15 AM ET, Nov 17, 2008

09. U.S. Sept. industrial production revised down to -3.7%
9:15 AM ET, Nov 17, 2008

10. U.S. Oct. manufacturing output rises 0.6%
9:15 AM ET, Nov 17, 2008

16. U.S. Oct. industrial output falls 0.1% excluding energy
9:15 AM ET, Nov 17, 2008

[Festivito]

3. Debt: 11/13/2008 10,578,639,151,691.10 (DOWN 39,869,480,893.40) (38B back?!.)

(Last Friday dump we saw 56B borrowed, now 39B comes back to US with 2B from FICA. Goooooood Morning. )

= Held by the Public + Intragovernmental(FICA)
= 6,320,976,663,656.70 + 4,257,662,488,034.43
DOWN 37,830,308,231.82 + DOWN 2,039,172,661.55
(NOTE: Excel 2007 cannot handle ten-trillion plus to the penny. It zeroes the penny.)

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

THINKING IN BILLIONS: 3 or 4 dollars per billion in a 300-Million person America.
If every American, man, woman and child puts in $3.33 each THAT'S 1B$.
A family of three: Mom, Dad, Child: THEIR SHARE IS TEN BUCKS in 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 a 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)
(I hate those end to end dollars to the moon and back, or years to spend $100/second. Just say'n)
If you read this and have a suggestion or comment, good or bad, I'd love to see it.

ANALYSIS:
There were 23 reports in the last 30 to 34 days.
The average for the last 23 reports is 12,359,031,277.61.
The average for the last 30 days would be 9,475,257,312.83.
The average for the last 34 days would be 8,360,521,158.38.
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$/day.
There were 30 reports in 44 days of FY2009 averaging 18.46B$ per report, 12.59B$/day.

PROJECTION:
GWB** must relinquish the presidency in 68 days.
By that time the debt could be between 10.7 and 11.4T$.
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)
11/13/2008 10,578,639,151,691.10 GWB (UP 4,850,443,355,509.53 so far since Bush took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 553,914,254,778.70 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
10/23/2008 +024,603,393,878.21 ------------**********
10/24/2008 -000,913,156,317.59 -----------
10/27/2008 -000,114,166,180.08 ----------- Mon
10/28/2008 -000,028,404,616.62 -----------
10/29/2008 +000,066,775,718.47 ------------*******
10/30/2008 +008,339,266,330.60 ------------*********
10/31/2008 +045,215,290,348.09 ------------**********
11/03/2008 -000,572,269,490.77 ----------- Mon
11/04/2008 +000,314,469,904.16 ------------********
11/05/2008 -000,077,530,396.02 -----------
11/06/2008 +056,540,493,221.63 ------------**********
11/07/2008 -000,129,624,570.02 -----------
11/10/2008 -000,178,876,517.33 ----------- Mon
11/12/2008 +000,116,562,137.90 ------------********
11/13/2008 -037,830,308,231.82 -----------

95,351,915,218.81 Total of 15 above reports.

Heavy borrowing seems to start 10/18/2008.
US borrowed $914,007,348,432.03 in last 56 days.
That's 914B$ in 56 days.
More than any year ever, except last year, and it's 90% of that highest year ever only in 56 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 56 DAYS NOT 365.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) YESTERDAY'S POST LINK:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3600742&mesg_id=3600792

[Festivito]

58. Debt: 11/14/2008 10,617,806,584,635.20 (UP 39,167,432,944.10) (39B back UP.)

(Friday dump before last we saw 56B was borrowed, next Friday dump 39B comes back to US, next day we borrow that 39B that we had just bought back yesterday. Weird.)

= Held by the Public + Intragovernmental(FICA)
= 6,360,691,569,969.19 + 4,257,115,014,666.08
UP 39,714,906,312.49 + DOWN 547,473,368.35
(NOTE: Excel 2007 cannot handle ten-trillion plus to the penny. It zeroes the penny.)

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

THINKING IN BILLIONS: 3 or 4 dollars per billion in a 300-Million person America.
If every American, man, woman and child puts in $3.33 each THAT'S 1B$.
A family of three: Mom, Dad, Child: THEIR SHARE IS TEN BUCKS in 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 a 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)
(I hate those end to end dollars to the moon and back, or years to spend $100/second. Just say'n)
If you read this and have a suggestion or comment, good or bad, I'd love to see it.

ANALYSIS:
There were 23 reports in the last 30 to 31 days.
The average for the last 23 reports is 14,060,943,271.03.
The average for the last 30 days would be 10,780,056,507.79.
The average for the last 31 days would be 10,432,312,749.48.
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$/day.
There were 31 reports in 45 days of FY2009 averaging 19.13B$ per report, 13.18B$/day.

PROJECTION:
GWB** must relinquish the presidency in 67 days.
By that time the debt could be between 10.7 and 11.5T$.
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)
11/14/2008 10,617,806,584,635.20 GWB (UP 4,889,610,788,453.63 so far since Bush took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 593,081,687,722.80 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
10/24/2008 -000,913,156,317.59 ---
10/27/2008 -000,114,166,180.08 --- Mon
10/28/2008 -000,028,404,616.62 ----
10/29/2008 +000,066,775,718.47 ------------*******
10/30/2008 +008,339,266,330.60 ------------*********
10/31/2008 +045,215,290,348.09 ------------**********
11/03/2008 -000,572,269,490.77 --- Mon
11/04/2008 +000,314,469,904.16 ------------********
11/05/2008 -000,077,530,396.02 ----
11/06/2008 +056,540,493,221.63 ------------**********
11/07/2008 -000,129,624,570.02 ---
11/10/2008 -000,178,876,517.33 --- Mon
11/12/2008 +000,116,562,137.90 ------------********
11/13/2008 -037,830,308,231.82 -
11/14/2008 +039,714,906,312.49 ------------**********
(Corrected from having a really dumb mistake that had added too many dashes.)
110,463,427,653.09 Total of 15 above reports.


Heavy borrowing seems to start 10/18/2008.
US borrowed $953,174,781,376.13 in last 57 days.
That's 953B$ in 57 days.
More than any year ever, except last year, and it's 94% of that highest year ever only in 57 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 57 DAYS NOT 365.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) YESTERDAY'S POST LINK:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3605098&mesg_id=3605103

[Eugene]

4. Oil falls towards $56 after G20 summit

Source: Reuters

Oil falls towards $56 after G20 summit
Mon Nov 17, 2008 4:25am EST

By Christopher Johnson

LONDON (Reuters) - Oil fell more than $1 to below
$56 a barrel on Monday, close to its lowest in almost
two years, after a meeting of the Group of 20 major
economies ended with few concrete proposals on dealing
with global recession.

News that the Organization of the Petroleum Exporting
Countries (OPEC) may wait until its meeting on December
17, instead of the end of November, to make a decision
on whether to cut production targets again also weighed
on prices.

-snip-

Governments from Washington to Beijing agreed on
Saturday to a raft of fiscal and monetary steps to
rescue the global economy but it was left to individual
governments to tailor responses to their circumstances
and troubled industries.

Although the package of economic rescue measures
agreed by the G20 countries sought to settle volatile
markets and calm consumer anxieties about leaders'
ability to work together, the proposals did little to
alleviate investors' fears.

-snip-

Read more: http://www.reuters.com/article/newsOne/idUSTRE49B3Y620081117

[ozymandius]

5. Auto bailout: Showdown in Washington

NEW YORK (CNNMoney.com) -- For more than a century, the U.S. auto industry has been at the center of the American industrial economy. Events over the next month could determine if that remains the case.

This week, Congress will consider whether to cough up billions of dollars to bail out the troubled companies.

....

Indeed, opposition to a bailout is widespread. GM and the other Detroit automakers are trying to win support from an American public that has largely turned their back on them. Sales by the U.S. companies account for only 47% of domestic sales this year, according to sales tracker Autodata.

Whatever Congress decides, it'll have to act fast. General Motors (GM, Fortune 500) has warned that by the end of the year it will have run down down its cash close to the minimum amount needed to operate. The status of Ford Motor (F, Fortune 500) and Chrysler LLC aren't as precarious, but both have joined their larger rival and the United Auto Workers union in asking for help for the industry.

http://money.cnn.com/2008/11/17/news/companies/gm_showdown/?postversion=2008111703

[ozymandius]

7. GM Sells Suzuki Stake for $230 Million

TOKYO -- Highlighting its urgent need for operating cash, General Motors Corp. said Monday it sold its remaining 3% stake in Japan's Suzuki Motor Corp. on the open Tokyo stock market for about $230 million.

GM said the move was "based on a mutual agreement," while the Japanese compact-car maker said it was mindful of GM's need to secure funds as it reels from a slump in auto sales in its major markets and high operating costs.

.....

But the deal means GM, which warned earlier this month it could conceivably run out of operating cash by the end of the year, is exiting Suzuki for the first time since it invested in the Japanese company in 1981.

http://online.wsj.com/article/SB122691782294132979.html?mod=googlenews_wsj

[ozymandius]

11. `Dumbest People' Industry Image May Cost Wagoner Job

Nov. 14 (Bloomberg) -- Rick Wagoner's 31-year career may fall victim to the mistakes of the industry and his own, even if General Motors Corp. survives.

The GM chief executive officer unleashed scrutiny of his record after asking for a government bailout to keep the Detroit automaker in business. Now, his departure may be a necessary condition of any federal rescue, business leaders and lawmakers say.

....

Wagoner has run the world's largest automaker for the past eight years, presiding over $73 billion in losses beginning in 2005. He already endured a fight with dissident shareholders and several failed turnarounds and may argue he knows the company better than most who could take his job.

The 55-year-old executive joined GM in 1977, as U.S. automakers were fending off Japanese competitors who recognized the need a decade earlier to build fuel-efficient vehicles. While U.S. auto sales broke records during Wagoner's years as CEO, the three major producers -- Ford Motor Co., Chrysler LLC and GM -- battled against high labor costs from pension and retiree health care obligations.

http://www.bloomberg.com/apps/news?pid=20601109&sid=ap8pS2oslvn0&refer=exclusive

[Tansy_Gold]

26. I'm going to continue to hammer this nail

GM -- and that includes Wagoner -- knew what their retiree obligations were well in advance. They should have made sure those were covered.

If they entered into get-rich-quick-schemes and those failed, they shoulda got out.

When you have obligations to people who are counting on you and have no other options, you treat them with special care. The people who worked for you and made you great are not just a future liability item on the balance sheet.

Wage and benefit packages are (or should be) negotiated on the basis of how much profit the company can make or is making and there should be some correlation between how much the workers are paid (they're making the profit, after all) and how much the stockholders (including stockholding upper management) are paid. If the gap widens, then the gap itself ought to be examined AS A POTENTIAL CAUSE of any subsequent problems.

When bad decisions are made, it's the decision makers who should be punished with loss of income long before the producers of the profit are.


Tansy Gold, struggling to produce a profit on her own.

[Sadie5]

37. GM contracts with the union were negotiated

on what the company was making in profits. Year after year the workers bowed down to the hard luck stories the company put forth yet in the end the workers who propped up the middle class for years will get the blame. As for the insurance, it stinks. They offer traditional BC/BS and it can get very expensive to get sick these days as a GM worker. Quit blaming the workers and blame Waggoner(Bush's pal) who should have been ousted years ago. BTW: That retirement is what the people work some 30 odd years for. GM needs to realize that. The CEO gets his share, would you begrudge the workers their share? Just saying...

[Roland99]

40. Gee...imagine a Nationalized One-Payer health system, funded via slightly increased employee taxes

and think of ALL that capital freed up for corporations.

But, NOOOO...can't have that socialism.

[Roland99]

41. Know what stuck in my craw watching Sen. Shelby on TV yesterday morning? (and Repukes in general)

They had NO problem bailing out their rich corporate banking buddies to the tune of over $1 Trillion! Oh, they're too big to fail, they're at the foundation of our economy, blah blah blah

And how many jobs is that saving? A few hundred on Wall Street?


But they have NO problem letting GM or Ford fail due to "free market consequences" where potentially hundreds of thousands of jobs across the country are in jeopary. Because, labor is not the foundation of our economy...making money off of doing NO work (fees on monetary transaction is not work and should NOT be the foundation of our economy).

Screw labor once again.

Bye Bye, Ms. American Pie....

[Tansy_Gold]

44. I agree with you, but I would point out that

there are hundreds of thousands employed in the "financial services" "industry" if you know what I mean ;-) :sarcasm: and Citi has announced it's going to furlough 50,000 of them.

That said, I'm still agreeing with you, because what Paulson, Bernanke, et Cie. were doing was bailing out the upper echelons in the financial markets, not the "workers."

And it should be noted that --

Many of those employed in the "financial services" "industry" are women, whether they are bank tellers or data entry clerks or "administrative assistants" or whatever. They are women like their mothers and aunts and grandmothers who, in another age and another economy, would have very likely been married to men who worked in the manufacturing industries, men who made good wages, men who supported their wives and children (and maybe their aging parents) as a single-income family.

The shift from the "traditional" nuclear family -- wage-earning husband, stay-at-home mom, kids, etc. -- to the variety of "family" structures we have today (all of them, imho, of equal value and validity) means that we have to adapt our industries and our wages to reflect the new reality.

As women entered the workforce in the 50s and 60s and 70s and were shunted into low-wage "pink collar" jobs, they essentially created a market for themselves. Without lots and lots of low-wage (usually female) workers, the typical call centers wouldn't have been staffed. And I don't want my syntax to imply that the workers were themselves to blame. Rather it was upper management that (maybe unconsciously) saw this huge pool of workers and sought ways to exploit them. Whether it was telemarketing or call center services or Walgreens on every corner or greeters at Wal-Mart, Managment (a.k.a. Capital) found ways to exploit them. And they still do, which is why there remains a huge income gap between men's and women's earnings.

In the process, this changed the nature of "family." Women who could work and support themselves didn't NEED to get married. They could live on their own or with female roommates and establish "alternate" family-styles. And I don't want this to seem as if I'm saying this only happened to women. Men, too, saw their family-style changing. And it doesn't matter what all the details were and are; what matters is that the changes have been massive, and reverting to an economy based on high wages for those engaged in physical manufacturing jobs but low wages for "support" personnel may imply that a reversion to the "traditional" single wage earner family is possible.

I don't think that kind of reversion IS possible, and therefore we have to look at the repercussions of a collapse of the "financial services" "industry" on those "families" that are not headed by a manufacturing industry wage earner.

I think there are a variety of those issues, but it points out how complex the economy has become and how far-reaching any major alteration to the status quo -- regardless how devoutly that alteration may be wished for -- may end up being.


Tansy Gold

[Roland99]

45. Very well said.

And what more proof could we want to show that workers are not benefiting from Bailout Bill? If Citi is tossing 50,000 out on their keester after having gotten how many billions?


:banghead:

[AnneD]

54. Devil's Advocate......

I am starting to feel a bit uneasy with this whole-let Detroit fail movement. People have been lulled into a false sense of security by in time turn around delivery and tooling around in their foreign autos.

But what if there is a time of war or insecurity... Who supplies us when all our manufacturing
base is gutted, all our manufacturing jobs are outsourced. Detroit caused their own problems by not getting a fuel efficient car to the manufacturing floor sooner, but it makes no sense to throw the baby out with the bath water. A strong manufacturing base is just as important to national security as a metal detector at an airway. In addition to providing good paying jobs, it provides for national security.

[Tansy_Gold]

56. National security issue

Was brought up on NPR this morning.

Early 1942, after Pearl Harbor, Detroit retooled for war-time production. Would we have a comparable capacity if GM collapses? The counter is that we already have a substantial military manufacturing sector -- Boeing, Grumman, etc. -- so that such a retooling in time of catastrophe wouldn't be needed.

Seems to me that the decisions are being made without anyone taking time to contemplate potential downsides. We're already seeing buyer's remorse for the $700bn bailout -- okay, so it's just Inhofe that's whining -- but these huge plans need not only careful oversight but they need careful planning. Too much crisis management going on, not enough crisis avoidance.

Just MHO from

Just


Tansy Gold

[AnneD]

59. My only 2 issues with the WS bail out...

who was in charge and what were the stipulations......

[ozymandius]

6. Recession hits Japan, IMF needs more money

LONDON (Reuters) - Japan became the latest major economy to fall into recession Monday with France close behind, and the IMF said it needed at least $100 billion to fight the billowing economic crisis enveloping the world.

Meanwhile, the battered auto industry came into focus. The U.S. Senate was to begin debating a bailout later in the day, Germany was to hold talks with General Motors unit Opel, and Japan's Toyota came under ratings scrutiny.

In something of a surprise, figures showed Japan, the world's second-biggest economy, sliding into its first recession in seven years in the third quarter as the financial crisis curbed demand for Japanese exports.

http://www.reuters.com/article/wtMostRead/idUSTRE49N5VU20081117

[ozymandius]

8. GLOBAL MARKETS-Asia stocks, oil slip with focus on grim outlook

HONG KONG, Nov 17 (Reuters) - Asian stocks slipped on Monday in choppy trade, despite some buying of Japanese shares by long-term investors, on expectations corporate results will reflect deteriorating economic conditions until at least the second half of 2009.

.....

Oil prices dipped to within striking distance of last week's 22-month low after policymakers from both emerging and developed economies who met in Washington chose to leave individual governments to tend their own backyards and did not propose a global response.

.....

The MSCI index of Asia-Pacific stocks outside of Japan fell 1.75 percent, extending last week's 9.7 drop. Year-to-date losses have piled up to around 57 percent.

Hong Kong's Hang Seng index was little changed in choppy trade, with shares of Hong Kong Exchanges & Clearing one of the biggest percentage losers as investors expected withering volumes to hurt the company's bottom line more.

.....

Tokyo's Nikkei share average recovered from early losses, edging up 0.7 percent, as the yen fell and as public pension fund managers snapped up cheap stocks. Some of the stocks lifting the index, such as Takeda Pharmaceutical, were so-called defensive plays, which were expected to perform relatively well in a slowdown.

http://www.forbes.com/topstories/feeds/reuters/2008/11/17/2008-11-17T071752Z_01_HKG212143_RTRIDST_0_MARKETS-GLOBAL-WRAPUP-3.html

[ozymandius]

9. Blankfein, Goldman Deputies Decide to Forgo Bonuses

Nov. 17 (Bloomberg) -- Goldman Sachs Group Inc., the firm that set a record for Wall Street pay last year, became the first U.S. bank to scrap 2008 bonuses for senior officers in the face of the worst financial crisis since the Great Depression.

.....

Wall Street bonuses, typically about two-thirds of the firms' total annual compensation, are under scrutiny by lawmakers and taxpayers after the U.S. government passed a $700 billion rescue plan for the industry. Banks and brokerages have announced $707 billion of writedowns and credit losses since the subprime- mortgage market collapsed last year, and have cut almost 160,000 jobs. Lehman Brothers Holdings Inc., once the biggest underwriter of mortgage securities, was forced to file for bankruptcy.

.....

Blankfein, Chief Financial Officer David Viniar, Co- Presidents Jon Winkelried and Gary Cohn, and Vice Chairmen J. Michael Evans, Michael Sherwood and John S. Weinberg won't receive year-end payouts, van Praag said. In the nine months through August, Goldman's compensation expense dropped 32 percent from last year to $11.4 billion.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aMw7rMoW1QmA&refer=home

[ozymandius]

10. Copper Drop Deepens as China Growth, Housing Falter (Update2)

Nov. 17 (Bloomberg) -- Not even $586 billion of emergency spending by China can slow the plunge in copper, the worst- performing metal since the commodities market crashed in July.

Global inventories more than doubled in the past four months as the economic slowdown spread. U.S. auto sales slumped 32 percent in October to the lowest level since January 1991. A report this week may show U.S. builders broke ground on the fewest houses in at least a half century, curbing demand for cables, wires and pipes. China, the world's biggest copper user, is heading for its slowest growth in almost two decades.

.....

Copper is an indicator for the world economy and sets the pace for other industrial metals because an average 400 pounds (181 kilograms) are used in homes and 50 pounds in cars, according to the Copper Development Association. Prices collapsed after rising as high as $8,940 a metric ton on the London Metal Exchange July 2. The International Monetary Fund in Washington said the U.S., Europe and Japan will fall into a recession simultaneously for the first time since World War II.

China is the key to commodity prices because the country is the largest user of iron ore, aluminum, zinc and copper. The nation's economy may grow 7.5 percent or less next year, Morgan Stanley and Credit Suisse Group AG say. That would be the slowest pace since 1990, data compiled by Bloomberg data show.

http://www.bloomberg.com/apps/news?pid=20601109&sid=a8jB0dy_r_F0&refer=exclusive

[ozymandius]

12. Roubini's Latest "Why Things Are Hopeless" List Hits New Record, 20 Items!

From Naked Capitalism:

I have not made a formal tally of Roubini's various lists of why the economy is going (and will continue to go) to hell in a handbasket, but recent sightings suggest his typical list is eight to twelve reasons.

However, in his latest missive, on the subject of why the consumer is toast, Roubini outdoes himself and comes up with twenty reasons. Oh, sorry, AT LEAST twenty reasons. I also don't think I've ever read Roubini say his tally of woes was less than comprehensive.

In case you are new to this line of discussion, "falling consumption" in the absence of big time government countermeasures, equals "memorably bad downturn."

Is there some secret significance to this development? Numerologists and technical analysts are encouraged to weigh in. Personally, I think his list does boil down to a dozen or so reasons, but be sure to read down to his last point, where he draws his bottom line, a peak to trough fall in GDP of 10%. He needed 20 reasons to steel readers for his conclusion.

And I am really not making fun of Roubini. It is merely that because his messages are so consistently grim and have so far proven correct, one needs to find comic relief where one can.

One can count at least 20 separate or complementary causes that will sharply reduce consumption in the next several years:

· The US consumer is shopped-out having spent for the last few years well above its means.

....

· Not only debt ratios are high and rising but debt servicing ratios are also high and rising having gone from 11% in 2000 to almost 15% now as the interest rate on mortgages and consumer debt is resetting at higher levels.

· The value of housing wealth is now sharply falling by over $6 trillion as home price depreciation will soon be 30% and reach a cumulative fall of over 40% by 2010. Recent estimates of this wealth effect suggest that the effect may be closer to 12-14% rather than the historical 5-7%....

· Mortgage equity withdrawal (MEW) is collapsing from $700 billion annualized in 2005 to less than $20 in Q2 of this year. Thus, with falling housing wealth and collapsing MEH US households cannot use their homes anymore as ATM machines borrowing against them.

....

· The credit crunch is becoming more severe as the recent Q2 flow of funds data and the Fed Loan Officers’ Survey suggests: it is spreading from sub-prime to near prime to prime mortgages and home equity loans; and from mortgages to credit cards, auto loans and student loans. Both the price and the quantity of credit are sharply tightening.

· Consumer confidence is down to levels not seen since the 1973-75 and 1980-82 recessions.

....

· Employment has been falling for 10 months in a row and the rate of job losses is now accelerating... In this cycle job losses have been so far “only” slightly over 1 million while labor market conditions are severely worsening based on all forward looking indicators...Massive job losses and concerns about job losses will further dampen current and expected income and further contract consumption.

· Tax rebates of over $100 billion failed to stimulate real consumption earlier in 2008. Only 25% of the tax rebate was spent as US consumers are worried about jobs and need to use funds to pay their credit card and mortgage....another general tax rebate would be as ineffective as the first one in boosting consumption.


....

· With consumption being over 71% of GDP a sharp and persistent contraction of consumption all the way through at least Q4 of 2009 implies a more severe recession than otherwise. Consumption did not fall even a single quarter in the 2001 recession and one has to go back to 1990-91 to see a single quarter of negative consumption growth...

http://www.nakedcapitalism.com/2008/11/roubinis-latest-why-things-are-hopeless.html

[ozymandius]

13. We're All Banks Now

Monty Python could have written this.

Before we explore the concept of Peak Earnings let's take a look at the mad rush by financial institutions to become banks or bank holding companies. I will tie the ideas together in just a bit.

The mad rush to become a bank continues.

Genworth in deal to buy bank, seeks TARP money.

Hartford Financial Acquires Bank from FDIC, Applies To Treasury Capital Purchase Program

CIT seeks bank status, TARP funds

American Express to Be Bank Holding Company

GMAC may become a bank holding company

Raymond James To Become Holding Company

Implications of Move to Become Bank Holding Companies

One of the implications of becoming a bank or a bank holding company is is that it puts the entity under Fed regulation. That means that Goldman, Morgan Stanley, Merrill Lynch (via merger with Bank of America) and any other nonbank becoming a bank holding company is going to have to reduce leverage. Kiss those 30-1 and 40-1 leverage ratios goodbye.

Furthermore, it is highly likely that the ability for banks to hold off balance sheets SIVs will be regulated away. This is a good thing as with reduced leverage comes reduce risk.

.....

Peak Earnings

One of the implications of Peak Credit is that financial earnings have peaked. And because of reduced leverage, earnings in the financial sector are not coming back for decades. Those earnings were all a mirage in the first place.

from Mike "Mish" Shedlock

[ozymandius]

14. Everyone wants in on the bailout gravy train, cities too

Hank Paulson may have created a monster. He has recently said that he does not want to use the TARP (Troubled Asset Relief Program) to buy dodgy assets as he originally billed the U.S. bailout measure. Instead, he wants to inject cash into consumer-oriented areas, now that the finance sector has seen major bailout cash. As a result, a lot of companies see a prime opportunity to get some desperately needed cash. But, cities are also lining up for cash too.

San Jose Mayor Chuck Reed said Friday he's working with leaders of other large California cities to make sure they're not left behind.

The stimulus package Congress passed last month wasn't designed to dole out money to governments, so it's far from clear whether San Jose will get a piece. But with $1.6 billion in unfunded retiree health care obligations, plus $500 million worth of local and regional road work to be done and the $750 million price tag to bring BART to the South Bay, Reed noted the city has a full slate of needs.

The Wall Street Journal also covers the desperate need for cash at the municipal level in the U.S. :

Requests for federal emergency funding are piling up, with the latest requests coming from cash-strapped cities seeking help to shore up budgets strained by sinking revenue, pension-plan losses and difficulty getting financing amid the credit crisis.

On Friday, the mayors of Philadelphia, Phoenix and Atlanta asked the Treasury Department to set aside $50 billion of the $700 billion Troubled Asset Relief Program to spur infrastructure investment to create jobs and lift local economies. The mayors also asked for loans to cover short-term borrowing needs and to meet payroll.

.....

Philadelphia, which has a $4 billion budget for 2009, faces a $108 million shortfall, nearly half from slower business activity and a drop in sales taxes, and the rest from lower real-estate-transfer and wage taxes. "Our revenues have fallen off the table," said Stephen Agostini, the city's budget director. Philadelphia's roughly $4 billion pension plan, which covers 33,000 retirees, had losses of more than $600 million through September.

In Atlanta, Mayor Shirley Franklin told city employees that a projected shortfall of as much as $60 million this year would result in a hiring freeze and a 10% reduction in wages and work hours of municipal employees beginning in December and lasting through June. That is in addition to layoffs of 350 employees earlier this year. "This is an emergency," said Ms. Franklin.

Like many other big-city mayors, Ms. Franklin said federal funding could help kick-start much-needed infrastructure projects, including a $30 million program to repair bridges and roads throughout the city. She said it could be launched within 90 days of funding approval, putting about 5,500 people to work.

These are not isolated incidents. Counties across America are cutting costs and services. Where I live in Montgomery County, Maryland, the county has announced a $50 million budget cut and hiring freeze. $19 millio of this must come from the school system. With home prices declining, municipalities are in dire straits and its only a matter of time before we see this in services offered and in municipal bond defaults.

http://www.creditwritedowns.com/2008/11/everyone-wants-in-on-bailout-gravy.html

[ozymandius]

15. Good morning Marketeers!

:donut: :donut: :donut:

I'll return late this afternoon to catch up on things.

Ozy :hi:

[Dr.Phool]

16. Good Morning Oz.

We'll try not to make too much of a mess today.

I'm back down in the frozen tundra wastelands of West Central Florida. Atlanta must be like the North Pole this morning. 46 frickin' degrees? WTF?

[Tandalayo_Scheisskopf]

17. Note:

Just checked Bloomberg. RBOB is down to 1.20/gal on the Globex.

Like I said, below 1.00 by the inauguration.

[Dr.Phool]

18. Will the pump price be back down to $1.45?

$1.45 the day chimpolini stole the office. $1.45 the day he leaves office.

And 8 years of nightmare in between.

[UpInArms]

25. Average U.S. gasoline prices fall below $2.10 a gallon

http://www.marketwatch.com/news/story/Average-US-gasoline-prices-fall/story.aspx?guid=%7B85E15B8B%2DAF6C%2D46E0%2DB93C%2D7EA4C6312644%7D

NEW YORK (MarketWatch) -- Average weekly gasoline prices continued declining, with the retail cost for a gallon of unleaded now $2.09 a gallon, off 2 cents from $2.11 a gallon on Sunday, according to the AAA Daily Fuel Gauge Report. A month ago, gasoline cost $2.89 a gallon and a year ago it cost $3.10 a gallon.

[radfringe]

27. saw $2.17 by me in northeast PA this morning... n/t

[Roland99]

29. $1.84 here in Louisville

[UpInArms]

30. $1.79 in a little hole in the road near me yesterday ... eom

[DemReadingDU]

35. $1.69 in my area, eom

[UpInArms]

19. dollar watch

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

Last trade 86.993 Change -0.431 (-0.55%)

That Sinking Feeling

http://www.bktraderfx.com/site/fx-weekly-reports/fx-weekly-1107-1114-that-sinking-feeling

Is England the next Iceland? The way cable is trading it certainly feels that way. The decline of GBP has been nothing short of stunning. Just 7 months ago the unit was holding the 2.000 handle but this week it broke the 1.50 level. Back in 2006 and 2007 when K and I would do road show presentations I would flippantly refer to the UK as the “hedge fund” economy. Watch global equity markets I would say. As they go so sterling will follow. Back in those halcyon real estate mania days I had little idea at just how accurate that analysis would turn out to be.

It appears that the whole UK economy was based on one single business premise - take petro-dollars from Middle East and Russia and invest them into capital markets in the West. Once that gig was up the Brits had no fallback position. From 2002 onward fully 50% of all new jobs in UK were finance related. We have certainly reached interesting times. The BoE which in its 500 year history has never taken short term rates below 2% ( not even in WW2 ) is now projected to run a near ZIRP like policy by end of the year with rates likely dropping to a mere 100 basis points.

England of course is not the only Anglo Saxon economy in trouble. US is hardly in better shape. This week the jobless claims exceeded the very disturbing 500K mark suggesting that massive unemployment may be in store in the next few months. Furthermore, the saga of the automakers could quickly unravel into yet another calamity as the government continues to fiddle while their cashflow burns.

Throw away your ideology for a second and understand this - a bankruptcy of GM or Ford would be the equivalent of a neutron bomb for the US economy. The Midwest as an economy would simply cease to exit. Unemployment would skyrocket to 12% and all those guns people have been buying lately would turn swaths of US into a much harsher version of Mad Max as the only law of the land will become kill or be killed.

Am I being overly dramatic? Perhaps, but I certainly do not want to risk that scenario. The US auto industry is a dinosaur. No argument here. But it cannot be allowed to fail right now. The system is just too fragile. In an ideal world where we have an intelligent pro-active government - it would force GM and Ford and Chrysler to merge, creating economies of scale to make the companies more competitive on the global stage. The reduction in labor force would be substantial, but gradual as industry shrinks capacity to accommodate the smaller consumer demand. Furthermore the merger would avoid bankruptcy and stop the domino chain of defaults in the auto parts sector. Instead we have bumbling idiots in both the executive and the legislative branches who would rather extend credit to AIG whose business consisted of an off track betting parlor, while millions of real Americans stand in harms way.

...more...

Wall Street Lays Another Egg

http://www.vanityfair.com/politics/features/2008/12/banks200812

This year we have lived through something more than a financial crisis. We have witnessed the death of a planet. Call it Planet Finance. Two years ago, in 2006, the measured economic output of the entire world was worth around $48.6 trillion. The total market capitalization of the world’s stock markets was $50.6 trillion, 4 percent larger. The total value of domestic and international bonds was $67.9 trillion, 40 percent larger. Planet Finance was beginning to dwarf Planet Earth.

Planet Finance seemed to spin faster, too. Every day $3.1 trillion changed hands on foreign-exchange markets. Every month $5.8 trillion changed hands on global stock markets. And all the time new financial life-forms were evolving. The total annual issuance of mortgage-backed securities, including fancy new “collateralized debt obligations” (C.D.O.’s), rose to more than $1 trillion. The volume of “derivatives”—contracts such as options and swaps—grew even faster, so that by the end of 2006 their notional value was just over $400 trillion. Before the 1980s, such things were virtually unknown. In the space of a few years their populations exploded. On Planet Finance, the securities outnumbered the people; the transactions outnumbered the relationships.

New institutions also proliferated. In 1990 there were just 610 hedge funds, with $38.9 billion under management. At the end of 2006 there were 9,462, with $1.5 trillion under management. Private-equity partnerships also went forth and multiplied. Banks, meanwhile, set up a host of “conduits” and “structured investment vehicles” (sivs—surely the most apt acronym in financial history) to keep potentially risky assets off their balance sheets. It was as if an entire shadow banking system had come into being.

Then, beginning in the summer of 2007, Planet Finance began to self-destruct in what the International Monetary Fund soon acknowledged to be “the largest financial shock since the Great Depression.” Did the crisis of 2007–8 happen because American companies had gotten worse at designing new products? Had the pace of technological innovation or productivity growth suddenly slackened? No. The proximate cause of the economic uncertainty of 2008 was financial: to be precise, a crunch in the credit markets triggered by mounting defaults on a hitherto obscure species of housing loan known euphemistically as “subprime mortgages.”

Central banks in the United States and Europe sought to alleviate the pressure on the banks with interest-rate cuts and offers of funds through special “term auction facilities.” Yet the market rates at which banks could borrow money, whether by issuing commercial paper, selling bonds, or borrowing from one another, failed to follow the lead of the official federal-funds rate. The banks had to turn not only to Western central banks for short-term assistance to rebuild their reserves but also to Asian and Middle Eastern sovereign-wealth funds for equity injections. When these sources proved insufficient, investors—and speculative short-sellers—began to lose faith.

...more...

[UpInArms]

20. JP Morgan could axe thousands of jobs: report

http://news.yahoo.com/s/nm/20081116/bs_nm/us_jpmorgan

LONDON (Reuters) – JP Morgan, the U.S. investment bank, is drawing up plans to axe thousands of jobs across its worldwide operations, reports The Sunday Telegraph.

The paper cites people close to the company, who say that it has started consulting on job cuts and they were likely to be on a comparable scale to those of rivals.

It points out that both Citigroup and Goldman Sachs are letting about 10 percent of their workforces go, which if applied to JP Morgan would mean more than 3,000 jobs being slashed across the world.

...more...

[UpInArms]

21. Forecasters: tough road ahead for the economy

http://news.yahoo.com/s/ap/20081117/ap_on_bi_ge/wobbly_economy

WASHINGTON – The country is sinking deeper into the economic doldrums, and it's likely to stay there for a while.

That's part of the latest outlook from forecasters in a survey to be released Monday by the National Association for Business Economics, also known by its acronym, NABE.

Approximately 96 percent of the economists polled believe that a recession has started, and nearly three-fourths think it could persist beyond the first quarter of 2009.

Under one definition, a recession happens when the economy shrinks for two quarters in a row. The economy contracted 0.3 percent in the third quarter as battered consumers cut back sharply on spending, the government reported last month. It was the worst showing since 2001, when the country was last in a recession.

NABE economists, among other experts, predict activity will continue to shrink in both the final quarter of this year and the first quarter of next year as weary consumers hunker down further under the stresses of rising unemployment, shrinking nest eggs and falling home values.

"Business economists became decidedly more negative on the economic outlook for the next several quarters as a result of the intensification of credit market stresses and evidence of spillover to the real economy," said NABE president Chris Varvares, president of Macroeconomic Advisers.

NABE economists are now forecasting the economy to shrink at a 2.6 percent pace in the final quarter of this year and then at a 1.3 percent pace in the first three months of 2009. The new projections marked downgrades from the association's previous survey, which called for growth of just 0.1 percent in the final quarter of this year and a 1.3 percent growth rate in the following quarter.

...more...

[UpInArms]

23. U.S. jobless rate to hit 7.5%, latest NABE survey shows

http://www.marketwatch.com/news/story/US-jobless-rate-hit-75/story.aspx?guid=%7B61CADAF1%2D46F2%2D489C%2D9F2A%2D8D2F3C4B048D%7D

WASHINGTON (MarketWatch) -- The National Association for Business Economics sees the U.S. unemployment rate rising to 7.5% by the end of 2009, up from an October 2008 rate of 6.5%. The peak unemployment rate for the current downturn had previously been projected at 6.2%. The respondents in NABE's November survey also job losses are expected to persist through the third quarter of 2009, before the employment picture begins to improve. In addition, the survey showed that the median forecast among business economists is for the Federal Reserve to make no further interest-rate cuts, keeping the key benchmark rate at 1% until what NABE called a "modest rate hike" is implemented during the fourth quarter of 2009. U.S. housing demand may show signs of stabilizing, although both housing prices and housing starts will likely remain weak, the NABE respondents said. Moreover, they see the federal budget deficit hitting $576 billion during the government's 2009 fiscal year and, in light of the ecnomic weakness, are projecting that inflation will be well contained in the U.S. economy next year.

[UpInArms]

33. NABE survey indicates most economists now believe U.S. recession's started

http://www.marketwatch.com/news/story/Economists-more-bearish-economy-NABE/story.aspx?guid=%7BDD5B1F50%2D8F90%2D48AF%2DB13C%2DDFAE238C9A55%7D

WASHINGTON (MarketWatch) -- The U.S. is in for a "prolonged" recession dragging into 2009, the National Association for Business Economics says.
In its latest survey, the organization sees a contraction in inflation-adjusted gross domestic product of 2.6% in the cards for the fourth quarter, with the weakness carrying well into next year. A separate survey by MarketWatch shows economists more pessimistic, expecting GDP to contract at a 3.5% pace in the fourth quarter.

With a small GDP contraction of 0.3% on the books for the 2008 third quarter, such a forecast would satisfy a widely held definition of the U.S. economy being in recession -- two consecutive quarters of negative growth -- at the end of the year.

A total of 96% of the economists surveyed by NABE believe that a recession has begun.

But the National Bureau of Economic Research, the research organization that actually defines when the economy's in recession, uses a different definition. A recession, according to NBER, is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in terms of real GDP, real income, employment, industrial production, and wholesale-retail sales.

...more...

4% need to be run over by the clue bus :eyes:

[UpInArms]

22. Freddie Mac could lose $20-$40 billion in 2009: Friedman

http://news.yahoo.com/s/nm/20081117/bs_nm/us_freddiemac_research_fbr

(Reuters) – Freddie Mac (FRE.P) could post losses totaling $20 billion to $40 billion in 2009, hurt by higher credit costs and write-downs in mortgage assets, an analyst at Friedman Billings Ramsey said.

As a result of the losses, the Treasury will have to infuse $30 billion to $50 billion in 2009, and postpone any thoughts of spinning the company back as a publicly traded one till 2010, analyst Paul Miller said in a note to clients.

Freddie Mac reported a $25.3 billion quarterly loss on Friday as the housing slump worsened, forcing the second-largest provider of U.S. home loan funding to draw on a $100 billion Treasury Department lifeline.

The McLean, Virginia-based company's regulator had submitted a request for the Treasury Department to provide $13.8 billion for Freddie Mac to erase the shareholder equity deficit, which the company expects to receive by November 29.

"We believe shareholders will focus on the government sponsored enterprises' earnings losses and capital position, as losses should determine the magnitude of capital injections that may be required by the Treasury," Miller said in a note to clients.

The U.S. government seized Freddie Mac (FRE.P) and its larger rival Fannie Mae (FNM.P) in September, pledging to inject capital as needed for the companies to operate and help stabilize the housing market. The move subordinated and nearly wiped out shareholders of Freddie Mac stock, which on Friday closed at 67 cents.

...more...

[UpInArms]

24. Volcker and Greenspan - Commentary: Two Fed chiefs with wildly contrasting legacies

http://www.marketwatch.com/news/story/Volcker-Greenspan-A-tale-contrasts/story.aspx?guid=%7B084B9CEC%2D9DCD%2D4D76%2D9B77%2D4A9FC289309C%7D

LONDON (MarketWatch) -- The chairmanship of the Federal Reserve Board is, and always has been, a deeply political office.

This is in dramatic contrast to the status of central bank governors in Europe, who - whatever their stature and degree of independence -- can never entirely throw off the air of financial technicians. When they leave office, European central bankers may advise investment banks, join think-tanks, sit on company boards and play golf -- but they nearly always leave the limelight far behind.
The most recent former incumbents at the Fed, Paul Volcker and Alan Greenspan, two men who dominated the institution for more than a quarter of a century, are in a different league. They remain in the center of public interest. And they offer a study in contrasts that could hardly be more divergent.

On the one hand, Volcker, combined a towering presence with a sometimes startlingly unpretentious demeanor. He was a public servant in the best sense of the word.

After quitting the Fed in 1987 he became chairman of Jim Wolfensohn's investment banking boutique, but kept in the line of civic duty with strong of public service responsibilities, whether overseeing post-Enron accounting practices, investigating Nazi war-time gold transactions, or chasing corrupt officials in the United Nations' Iraq "oil for food" program.

During the 1970s Volcker gained huge international respect as the U.S. Treasury's globe-trotting trouble-shooter for international monetary affairs, presiding over the collapse of Bretton Woods and trying to patch up the aftermath. He won his inflation-busting spurs as the architect of a savage increase in interest rates in 1979 after the Fed moved on to direct targeting of the money supply -- thrusting the U.S. into recession, ditching Jimmy Carter's chances of re-election and paving the way for Ronald Reagan.

Volcker was hardly Mr. Popular at the time, but -- not just reflecting time's patina -- his reputation has gained a guru-like significance over the years. Interestingly, as a genuine internationalist, he has always been a fan of the euro and probably ranks as the most senior American full-heartedly to back the now 10-year-old European currency.

At the opposite end of the spectrum stands Greenspan, whose stock has fallen in the past two years just Volcker's has risen.

...motr...

[UpInArms]

28. Citigroup to cut 50,000 jobs-CNBC

http://www.reuters.com/article/bondsNews/idUSN1746833620081117

NEW YORK, Nov 17 (Reuters) - Citigroup Inc (C.N: Quote, Profile, Research, Stock Buzz) plans to cut 50,000 people from its workforce, CNBC television said on Monday, as souring economies and global credit conditions cause the U.S. bank with the farthest reach worldwide to retrench.

The job cuts are on top of the roughly 23,000 jobs Citigroup has already slashed this year, and would leave the second-largest U.S. bank with about 300,000 jobs worldwide.

Cuts are expected to come from layoffs, the sale of units and attrition, CNBC said. The bank was not immediately available for comment.

The cuts are Chief Executive Vikram Pandit's most dramatic move yet to restore profitability and bolster a sagging share price. Last week, the stock fell into the single digits for the first time since Sanford "Sandy" Weill created Citigroup in 1998 from the merger of Travelers Group Inc and Citicorp.

Pandit has faced growing criticism from investors and others for failing to implement a workable turnaround plan for New York-based Citigroup.

The bank has lost more than $20 billion in the last year, hurt by bad bets on complex and risky debt, often tied to mortgages. Some analysts say the bank might not be profitable before 2010.

Pandit is holding a "town hall" meeting for employees on at 8 a.m. EST (1300 GMT), at which he plans to discuss the bank's plans, including "the money we spend."

...more...

[Tansy_Gold]

36. Here we go again: Save the stockholders' profits! Jettison employees!

Makes perfect sense to me!

:sarcasm:

[UpInArms]

31. Japan in recession, IMF needs money, autos stressed

http://www.reuters.com/article/bondsNews/idUSSP35408320081117?sp=true

LONDON, Nov 17 (Reuters) - Japan became the latest major economy to fall into recession on Monday with France close behind, and the IMF said it needed at least $100 billion to fight an economic crisis enveloping the world.

Meanwhile, the battered auto industry came into focus. The U.S. Senate was to begin debating a bailout later in the day, Germany said it was ready to help General Motors (GM.N: Quote, Profile, Research, Stock Buzz) unit Opel, and Japan's Toyota (7203.T: Quote, Profile, Research, Stock Buzz) came under ratings scrutiny.



Wall Street looked set for a poor start to the week to follow sharp losses on Friday. CNBC reported that Citigroup CN> Chief Executive Vikram Pandit would announce cuts of as many as 50,000 jobs.

Japan surprised markets with figures showing the world's second biggest economy was sliding into its first recession in seven years in the third quarter as financial crisis curbed demand for Japanese exports.

The 0.1 percent contraction in July-September was worse than consensus forecasts.

The euro zone is also in formal recession, with two consecutive quarters of contraction, Britain and the United States are on the brink and China is slowing sharply. Britain's main employers group forecast on Monday that unemployment could rise to almost 3 million by 2010 while France's central bank said the French economy should contract 0.5 percent in the fourth quarter.

Policymakers have little doubt that their economies will continue to decline.

...more...

[UpInArms]

32. Capital One card delinquencies rise in October

http://www.reuters.com/article/bondsNews/idUSWEN062620081117

NEW YORK, Nov 17 (Reuters) - Capital One Financial Corp (COF.N: Quote, Profile, Research, Stock Buzz), one of the largest issuers of MasterCard and Visa credit cards, on Monday said credit quality deteriorated in several areas of lending in October, a month when stocks worldwide fell and recession fears grew.

In a regulatory filing, the McLean, Virginia-based company said the annual net charge-off rate for U.S. credit cards increased to 6.54 percent in October from 6.34 percent in September, while the rate for loans at least 30 days delinquent rose to 4.48 percent to 4.20 percent.

Net charge-offs reflect loans that a lender does not expect to be repaid.

In auto loans, the charge-off rate increased to 5.50 percent in October from 4.98 percent in September, while the delinquency rate declined to 9.14 percent from 9.32 percent.

...more...

[Roland99]

38. 9:40am - Citi start (heh heh)

DJIA 8,373.69 -123.62 -1.45%
Nasdaq 1,498.83 -18.02 -1.19%
S&P 500 861.52 -11.77 -1.35%
Global Dow 1,424.25 -19.94 -1.38%
Dow Util 362.45 -3.90 -1.06%
NYSE 5,395.81 -56.82 -1.04%
Russell 2000 455.02 -1.50 -0.33%
Semcond 731.00 -11.50 -1.55%
AMEX 1,309.69 +1.71 +0.13%
30-Year Bond 4.21% -0.02 -0.40%
10-Year Bond 3.72% -0.03 -0.85%

[Ghost Dog]

42. Only cure for a bubble (Noland)

...snip...

I have repeatedly pointed to Milton Friedman's analysis of the causes of the Great Depression as the keystone for our nation's deeply flawed economic perspective. By the 1960s, there was an eagerness to cast blame for the Depression on policy mistakes made in 1929 and subsequent to the crash. The depression, it was determined, was not due to any weaknesses or vulnerabilities associated with the credit system and market pricing mechanisms. Instead, the 1920s were conveniently recast as the "golden age of capitalism". Over the years, Federal Reserve Board chairman Dr Ben Bernanke has repeatedly excoriated the "bubble poppers" for their principal role in instigating the thirties downturn.

Those of us who have studied the nature of the financial and economic maladjustments engendered during the rampant credit excesses leading up to the '29 crash take serious exception. Indeed, the Friedman/Bernanke/conventional view of that historical bubble and bust has been a most dangerous case of historical revisionism and flawed analysis. I am more interested today in working to change failed economics than fingering blame for the crisis on our public servants working desperately to avert collapse.
It is in this spirit that I am compelled to defend Treasury Secretary Hank Paulson and his team at the Treasury. The severity of today's crisis is not the result of policies - good, bad or otherwise - implemented over the past few months. The greatest bubble in the history of mankind - nurtured by decades of flawed economics, flawed finance, flawed policymaking and irresponsible behavior throughout - is bursting and there is little our authorities can do about it. Everyone was content during the boom to buy into the notion of all-powerful Fed reflation and Washington stimulus, and we must now come to grips with the reality that the entire framework advocating post-bubble "mopping up" strategies was specious.

Secretary Paulson has been criticized for "making up the rules as he goes along". Well, there is no rulebook for resolving this crisis. His policymaking has been faulted - perhaps not undeservingly - for lacking transparency. Yet a more substantive policy issue goes back 15 years: regulators looked the other way and didn't demand transparency as the leveraged speculating community borrowed trillions and accumulated massive holdings. Paulson and Bernanke likely believed that an unprecedented US$700 billion government program to acquire securities would provide the backstop bid to help restore market confidence, securities prices, and lending throughout the economy. It simply didn't work. Yet the system was heading toward collapse had they not moved aggressively.

The Treasury, Fed, and the marketplace now appreciate that the system faces a multi-trillion de-leveraging problem - not to mention the issue of new credit creation necessary to avert economic collapse. The focus has, rightly, turned away from the issue of impaired securities markets to a primary focus on stimulating lending. The hope now is that the economy will receive a much bigger bang for 700 billion bucks if it is used to recapitalize the financial system rather than to acquire securities from distressed sellers. With the securitization markets now essentially lost causes, the last hope rests with a recapitalized and, supposedly, resurgent banking system. The expectation is that $700 billion of additional capital can be multiplied into the trillions of new loans vital to bolstering the economy going forward. It's not Paulson's fault if it doesn't work.

We are witnessing policymaking out of desperation. Treasury has very limited time, few alternatives and faces dire problems. It has become popular to point out that the marketplace has lost confidence in Mr Paulson and his team. I believe, however, that it is more aptly stated that the market has lost faith in the prospect of policymaking generally having much influence on developments. This is a consequence, as Ms Shelton reminds us, of upwards of 40 years of "monetary policy indulgence." Regrettably, G-20 policymakers at the weekend hardly even paid lip service to monetary system reform.

Fundamentally, individual participant discipline is the nucleus of any stable international monetary regime, whether it is the classic gold standard approach or Bretton Woods system type of arrangement. The global abandonment of any semblance of monetary or fiscal discipline is a hallmark of this extraordinary period of bursting bubbles. Stable "money" may be the key - but it's also nowhere to be seen.

/Much more... http://www.atimes.com/atimes/Global_Economy/JK18Dj05.html

[fedsron2us]

47. The people of Iceland are ruing the day that they allowed Friedman to step on their soil.

[Joe Chi Minh]

48. Bit late in the day for the Nobel people to be awarding a prize to Krugman, isn't it?

[Ghost Dog]

43. US's road to recovery runs through Beijing

By Francesco Sisci and David P Goldman

English author G K Chesterton rhymed about "the night we went to Bannockburn by way of Brighton Pier", and it may seem no less whimsical to argue that the United States' road to recovery, as well as Barack Obama's path to presidential greatness, run through China.

In the rush to prop up America's financial institutions, foreign economic policy seems remote from Washington's agenda. America wants to revive the mortgage market and consumer spending. The effort is doomed to failure. For a quarter of a century the American consumer has been the locomotive of the world economy, and now the locomotive has derailed and taken the rest of the world economy with it.

Recovery requires a great change in direction of capital flows. For the past decade, poor people in the developing world have financed the consumption of rich people in America. America has borrowed nearly $1 trillion a year, mostly from the developing world, and used these funds to import consumer goods and buy homes at low interest rates. The result is a solvency crisis of the American household, which shows up as a solvency crisis for financial institutions. If we reckon the retirement needs of households as a liability, the household sector is as good as bankrupt.

No recovery is possible unless American households can save, and they cannot save in an economic contraction when incomes spiral downwards. To save, Americans must sell goods and services to someone else, and a glance at the globe makes clear who that must be: nearly half the world's population, and most of the world's capacity for economic growth, is concentrated in China and the Pacific Littoral.

China's economic problem is the inverse of America's: China has achieved fast rates of growth at the expense of huge disparities between the prosperous coast and the backward interior, as well as excessive dependence on foreign markets. China's policy response to the economic crisis is far more radical than Washington's. Rather than attempting to patch up the situation and restore the status quo ante, China plans to spend nearly a fifth of its gross domestic product on an internal stimulus focused on infrastructure in its interior. Severe execution risk attends the Chinese proposal, and markets remain to be convinced.

China can reduce the execution risk of its great economic shift towards home consumption, and America can solve its savings problem, through a grand partnership. This partnership need not be exclusive to America and China, but it must be founded on America and China, two of the world's largest economies. India and the other Asian economies should be encouraged to join this partnership. A great deal has been written about prospective conflict between China and the United States, but very little explanation is offered as to what issues might arise between China and the United States. China and America have far more to gain from cooperation than from conflict.

/More... http://www.atimes.com/atimes/China/JK15Ad01.html

[Joe Chi Minh]

51. One major disagreement I have with the suggested list of requirements within a mutually-supportive

treaty between the US and China is with the iteration of the grotesquely presumptuous stipulation that China accept a roadmap for its democratization. Our political leaders in the US and UK are scarcely in a position to preach to the Chinese how they should run their country. I think most Americans would feel a lot safer walking the streets of China after dark than in the US, particularly women. The same goes for the UK, though it may not yet be quite as dire yet. And this, in the US, despite an iniquitously vast gulag.

On the other hand, they may or may not have "country club" prisons for white-collar criminals who wreak so much havoc in so many areas of our societies, either, but they do deal with them very unambiguously.

[Changenow]

46. A rally on all the good news we're up to -29. nt

[Ghost Dog]

49. European shares end lower; miners, banks slide

LONDON, Nov 17 (Reuters) - European shares ended lower on Monday as mounting concerns about a global recession and Citigroup's (C.N: Quote, Profile, Research, Stock Buzz) plan to slash about 50,000 jobs hurt bank stocks, while miners tracked weaker metals prices.

The pan-European FTSEurofirst 300 index .FTEU3 closed 2.6 percent lower at 837.41 points. The benchmark has lost more than 44 percent this year, hit by a credit crisis.

Banks were one of the top losers on the index, with HBOS (HBOS.L: Quote, Profile, Research, Stock Buzz) falling 13.9 percent, Royal Bank of Scotland (RBS.L: Quote, Profile, Research, Stock Buzz) down 12.4 percent and Dexia (DEXI.BR: Quote, Profile, Research, Stock Buzz) shedding 6.8 percent.

Barclays (BARC.L: Quote, Profile, Research, Stock Buzz) shares were down 3.1 percent. Corporate governance advisers PIRC called on shareholders in British bank Barclays to vote against the lender's plan to raise 7 billion pounds ($10.4 billion) from private investors.

...

Britain's main employers group forecast unemployment could rise to almost 3 million by 2010, while France's central bank said the French economy should contract 0.5 percent in the fourth quarter.

Across Europe, Britain's FTSE 100 .FTSE fell 2.4 percent, while both Germany's DAX .GDAXI and France's CAC .FCHI fell 3.3 percent.

G20 AGREEMENT

The Group of 20 world leaders agreed over the weekend to a raft of fiscal and monetary steps to rescue the global economy, but it was left to individual governments to tailor their response to their own circumstances.

"There is disappointment that the G20 didn't come up with concrete plans," said Philippe Gijsels, senior equity strategist at Fortis Bank, in Brussels. "I still think we're in the process of finding a bottom in the market, and there will be a bear market rally by the end of the year, as bad news is now priced in."

/... http://www.reuters.com/article/marketsNews/idCALH6385120081117?rpc=44&sp=true

[radfringe]

50. Halliburton Investigations Continue

Halliburton Investigations Continue
By Margie Burns
From The Progressive Populist, December 1, 2008
http://www.populist.com/08.21.burns.html

Somewhat off the radar screen in recent weeks, the Department of Justice is quietly continuing to investigate major military contractor Halliburton and its spin-off company KBR. Halliburton is the giant oilfield services company where Vice President Dick Cheney was CEO before joining the 2000 Republican ticket with George W. Bush. The investigation has borne fruit. On Sept. 3, in US District Court in Houston, the feds filed a plea agreement with Albert Jackson “Jack” Stanley, the former chairman and CEO of KBR. Stanley pled guilty to bribing Nigerian officials in oil commerce.

This is a big case. Stanley, who ran KBR when it was a Halliburton subsidiary, is introduced by the nonprofit ProPublica.org blog thus:

“In the world of Big Oil, Albert “Jack” Stanley was legendary for winning billion-dollar contracts in third world countries, the Halliburton executive who knew all the secrets of deals in places like Malaysia, Egypt and Yemen.

“In the wake of his admission in a guilty plea last week that he had resorted to bribes, kickbacks and high-level corruption to secure deals in Nigeria, however, Stanley now lies at the center of a widening scandal in the oil industry that has implications for corporations and governments across the globe.”

Prosecuted under the US Foreign Corrupt Practices Act, Stanley admitted to arranging more than $182 million in illegal payments—bribes and kickbacks—to Nigerian government officials.

As the FCPA Blog (fcpablog.blogspot.com), led by former Wall Street Journal managing editor Paul Steiger, notes, “The scale of the bribery is enormous, the companies involved are powerhouses, and the cast of characters is daunting. But it’s the most important FCPA story around, and maybe the most important one ever.”

[Doctor_J]

52. Financial experts: I have a 30yr fixed with Chase, w/ 27 yrs remaining. My house has

dropped in value. Will Chase (or someone) let me refi at the current value? IOW, can I get something for my depreciation w/o giving up the house?

[specimenfred1984]

53. Sure, just look at the 27th tranch of Chase's CDO mortgage tiered addendum

with AIG, you can do anything you want as long as you get an entire culture of corruption to lie for you!

[Roland99]

55. 4:03pm - Going to close near session lows (probably still settling a bit)

DJIA 8,273.58 -223.73 -2.63%
Nasdaq 1,482.05 -34.80 -2.29%
S&P 500 850.75 -22.54 -2.58%
Global Dow 1,412.39 -31.80 -2.20%
Dow Util 365.40 -0.95 -0.26%
NYSE 5,323.74 -128.89 -2.36%
Russell 2000 451.42 -5.10 -1.12%
Semcond 742.00 -0.50 -0.07%
Oil $55.09 -$2.09
AMEX 1,308.42 +0.44 +0.03%
30-Year Bond 4.21% -0.02 -0.57%
10-Year Bond 3.68% -0.07 -1.76%

[ozymandius]

57. It settled early. Here's the closing poop.

4:25 pm : On Monday, stocks posted sharp losses as economic concerns and corporate job cuts continue to weigh on investor sentiment.

Stocks made a recovery attempt to briefly trade with a gain, but a surge in selling interest in the final minutes sent the S&P 500 to close near its session low. Trading action was choppy in below average volume. All ten of the economic sectors posted a loss.

In corporate news, Citigroup (C 8.87, -0.65) announced plans to slash 52,000 jobs from its 352,000 workforce in an effort to cut costs due to the financial market turmoil. Citi has already eliminated 36,000 positions in 2008. The financial sector was a laggard with a decline of 6.0%.

Lowe's (LOW 19.01, +0.78) topped expectations for the third quarter, but issued downside earnings guidance for the fourth quarter after warning that consumers will likely delay discretionary home improvement and big ticket purchases. The results were better-than-feared following downside guidance from several retailers last week, resulting in a bounce in shares of Lowe's.

Target (TGT 31.69, -1.34) reported in-line earnings, but decided to temporarily suspend its share repurchase program due to the uncertain economic environment. The retailer also cut its 2009 capital expenditure forecast by $1 billion. Retailers as a whole fell 2.7%.

The group of twenty finance ministers, known as the G-20, announced their latest initiatives, but did not produce any agreements that would alter the near-term picture in any meaningful way. Among other measures, the G-20 agreed to continue to use fiscal measures to help stimulate domestic demand and help developing economies gain access to credit. The G-20 also said there will be more international cooperation among regulators and banks will meet stricter standards. For the next 12 months the G-20 countries will not implement any new trade barriers.

Economic conditions remain weak across the globe -- Japan officially fell into a recession for the first time since 2001, joining the Eurozone.

In U.S. economic news, industrial production bounced to an increase of 1.3% in October from a decrease of 3.7% in September. The increase should be seen as temporary as it was in part due to recovery in mining (oil) and regional manufacturing output following hurricanes Gustav and Ike.

The November New York empire manufacturing index, a regional manufacturing survey, declined to -25.4 from its October level of -24.6. While the reading reflects contraction in manufacturing in the New York region, it was slightly better than the -26.0 that economists expected.

Oil futures ($55.01, -3.6%) traded in a volatile manner, with OPEC cutting its 2009 demand forecast to 30.9 million barrels per day from 31.1 million. OPEC said evidence suggests the global economy will be weaker than the cartel had previously anticipated.DJ30 -223.73 NASDAQ -34.80 NQ100 -2.4% R2K -1.1% SP400 -1.6% SP500 -22.54 NASDAQ Adv/Vol/Dec 861/1.85 bln/1918 NYSE Adv/Vol/Dec 767/1.31 bln/2385