STOCK MARKET WATCH, Wednesday December 17

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday December 17, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 34
WHERE'S OSAMA BIN-LADEN? 2604 DAYS
DAYS SINCE ENRON COLLAPSE = 2901
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 December 16, 2008

Dow... 8,924.14 +359.61 (+4.20%)
Nasdaq... 1,589.89 +81.55 (+5.41%)
S&P 500... 913.18 +44.61 (+5.14%)
Gold future... 842.70 +6.20 (+0.74%)
30-Year Bond 2.87% -0.13 (-4.23%)
10-Yr Bond... 2.36% -0.17 (-6.71%)






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

Uncle Ben's B-52's and Outlook 2009
BY FRANK BARBERA, CMT

So the Fed went “all in” throwing its full weight behind the fight against deflation. By slashing short-term rates once again and targeting mortgage and agency bonds, the Fed is announcing to the world that monetary inflation is now the weapon being brought to bear. For stocks, monetary inflation will serve to arrest the decline and bear market, which has had the equity markets in a stranglehold all year. With a more passive Fed, and a lot less intervention, we would probably find ourselves in the Deflation, DJIA 3,000 camp. Yet, those arguing deflation must see they are fighting the combined forces of the known universe and while it may take time, and likely will take time, ultimately, they are likely to find themselves on the wrong side of a rising equity market. To this end, today’s Fed announcement should serve as notice to investors to perk up and begin contemplating what sectors and individual companies might make good 3 to 4 year investments. Since doing the best homework always takes time, this is probably not a bad time to start. While traders will find no dearth of opportunities in the market's wild swings, for longer range investors the next six months will probably afford a number of low risk entry points to buy quality businesses on sale.

In today’s update, we take a look at a variety of different industry groups to take note of current events and how the slow down in the global economy has impacted different sectors. Among the most hard hit sectors in recent months has been the natural resource space where ‘demand destruction’ was the perceived downside catalyst, the idea being that a slow down in major economies would cripple forward demand for raw materials. As a result, everything from copper miners to iron ore producers, coal suppliers to platinum producers have been devastated.

.....

As a result, one theme which is likely to emerge as 2009 unfolds is the concept of ‘supply destruction’, namely that the plunge into economic contraction has been so rapid, with so many companies cutting back sharply right off the bat that as 2009 unfolds, the perceived excess demand will be counteracted by a sharp reduction in available supply. In my view, one has only to ponder the prospect of China's huge new $582 billion dollar infrastructure spending program to understand that in the next recovery cycle, core basic materials will live to fight another day. For China, $582 billion dollars buys a lot of infrastructure, with the equivalent spending power in excess of 3 trillion US. Add to this the fact that the prior cycle was very atypical where basic material inventories are concerned. While Nickel and Aluminum currently have hefty supplies, supplies which are likely take a year or more to chew threw, other metals did not see inventories bulge to the high end of the historical range and thus may be in a position to normalize more quickly than most would believe. For Copper, Lead, and Zinc, aggregate inventories are presently not historically at high levels with Copper the 800 pound gorilla for most mining operations.

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

[DemReadingDU]

17. the Fed is sure active

actively delaying the inevitable depression.

The Fed must be nearly out of tricks in their toolbox.

[tclambert]

19. The Fed is running a way bigger Ponzi scheme than Madoff did.

[tama]

26. question

How will the trick of monetizing debt (Fed directly buying T-bonds) affect overall confidence in US dollar? When will euro be 2 bucks? Three bucks? N (zimbabwe bucks)? And what will oil cost to US industries and consumers if and when dollar takes real plunge?

[ozymandius]

33. Oil, dollar valuations and direct corollaries

I cannot say how the Fed's intervention in the bond markets will effect the dollar. The plan appears focused in juicing the bond market to attract buyers of our nation's debt. The dollar has weakened under these circumstances before. However, the long-term effect of dropping interest rates has been illusory.

The Fed has announced its plan to print money through its 'quantitative easing' initiative we will see deflation as a likely result.

Now, move the clock forward to the next case scenario. As the cost of production and transportation, linked to the price of oil, rises then the specter of stagflation rises; or stag-deflation as Nouriel Roubini has phrased it. This is combination of many factors that are hostile to the consumer. The reciprocal effect of these circumstances will redirect hostility toward our industrial sectors with our economy based so squarely on consumer consumption.

Anyone who knows the answer to your currency questions then they stand to make a fortune in the Forex markets.

edited for clarity, vocab error and link to column

[tama]

41. Ehm

I don't see how Fed buying directly T-bonds would attract buyers of US debt - what I see is bond market is now expecting "quantitative easing" big time as yields are dropping to historical lows not seen since 1930. Would not the logical consequense be that once Fed really starts buying T-bonds it may sooner or later find out that it is the only buyer left, as "real" money (what's left of it) escapes (de facto) negative yields to commodities (lot's of Keynesian infrastructure projects by governements starting next year + serious supply destruction), some other currencies and what not...

As for currency market, some say that Japan, UK and Switzerland may follow or will be forced to follow Fed's example of 0% and quantitative easing. But not ECB, what ECB is saying that it will not drop rates (much) lower. And the attitude of Europeans and especially Germans (who remember hyperinflation..) toward quantitative easing schemes of Fed seems to be silent horror. For ECB quantitative easing is simply unthinkable - and which member's bonds would it buy, any way?

So if ECB sticks to 2-2,5% and US (and some others) at 0%, the speculative money will flow into euro at least short to mid term. It's not at all impossible that euro will replace dollar as world currency relatively soon.

[ozymandius]

43. knee-jerk response of buying algorithms

My notion of the Fed juicing the treasury market hinges on the notion that automated buying programs will kick in, just like they do with stocks, as the Fed spurs demand. Yes, the yield will drop as a consequence. Quantitative easing is the biggest contradiction to the Fed's plan to buy treasuries. By extension, this would indicate negative bond yield with the dollar devaluation to result. Who would volunteer for such a rotten deal except dumb computer purchasing programs?

The currency market scenario you describe shows a fine example of how the U.S. and the E.U. have diverged significantly on monetary policy. The E.U. is protecting its currency. The U.S. has the fiat currency advantage. I am curious to see how long this lasts as, you say and I agree, the E.U. shows ambition to usurp the United States in this regard.

[ozymandius]

2. Today's Report

10:35 Crude Inventories 12/13
Briefing.com NA
Consensus NA
Prior NA

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

[UpInArms]

42. Petroleum Inventories Report:

07. Crude stocks up 500,000 barrels last week: EIA
10:36 AM ET, Dec 17, 2008

08. Gasoline stocks up 1.3 mln barrels last week: EIA
10:36 AM ET, Dec 17, 2008

09. Distillate stocks up 2.9 mln barrels last week: EIA
10:36 AM ET, Dec 17, 2008

[ozymandius]

3. Oil prices rise to above $44 before OPEC meeting

SINGAPORE – Oil prices rose above $44 a barrel Wednesday in Asia as investors waited to see how big a production cut OPEC will announce at a meeting in Algeria.

Light, sweet crude for January delivery was up 65 cents to $44.25 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore.

....

Saudi oil minister Ali Naimi said Tuesday that OPEC, which accounts for about 40 percent of global supply, would likely cut production by about 2 million barrels per day.

....

Investors will also be watching for signs of slowing U.S. demand in the weekly oil inventories report to be released Wednesday by the U.S. Energy Department's Energy Information Administration.

The report is expected to show that oil stocks fell 900,000 barrels last week, according to the average of estimates in a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.

....

In other Nymex trading, gasoline futures rose 2.77 cents to $1.07 a gallon. Heating oil gained 2.21 cents to $1.48 a gallon while natural gas for January delivery jumped 4.9 cents to $5.80 per 1,000 cubic feet.

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

[ozymandius]

4. World markets mixed after Fed's historic rate cut

HONG KONG – Global markets were mixed Wednesday after the U.S. Federal Reserve slashed its key interest rate to historic lows, with Asian stocks climbing modestly but European shares falling in early trade.

Investor enthusiasm was tempered by a mix of lingering worries about the U.S. economy and a weakening dollar that threatened to add to the woes of Asia's exporters. Also weighing on markets was a steep drop in U.S. stock futures, suggesting Tuesday's rally on Wall Street would quickly fizzle.

....

Asian markets held onto most of their gains after opening higher but European shares soon slid into the red. Benchmarks in Britain, Germany and France were all trading down by about 1.5 percent or more early in the session.

Japan's Nikkei 225 stock average rose 44.50 points, or 0.5 percent, to 8,612.52 after initially rising 1.1 percent, and Hong Kong's Hang Seng Index rose 2.2 percent to 15,460.52.

South Korea's Kospi added 0.7 percent to 1,169.75, while benchmarks in Singapore, Thailand and Australia also gained. However, China stocks closed largely flat and India's benchmark lost ground.

http://news.yahoo.com/s/ap/20081217/ap_on_bi_ge/world_markets

[ozymandius]

6. Early market futures

S&P 500 -17.80 895.00 12/17 5:36am

NASDAQ -18.50 1222.50 12/17 5:37am

Dow Jones -158.00 8733.00 12/17 5:33am

http://money.cnn.com/data/premarket/index.html

[Roland99]

28. They look better than *my* futures

But, alas, tis better to have loved and lost than to have never loved at all.




Or something... ;)

[Ghost Dog]

11. Fed-inspired rally fades in Europe

Wednesday December 17, 4:17 am ET

By Natsuko Waki

LONDON (Reuters) - Europe failed on Wednesday to extend strong gains in Asian stocks and on Wall Street as initial optimism from the Federal Reserve's move to slash interest rates toward zero faded, while the dollar fell broadly.

In a surprise move, the Fed cut its target for the benchmark rate to zero to 0.25 percent from 1 percent on Tuesday, virtually exhausting traditional measures to battle the year-long recession. It also promised to take more action by extending its quantitative easing measures.

Wall Street and Asia rallied in the wake of the Fed's move, but Europe failed to follow through.

Government debt prices shot up as investors expect a prolonged period of low interest rates, pushing the benchmark 10-year U.S. Treasury yield to fresh five-decade lows.

The dollar fell across the board after the rate cut, which knocked the currency's interest rate premium.

"The Fed's measures will work positively for stock markets and will help the U.S. economy to slow down the pace of deterioration in the short term," said Masamichi Adachi, analyst at JP Morgan Securities in Tokyo.

"But taking a longer perspective, the Fed's steps alone will not be enough to reverse the economy and we need to examine details of expected economic stimulus measures by the new administration."

MSCI world equity index (^MIWD00000PUS - News) rose 1.4 percent to hit its highest level since November 11. The FTSEurofirst 300 index of leading European shares (^FTEU3 - News) fell 0.2 percent. Emerging stocks (^MSCIEF - News) rose 2.5 percent.

"The Fed can take rates no lower. And lower rates by themselves won't do it. We've seen that in Japan, although it's better to have low rates than high rates, for sure," said Bernard McAlinden, investment strategist at NCB Stockbrokers in Dublin.

/... http://biz.yahoo.com/rb/081217/business_us_markets_global.html?.v=5

[Festivito]

5. Debt: 12/15/2008 10,655,601,512,061.10 (UP 58,532,774,134.00) (Big again)

(No borrowing for a month! Then watching it drop, now back up. The FICA down 30B two reports ago, now up30B. The public debt down 20B now up 28B. What are they doing over there, laundering money? Have a good time today.)

= Held by the Public + Intragovernmental(FICA)
= 6,418,685,498,877.51 + 4,236,916,013,183.68
UP 27,986,876,028.13 + UP 30,545,898,105.96
(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 21 reports in the last 30 to 31 days.
The average for the last 21 reports is 1,799,758,448.85.
The average for the last 30 days would be 1,259,830,914.20.
The average for the last 31 days would be 1,219,191,207.29.
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$/day.
There were 51 reports in 76 days of FY2009 averaging 12.37B$ per report, 8.30B$/day.

PROJECTION:
GWB** must relinquish the presidency in 36 days.
By that time the debt could be between 10.7 and 11.0T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
12/15/2008 10,655,601,512,061.10 GWB (UP 4,927,405,715,879.53 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: 630,876,615,148.70 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
11/24/2008 -000,086,920,504.20 ---- Mon
11/25/2008 +001,468,316,558.23 ------------*********
11/26/2008 +000,650,427,812.76 ------------********
11/28/2008 +000,783,239,406.89 ------------********
12/01/2008 +038,288,359,563.07 ------------********** Mon
12/02/2008 +000,199,375,927.74 ------------********
12/03/2008 -000,525,799,120.43 ---
12/04/2008 -022,902,653,130.86 -
12/05/2008 -000,187,074,568.06 ---
12/08/2008 -000,759,942,653.72 --- Mon
12/09/2008 +000,031,558,514.41 ------------*******
12/10/2008 +000,087,731,393.17 ------------*******
12/11/2008 -019,940,834,952.80 -
12/12/2008 -000,182,958,692.63 ---
12/15/2008 +027,986,876,028.13 ------------********** Mon

24,909,701,581.70 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $990,969,708,802.03 in last 88 days.
That's 991B$ in 88 days.
More than any year ever, except last year, and it's 97% of that highest year ever only in 88 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 88 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.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3646824&mesg_id=3646863

[Festivito]

63. Debt: 12/16/2008 10,630,556,502,899.80 (DOWN 25,045,009,161.30) (All FICA.)

(Very little public debt change. The FICA debt, the money owed to us workers went down.)

= Held by the Public + Intragovernmental(FICA)
= 6,418,858,135,322.00 + 4,211,698,367,577.88
UP 172,636,444.49 + DOWN 25,217,645,605.80
(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 22 reports in the last 30 to 32 days.
The average for the last 22 reports is 579,541,739.30.
The average for the last 30 days would be 424,997,275.49.
The average for the last 32 days would be 398,434,945.77.
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$/day.
There were 52 reports in 77 days of FY2009 averaging 11.65B$ per report, 7.87B$/day.

PROJECTION:
GWB** must relinquish the presidency in 35 days.
By that time the debt could be between 10.6 and 10.9T$.
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)
12/16/2008 10,630,556,502,899.80 GWB (UP 4,902,360,706,718.23 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: 605,831,605,987.40 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
11/25/2008 +001,468,316,558.23 ------------*********
11/26/2008 +000,650,427,812.76 ------------********
11/28/2008 +000,783,239,406.89 ------------********
12/01/2008 +038,288,359,563.07 ------------********** Mon
12/02/2008 +000,199,375,927.74 ------------********
12/03/2008 -000,525,799,120.43 ---
12/04/2008 -022,902,653,130.86 -
12/05/2008 -000,187,074,568.06 ---
12/08/2008 -000,759,942,653.72 --- Mon
12/09/2008 +000,031,558,514.41 ------------*******
12/10/2008 +000,087,731,393.17 ------------*******
12/11/2008 -019,940,834,952.80 -
12/12/2008 -000,182,958,692.63 ---
12/15/2008 +027,986,876,028.13 ------------********** Mon
12/16/2008 +000,172,636,444.49 ------------********

25,169,258,530.39 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $965,924,699,640.73 in last 89 days.
That's 966B$ in 89 days.
More than any year ever, except last year, and it's 95% of that highest year ever only in 89 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 89 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.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3648340&mesg_id=3648356

[ozymandius]

7. SEC chairman says agency failed to probe Madoff

WASHINGTON – In a stunning rebuke, the Securities and Exchange Commission chairman blames his career regulators for a decade-long failure to investigate Wall Street money manager Bernard L. Madoff, now accused of running one of the largest Ponzi schemes ever.

On Tuesday night, SEC Chairman Christopher Cox ordered an internal investigation of what went wrong and offered a scathing critique of the conduct of his staff attorneys. He said they never bothered to seek a formal commission-approved investigation that would have forced Madoff to surrender vital information under subpoena. Instead, the staff relied on information voluntarily produced by Madoff and his firm.

Credible and specific allegations regarding Madoff's financial wrongdoing going back to at least 1999 were repeatedly brought to the attention of SEC staff, said Cox.

....

Cox's harsh assessment may have the effect of shifting questions away from the politically appointed five-member commission and placing blame squarely — if not solely — on the agency's staff for failing to aggressively pursue a massive fraud.

http://news.yahoo.com/s/ap/20081217/ap_on_bi_ge/madoff_scandal

---

Gawds! Looks like we have more bad apples.

[tclambert]

21. They shudda probed him the way the space aliens probed Cartman.

"I love to sing-a, about the moon-a and the June-a and the spring-a"

[AnneD]

34. Again...the peons

take the fall. In a time when crime is not punished and laissez faire is the law of the land...why is everyone shocked about Madoff.

OK Elliot Spitzer may have screwed a call girl, but the rest of us has been fucked every since.

And they wonder why folks are not investing in stocks any more. A small investor just as well have a target on their back. I invest a small amount these days because I have a defined benefit pension and this is just extra and I want to get some bargains. But I wouldn't want to risk my pension in the market. :eyes:

[Karenina]

53. Wonder what will happen to this guy. It's only 62M

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3648737

Seems Madoff just gets "house arrest" in his $7M apartment.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3648756

[AnneD]

54. OK that makes 55 mil he has to cough up.........

I was listening to NPR and many of Maddoffs accounts were in Charitable Trust-widows, orphans, cancer patients, homeless, hungry, etc. I hope he experiences the pain he is inflicting on the helpless. I can't think of better Karmic Justice. These people know no shame.

This other guy preyed on Hispanics. I wonder how equal the justice, but then I have wondered for a while.

[Joe Chi Minh]

62. House arrest: brutal.

[tclambert]

64. What? He can't go the country club for brunch?

The inhumanity! The cruelty! Surely they'll make an exception for the new gallery opening.

[Joe Chi Minh]

69. One does hope...

[Robbien]

36. The SIPC says if they don't have the money to re-pay Madoff clients, a govt bailout will be obtained

from here
http://www.streetinsider.com/Insiders+Blog/SIPCs+Role+In+Madoff-Of-All-Scams+Could+Save+The+Stock+Market/4243249.html

Ms. Wang indicated to us that the SIPC has a budget of just $1.6 billion and a few credit lines worth $2 billion total. While SIPC is a non-profit organization, they have indicated to us that they will try to make as many people as whole as possible. They claim to be free from any conflicts of interest, even if the amount needed would eclipse their budget. When asked if the Madoff claims came in at $5 billion what would be done, Ms. Wang indicated to us that they could look to Congress for the money.

And if the entire ponzi scheme was bogus

It seems likely that most, if not all, of the statements Bernard Madoff delivered to clients were entirely bogus. Based on the SIPC mandate, it could be in the realm of possibility that the SIPC has to buy securities to replace those that were faked on statements delivered to Madoff clients.

They are even looking at answering questions about covering hedge funds

If a hedge fund that invested in Madoff has 100 clients, will the SIPC pay out $500K just to the hedge fund or $500K to each of the 100 clients?

Appears there is another set of rules when compensating for losses when it is the elite being scammed by ponzi schemers.

[specimenfred1984]

57. Of course, you and I will be forced to pay for their crimes

I'll just keep pretending it's all over my stupid little head and take it up the arse everyday. Ahhhh, the life of a good German.

[tclambert]

65. Wait, don't they have to carpool to DC and go through a grilling by hostile Southern Senators first?

How come everybody gets to snap their fingers and get a bailout except the one industry that actually makes something and employs union workers? Oh.

[ozymandius]

8. Honda slashes forecast again, outlines counter-moves

TOKYO (Reuters) – Japan's Honda Motor Co issued its third profit warning this year, slashing its operating forecast by two-thirds as the global recession batters car sales and sends the yen soaring.

The deeper-than-expected revision at Japan's No.2 automaker could touch off similar moves at domestic rivals Toyota Motor Corp and Nissan Motor Co, also reeling from the dollar's fall to 13-year lows against the yen.

Automakers everywhere are under enormous pressure to cut costs and save cash to weather the storm as tight credit and weak consumer sentiment hammer demand.

....

Honda also said it would cut capital spending, delay new plants and product launches and reduce its third-quarter dividend. It will also review bonus payments for directors, and cut their monthly salaries by 10 percent from January.

http://news.yahoo.com/s/nm/20081217/bs_nm/us_autos

[ozymandius]

16. Honda Rides Into Red Territory

The automaker is set to post its first half-year operating loss in 11 years. And there's little relief ahead.

The market expected the global recession to decimate Japanese automakers' profits, but few expected their second-half losses to be so huge. Now the question is whether whopping output and capital spending cuts will even allow them to break even next year.

Honda Motor looks on course to post an operating loss in the second half to the tune of at least 120.0 billion yen ($1.4 billion), on the severe demand slump and surge in the value of the yen. This would be the company's first half-year operating loss in over a decade. Japanese automakers are scrutinizing all their pipeline investments for possible delays or cancellation, slashing output and jobs, and looking to wrangle price cuts from steelmakers and other suppliers.

....

Honda said it expected sales to have fallen 13.0% for the year, because of a collapse in demand from the U.S. and Europe. The yen's surge to decade-highs against the dollar and euro has dealt a further devastating blow to Japanese exporters by eroding their overseas earnings. Honda said it would cut its dividend to 11 yen (12 cents) per share for the October-December period, down from 22 yen (25 cents).

http://www.forbes.com/markets/equities/2008/12/17/honda-cuts-guidance-markets-equity-cx_twdd_1217markets3.html

[ozymandius]

9. ZIRP!

That’s zero interest rate policy. And it has arrived. America has turned Japanese.

This is the thing I’ve been afraid of ever since I realized that Japan really was in the dreaded, possibly mythical liquidity trap. You can read my 1998 Brookings Paper on the issue here.

Incidentally, there were a bunch of us at Princeton worrying about the Japan problem in the early years of this decade. I was one; Lars Svensson, currently at Sweden’s Riksbank, was another; a third was a guy named Ben Bernanke. I wonder whatever happened to him?

Seriously, we are in very deep trouble. Getting out of this will require a lot of creativity, and maybe some luck too.

http://krugman.blogs.nytimes.com/2008/12/16/zirp/

[KoKo]

35. An interesting reply about ZIRP from commenter on Krug's blog...

This will be less effective even than the Japanese ZIRP, which did at least boost their exports by suppressing the yen-dollar exchange rate enough to give their exporters a 20-25% cost advantage over US competitors.

By reducing to zero the interest income of those retirees and soon-to-be-retirees who actually have savings, this will dramatically reduce the propensity to consume of the only market segment not already in deep financial doo-doo.

It won’t raise home prices, because the supply glut is now obvious to all, and the “real estate can only go up” psychology has been destroyed. And there’s no pent-up first-time buyer demand because the bubble pulled it all forward. Not only does everyone who wants and can afford to own a home already own one, millions who can’t afford one “own” one, too (often three or four). In Japan, mortgage rates fell to 2.38% (governemnt-subsiidy), but home sales and prices just kept on falling.

Millions of baby boomers fast approaching retirement — many about to be forced into it by layoff into a hopeless job market — have seen their stock holdings slashed 40% in value, and their bond funds fallen, too. Since the Fed intends to force them to lend their savings to the banks at zero percent interest, they are going to realize they need to save even more. If they’re still employed, that is; if they’re not, they’re going to tie their purse strings into super-Gordian knots proof against even an Alexander.
— jm

[ozymandius]

10. Did you read the FOMC statement? Here it is.

Behold! in all it's warty glory.

The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1/4 percent.

Since the Committee's last meeting, labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further.

Meanwhile, inflationary pressures have diminished appreciably. In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters.

The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability. In particular, the Committee anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.

The focus of the Committee's policy going forward will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve's balance sheet at a high level. As previously announced, over the next few quarters the Federal Reserve will purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets, and it stands ready to expand its purchases of agency debt and mortgage-backed securities as conditions warrant. The Committee is also evaluating the potential benefits of purchasing longer-term Treasury securities. Early next year, the Federal Reserve will also implement the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses. The Federal Reserve will continue to consider ways of using its balance sheet to further support credit markets and economic activity.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; Christine M. Cumming; Elizabeth A. Duke; Richard W. Fisher; Donald L. Kohn; Randall S. Kroszner; Sandra Pianalto; Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh.

In a related action, the Board of Governors unanimously approved a 75-basis-point decrease in the discount rate to 1/2 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of New York, Cleveland, Richmond, Atlanta, Minneapolis, and San Francisco. The Board also established interest rates on required and excess reserve balances of 1/4 percent.

So the plan looks to to artificially stimulate spending via borrowing. Thereby their actions will sustain valuations of the most vulnerable investment tools that started this mess. Oh - dontcha love the part about the Fed investing in the Treasury? I think Enron tried something like this with many of its surrogate shell companies.

[Loge23]

15. Life on a roller coaster

Trying to predict what comes next is becoming as futile as hope.
However, the current deflationary cycle we are experiencing - purportedly as a reaction to excess supply - can only eventually give way to sharp, perhaps unprecedented, inflation.
Factories are shutting down, raw material producers and miners are curtailing their production activities, fundamental demand structures such as consumer demand/spending are grounding to a halt.
When (and "when" is the trillion dollar question) the demand shifts into drive again, supply will be way behind the curve. Result? Rapidly escalating prices which will extend the misery for another year or so - and that's when demand becomes positive (estimates range anywhere from late-2009 to 2014 at this point).
But that's just basic economics and we're assuming that there will still be a viable economy to recover - that's assuming plenty in the face of the smoldering WTC-like wreckage of the American economy today.
Analogous to a roller coaster, we hold on and scream - knowing deep inside that the coaster is built well and that we'll make it back to the depot intact. This round, that inner confidence is gone.

[tclambert]

23. The pattern I'm seeing is when Ozy gives us really bad news,

the Fed steps in and the stock market goes up a little. And when it's really, really bad news, the market drops like, like, Bush's approval rating. And if Ozy gives us good news? I haven't been following SMW THAT long.

[ozymandius]

30. Good news has been hard to come by if you're not a bailed-out exec.

Honestly, I try to find good news. There's just not that much pertaining to fundamentals. The news you see posted here is much the same news that traders and business types read every day. I feel that I am right more than I am wrong in discerning the psychology of a trading day. My track record over these years has shown as much; plus I am often confounded publicly, verbally when trading sentiment reverses the course plotted by the news of the day.

News outlets like Forbes, Bloomberg and WSJ have extensive resources in the major industrial companies. So when I read reports from these organizations that spell dour economic news then I expect the markets to respond in kind. However we see here that is not always the case. Also consider the machine of the PPT that can goose the system when fundamental interests grow wobbly. In my mind, sucker rallies are just another part of the human condition. Just like that "greater fool" theory. We just never seem to run out of fools.

[tclambert]

66. I wasn't blaming you, Ozy. It's reality that seems to have a negative bias lately.

I think part of what drew me to SMW was the same impulse that draws people to watch a house on fire.

[4dsc]

32. Cramer declared this to be a very good plan...

Cramer declared that any talk of depression or worse is now off the table. He stated nothing but good times are ahead of us because of his new best friend, Bernanke, helicoptor Ben as he referred to him as he threw a bunch of $100 bills around the studio..

Did any one witness this last night??

[ozymandius]

40. Was he or was he not wearing clown shoes?

Can anyone testify to this? He sure sounds like a clown to me. How can anyone take this freak seriously anymore?

[MilesColtrane]

49. "A little song...a little dance...a little seltzer down the pants"

[ozymandius]

12. Wall Street futures fall ahead of Morgan Stanley figures

(Reuters) – Stock index futures pointed to a lower open on Wall Street on Wednesday ahead of Morgan Stanley figures.

Highlights:

* At 5:01 a.m. EST S&P 500 March futures were down 2.3 percent, Dow Jones futures were 2 percent lower and Nasdaq 100 futures were down 2.3 percent.

* Morgan Stanley (MS.N) is expected to report a loss per share of $0.24 compared with a loss of $3.61 last year as the former investment bank struggles to transform itself into a deposit-gathering institution that relies less on using borrowed money to make big market bets.

http://news.yahoo.com/s/nm/20081217/bs_nm/us_markets_stocks

[ozymandius]

13. Morgan Stanley Earnings to Drop 59% in 2009, Deutsche Bank Says

Dec. 15 (Bloomberg) -- Morgan Stanley’s earnings per share will drop 59 percent in 2009 as revenue declines to the same level as 2005, according to a note to investors today from Deutsche Bank AG analyst Michael Mayo.

Mayo slashed his 2009 earnings estimate to $1.55 from a forecast of $2 a share and cut his 2010 estimate to $1.95 from $2.35, below the average forecast of analysts. Those estimates compare with his $3.77 per share earnings estimate for 2008. The average estimate of 17 analysts surveyed by Bloomberg is for Morgan Stanley to earn $2.82 a share in 2009 and $3.56 in 2010.

http://www.bloomberg.com/apps/news?pid=20601103&sid=aLLacdAdrtSg&refer=us

[ozymandius]

14. Obama Works to Overhaul TARP

WASHINGTON -- The incoming Obama administration is considering a series of initiatives to combat the financial crisis, including some efforts to help banks that the Bush administration has tried with limited success.

Among the plans being discussed are injecting more capital into banks, creating a market for illiquid assets clogging the books of financial institutions and helping borrowers who are having trouble making their mortgage payments.

On Tuesday, members of President-elect Barack Obama's economic team briefed Mr. Obama on ways to address the financial crisis and also on plans for an economic-stimulus package.

....

The Obama team, hoping to avoid the criticism leveled at Mr. Paulson by lawmakers that he lacks a consistent strategy, is also working to come up with a way to cogently explain the rationale behind its approach.

One key distinction will be in the approach to helping homeowners facing foreclosure. Mr. Paulson and the White House have resisted calls to embark on a government rescue of homeowners. The Obama team, by contrast, sees that as a critical leg of its financial-crisis rescue plan, people familiar with the matter said.

http://online.wsj.com/article/SB122947278692012293.html

[Tansy_Gold]

18. I have a plan! I have a plan!

Hey, Mr. Bank CEO, I have a plan for you.

Y'know all those bad assets that are on your books? Those CDOs and SIVs and POSes that are on your books that you can't unload on anyone because everyone in your business knows they're not worth shit?

Why not write their value down to -0-? You know, just admit that it's crap, write it off, and go back to doing what banks are really supposed to do.

Oh, sure, I know about the bookkeeping. You have to counter that loss on the asset side with, well, with something over on the equity side. You'll have to show a loss, I guess, and maybe not pay out such fat bloated bonuses to yourself and your other executives. But you'd keep your bank in business. You'd save the jobs of all the tellers and loan officers and data entry clerks and the cleaning people and the local company that comes in once a week to water and fertilize and manicure the plants in your lobby. And you'd save the taxpayers a bunch of money, too, so they could continue to buy groceries and get oil changes and save up for their kids' college education.

Now you know, Mr. Bank CEO, that you wouldn't lend ten thousand dollars to a guy to buy a 1998 Xterra with 248,000 miles on it, bald tires, and bashed in front end where somebody tried to drive out to Woodpecker Canyon. So why would you, being a fair and honest banker, expect another bank -- the Fed -- to give you the money for those CDOs and SPMs and other worthless pieces of shit sitting on your books? It's not like you're planning to pay it back or anything.

You know their true value, sir. Write them down to zero. Take your loss like a real man and get on with life. Take early retirement. Buy a beat up old Jeep and head out to Woodpecker Canyon. Trust me. You'll have a good time. Just bring a spare axle or two.


Your friend in Arizona,


Tansy Gold

[DemReadingDU]

24. good plan!

except the banksters fear they might have to spend a few years in jail for white collar crime. Nope, they'd rather bring the whole world to collapse rather than admit to any greedy scam.

:eyes:

[tclambert]

25. Tansy, Tansy, Tansy. You should know how executive bonuses work by now.

If the company makes money, the executives get bonuses for doing a good job. If the company loses money, the executives get bonuses for dealing with the emotional stress. If the company goes bankrupt, the executives get a parting bonus, a golden parachute.

I'm sure you, and the rest of us, would prefer to push them out of an airplane with a parachute pack literally filled with gold.

[Tansy_Gold]

27. Actually. . . ..

I've been out to Woodpecker Canyon. It's a gorgeous place.

But the whole area is pocked with little mine shafts and pits and stuff like that.



Get the picture?


Tansy Gold, who is passing today on another expedition to the site pictured above because it is POURING RAIN and Woodpecker Canyon is not a place to be in the pouring rain

[Ghost Dog]

31. Got the picture, yes,

thanks Tansy, everyone.

[InkAddict]

29. "creating a market for illiquid assets - clogging the books of financial institutions

Isn't that what caused this fiasco in the first place? "? I can understand it where there is actually a physical structure behind the asset, i.e., a house or a stock certificate, but who would pay for something that's not there and has no value? What am I missing? I mean, golly, the US in in montrous debt, so it's not like they can keep taking write-offs to offset gains? What gains? They need to get people working and caring for the REAL structures that have had to be abandoned or given up as THOSE BANKS AND WALL STREET sucked out the marrow of America's economic bone.

Perhaps they could give the homes away to a corporations who take on that illiquid asset which is actually there AND in "new hires" who have lost homes or are losing them, even their own, in lieu of healthcare, locally, and rent them to the employee nominally until the home could be sold at full value for the area, at which time the employee could then be offered first crack at the new mortgaged property or, if unqualified, at least whatever type of healthcare package we'd be transitioning to? Both homes and healthcare subscription have a value to workers, no? Quarterly costs, rental/mortgage costs and healthcare premiums seem to be fairly equal at the moment, and many companies require a health check or at least a drug test currently?

NOW, MOVE THAT BUS!

[UpInArms]

20. dollar watch

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

Last trade 80.406 Change +0.191 (+0.25%)

Fed Cuts Rates by 75bps to a New Record Low

http://www.dailyfx.com/story/topheadline/Fed_Cuts_Rates_to_a_1229453422154.html

The U.S. Federal Reserve decided on Tuesday to lower its Fed Funds rate by 75 basis points to 0.25 percent, the lowest level for the overnight rate ever. In particular, the Fed is concerned about the deterioration in the labor market, tight credit conditions and the ongoing contraction in the housing market which is likely to weigh on economic growth over the next few quarters. More importantly, the Fed anticipates that weak economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time, according to the Federal Open Market Committee (FOMC) statement released today.

Market Reaction

The U.S. dollar, which had been lower ahead of today’s Fed rate decision, fell even further against the world’s most heavily traded currencies. However, the currency market remains very volatile and is still too early to make any type of cause-effect extrapolation between the recent price action and today’s Fed rate decision. The key question for the U.S. dollar is whether the U.S. economy will continue to grow in face of job losses and a massive deleveraging in the financial sector.

<snip>

Next Stop! Zero Interest Rates

The next FOMC meeting is on January 28 and the Fed looks poised to cut rates all the way to zero, according to the implied probability on Fed Funds futures.

...more...

US Dollar at Key Levels Against Forex Majors - Where to From Here?

http://www.dailyfx.com/story/special_report/special_reports/US_Dollar_at_Key_Levels_1229422711140.html

The US Dollar has retreated against the major forex currencies over recent days, suffering most at the hands of the Euro and the Japanese Yen. Prices are now poised to test pivotal support, with positioning favoring a return to US dollar dominance.



...more...

[DemReadingDU]

22. GMAC Again Extends Deadline for Debt Exchange

12/17/08
GMAC LLC has again extended the deadline for a crucial debt restructuring offer, reflecting demands by investors for more time to tender their securities.

The new deadline is Dec. 19 at 5:00 p.m. Eastern time. The latest extension was announced late Tuesday after a 5 p.m. deadline came and went. It's the fourth time GMAC has revised the deadline; in addition, it has twice sweetened the terms of the debt exchange.

Many GMAC investors have yet to tender their debt holdings in the wake of last week's agreement to amended terms of the $38 billion debt exchange. As of Tuesday, the lender had received 58% of existing, eligible GMAC debt securities, and 37% of outstanding debt securities of Residential Capital LLC, GMAC's ailing mortgage unit.

Some 75% of the selected securities must be tendered for the proposed debt restructuring to go through.

"We are encouraged by the progress," said Gina Proia, a GMAC spokeswoman. "But we still require more participation. We have provided a little more time for an orderly process of tendering these securities."

In addition to the debt restructuring exercise, GMAC is racing to raise $1.25 billion in fresh capital so the Federal Reserve can begin backstopping the company's troubled finances. Talks with with potential investors, including private-equity firms, are under way, according to people familiar with the matter.

All this is part of GMAC's plan to become a bank-holding company regulated by the Federal Reserve. GMAC owns an industrial bank chartered in Utah that doesn't have full commercial bank powers. If it becomes a bank-holding company, GMAC Bank will become a Utah-chartered Fed member bank, eligible fore funds from the U.S. Treasury.

As a federally-chartered bank, GMAC can have its debt temporarily guaranteed by the Federal Deposit Insurance Corp; it could also gain access to the Federal Reserve's discount window for inexpensive, short-term emergency loans. The firm's borrowing costs have soared due to battered credit ratings.

GMAC still faces significant hurdles: It still hasn't raised $2 billion from existing or new investors -- money it needs in order to meet bank-holding company rules. Current shareholders are forking over $750 million of the $2 billion sum. They're unlikely to chip in more.

The lender has been weakened by the billions of dollars it pumped into its mortgage unit, also known as ResCap, which was a large subprime lender. It has also been hit by losses on auto loans. General Motors Corp. owns 49% of GMAC after an investor group led by Cerberus Capital Management LP bought 51% of the lender in 2006 for about $14 billion.

more...
http://online.wsj.com/article/SB122949609590213871.html?mod=googlenews_wsj

[DemReadingDU]

37. Calpers To Report Losses of 103% on its Residential Investments

103%!

CalPERS, the California Public Employees' Retirement System announced a new milestone in pension plan incompetence today by admitting losses in Risky, Ill-Timed Land Deals (WSJ).

At the height of the property bubble, California's giant pension fund, Calpers, made a fateful decision: It aggressively poured money into real estate. As a result, today it's one of the biggest owners of undeveloped residential land in America.

Partly because of these investments, California Public Employees' Retirement System is struggling to avoid one of its worst annual declines since its 1932 inception. Calpers has lost almost a quarter of its assets since July 1, the start of the current fiscal year.

The problems come at a time of uncertainty for the nation's largest public pension fund, which has been without its top two executives for nearly half a year. Calpers is poised to appoint a new chief executive as early as this week, people familiar with the matter said.

Calpers is now warning California's cities, towns and schools that they may have to cough up more money to cover the retirement and other benefits the fund provides for 1.6 million state workers. Some towns are already cutting municipal services, and at least one is partly blaming the Calpers fees.

Calpers in recent weeks said it expects to report paper losses of 103% on its residential investments in the fiscal year ended June 30. That's because Calpers invested not only its own money, but billions of dollars of borrowed money that must be repaid even if the investment fails. In some deals, as much as 80% of the money invested by Calpers was borrowed. ... Rest by Subscription (WSJ)

more from Mish Shedlock
http://globaleconomicanalysis.blogspot.com/2008/12/calpers-to-report-losses-of-103-on-its.html


edit for WSJ link
http://online.wsj.com/article/SB122947172015212225.html?mod=testMod

[ozymandius]

39. Of course, the taxpayer is on the hook for Calpers' losses.

It's the American way!

[tclambert]

67. A county treasurer near here spent taxpayer money to help some poor Nigerian transfer funds

out of his country. Seems he needed a trustworthy American's help, and was willing to pay a generous fee, and . . . Well, you know how the scam goes. It was a couple of years ago, and the fool lost thousands of the county's money. It was one of those stories that made me think, "Just when you think human beings can't get any stupider . . ."

[Ghost Dog]

38. Public mood darkens on job fears: Reuters poll

Wed Dec 17, 2008 7:13am EST WASHINGTON (Reuters) - A recession-mired economy and growing job insecurity have shaken American confidence in the future despite an upbeat view of President-elect Barack Obama's performance, according to a Reuters/Zogby poll released on Wednesday.

The Reuters/Zogby Index, which measures the mood of the country, dipped to 90.5 in December from 93.3 in November as seven of the 10 measures of public opinion used in the index declined.

Americans are feeling less secure in their jobs and more worried about the country's direction in the midst of a year-old recession and signs of widespread economic distress in nearly every sector, the poll found.

The sagging public mood returned after a burst of optimism last month, when Obama was elected to the White House on promises of changing the status quo and transforming the Washington political culture, pollster John Zogby said.

/... http://www.reuters.com/article/topNews/idUSTRE4BG3BN20081217?sp=true

:(

[Ghost Dog]

44. Madoff tries to stay out of jail as probe widens

Wed Dec 17, 2008 9:42am EST BOSTON/NEW YORK (Reuters) - Bernard Madoff, the longtime Wall Street executive accused of cheating investors around the world out of $50 billion, scrambled to find friends or relatives to guarantee his bond on Tuesday and keep him out of jail.

In Massachusetts, where the disgraced investor long cultivated a loyal group of wealthy individuals, the state's chief securities regulator subpoenaed Bernard L. Madoff Investment Securities and Cohmad Securities Corp, a firm that marketed Madoff investment products.

The two firms must hand over the names and addresses of all local residents who let Madoff invest their money by December 29. They must also deliver notes, emails, meeting agendas related to investments made since 2000, William Galvin, the state's Secretary of the Commonwealth, said on Tuesday.

In New York, Madoff, who was arrested last week, has not yet fully met the conditions of his $10 million bond, according to court papers. He must find three co-signers to guarantee the bond.

/... http://www.reuters.com/article/topNews/idUSTRE4BG3BN20081217?sp=true

[Ghost Dog]

45. Morgan Stanley posts loss on writedowns

Wed Dec 17, 2008 10:13am EST NEW YORK (Reuters) - Morgan Stanley reported a much wider-than-expected quarterly loss on Wednesday as the credit crisis generated more writedowns and slashed fees from investment banking and brokerage.

It was the bank's second quarterly loss in the last five quarters. Morgan Stanley shares fell 4.5 percent in early trade.

"The numbers are not good," said Sal Arnuk, co-manager of trading at Themis Trading in Chatham, New Jersey. "They're cutting back on many, many different business lines, so it calls into question what is the return on equity going to be down the road."

Credit rating agency Moody's Investors Service reacted to the news by cutting Morgan Stanley's senior debt rating by a notch, citing both the quarterly results and the bank's exposure to the credit crisis.

The New York-based bank said its loss from continuing operations for the fiscal fourth quarter ended November 30 was $2.20 billion, or $2.24 a share. Analysts' average forecast was a loss of just 33 cents a share, according to Reuters Estimates.

Morgan Stanley, which has converted to a bank holding company from an investment bank, said it was targeting an additional $2 billion in cost savings, although that figure includes the annualized effect of previously announced job cuts.

/... http://www.reuters.com/article/topNews/idUSTRE4BG3R320081217

[ozymandius]

46. 11:15 update

Dow 8,832.63 Down 91.51 (1.03%)
Nasdaq 1,572.87 Down 17.02 (1.07%)
S&P 500 905.15 Down 8.03 (0.88%)
10-Yr Bond 2.116% Down 0.247
NYSE Volume 1,857,622,000
Nasdaq Volume 605,836,812.5

11:00 am : OPEC announced it will cut daily production by 4.2 million barrels from September output. It is cutting 2.2 million barrels from current daily production. Crude prices spiked on the announcement, but have since retreated. Crude is now back in negative territory, trading with a loss of 0.6% at roughly $43.35 per barrel.

The production cut is expected to provide a boon to oil prices as OPEC attempts to realign supply with demand, which has waned amid softer global economic conditions. Many fear, though, that higher oil prices could further depress consumer spending. More setbacks to consumer spending could make the path back to economic growth all the more arduous, since consumer spending typically accounts for more than two-thirds of economic activity.

Though oil prices continue to trade in the red, the energy sector has made its way into positive ground. It is now up 0.9% after being down as much as 1.7%. Its advance makes it a new leader among the other sectors. DJ30 -75.03 NASDAQ -17.26 SP500 -7.71 NASDAQ Adv/Vol/Dec 1078/544 mln/1453 NYSE Adv/Vol/Dec 1263/311 mln/1640

10:35 am : The Department of Energy announced crude oil inventories had a build of 525,000 barrels for the week ending December 12. A build of roughly 600,000 barrels was expected. Oil prices were down 0.7% just ahead of the report, but are now down 2.5% to trade at $42.45 per barrel.

Energy traders continue to anticipate a production cut from OPEC, which is meeting today. A production cut of roughly 2 million barrels per day is expected, but a cut of greater or lesser magnitude could induce price volatility. DJ30 -114.06 NASDAQ -20.15 SP500 -11.87 NASDAQ Adv/Vol/Dec 1058/421 mln/1430 NYSE Adv/Vol/Dec 1145/236 mln/1730

10:10 am : Materials continue to stand out as an outperformer, though it has surrendered some if its gains. The sector was up 1.0% earlier, but is now up just 0.1%.

February gold is up $24.50 to $867.20 per ounce. Gold is just off its highs at $868.40 per ounce. Meanwhile March silver is trying to reclaim its high of $11.43 per ounce as it trades up $0.515 to $11.22 per ounce.

Weakness in the dollar continues to bolster precious metals. The dollar is down 1.8%, extending the prior session's 1.9% slide.

The market continues to await confirmation of a production cut from OPEC. A cut of at least 2 million barrels per day is expected. This wait has stifled any moves in crude oil futures. Crude is currently up 0.4% to $43.80 per barrel. Traders are also awaiting inventory data from the Department of Energy. The inventory data is scheduled to be released at 10:35 AM ET. The current consensus calls for a build of 600,000 barrels.

January natural gas is up $0.057 to $5.808. Its session highs were set in overnight trade at $5.855.DJ30 -107.52 NASDAQ -22.35 SP500 -12.05 NASDAQ Adv/Vol/Dec 985/283 mln/1426 NYSE Adv/Vol/Dec 1030/169 mln/1787

[Ghost Dog]

47. Global crisis, storms hit Cuba finances

Wed Dec 17, 2008 10:47am EST HAVANA, Dec 17 (Reuters) - Three hurricanes and the global financial crisis have left Cuba strapped for cash, forcing the government to juggle debt payments and seek new financing, diplomatic and business sources say.

France is the latest government to receive notice from Cuba that it needs to reschedule upcoming debt payments, European diplomats said.

"A few months ago, Cuba told Japan and Germany it could not meet debt payments but those problems apparently have been worked out. Now France has received the same news," a diplomat said. The information was confirmed by French business sources.

Cuba, whose foreign debt rose by $1.1 billion to $16.5 billion in 2007, recently rescheduled some debt with China.

The government did not immediately respond to a request seeking comment, but Cuba's planning and economy minister, Jose Luis Rodriguez, recently said the island, like all countries in the region, faces a difficult year ahead due to the global financial crisis.

Various foreign businessmen, who like the diplomats asked that their names not be used, said payments had slowed from Cuban state-run banks, with cash transfers that usually took 48 hours now sometimes put off for weeks.

"It appears they do not have the cash on hand so they delay and then pay you and delay payment to someone else," one Western businessman said.

Despite the problems, few think Cuba is in such dire straits that it will stop payments altogether because, as another businessman said, "that would send a very negative signal."

/More... http://www.reuters.com/article/marketsNews/idINN1244996520081217?rpc=44&sp=true

[wordpix]

48. Obama talking about wind, solar, proactive Interior Dept under Salazar---Dow up 30 pts

[Ghost Dog]

50. Europe shares end lower as BNP weighs on banks

Wed Dec 17, 2008 11:42am EST FRANKFURT, Dec 17 (Reuters) - European stocks closed lower on Wednesday as banks weighed heavily with BNP Paribas (BNPP.PA: Quote, Profile, Research, Stock Buzz) revealing a 11-month loss at its investment banking unit, hit by exposure to an alleged fraud by U.S. financier Bernard Madoff.

The FTSEurofirst 300 .FTEU3 index of top European shares closed provisionally down 1.2 percent at 825.07 points.

The index has lost more than 45 percent this year, hurt by a credit crisis that has led to a recession in several major economies.

BNP Paribas tumbled 17.7 percent, while Deutsche Bank (DBKGn.DE: Quote, Profile, Research, Stock Buzz) and Natixis (CNAT.PA: Quote, Profile, Research, Stock Buzz) were down respectively 8 percent and 12.7 percent.

/... http://www.reuters.com/article/marketsNews/idCALH22142320081217?rpc=44

[Ghost Dog]

51. BNP warns it may abandon Fortis bid - report

Wed Dec 17, 2008 8:01am EST BRUSSELS (Reuters) - France's BNP Paribas (BNPP.PA: Quote, Profile, Research, Stock Buzz) may abandon its takeover bid for Belgian-based financial group Fortis (FOR.BR: Quote, Profile, Research, Stock Buzz)(FOR.AS: Quote, Profile, Research, Stock Buzz) after a Belgian court last week froze the latter's state-led break-up, Belgian daily Le Soir said on Wednesday.

The paper, citing unnamed sources, said BNP Chief Executive Officer Baudouin Prot told Belgian authorities on Sunday that the bank was "starting to ask ourselves questions."

"If we cannot now take the capital of Fortis Bank, we will pull out."

Officials of BNP Paribas, which is set to hold a shareholder meeting on Friday over the deal, were not immediately available for comment.

/... http://www.reuters.com/article/euMergersNews/idUSLH65043320081217

[MilesColtrane]

52. Motorola Permanently Freezes Employee Pension Fund

CEOs take 25% Pay Cut (looks like they'll have to resort to domestic caviar.)

Letter sent to me by email. Confirmed by MSNBC at http://www.msnbc.msn.com/id/28277913/

17 December 2008

To: All Motorola Employees



Important Compensation and Benefit Changes



As we all know, these are the most difficult economic times in recent memory. The current economic downturn has affected Motorola’s customers, suppliers and employees, impacting every area of our business. We have already asked you to do all you can to improve cash flow, while at the same time serving our customers – and your efforts are sincerely appreciated.

Now, even more is being asked of us all. The continued decline in the global economy requires that we take further action to best position the company for today and for the future. We simply must make tough decisions to conserve cash and further reduce costs. Today, we are announcing important changes to the employee compensation and benefit programs to help achieve these goals.

Global 2009 Merit Program and CEO Pay Changes

In response to economic realities and globally competitive pay practices, Motorola will eliminate 2009 salary increases in many markets. Salary increases will continue to be offered in countries where it is legally required or a competitive necessity; however, in most cases, these increases will be below 2008 levels.

In addition, the two of us will voluntarily reduce our base compensation by 25 percent in 2009 and forgo our 2008 cash bonuses.

U.S. 401(k) Company Match Suspension

Effective 1 January 2009, we will temporarily suspend all company matching contributions to the Motorola 401(k) Plan. This means that while U.S. employees may continue to contribute to the 401(k) plan, you will not receive matching contributions from the company. Motorola will provide the 2008 matching contribution as planned.

U.S. Pension Plan Freeze

Effective 1 March 2009, we will permanently freeze all future benefit accruals under the Motorola Pension Plan and the Motorola Supplemental Pension Plan. This means that U.S. pension plan participants (i.e., employees hired on or before 31 December 2004) will keep any pension benefits earned through 28 February 2009, but will not accumulate any additional pension benefits beyond that date.


In addition to current difficult market conditions, the pension benefit freeze is in response to, and in line with, the competitive industry environment. However, after the freeze we intend to continue to fund the pensions to meet our obligations to retirees and active employees with accrued benefits. Participants will receive more information about this change in March 2009.

Resources

We know that you will have questions about what these important changes mean to you. Please refer to the prepared questions and answers and submit additional questions as needed.


You also may direct your questions as follows:

U.S. 401(k) company match suspension – Hewitt Participant Service Center at 1-800-585-5100
U.S. pension plan freeze – Hewitt Participant Service Center at 1-800-585-5100
Global 2009 Merit program – your local human resources representative
In Closing
We hope you will understand these are difficult, but necessary steps to further improve our overall cost structure. As we head into 2009, we all must continue to look for ways to better serve our customers while reducing cost and improving our cash flow.

By focusing on the things that we can control, planning for continued macroeconomic challenges and executing efficiently to continue meeting customer needs, we will navigate through the issues confronting all companies around the world and deliver on our business objectives. Thank you for your continued focus and dedication.


Best regards,

Merry Effing Christmas

[Robbien]

58. Freezing -- nice word

A word which basically means no more pension plan.

The old pension plan will pay out prior obligations but if one wants current labor to be covered they have to look elsewhere. Everyone is on their own.

[specimenfred1984]

55. Oh well, yet another AG is corrupt, no surprise there

A pro-torture crony who's directly connected to the biggest stock market fraud in history. Oh but don't worry about a little thing like that, you can rest assured whatever you're going to "invest" in is legit, LOL.

[tama]

56. Did (short term) bonds bottom today?

Wild day in the bond market today. The announcement of Fed that it considers buying long term bonds (10- and 30-year I guess) got me thinking yesterday that at some point we might see "smart" money fleeing the short term bonds so their yield goes up, while institutional buying by Fed keeps the long term yield down and even lower.

And voila:
http://finance.yahoo.com/bonds

[ozymandius]

59. spot on assessment

I think we've seen the same in stocks too with the individual investor fleeing the market. The volume of trades has marked some pronounced lows over the past few weeks. This leads me to believe that institutional investors making block trades have driven the markets lately.

[ozymandius]

60. end of the day numbers and blather

Dow 8,824.34 Down 99.80 (1.12%)
Nasdaq 1,579.31 Down 10.58 (0.67%)
S&P 500 904.42 Down 8.76 (0.96%)
10-Yr Bond 2.19% Down 0.173
NYSE Volume 5,976,661,000
Nasdaq Volume 2,150,873,500

4:45 pm : Stocks climbed from a loss of nearly 2% to a gain of roughly 0.6% before slipping back into the red to finish the session 1% lower. The relatively modest loss follow's the prior session's 5% surge, suggesting many investors may becoming more willing to ride their gains.

Trading came without concerted leadership.

Technology, which accounts for the largest weighting in the S&P 500 at roughly 15%, finished 1.7% lower. Its weakness stemmed from large-cap tech names, such as Apple (AAPL 89.16, -6.27). Apple sagged following reports that the company must end its exclusive deal with a French network operator, and that its CEO will discontinue attending a popular conference.

Financials (-1.3%) were up 1.7% at their session high, but were unable to lock in gains. Morgan Stanley (MS 16.63, +0.50) posted a larger-than-expected loss for the latest quarter, but traded with strength alongside Goldman Sachs (GS 78.78, +2.78) as investors being to look past the firms' massive losses.

Citigroup (C 7.83, -0.40) was a laggard in the financial sector, though. It displayed weakness after an article from The Wall Street Journal indicated regulators are increasing their oversight of Citi due to increased concern regarding the firm's financial status.

2008 has been a dry year for deal making, but Constellation Energy (CEG 23.00, -5.74) and Electricite de France announced a definitive agreement in which EDF will pay $4.5 billion for almost half of Constellation's nuclear operations. The agreement comes despite MidAmerican Energy's offer to pay $4.7 billion for all of Constellation, and makes it unlikely a new suitor or sweetened offer will surface. Shares of CEG plummeted 20% this session.

Government debt, which is considered a defensive investment, closed higher. The yield on the benchmark 10-year Note remains at historic lows. The 10-year Note is currently yielding 2.16% after advancing 27 ticks. It was up 50 ticks in the early going.

Gold, another safe haven, climbed more than $26 to hit $868.00 per ounce. Meanwhile, March silver added $0.72 to close trading at $11.425 per ounce.

Other commodities traded in mixed fashion. March corn slipped, but wheat advanced. January soybeans were also up.

Oil prices fell as much as 8.5% before settling $3.36 lower at $40.23 per barrel. The intraday drop took oil prices to a new record low of $39.88 per barrel. Oil's slide comes after the Department of Energy reported a build of 525,000 barrels for the week ending Dec. 12, though a build of 600,000 barrels was expected, and OPEC stated it is now targeting daily production of 24.85 million barrels, which is down 2.46 million barrels from the current production target level and down 4.2 million barrels from actual September production. The cut from current production targets is essentially in-line with the cut of 2 million barrels per day that was widely expected.

Oil's drop came even though the U.S. dollar extended its recent downturn. The dollar fell 2.2%, limiting its year-to-date advance to just 2.9%.

Converse to the weakened dollar are stronger foreign currencies, which make the prices of imports more expensive. That played into Honda Motor's (HMC 21.22, -1.63) to reduce its profit forecast and cut its dividend in half.

Still, Asian markets concluded their latest session with gains. The MSCI Asia-Pacific Index advanced 2.7% to hit a five-week high. Japan's Nikkei finished 0.5% higher, while Hong Kong's Hang Seng climbed 2.2%.

In European markets, London's FTSE locked in a 0.4% advance, reversing early gains. However, Germany's DAX ended 0.5% lower and France's CAC closed with a 0.3% loss.DJ30 -99.80 NASDAQ -10.58 NQ100 -1.4% R2K +0.8% SP400 +1.0% SP500 -8.76 NASDAQ Adv/Vol/Dec 1439/2.15 bln/1335 NYSE Adv/Vol/Dec 1821/1.34 bln/1273

[truthisfreedom]

61. "Stocks went down up down up down up down up down today, ending down."

It's a freaking nightmare.

[tclambert]

68. Wasn't it J. P. Morgan who, when asked what he thought stocks would do, said:

"I predict they will . . . fluctuate."