STOCK MARKET WATCH, Wednesday February 4

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday February 4, 2009

Bush Administration Officials Under Indictment = 0
Financial Sector Officials Under Indictment = 0
Financial Sector Officials In Prison = 1

AT THE CLOSING BELL ON February 3, 2009

Dow... 8,078.36 +141.53 (+1.75%)
Nasdaq... 1,516.30 +21.87 (+1.46%)
S&P 500... 838.51 +13.07 (+1.58%)
Gold future... 892.50 -14.70 (-1.65%)
30-Year Bond 3.62% +0.15 (+4.41%)
10-Yr Bond... 2.84% +0.12 (+4.52%)

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

Market Conditions During Trading Hours

GOLD,EURO, YEN, Loonie and Silver

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Read more: du

[ozymandius]

1. Market WrapUp

Signposts of Recession and the Downfall of "Free Trade"
BY FRANK BARBERA, CMT

It was Senator Mitch McConnell who put it best on Monday, when urging the Obama Administration to strip out the “Buy American” clause from the economic stimulus plan. Quoting McConnell, “"I don't think we ought to use a measure that is supposed to be timely, temporary, and targeted to set off trade wars when the entire world is experiencing a downturn in the economy," said Senator Mitch McConnell.” We would have phrased it a bit stronger, as in “the worst downturn of the last 60 years” but no arguments otherwise. As McConnell aptly stated, it is hard to see how such wording will be interpreted as anything but a return to US protectionism and as such, hard to see how the wording would accomplish anything other than a host of ‘retaliatory actions.’

To that end, as McConnell so stated, this language is a ‘bad idea’ – possibly a disastrous idea that could tilt a very negative situation into becoming a dire situation in short order. Any way you slice the baloney the globalization policies of the last two decades were terribly short sighted, and were cataclysmic for the US manufacturing base leaving the US today far more dependent on imported goods. On Monday, Macy’s, an American icon if ever there was one, announced 7,000 job cuts while slashing the dividend. In the last few days, each of the following companies has experienced a share price collapse of sizeable proportions with some of these companies now in single digits, or even penny stocks: (see enormous list)

....

In today’s climate, unwinding 20 years of globalization with reverse-globalization (i.e. bringing jobs back to the US), even if it were possible, would be bound to trigger massive trade wars and economic convulsions in both US interest rates and the global currency markets. For the average soul walking the streets of Cleveland or Detroit, Los Angeles or New York, the skyrocketing cost of every day goods that would come with a collapse in the purchasing power of the Dollar (brought on by a currency crisis) would simply devastate the US economy and ratchet up the pain threshold even higher. For many, with things already very grim, that may seem inconceivable, but a currency crisis layered upon the present situation would make life imminently worse and make what has been seen thus far in the way of unemployment but an opening act. Thus, while we have no shortage of contempt for the unrestrained practices which allowed US multi-nationals to exports jobs over the last 20 years, trying to alter and reverse that trend in the current climate is not a tenable outcome.

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

---

I happen to agree with the assessment on protectionism. Smoot-Hawley was a bad idea in 1932 because it brought with it a huge raft on unintended consequences. Any similar legislation must avoid protectionism as stated government policy.

[Demeter]

15. Historians Differ On Smoot Hawley

There are strong arguments that it was poorly timed GOP budget balancing demands that put recovery off track, and that tarriffs were entirely effective and useful.

[sendero]

17. "protectionism"...

... is coming. It might not be a good idea for us to be the one that "starts" it, but we will most definitely have to finish it.

[Tansy_Gold]

18. If not protectionism, what?

What options are there? Continue buying everything from everyone else while no one buys anything from us? Where will that road lead? (Are we there yet?)


Or shall we slash all U.S. wages to Mariannas Islands levels? Who then will we be able to buy from?


TG

[sendero]

74. Believe me..

... I agree with you, the one-sided "free trade" bullshit has to stop.

[Warpy]

48. Many of the countries that now have our old industries

are protectionist, which is why any new industrial base here will have to be both protectionist and based on renewable energy in order to compete.

That's another dirty secret about free trade: we've been one of the few countries to try it and the destruction of our manufacturing base has been the result.

[tclambert]

19. Ima gonna disagree wit' ya on this one.

"hard to see how the wording would accomplish anything other than a host of ‘retaliatory actions.’"

How about jobs coming back to America from overseas? And if other countries want to take back the jobs they've outsourced to America, they're welcome to try. What's that? They didn't outsource any jobs here? Then what's the retaliation?

There is not an automobile market in the world that doesn't have some sort of protectionism favoring locally made cars, except the American market. And the American market is still the largest in the world. Free trade has always been a myth because it was one-sided. It was just code for "We want to be able to make things in foreign sweatshops and sell them here without penalty." Where was the reciprocation? Where was the balance? Certainly not in any kind of trade balance. (Trade balance used to be a concept important to national economists.)

We've been building foreign economies with our money and our jobs. That's not all a bad thing. But it's not all a good thing, either.

This answer to this economic crisis is jobs. We need massive, truly massive, jobs programs. Our government needs to start building and rebuilding to make America better, but mostly to give people millions of jobs.

[Tansy_Gold]

24. Ima gonna agree wit' ya on dis one

:hi:

None of it's gonna be without pain. Goddess knows the working people are in enough pain, with all the bailouts and programs and other crap designed to spare those who aren't in pain any risk of ever feeling any. THAT has to change.

I'm fucking sick and tired of the "sacrifice" talk. too many of us no longer have anything to sacrifice, and too few of us have far more that could be sacrificed. there are empty houses being vandalized and there are homeless families desperate for shelter. WHAT'S FUCKING WRONG WITH THAT PICTURE???? Oh, I'm sorry, I forgot. The stockholders in the banks, who don't want to live in those houses and already have two or three houses of their own have to have their "investment" protected, so the homeless family will give the stockholders their tax money but have nothing to show for it.


So American manufacturing corporations, whose job it is to provide dividends to their stockholders, ship all their jobs to Taiwan or China or Turkey or Vietnam and bring their cheap shit back to Los Angeles and Wichita and Akron and Atlanta and because it's cheap the people buy it. But when all the jobs have been shipped out, where do the consumers find the money to continue to buy? Answer: THEY DON'T. They stop buying. And Wal-Mart can fill the shelves with as many tons of cheap plastic crap as they want (supply side), but if the peoples don't gots dollars, they don't buy. it's as fucking simple as that.

Damn it, damn it, damn it. we need to get the Obama people to read SMW daily. We need to bombard them with simplicity. Ax the corporations. Judd will do NO GOOD at commerce, unless he can be made into a poster child for the follies of the right wing. But with Geithner and Summers and Rubin, there will be no counter voice. None at all.

Damn damn damn.

:grr:


Tansy Gold

[ozymandius]

30. Tansy and tclambert

I will attempt to put a name on the Bogeyman.

First, we have lost our manufacturing base over the past thirty years. That was not an accident that resulted in us being somehow out-thought and outworked by overseas competitors. Easy money and easy government policies giving way to high capital interests made this happen. It was like death by a thousand cuts. Healthcare became a commodity. Defined pension plans gave way to the 401(k) - that was a cheapskate option for employers. HMOs became the middle-man that decides how much healthcare you can have based on projected dividends to be rendered to shareholders. Cheap overseas labor, minus healthcare, minus OSHA protections, minus pensions, minus Social Security requirements trumped everything else.

I think we wholly agree that we have been thoroughly screwed by how the rules have been re-written in exchange for campaign contributions and posh junkets to Scotland - or wherever.

How outrageous it is that corporations that capitalized on lax laws and blanket protections of degrading work conditions, in the areas of the world where the United States Congress wields influence, are able to hide their income, tax-free, in off-shore accounts.

I recall when the first caps on imported textiles from China were lifted. South Carolina was devastated in a matter of months. MONTHS! Further lifting of these caps are scheduled soon. This will have the effect of kicking the corpse. This comes on top of thirty years' worth of insults and assaults.

Protectionism articulated as "Buy American" in a spending bill will not make jobs come back. I am sick of this notion that if we just elevate the level of tariffs on overseas goods then our jobs will reappear. The name of the Bogeyman is a litany of legislative acts that have made outsourcing profitable for the corporations for whom these bills have been written by their lobbying interest in Washington. How many years did Congressional Republicans cover the asses of slave labor shops and plantations in the Northern Marianas Islands?

So what to do?

How do you begin to rebuild what has been lost over a generation? I say we begin by attacking the laws that make it profitable for these companies to assault us. Healthcare should not be a commodity to be traded like art objects. How much health insurance costs are embedded in the cost of an American made vehicle? Tax laws need to be reformed that give tax collectors blunt-force tools to go after corporate tax evaders. The whole notion of our consumerist society must be reviewed.

Delicately, delicately, these must be accomplished.

I will check back in a few hours. Thank you for your comments.

[Tansy_Gold]

35. Delicately. Delicately? Tell that to the jobless, the sick, the homeless

I understand where you're comin' from, Ozy, I really do. In a perfect world. . . .


But this ain't a perfect world.


How easy will it be to put universal health care on the legislative table when people are screamin' for jobs? When the budget is in deficit? When the insurance company vultures hold the campaign purse strings? It ain't gonna happen.


How do you execute/assassinate the corporations? They ARE the government.

"Protectionism" serves as a rallying cry, if nothing else.


I'll check in later, too. I'm behind schedule and I have a daily deadline.



TG

[ozymandius]

75. I hear the frustration and head-splitting dissonance from the thousands of

assaults against the common good that we have all witnessed. And reviled. Every day when I start the SMW, it often feels like I'm living a scene from the life of Dorothy Parker, who greeted the world with the words, "What fresh hell is this?"

When I say delicately, Tansy, I am talking about fixing the world we live in, starting with our own back yard. The wheels of change in Washington move slowly. But when they move - they do so with great effect. That is where change must happen for equitable conditions to permeate elsewhere. Yes, we need jobs. Sustainable jobs. Growth jobs. Jobs that create what our neighbors down the street will use. Congress can do that. That is what Keynesian economics is all about. The government must direct itself on a course of stimulating economic growth through policy.

I teach the Fourteenth Amendment. Those who care to explore that Amendment learn how it has been perverted to extend immortal personhood protections to corporations. That thread is the first one to pluck. Then there is another pet movement of mine: public financing of elections to level the playing field between those who seek public office to write public policy for high-dollar interests and those who seek to serve the general good. I see this change in public policy as a long battle between the camp represented by Mitch McConnell and that represented by Bernie Sanders.

If I were to go down the list of things I would wish for in this world, and seek leverage with which to get it, our current surging throngs of jobless, sick and the homeless only create momentum for achieving these goals. Our system does not work. It never really did since every damned thing we consume just from existing has been commoditized.

You talk about "Protectionism" as a rallying cry. That is absolutely necessary. How could I disparage that? If I gauge our differences here correctly - we disagree over the precise mechanism for exacting that change on every issue. Where I would focus my attention, armed with legislative force, would be on reshaping policies that have ill-served populist causes because they were written precisely to do that. Meanwhile I seek to minimize the horrific casualties that have already set upon our good people. Like the Hippocratic Oath: "for the good of my patients according to my ability and my judgment and never do harm to anyone".

But for corporations: I see ethical standards and, if not the letter, then the spirit of laws having been violated through the tacit legitimacy of legislative action. Where I see 'violation' then I instinctively think 'remedy'. Corporation through deregulation have pursued activities over the past many decades (even earlier in our nation's history with relentless glee) that are not unlike Soviet consolidation of economic power. That must end. Like the Soviet system - our banking system has suffered a similar collapse. But that consequence is not enough to make the wrongs right. We need genuine change that will kill the immortal corporation and return the balance of societal influence to the individuals who honestly earn it.

So I believe in the power of organized labor. I believe that massive corporations like General Motors will eventually succumb to the legislative hubris and ill-intended effect they have created for themselves. I will venture that universal healthcare will become a necessity for their survival. Remember: the corporation must survive by any means, even if left to the devices of the short-sighted fools who run them. Lifting the burden of healthcare could, as they say, make for strange bed fellows in this cause. This has already been discussed openly by those whose involvement would seem anathema to the idea.

As for turning this national economy into something that it has, for only a little while, at select moments in history, been productive and of service to those who use it: our great infrastructure

I believe that by attacking all the aforementioned fronts we will finally achieve an imperfect semblance of what we would like our society to be. Consider the arc of humankind's self-empowerment. Ever since the age of Charlemagne has that arc grown with only few stumbles along the way. My greatest fear is that someday I will lament at death from never having realized even part if it.

[tclambert]

68. Thanks for the support, Tansy Gold

Always nice to here from you.

[GliderGuider]

36. Retaliatory export tariffs will cause a lot of short term pain.

With the US manufacturing base in such a parlous condition you need to import a lot of essential goods -- and that need will continue until you rebuild your base. Until you have your own capacity restored export tariffs implemented by your (erstwhile) trading partners will at the very least cause a cash hemorrhage, and may result in diplomatic ruptures as well. It may ultimately be worth the price, but we're looking at full-on global trade wars over the next decade or more.

One thing that worries me about trade wars is that if a country embargoes a truly crucial export the payback could turn military.

[Tansy_Gold]

40. So what do you offer as an alternative?

So far, all we're seeing from Washington is more of the same: tax incentives for corporations to keep importing to the US the same things we used to make here and more of them. No incentives for keeping jobs here. $$$$$ to the corporations to keep them afloat while they ship more and more and more jobs overseas. No regulation. No limitation.

Hey, sounds like a plan to me!!!!


:sarcasm:


Got any suggestions?



TG

[GliderGuider]

45. It's a Gordian knot.

I really have nothing to offer on the purely economic front. I expect that we will muddle along as we always have.

I suggest that people hone and expand their altruistic instincts to include a wider sphere of people, nations and species. I also suggest that we continue to educate ourselves about everything that's going on, and prepare ourselves to take action on what we learn -- whatever that is.

"We" don't control national and international responses, but we do control our own responses. Start there, and change your world by changing yourself. It may sound esoteric, but it's a perspective that is available to all of us regardless of our social or economic circumstances.

[Tansy_Gold]

49. Of course. You're absolutely correct.

We can do nothing. We should just give up.

Why didn't I think of that?




TG

[GliderGuider]

50. Where did I say that?

:shrug:

I just define "doing something" differently than you do. I did use the phrase "take action", after all.

The world is a system in crisis. Trying to fix a single failing component without recognizing that fact is a crap shoot at best. I think that trying to fix the economic problem in isolation is a fool's errand, unlikely to do more than delay the full-system breakdown. The more we widen our horizons, the greater our chances for success, however we define that word.

[Tansy_Gold]

70. What you said was ----

I really have nothing to offer on the purely economic front. I expect that we will muddle along as we always have.

Since what we're discussing here IS "the economic front," you're saying you have no suggestions. In other words, do what we've been doing. Do nothing in the way of change. Just "muddle along."

I suggest that people hone and expand their altruistic instincts to include a wider sphere of people, nations and species. In other words, we should not worry about ourselves. We should give of ourselves, sacrifice in other words, whether to do so is in our best interest or eventhe best interest of that "wider sphere." Since on of the aspects frequently mentioned in the wider discussio is that while Americans are losing their jobs, many of the people who are now doing the same jobs do so in virtual slavery. Since you don't seem to have a problem with that, or at least not enough of a problem to have any ideas, I guess you think it's okay?? After all, why should WE want jobs that we might take away from those 10-year-old boys who are working 18-hour-days to make hand-woven rugs? I also suggest that we continue to educate ourselves about everything that's going on, and prepare ourselves to take action on what we learn -- whatever that is. I hate to say it, but that sounds VERY "ivory towerish." Do you mind if I :puke:? Maybe you should read "Bread Givers."

"We" don't control national and international responses, but we do control our own responses. Margaret Mead would beg to differ with you. So would Upton Sinclair, Harriet Beecher Stowe, Rosa Parks, Mohandas Gandhi, even Barack Obama. Start there, and change your world by changing yourself. It may sound esoteric, but it's a perspective that is available to all of us regardless of our social or economic circumstances. Unfortunately, very few of us really have that option. We can't all go off into the wilderness, live in a cave, and subsist on nuts and berries. Even to turn the back yard into a garden requires the cooperation of a much wider and more complex network than mere family and friends and like-minded individuals: getting seeds, finding water, paying taxes on the land, procuring methods of storage. Unless you think there's some higher calling in going back to a pre-industrial lifestyle, with its attendant lack of sanitation, health care, modern tools, etc.


Yes, I'm angry. I'm angry that I allowed myself to be suckered into this claptrap. I'm angry that my altruistic side told me "Refute this bullshit for the sake of the lurkers!"

I'm not ready to live in a cave, though I do wish I had my underground house back. Nor am I ready to give up the internet and DU, both of which would go away if we returned to subsistence living.



Tansy Gold

[GliderGuider]

80. I'm not advocating going to live in caves.

Based on my last 5 years of research, I think we're looking at a tsunami of change that is going to be beyond the means of any of us to hold back, whether we are Mohandas Gandhi, Barack Obama or King Canute.

It true that individuals can have broad and deep influences on the world. But I think you'll find that for most of them the change started within themselves. Gandhi said, "Be the change you wish to see in the world", which to me means that you start by changing yourself. Rosa Parks was not seeking to become a civil rights icon, she was just tired of being pushed around, and did something personal. I can only imagine the inner change that was required for her to take the seat she did. Most of us have yet to take that first step, but instead wish to leapfrog straight to worldly influence. I suggest that most people will be more effective if they begin at the beginning.

When I speak about developing altruism, I start from the assumption that we are already very well practiced in the art of thinking of ourselves. While self-interest is obviously a healthy survival trait, we live in a very interdependent world. Others depend on me, and I on them. To forget this is to risk breaking the connections that make even personal survival possible. By including others in our sphere of self-interest we strengthen those connections and make our own survival more probable and more enjoyable. I think the deliberate development of altruism is a sign of personal maturity, and that the same applies on the larger scale, to communities and nations.

One reason I say I have no ideas is that I try not to give advice outside my areas of expertise. I do of course have ideas about what might help the world. However, I doubt that many of the things I think would help would find a sympathetic hearing here, or would be likely to help or even be attempted in the short term. For example, one thing I think might help is if government bailout money flowed into the banks from the bottom rather than the top (i.e. the government should pay off mortgages with that money). I don't have enough economic training to assess the risks and benefits of that suggestion though, and I'm damned sure that the governments around the world that are bailing out banks are not about to listen to any such populist notion.

In the past I've advocated Jubilee. I also think that the only thing that would really break down the oppressive socioeconomic system our civilization has erroneously decided on is either refusal or outright revolt, starting with a refusal to pay taxes, mortgages or credit card debt, and perhaps culminating in a few torches and tumbrels. Unfortunately, this forum seems to be dedicated to the proposition that our economic system is essentially a good thing just in need of some reforms, while I believe it irredeemably flawed. As a result there are enough perceived downsides to my attitude that pushing my agenda here would be unhelpful.

In another thread I mentioned that my avatar is the flag of Anarcho-Primitivism, the philosophy that informs my personal critique of modern civilization and how we got ourselves into this mess. Unlike most A-P's I don't advocate trying to return humanity to some pre-civilized or feral condition because that's just stupid -- for better or worse, human development is a one-way function. So that means no caves, and no renouncement of vaccinations or water treatment systems. I would point out, however, that our current western conditions have only held for the last few hundred years out of a human history many times that long (and even then over only a part of the world). Most of our time on this planet was spent in pre-industrial conditions. While most of us in the West prefer living this way, one glance back in time or even out into our world today suggests that this is not the only way humans can live and find happiness.

We in the first world are very much out of touch with large-scale suffering. Such suffering has been the lot of humanity since our time here began, but a few of us got lucky and have been able to hold the suffering at bay for a time. In fact we held it at bay for so long we forgot that our present happy state was the exception, and started to understand it as our natural right. Because of the tsunami I mentioned at the outset, we are probably about to get reacquainted with the true natural state of human existence. There will still be happiness and joy in peoples' lives though, and it will be felt all the more keenly in its contrast with suffering. Think of it as a restoration of the natural balance of joy and suffering. Yin and Yang.

This may sound like ivory-tower claptrap to you, but that's OK. It would be a boring world indeed if we all thought the same way. You will find your path, and I will find mine -- this is one of the few truly inalienable rights we have been endowed with.

I hope this clarifies my position a bit.

[tama]

53. Hey Al,

lost your sword? :)

But you speak the truth. (Re)localising production starts with one's self, the backyard (e.g. turning it into a garden) and the closest community. Both metaforically and concretely.

[GliderGuider]

54. ??

Al? I don't get the reference, unless you're thinking of someone else. I don't think I've ever owned a sword...

Paul

[tclambert]

69. Gordian knot, Alexander the Great.

The story was whoever could undo the Gordian knot would rule the world. Al didn't untie it, he took a sword and sliced it. He cheated. But he did end up ruling all the world they had on their Google maps, and then some.

[GliderGuider]

71. D'oh! I knew that....

:blush:

[Hannah Bell]

72. Look, if you have no assets & no access, changing your attitude = dying with a smile.

Thirty years of that propaganda, it's the modern version of "Jesus will provide."

[Tansy_Gold]

77. >>>>

:thumbsup:


:yourock: Hannah Bell!

[Hannah Bell]

79. you must be one of the few on DU who thinks so, but thanks. glad i'm not

alone in the funhouse that is modern america.

[GliderGuider]

81. We are all going to die. Is it better to die wearing a smile or a scowl?

:shrug:

[ozymandius]

2. Today's Reports

08:15 ADP Employment Change Jan
Briefing.com -525K
Consensus -515K
Prior -693K

10:00 ISM Services Jan
Briefing.com 39.5
Consensus 39.0
Prior 40.1

10:30 Crude Inventories 01/30
Briefing.com NA
Consensus NA
Prior 6.2 mln

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

[UpInArms]

21. U.S. Jan. ADP employment index down 522,000

01. U.S. Jan. ADP employment index down 522,000
8:15 AM ET, Feb 04, 2009

let's see how far off from reality this always wrong report is

:eyes:

[tclambert]

26. I heard job losses in January were 700,000

That was a report from last evening.

[UpInArms]

32. Layoffs surge to highest level in seven years

http://www.marketwatch.com/news/story/Layoff-announcements-surge-highest-level/story.aspx?guid=%7B927AF7BE%2D8601%2D432E%2D96CC%2DDC70070B49A7%7D

WASHINGTON (MarketWatch) -- Major U.S. retailers slashed their payrolls in January, helping to push the total number of corporate announced layoffs in the month to the most in seven years, according to a monthly tally released Wednesday by outplacement firm Challenger Gray & Christmas.

Last month's layoff announcements totaled 241,749, more than three times as high as in January 2008 and 45% higher compared with December, Challenger Gray said. It was also the fourth-highest monthly total ever in Challenger Gray's records that date back to 1993, nearly matching the job cuts announced in January 2002 as well as in September and October of 2001.

January is typically the biggest month of the year for job-cut announcements. The figures are not seasonally adjusted.

For all of 2008, major companies announced 1.2 million job cuts.

Retailers cut 53,968 positions in January, the most ever for the retail sector and the third highest monthly total for any industry. Most of the retail layoffs came in high-profile reductions at Circuit City, which is being liquidated, and at Home Depot (HD: 21.92, +0.35, +1.6%) and Starbucks (SBUX: 9.83, +0.38, +4.0%).

Retailers reported their worst holiday sales season in decades, as consumer spending has fallen sharply for two quarters in a row -- the first declines in inflation-adjusted spending since 1991. Consumers have been hit by a triple whammy: large job losses, falling wealth, and less access to credit.

...more...

[Roland99]

47. I'll be part of that number now.

Found out I could file for unemployment and did so last Fri. Now, whether I get approved or not is another story but if so, I'll be able to last a good 6-7 months and am sure a job will pop up by then.

As for now, I just finished a 1900-mile trip across the country and am staying with a friend in Las Vegas. Maybe I'll hit it big at blackjack (doubtful. I'm more interested in going to Red Rocks than The Strip.) :-)

[UpInArms]

43. Petroleum Inventories Report:

03. U.S. gasoline inventories up 300,000 barrels last week: EIA
10:32 AM ET, Feb 04, 2009

04. U.S. distillate stocks down 1.4 mln barrels last week: EIA
10:32 AM ET, Feb 04, 2009

05. U.S. crude inventories hit 18 months high last week
10:31 AM ET, Feb 04, 2009

06. U.S. crude inventories up 7.2 mln barrels last week: EIA
10:30 AM ET, Feb 04, 2009

[UpInArms]

44. U.S. Jan. ISM services 42.9%, above consensus 39%

10. CORRECT: U.S. Jan. ISM services 42.9%, above consensus 39%
10:05 AM ET, Feb 04, 2009

(note: still in contractionary mode)

[ozymandius]

3. Oil hovers near $41 as traders mull mixed US data

SINGAPORE – Oil hovered near $41 a barrel Wednesday in Asia as investors mulled the impact of OPEC production cuts and mixed signs about the U.S. economy.

....

Other indicators pointed to a worsening slowdown. U.S. car and truck sales fell 37 percent in January, including a 49 percent drop at General Motors Corp. and 40 percent at Ford Motor Co.

....

The Organization of Petroleum Exporting Countries has promised to reduce output by 4.2 million barrels since September, and the group's leaders have hinted that the cartel could cut production more during the next few months if prices don't recover.

OPEC may be hesitant to make further output cuts because higher crude costs could prolong the global economic slowdown and undermine member nations' longer-term income from oil.

....

In other Nymex trading, gasoline futures rose 0.60 cent to $1.17 a gallon. Heating oil was steady at $1.32 a gallon while natural gas for March delivery dropped 1.3 cents to $4.50 per 1,000 cubic feet.

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

[ozymandius]

4. Panasonic warns of $4.2 billion loss, to cut 15,000 jobs

TOKYO (Reuters) – Japan's Panasonic Corp (6752.T), the world's No.1 plasma TV maker, warned it would post an annual loss of $4.2 billion and said it would cut about 15,000 jobs as it grapples with a stronger yen and slowing demand.

The maker of Viera flat TVs and Lumix digital cameras joins a growing list of electronics makers stepping up restructuring in the face of a global slump that is shaping up to be nastier than the last major downturn in 2001 after the IT bubble.

Sony Corp (6758.T), Toshiba Corp (6502.T) and Hitachi Ltd (6501.T) are all facing multibillion dollar losses, crippled by the double whammy of falling sales and a strong Japanese currency that eats into overseas profits when repatriated.

....

Panasonic said it would close 27 manufacturing sites in the current year to March, and carry out another round of plant closures of a similar scale in the next business year.

It also plans to cut around 15,000 jobs, including both full-time regular employees and contract workers. Half the cuts will be in Japan and half overseas. It has a global workforce of about 300,000 regular workers.

http://news.yahoo.com/s/nm/20090204/bs_nm/us_panasonic_results

[ozymandius]

5. Obama to detail compensation limits on executives

WASHINGTON – Call it the maximum wage. President Barack Obama wants to impose a $500,000 pay cap on executives whose firms receive government financial rescue funds, a dramatic intervention into corporate governance in the midst of financial crisis.

The new restrictions, described by an administration official familiar with the new rules, are to be announced Wednesday morning at the White House. The steps set the stage for the administration's unveiling next week of a new framework for spending the money that remains in the $700 billion financial rescue fund.

....

Firms that want to pay executives above the $500,000 threshold would have to compensate them with stock that could not be sold or liquidated until they pay back the government funds, the official said.

....

According to the official, the proposals include:

• Requiring top executives at financial institutions to hold stock for several years before they can cash out.

• Requiring nonbinding "say on pay" resolutions — that is, giving shareholders more say on executive compensation.

• A Treasury-sponsored conference on a long-term overhaul of executive compensation.

http://news.yahoo.com/s/ap/20090204/ap_on_go_pr_wh/bailout_executive_pay

[Demeter]

16. Or More Usefully, Limit Executive Pay to 10 Times the Minimum Wage

Minimum wage is $10/hour, execs. get $200,000. It would fix both ends of the equation.

[tclambert]

22. $18B in bonuses to ruin Wall Street? I coulda done it for $17B

Hell, I would've happily ruined Wall Street for $17M. (But not $17K, though I'm sure you could have found someone to do it for that little.)

On the other hand, I thought subprime mortgages were a bad idea, and loaning out so much more money than the banks actually possessed was building a house of cards. And once the foreclosure rate started up, I said, "Oh, my, we ought to try to fix this." So, maybe I wouldn't have ruined them. And they could have saved billions on my bonus, and saved taxpayers trillions. Trillions! Hey, Festivito, what's a trillion dollars per American? Was it like $3,300? About ten grand for a family of three?

[Robbien]

25. WSJ's reaction to this in their blog

It's a scary thought that the voice of the people should reign so supreme over any administration's policy initiatives, if only because history has often proven the voice of the people irrational. There are positives to this though, namely that it's going to act as a disincentive for companies to accept Fed money in the future, which will in fact probably lead to a consolidation/clearing of the finance industry. There's also the idea that in the public eye something has been done about this menacing problem: statements have been made, leaders acted, rules formulated - and in the end, that might just be enough to keep the brilliance of middle America off our backs for a little while.

The guys who helped set up the gambling casino which tanked the economy believes middle America is the one who is irrational.

[ozymandius]

6. Obama economic plan now tops $900 billion

WASHINGTON – The cost of President Barack Obama's economic recovery plan is now above $900 billion after the Senate added money for medical research and tax breaks for car purchases.

It could go higher Wednesday if a tax break for homebuyers is made more generous, even as centrists in both parties promise to clear away spending items that won't jump-start the economy right away.

In an interview on CNN, Obama signaled a willingness to drop items that "may not really stimulate the economy right now." He also signaled he'll try to remove "buy American" provisions in the legislation to avoid a possible trade war.

....

But several hours later, GOP conservatives didn't contest approval of a $6.5 billion increase in research funding for the politically popular National Institutes of Health. That amendment, by Tom Harkin, D-Iowa, drove the price tag of Obama's plan just above $900 billion.

http://news.yahoo.com/s/ap/20090204/ap_on_go_co/congress_stimulus

[ozymandius]

7. US auto sales in reverse, plunge to 26-year low

DETROIT – Automakers started 2009 in reverse.

Consumers frightened by the prospect of losing their jobs stayed away from auto showrooms again in January and sent U.S. car and truck sales falling 37 percent, a familiar refrain for the struggling industry but an unwelcome start to a critical year for U.S. carmakers.

Devastated by an economy in which few people have the spare cash to buy a car or can obtain the financing to do it, Chrysler's domestic sales for January were less than half what they were a year earlier.

Sales fell 49 percent at General Motors and 40 percent at Ford. Toyota and Nissan's sales each fell at least 30 percent.

...

With January's drop, the industry's sales have declined for 15 straight months when compared with the same month in the previous year. There hasn't been a year-over-year increase since October 2007, when light vehicle sales rose a paltry 1 percent, according to Autodata Corp. and Ward's AutoInfoBank.

http://news.yahoo.com/s/ap/20090204/ap_on_bi_ge/auto_sales

[ozymandius]

8. Toyota Recalls 130,000 US Yaris Cars

NEW YORK -- Toyota is recalling 1.3 million vehicles worldwide due to a seat belt defect. The recall includes more than 130,000 Yaris models sold in the U.S.

Toyota Motor Sales USA said it is working with the National Highway Traffic Safety Administration to recall 134,900 model-year 2006 and 2007 Yaris subcompact cars. The automaker says in severe front-end collisions, the seat belt is at risk of causing a foam pad in the vehicle to ignite.

http://www.wsbtv.com/safetyandrecalls/18584919/detail.html#-

[fasttense]

13. Come on supply-side economists, start creating that demand!

I thought all those overpaid Raygun economist told us all they had to do was create a product and then demand would follow just because the product was there. So, there are hundreds of thousands of cars just waiting to be bought up. Where is that demand? Come on create us some demand. We really need it now.

[tclambert]

23. That's the "Field of Dreams" version of economics.

"If you build it, he will come." Well, they're building cars. And they're running short of room to store them. Yet the customers stubbornly refuse to come out of the corn field. The Voice lied!

[Demeter]

37. US car sales below 10m despite discounts

http://www.ft.com/cms/s/0/e99e8514-f234-11dd-9678-0000779fd2ac.html

Annualised US car sales slipped below 10m last month in spite of steep discounts offered by carmakers and government efforts to ease lending.

General Motors’ monthly sales of cars and light trucks fell by 49 per cent last month, Chrysler’s by 55 per cent and Ford Motor’s by 40 per cent, including vehicles made by Volvo, its Swedish premium brand.


GM said it estimated the overall annualised selling rate for cars at 9.8m in the US in January, compared with 10.3m in December, and less than China’s estimated selling rate of 10.7m last month.

”This is the first time in history that China has surpassed the US,” said Michael DiGiovanni, GM’s head of global sales and industry analysis.

[ozymandius]

9. Costco Warns on Quarterly Earnings

Costco Wholesale Corp. warned that its fiscal second-quarter earnings will likely be well below consensus expectations.

The warehouse retailer said earnings per share for the quarter ending Feb. 15 are likely to come in "substantially below" the current First Call estimate of 70 cents a share.

Costco, which is due to report second-quarter results March 4, also said it won't provide earnings estimates for the rest of the fiscal year.

Chief Financial Officer Richard Galanti said in a statement that sales and margins have been hurt by general economic conditions.

http://online.wsj.com/article/SB123373710879547371.html?mod=googlenews_wsj

[AnneD]

51. I don't see that......

they got lots of my last paycheck-I mean lots (big ticket item-HD tv SuperBowl party goodies). Since Target treated me poorly, I do all my major shopping at Costco. Never been happier. The store closest to me is quite during the week but rake it in FSS.

[ozymandius]

10. Looking for the Sun (-or - How to Dive Off a Cliff without a Parachute)

Here is a 2009 prognosis from Calculated Risk

2009 will be a grim economic year. The unemployment rate will rise all year, house prices will fall, commercial real estate (CRE) will get crushed ... but there might be a few rays of sunshine too.

....

Based on the sales reports today from Ford, GM, Toyota and Chrysler, it looks like vehicle sales were below 10 million units (SAAR) for the first time since the early '80s. My estimate is vehicle sales were at a 9.2 million SAAR in January. Ouch!

....

Sales of new one-family houses in December 2008 were at 331 thousand (SAAR). This is the lowest level ever recorded by the Census Bureau (data collection started in 1963).

....

Total (single family housing) starts were at 550 thousand (SAAR) in December, by far the lowest level since the Census Bureau began tracking housing starts in 1959. Single-family starts were at 398 thousand in December; also the lowest level ever recorded (since 1959). Single-family permits were at 363 thousand in November, suggesting single family starts may fall even further next month!

More information and a little ray of sunshine, founded on hope and based on probability, are available at the link.

[Festivito]

11. Debt: 02/02/2009 10,667,963,268,393.28 (UP 35,958,021,656.31) (Jumps 46B$.)

(Last three days have been minimal, now it jumps. Good, Obama needs to get the stimulus started. I hope it works.)

= Held by the Public + Intragovernmental(FICA)
= 6,363,558,989,801.84 + 4,304,404,278,591.44
UP 46,334,807,167.90 + DOWN 10,376,785,511.59

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

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 306-Million person America.
If every American, man, woman and child puts in $3.27 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.81, ABOUT TEN BUCKS for a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is the federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)

PERSONALIZED DEBT:
Every 14 seconds we net gain a another American, so at the end of the workday of this report, there should be 305,727,172 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $34,893.74.
A family of three owes $104,681.21. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 31 days.
The average for the last 21 reports is 1,904,855,831.55.
The average for the last 30 days would be 1,333,399,082.09.
The average for the last 31 days would be 1,290,386,208.47.
There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 75 reports in 112 days of GWB's part of FY2009 averaging 8.03B$ per report, 5.38B$/day.
There were 9 reports in 13 days of Obama's part of FY2009 averaging -0.37B$ per report, -0.23B$/day so far.
There were 84 reports in 125 days of FY2009 averaging 7.66B$ per report, 5.15B$/day.

PROJECTION:
There are 1,448 days remaining in this Obama 1st term.
By that time the debt could be between 12.5 and 18.1T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
02/02/2009 10,667,963,268,393.28 BHO (UP 41,086,219,480.20 so far since Obama 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: 643,238,371,480.80 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
01/12/2009 -001,098,982,842.59 -- Mon
01/13/2009 -000,038,769,243.84 ----
01/14/2009 -000,515,208,818.51 ---
01/15/2009 +020,470,437,698.93 ------------**********
01/16/2009 -000,579,761,204.80 ---
01/20/2009 -001,254,116,733.01 -- Tue
01/21/2009 -000,225,946,840.81 ---
01/22/2009 -010,383,446,466.83 -
01/23/2009 -000,119,553,441.75 ---
01/26/2009 -001,004,948,620.76 -- Mon
01/27/2009 +000,188,054,837.85 ------------********
01/28/2009 -000,240,130,414.24 ---
01/29/2009 +014,335,901,611.96 ------------**********
01/30/2009 +007,363,512,286.86 ------------*********
02/02/2009 +046,334,807,167.90 ------------********** Mon

73,231,848,976.36 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,003,331,465,134.21 in last 137 days.
That's 1,003B$ in 137 days.
More than any year ever, except last year, and it's 99% of that highest year ever only in 137 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 137 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=3720414&mesg_id=3720425

[UpInArms]

31. Treasury says it will hit debt ceiling in first half '09

05. Treasury says it will hit debt ceiling in first half '09
9:01 AM ET, Feb 04, 2009

07. Treasury to auction new 30-yr bonds quarterly, one reopening
9:00 AM ET, Feb 04, 2009

08. Treasury to auction 7-yr notes monthly, beginning this month
9:00 AM ET, Feb 04, 2009

09. Treasury to auction $14 bln in 30-year bonds next week
9:00 AM ET, Feb 04, 2009

10. Treasury to auction $21 bln in 10-year notes next week
9:00 AM ET, Feb 04, 2009

16. Treasury to auction $32 bln 3-year notes next week
9:00 AM ET, Feb 04, 2009

17. Treasury to auction record $67 billion next week
9:00 AM ET, Feb 04, 2009

[UpInArms]

52. U.S. to auction Record $67 billion in quarterly refunding

http://www.marketwatch.com/news/story/Treasury-sell-record-67-billion/story.aspx?guid=%7B55792A97%2DD52D%2D4503%2DB749%2D72FED742DC56%7D

WASHINGTON (MarketWatch) -- The Treasury Department will auction a record $67 billion in notes and bonds next week and plans several major changes to its auction schedule as the government struggles to come up with the funds to finance a deficit expected to top $1.6 trillion this fiscal year.

In line with what the bond market expected, the Treasury said Wednesday it will auction off $32 billion in 3-year notes, $21 billion in 10-year notes and $14 billion in 30-year bonds to refund $36.3 billion in maturing securities and raise approximately $30.7 billion.

Traders in government bonds took the Treasury's announcement in stride, with yields on shorter-maturity notes rising modestly. See Bond Report.

Financing the government's needs may prove more challenging in the months ahead. In addition to the economic-stimulus package moving through Congress, the Treasury is likely to have to finance more funds to rescue the banking sector and to help homeowners avoid foreclosure.

The Treasury also said it will resume issuing 7-year notes on a monthly basis, after a 16-year absence.

Moreover, it will auction a new 30-year bond each quarter. There will be a regular reopening of the bond in the month following the initial offering, effectively amounting to eight auctions per year, up from four last year.

...more...

[Festivito]

65. Debt: 02/03/2009 10,668,643,381,356.91 (UP 680,112,963.63) (Little, mixed.)

(Back to a tiny amounts again today.)

= Held by the Public + Intragovernmental(FICA)
= 6,363,420,764,397.43 + 4,305,222,616,959.48
DOWN 138,225,404.41 + UP 818,338,368.04

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

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 306-Million person America.
If every American, man, woman and child puts in $3.27 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.81, ABOUT TEN BUCKS for a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is the federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)

PERSONALIZED DEBT:
Every 14 seconds we net gain a another American, so at the end of the workday of this report, there should be 305,733,343 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $34,895.26.
A family of three owes $104,685.77. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 to 32 days.
The average for the last 22 reports is 1,849,185,701.20.
The average for the last 30 days would be 1,356,069,514.21.
The average for the last 32 days would be 1,271,315,169.57.
There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 75 reports in 112 days of GWB's part of FY2009 averaging 8.03B$ per report, 5.38B$/day.
There were 10 reports in 14 days of Obama's part of FY2009 averaging -0.45B$ per report, -0.27B$/day so far.
There were 85 reports in 126 days of FY2009 averaging 7.58B$ per report, 5.11B$/day.

PROJECTION:
There are 1,447 days remaining in this Obama 1st term.
By that time the debt could be between 12.5 and 18.1T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
02/03/2009 10,668,643,381,356.91 BHO (UP 41,766,332,443.83 so far since Obama 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: 643,918,484,444.50 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
01/13/2009 -000,038,769,243.84 ----
01/14/2009 -000,515,208,818.51 ---
01/15/2009 +020,470,437,698.93 ------------**********
01/16/2009 -000,579,761,204.80 ---
01/20/2009 -001,254,116,733.01 -- Tue
01/21/2009 -000,225,946,840.81 ---
01/22/2009 -010,383,446,466.83 -
01/23/2009 -000,119,553,441.75 ---
01/26/2009 -001,004,948,620.76 -- Mon
01/27/2009 +000,188,054,837.85 ------------********
01/28/2009 -000,240,130,414.24 ---
01/29/2009 +014,335,901,611.96 ------------**********
01/30/2009 +007,363,512,286.86 ------------*********
02/02/2009 +046,334,807,167.90 ------------********** Mon
02/03/2009 -000,138,225,404.41 ---

74,192,606,414.54 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,004,011,578,097.84 in last 138 days.
That's 1,004B$ in 138 days.
More than any year ever, except last year, and it's 99% of that highest year ever only in 138 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 138 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=3722067&mesg_id=3722111

[ozymandius]

12. What the Hell is the Obama Administration Thinking?

As we have (and I have) said ad nauseum over the past months since this Bad Bank rescue idea starting making the rounds - there just seems to be no explaining basic economic mechanics to some people. Those people would be those who believe the rules of money do not apply to the United States because the dollar holds some "special" status (which it does, somewhat, thanks to Bretton Woods). This special status is inconsequential to the fundamental stupidity of this rescue plan. Furthermore - TPTB evidence the belief that we can do whatever we want -when- we want because we feel we can. That is the worst possible reason to do anything.

Here is Yves Smith to add more umph! and righteous outrage to this argument.

---

Yves Smith is not very pleased with the administration's bank bailout plan:

"Even Worse Than You Imagined"

The Bad Bank Assets Proposal: Even Worse Than You Imagined, by Yves Smith:

Dear God, let's just kiss the US economy goodbye. It may take a few years before the loyalists and permabulls throw in the towel, but the handwriting is on the wall.

The Obama Administration, if the Washington Post's latest report is accurate, is about to embark on a hugely costly "save the banking industry at all costs" experiment that:

1. Has nothing substantive in common with any of the "deemed as successful" financial crisis programs

2. Has key elements that studies of financial crises have recommended against

3. Consumes considerable resources, thus competing with other, in many cases better, uses of fiscal firepower.

The Obama Administration is as obviously and fully hostage to the interests of the financial services industry as the Bush crowd was. We have no new thinking, no willingness to take measures that are completely defensible (in fact not doing them takes some creative positioning) like wiping out shareholders at obviously dud banks (Citi is top of the list), forcing bondholder haircuts and/or equity swaps, replacing management, writing off and/or restructuring bad loans, and deciding whether and how to reorganize and restructure the company. Instead, the banks are now getting the AIG treatment: every demand is being met, no tough questions asked, no probing of the accounts (or more important, the accounting).

Read more here.

[Tansy_Gold]

14. It hurts to read this stuff, because we all know it's true but we can't

get anyone to listen to us.

Like many others, I'm working hard to keep my head above water in these tough times. I consider myself lucky to have a little job that doesn't pay a whole lot but it has some non-monetary compensations that suit my lifestyle. I'm frugal and barring any major catastrophes, I'm gonna be okay. But I don't have the time to sit around all day and write the letters and blog entries and other stuff that I'd like to.

And I know I'm not alone. Those of us who are going to be impacted the most and the worst by all this shit are those who are least able to do anything about it.

It's possible that nothing will change without torches and pitchforks. Perhaps I'm as delusional as TPTB in that I had hoped we might avoid that. Or perhaps my November recognition of the follies in Obama's economic advisory team was something I should have latched onto like the proverbial pit bull.

The day job calls. You know the feeling.


Tansy Gold

[DemReadingDU]

29. Spouse says same thing: There's nothing I can do

Because he says: they (Congress - Reps & Senate) are doing to do what they want based on the advice from 'the experts'. They proved it last summer when they passed the 700 billion TARP while we taxpayers were overwhelmingly against it. Unfortunately, to get the change we need, I'm afraid it is going to take a revolution with torches and pitchforks.

Kucinich gets it. All our Congressmen and Senators should be following Dennis.
G_j posted - Kucinich: Bank bailouts are an unprecedented fraud
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4975333

direct link to video
Kucinich: We Should Be Going From Golden Parachutes To Golden Handcuffs!
http://www.youtube.com/watch?v=oxHINf0ItHg appx 7.5 minutes

edit for spacing

[AnneD]

56. Morning Marketeers.....

:donut: and lurkers. At our neighbourly happy hour last night this was our topic of conversation. In the current recession/depression hubby and I are as well placed as one can be. He is security and I am education/medical. While his tabla player has a spotty income (music teacher/performer)he has no debts etc.

I think the Senate and Obama were taken aback at how angry folks were about Daschle and the others that get special treatment whether in bonuses or taxes. Obama came with a clean slate and the good will of the people. Folks are sick of this sense of entitlement. I am still burning up on that post above where those WS folks are upset that the people are having a say in how their money is spent in regards to bonuses and CEO pay. It was that sense of entitlement that has launched many a revolution so the might better take heed.

Frankly, this isn't going to be your grandfather's depression. Folks will not wait patiently in soup or bread lines while WS is living it up after they stole all the money and pissed it away. Desperate people do desperate things.

Happy hunting and watch out for the bears.

[UpInArms]

20. dollar watch

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

Last trade 85.788 Change +0.778 (+1.00%)

Further Contraction In The Service Sector Would Conflict With Bearish Dollar Outlook

http://www.dailyfx.com/story/special_report/special_reports/Further_Contraction_In_The_Service_1233725471622.html



Fundamental Outlook

The service industry is expected to have contracted for a fourth straight month with a reading of 39.1, as consumers and businesses continued to retrench in the face of a deepening recession and tight credit markets. However, last month saw a bounce from a record low of 37.3 led by a 6.6 improvement in business activity followed by new orders gaining by 4.5. may be a sign of future growth. An improvement in services, which accounts for 70% of GDP could spark a rally in equity markets which found support yesterday. The increase in risk appetite would support the bearish dollar technical outlook as the greenback would suffer from cash flows leaving the safety of U.S. Treasuries. Yet, further contraction in the sector could add to the recent downturn in stocks and push the dollar higher.

...more...

Euro Stumbles On Weak Service Sector Data

http://www.dailyfx.com/story/bio1/Euro_Stumbles_On_Weak_Service_1233746139644.html

The Euro stumbled after reaching as high as 1.3070 dropping a 100 bps down to 1.2920. The Euro-zone PMI service final reading for January slipped to 45.2 from the preliminary print of 45.5. Germany and France both saw their individual gauges revised lower which dragged on the overall index, which contracted for an eighth straight month. Meanwhile, retail sales in the region were flat for December which beat expectations of a –0.2% decline. However, the year-over-year reading fell 1.6% which was greater than the –1.4% forecasted. The lack of domestic growth will remain a weighing factor on the economy and the service sector and may prolong the current recession.

The euro/dollar has been strongly correlated with equity markets and despite the brief break due to fundamentals overnight we expect that relationship to hold. Therefore, if risk appetite continues to increase then we may see the pair look to re-test 1.3000 with a run at the 20-day SMA at 1.3980. However, upside potential may be limited with a pending ECB rate decision tomorrow. Although expectations are that the central bank will keep rates on hold, falling inflation and a deepening recession could force President Trichet to continue the current easing policy.

U.K. fundamental data continues to improve as the service PMI added to an improving outlook with a print of 42.5 after 40.2 the month prior. The small signs that the U.K. economy may be bottoming could give the BoE reason to pause its easing policy. Expectations are that the central bank will cut rates by 50 bps tomorrow. However, if Governor King signals that they may have reached an end to their easing cycle then we could see the pound continue to gain. The pound/dollar has bounce from its overnight low of 1.4330 and is now looking to test the high of 1.4460.

The dollar could remain under pressure as risk appetite continues to increase. Although, traders remain cautious equity markets the expectations that a stimulus package will ultimately pass through the Senate has fueled bullish sentiment. Today’s economic calendar may threaten that optimism as the ISM non-manufacturing gauge is expected to show further contraction to 39.0 from 40.1in the sector that accounts for 70% of GDP. Additionally, the ADP employment report is expected to show the economy lost over 500,000 jn January. The report which has been reconfigured too more closely reflect the NFP report due Friday and may provide major event risk for the dollar.

...more...

so the euro falls with its service sector falling - but... if the US service sector falls, the dollar climbs?

this is utter bullshit

[UpInArms]

27. Soros warns against 'bad bank' option - WSJ

http://www.reuters.com/article/bondsNews/idUSBNG39208920090204

Feb 4 (Reuters) - Setting up a 'bad bank' to absorb toxic assets of troubled U.S. lenders -- a move the Obama administration is debating -- would be an error on political and financial grounds, billionaire financier George Soros said.

The process would lead to difficulties in valuing toxic securities and generate covert subsidies for affected banks, generating "tremendous political resistance to any further (bailout)," Soros wrote in a commentary in the Wall Street Journal on Wednesday.

The U.S. administration is thought to be considering creating a government entity to take toxic assets off banks' balance sheets as part of a $900 billion stimulus package President Barack Obama hopes to see passed by mid-February.

European leaders are reviewing similar options -- already under discussion by the German, British and Dutch governments -- and will take their proposals to April's G20 meeting, European Union economic chief Joaquin Almunia said on Monday.

...more...

nationalize the freakin' banks - take the losses and remember - nothing is "too big to fail"

[UpInArms]

28. Fidelity title insurer cuts 1,500 jobs, has loss

http://www.reuters.com/article/bondsNews/idUSN0425366020090204

NEW YORK, Feb 4 (Reuters) - Fidelity National Financial Inc (FNF.N), the largest U.S. title insurer, on Wednesday said it cut 1,500 jobs in January, and posted a fourth-quarter loss as the housing slump drove down home sales and refinancings.

The company nevertheless said demand for new business soared in December, and in January grew more than 50 percent from December's level, an increase that reflects lower borrowing costs for customers as well as recent acquisitions.

The quarterly loss for the Jacksonville, Florida-based company was $1.7 million, or 1 cent per share, compared with a loss of $44.9 million, or 21 cents per share, a year earlier. Revenue fell 21 percent to $1.02 billion.

Analysts on average had expected a loss of 2 cents per share on revenue of $951 million, according to Reuters Estimates.

Results were the first since Fidelity National on Dec. 22 bought three title insurers, including LandAmerica Financial Group Inc's (LFGRQ.PK) Commonwealth Land Title Insurance Co and Lawyers Title Insurance Corp.

LandAmerica filed for bankruptcy protection in November after Fidelity National withdrew an offer to buy the entire company and assume more than $500 million of debt. Analysts said buying the title businesses alone made more sense.

...more...

[UpInArms]

33. EA to cut 1,100 workers; losses grow

http://www.marketwatch.com/news/story/EA-cut-1100-workers-losses/story.aspx?guid=%7B475DEAC1%2D8F8B%2D47F6%2D99EF%2D46460DE1D8BE%7D

NEW YORK (MarketWatch) - Shares of Electronic Arts Inc. rose more than 5% in premarket trades Wednesday as investors reacted well to cost-cutting plans and the outlook for the next fiscal year.

Electronic Arts Inc. said Tuesday that net losses slid deeper in its third fiscal quarter as video game sales for the crucial holiday period came in below expectations.

The video game publisher (ERTS: 16.22, +1.36, +9.2%) also announced plans to lay off 1,100 people, or about 11% of its total workforce, and close 12 facilities in an effort to reduce its costs.

EA, the force behind big-name game franchises like "The Sims," "Madden NFL" and "Need For Speed," is struggling to improve its game offerings while coping with a slumping economy that is hurting the ability of consumers to buy high-end consoles and titles.

"Although this is difficult to take apart the macro and the micro, a significant portion of the miss relates to our own performance," EA chief executive John Riccitiello said in a conference call. "Clear and simple, our titles did not perform to our expectations."

...more...

[UpInArms]

34. Panasonic facing $4.2 billion loss, pledges cuts: Electronics giant to layoff 15,000, close 27 plan

http://www.marketwatch.com/news/story/Panasonic-facing-42-billion-loss/story.aspx?guid=%7B2F50A421%2DADA5%2D4046%2DABBA%2D0D94E6B4683A%7D

HONG KONG (MarketWatch) -- Panasonic Corp. said Wednesday it will suffer a net loss of 380 billion yen ($4.2 billion) in the financial year ending next month, its biggest in seven years. It pledged to eliminate thousands of jobs and close plants, as part of efforts to restructure as it faces a stronger yen and weaker global demand.

Panasonic (JP:6752: news , chart , profile ) (PC: 12.21, +0.37, +3.1%) said it will close 27 factories, including 13 in Japan, resulting in 15,000 jobs cuts by the end of March 2010. The move was announced as Panasonic said Wednesday it will swing to a net loss of 63.1 billion yen ($709 million) in the third fiscal quarter, from a 115.2 billion yen profit a year earlier.

Speaking at a post-results press conference, CFO Makoto Uenoyama said the company was expecting further weakness in sales this quarter, following across-the-board declines in its business segments last quarter.

Underscoring how rapidly the global outlook has shifted, Panasonic had as recently as November forecast a 30 billion yen profit for the fiscal year.

Panasonic said its underlying business was pressured by a stronger yen which makes its products less competitive against rival manufacturers such as South Korea's Samsung Electronics.

...more...

[antigop]

38. Message to D.C.: It's the jobs, stupid, not tinkering with taxes

http://www.buzzflash.com/articles/analysis/608

Look into your heart, America, and ask: Why have you quit buying, or at the very least, cut back? Why are you scared? And when you find the answer, could you please tell your Congressional delegation? Preferably today?

Is your lack of confidence and change in purchasing habits due to the stock market plunge? Really? Were you in the habit of sellng stocks to make your day-to-day purchases, but now you won't do that?

Are you spending less because your home is worth less on paper than you could have listed it for a year ago? Why would that matter to anyone who was probably going to remain in place anyway while riding out this fearful downturn? Not to mention that most renters could care less about mortgage rates, home equity, or mortgage-backed derivatives.

Have you stopped spending because your bank won't loan you the money you want? How many personal purchases require a bank loan anyway?

Or ... have you quit spending because you're worried about your job? Aha! Getting closer to the truth now, aren't we?

Are you less confident today than you were six months ago that your job is secure? Most folks are. Do you feel you should leave the credit card in a drawer, cook dinners at home, postpone optional travel, defer buying a car-tv-new outift, or fill-in-your-own-blank -- because your company may be the next one to announce lay-offs?

Exactly what DU'ers on the SMW thread have said.

[antigop]

39. (Larry) Summers: Unions cause unemployment (Crosspost from GD)

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4977430&mesg_id=4977430

[Tansy_Gold]

41. .

.

[Tansy_Gold]

42. Previous post was to indicate I'm speechless, but I found

exactly 500 characters to send a note to whitehouse.gov and ask them when the bloody hell they're going to realize the issue is jobs.


other than that, I'm still speechless.

[Hugin]

46. ...

You still should've added it to your Journal.

*tsk*

[Dr.Phool]

61. More change we can make believe in.

Fire this bastard. Fire Gregg before he starts.

I'm ready to fire Obama already. I said before, that I'd be willing to give him the benefit of the doubt for a few months. He's poisoning that idea real fast.

[Tansy_Gold]

66. DITTO! DITTO! DITTODITTO!!!!!

Did I mention I agree with you?


:hi:




Tansy Gold, losing patience

[sam kane]

76. dishonesty. epic, insulting dishonesty. nt.

nt.

[DemReadingDU]

55. Possible new forum: Does DU need a "Unemployment and Recession survival" forum?

Go here to voice opinion...
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4978721

[UpInArms]

57. 2:30 EST numbers and blather

Dow 7,946.22 132.14 (1.64%)
Nasdaq 1,511.36 4.94 (0.33%)
S&P 500 830.43 8.08 (0.96%)
10-Yr Bond 2.919% 0.077

NYSE Volume 4,533,957,000
Nasdaq Volume 1,546,096,500

2:00 pm : After steadily drifting downward from its session high, the stock market has buckled to fall into negative territory. The Nasdaq has also reversed its gains; it now trades just above the unchanged mark.

The descent has been broad-based as virtually every sector in the S&P 500 slips to session lows.

Consumer staples stocks amd consumer discretionary stocks have lagged the broader market for the entire session. The two sectors are now down 2.7% and 2.1%, respectively.

Financial stocks are rading in-line with the broader market. The sector is down 0.6%.

Materials continue to sport the best gain of any sector. Materials stocks are up 2.1%, though they were up 4% earlier.DJ30 -108.00 NASDAQ +1.00 SP500 -5.35 NASDAQ Dec/Adv/Vol 1427/1194/1.39 bln NYSE Dec/Adv/Vol 1612/1378/808 mln

1:30 pm : The Nasdaq continues to outperform the other headline indices even as stocks drift downward. The Nasdaq's advance stems from leadership in large-cap tech stocks like Intel (INTC 14.26, +0.67) and Microsoft (MSFT 18.83, +0.33).

Cisco (CSCO 15.94, +0.32) is also trading higher, though it isn't necessarily providing the Nasdaq with leadership. The stock is up ahead of its quarterly announcement, which is expected to take place after the market closes. The consensus calls for Cisco to earn $0.30 per share. DJ30 -14.89 NASDAQ +19.85 SP500 +4.95 NASDAQ Dec/Adv/Vol 1093/1484/1.22 bln NYSE Dec/Adv/Vol 1184/1777/707 mln

[UpInArms]

58. Obama limits bailed-out bank CEO pay to $500,000

http://www.marketwatch.com/news/story/Obama-limits-bailed-out-bank/story.aspx?guid=%7BE10B6EBB%2D8F8A%2D461D%2D891C%2D1134821D0816%7D

WASHINGTON (MarketWatch) -- In another stern message to Wall Street, President Barack Obama announced Wednesday a crackdown on the practices of firms receiving help from the government, including capping the pay of top executives of some of those financial institutions at $500,000 a year.

"We're going to be demanding some restraint in exchange for federal aid -- so that when firms seek new federal dollars, we won't find them up to the same old tricks," Obama said in announcing the new limits at the White House.

The new rules would not apply to most banks and other financial institutions that have already received capital from a controversial $700 billion bank-bailout bill approved by Congress in October, unless they seek more funds. Already, as of Jan. 23, Treasury has allocated $294 billion of the bailout funds, most of which went to buy large minority stakes in 317 financial institutions.

The new standards would apply to banks receiving "exceptional assistance" from the government, such as American International Group Inc. (AIG: 1.04, -0.04, -3.7%) and Bank of America (BAC: 4.84, -0.46, -8.7%) . Banks now applying for help from the bailout program would face additional prohibitions such as restrictions on "golden parachutes" for executives departing their positions.

Responding to concerns about Wall Street excesses and annual bonuses in the millions of dollars, Obama said he would no longer tolerate these practices. See related commentary.

"For top executives to award themselves these kinds of compensation packages in the midst of this economic crisis is not only in bad taste, it's a bad strategy, and I will not tolerate it," Obama said.

Executives at large banks receiving exceptional assistance and new financial institutions applying for capital are having their salaries limited to $500,000.

...more...

:applause:

[Silent3]

64. That's about $485,000 too high...

...but it's a start. :)

[DoBotherMe]

59. Bump n/t

[UpInArms]

60. Lawmakers Criticize Role of SEC in Madoff Scheme

http://online.wsj.com/article/SB123376121943648081.html?mod=mktw

WASHINGTON -- The Securities and Exchange Commission was sharply criticized by both U.S. lawmakers and the fraud investigator who blew the whistle on Bernard Madoff's alleged Ponzi scheme Wednesday, describing the regulator as scared to pursue cases against top securities firms and investors.

"You are both a captive regulator and a failed regulator," Harry Markopolos said of the SEC in highly anticipated testimony to a U.S. House subcommittee.

Mr. Markopolos detailed his nine-year effort to alert federal regulators about Madoff, who is accused of engineering one of the largest swindles in U.S. history. The SEC was "unable to understand" the complex financial instruments involved in the alleged fraud, Mr. Markopolos said, and regulators weren't interested in pursuing investigations against influential firms and investors.

Mr. Markopolos also said Wednesday that he also tried to tell former New York Gov. Eliot Spitzer of Mr. Madoff's actions.

"The SEC was never capable of catching Mr. Madoff," Mr. Markopolos told a House Financial Services subcommittee.

Mr. Markopolos described his efforts in the terms of a Tom Clancy novel, sprinkling his testimony with talk of intelligence networks, the Russian mob, drug cartels and collecting information from "field operatives." He claimed he feared for his life as he sought to expose Mr. Madoff's actions, even making sure to remove his fingerprints from an envelope with Madoff information he handed to former New York Gov. Eliot Spitzer during an appearance in Boston.

"When you are zeroing out mobsters, you have a lot to fear," he said. "If would have known my name, and he had a team tracking it, I wouldn't have been long for this world."

...more...

[DemReadingDU]

73. This was great testimony!

I started a thread and some of us commented throughout the day.
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4977354

[DemReadingDU]

82. delete

already posted

[Demeter]

62. Typhoid Mary And Finding The Man Who Started The Global Recession

NOT SURE IF THIS GUY IS SERIOUS OR NOT--MY SISTER SENT IT TO ME, SO BEWARE! COULD BE AN EARLY APRIL FOOL'S JOKE.


http://www.247wallst.com/2009/02/typhoid-mary-an.html?icid=200100125x1218548795x1201182387


Some communicable diseases can be traced back to what medical researchers call "patient zero", the first carrier of an illness and often someone who has no symptoms. One of the most notorious examples of this is "Typhoid Mary", Mary Mallon, who is alleged to have spread typhoid fever in New York City and its suburbs between 1901 and 1906.

The global recession has a "patient zero", a single person who set off the series of events which may lead the economy into its greatest downturn since The Great Depression and, by some estimates, push 50 million people around the world out of jobs this year, according to The International Labour Organisation.

"Patient zero" bought a house in Stockton, California, in 2003 after getting a subprime mortgage. He defaulted on that mortgage 39 months later.

Most economists blame the collapse of the credit markets which began the recession on a drop in US housing prices and devaluing of subprime mortgage-backed securities. The Wall St. experts who created these financial instruments failed to predict how quickly low-quality mortgages would default to some extent because the national value of housing had gone up for decades. But, as defaults did rise, the value of these derivatives cascaded and the banks and other institutions which held them were required to take massive losses. At Davos, Russian and Chinese leaders attacked the US for the “failure” of regulators which allowed the spread of toxic derivatives.

Building the securities which were sold as mortgage-backed financial products was complex. Financial firms had to buy large pools of existing mortgages and develop mathematical models for the cash flows they would produce well into the future as homeowners made their monthly payments. These pools were cut into tranches with each tranche carrying a probability of how many mortgages in it would pay out to maturity and how many would fail. After these calculations were made, they were sold to banks, brokerage firms, and other financial institutions as high-yield paper. The major credit agencies gave these securities "Aaa" ratings based, in part, on the fact that nationwide home prices had not dropped in any year since The Great Depression. The notion that pools of subprime mortgages could be rated "Aaa" under any circumstance is astonishing.

In 2007, mortgage default rates, especially among subprime mortgage holders, began to climb at an unprecedented rate. Many home loans had been given to people without even a credit check or income verification. The mortgages often carried very low interest rates in their first three years which reset to much higher numbers after that period. Homeowners found their monthly mortgage payments spiking up and, in many cases, they could no longer afford to make these payments as employment fell across the economy.

At that point the original mathematical projections for the performance of mortgage-backed paper began to sharply diverge from what was actually happening. With the cash flow from many mortgage pools dropping quickly, the derivatives based on them began to lose a tremendous part of their value. The paper became so "toxic" from a performance standpoint that the trading in the instruments locked up, making them illiquid and driving down their values even faster.

Someone who took out a subprime loan in 2003 is the "patient zero" who began the great recession. In financial models, he was supposed to pay his mortgage for ten years and then sell his home. When his mortgage reset in 2006, he defaulted. The flow of his payments into the mortgage pool stopped. The differential between the real world and the Wall St derivative model moved off center by a fraction of a millimeter. Another person within the same pool defaulted the next day, and quickly the mortgage pool lost the financial yield characteristics that it was supposed to have. Tranches began to change in value, one by one. A small snow ball turned into an avalanche. On the day of this first unexpected default, the value of the other homes in its neighborhood ticked down a fraction. With each default that occurred, this drop accelerated.

Where was the recession's "patient zero" from and what were his financial circumstances? Based on where the real estate markets began to decline and where the most subprime loans where made, he was a client of Countrywide. He got a $250,000 mortgage five years ago, He did not have to put a nickel down to get the loan. The value of real estate in Stockton, California, where he bought his home had been rising at 10% a year for four years. He was a good credit risk not because of his income but because the value of the asset he bought was bound to go up 100% by the end of this decade. Two months after his mortgage reset in 2006, he lost his job. He was in default less than 90 days later.

Somewhere in the Countrywide archives are his number, phone number, and most recent forwarding address. He is still looking for permanent employment.

Douglas A. McIntyre

[AnneD]

63. Please recommend this post.......

Seems like we aren't the only one's wanting a job forum

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4979748&mesg_id=4979915

[Tansy_Gold]

67. Another option. . . . .

If someone posted a daily GD thread, similar to SMW here in LBN, related to jobs, recession survival, etc.

Just thinkin'. . . ..

[skoalyman]

78. you know free (fair) trade was fine until

our company's fired the American workers or shuttered the plants here altogether in search of work for a buck or less an hour worker over seas.Witch in turn undercut what fair free trade should have been about.(Fair) I dunno its a tangled Webb they've woven :crazy: