STOCK MARKET WATCH, Tuesday February 10

[ozymandius]

Source: du

STOCK MARKET WATCH, Tuesday February 10, 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 9, 2009

Dow... 8,270.87 -9.72 (-0.12%)
Nasdaq... 1,591.56 -0.15 (-0.01%)
S&P 500... 869.89 +1.29 (+0.15%)
Gold future... 892.80 -21.50 (-2.41%)
30-Year Bond 3.71% +0.02 (+0.62%)
10-Yr Bond... 3.03% +0.05 (+1.61%)

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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

Crime Scene Investigation
BY ROB KIRBY

Last week on Thursday February 5th, 2009, The President’s Working Group On Financial Markets held their first official soiree with former New York Federal Reserve Bank President, Timothy Geithner, installed as President Obama’s pick as Treasury Secretary.

In the spirit of “Change has come to America” and transparency, cameras were invited in for the ‘proverbial photo-op’ in what was no doubt an attempt to demystify this shadowy organization. You can see this press conference for yourself beginning at the 3:20 minute mark of this http://notcorporatemedia.com/1384/peter-schiff-lays-it-down-again">video excerpt.

Twenty-one years ago, the President's Working Group on Financial Markets was created by Executive Order 12631, signed on March 18, 1988 by United States President Ronald Reagan.

...

Over the past decade, much has been written and documented regarding claims about what the Working Group really does. While the mainstream financial press generally dismisses these activities as conspiracy theories, preferring the romantic notion that free markets really exist, the Working Group acts in concert with its agents (J.P. Morgan, Goldman Sachs et al) to:

* manipulate currencies, including precious metals
* manipulate stock markets and bond markets using various means like “moral suasion” or falsified / massaged economic data
* surreptitiously change benchmarks, utilizing data keepers like the BLS
* purchase and sale of stocks and stock idex futures
* utilize various derivatives icluding interest rate swaps in close co-ordination with Federal Reserve Open Market Operations.

Taken together, these activities are more akin to Central Planned “economies” than that espoused by free markets and the Constitution for the United States of America.

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

[Festivito]

Debt: 02/06/2009 10,717,280,371,345.89 (DOWN 717,751,941.81) (Tiny.)

(Yesterday was big, today, not so much. In fact, downright tiny.)

= Held by the Public + Intragovernmental(FICA)
= 6,410,361,244,733.45 + 4,306,919,126,612.44
UP 340,839,567.98 + DOWN 1,058,591,509.79

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 305,751,858 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $35,052.22.
A family of three owes $105,156.65. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 31 days.
The average for the last 23 reports is 3,428,461,958.78.
The average for the last 30 days would be 2,628,487,501.73.
The average for the last 31 days would be 2,543,697,582.32.
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$/day.
There were 13 reports in 17 days of Obama's part of FY2009 averaging -0.16B$ per report, -0.01B$/day so far.
There were 88 reports in 129 days of FY2009 averaging 7.87B$ per report, 5.37B$/day.

PROJECTION:
There are 1,444 days remaining in this Obama 1st term.
By that time the debt could be between 12.7 and 18.5T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
02/06/2009 10,717,280,371,345.89 BHO (UP 90,403,322,432.81 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: 692,555,474,433.40 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ---
02/04/2009 -000,068,491,025.50 ----
02/05/2009 +046,668,131,793.54 ------------**********
02/06/2009 +000,340,839,567.98 ------------********

101,216,627,113.98 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,052,648,568,086.82 in last 141 days.
That's 1,053B$ in 141 days.
More than any year ever, including last year, and it's 103% of that highest year ever only in 141 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 141 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=3729884&mesg_id=3729891

[Festivito]

190. Debt: 02/09/2009 10,717,726,200,848.14 (UP 445,829,502.25) (Tiny again.)

(Two tiny days, one up, today down.)

= Held by the Public + Intragovernmental(FICA)
= 6,409,788,263,996.47 + 4,307,937,936,851.67
DOWN 572,980,736.98 + UP 1,018,810,239.23

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 305,770,372 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $35,051.55.
A family of three owes $105,154.66. (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 5,141,315,868.62.
The average for the last 30 days would be 3,598,921,108.03.
The average for the last 31 days would be 3,482,826,878.74.
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$/day.
There were 14 reports in 20 days of Obama's part of FY2009 averaging -0.24B$ per report, -0.13B$/day so far.
There were 89 reports in 132 days of FY2009 averaging 7.79B$ per report, 5.25B$/day.

PROJECTION:
There are 1,441 days remaining in this Obama 1st term.
By that time the debt could be between 12.7 and 18.3T$.
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)
02/09/2009 10,717,726,200,848.14 BHO (UP 90,849,151,935.06 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: 693,001,303,935.70 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ---
02/04/2009 -000,068,491,025.50 ----
02/05/2009 +046,668,131,793.54 ------------**********
02/06/2009 +000,340,839,567.98 ------------********
02/09/2009 -000,572,980,736.98 --- Mon

101,223,407,581.80 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,053,094,397,589.07 in last 144 days.
That's 1,053B$ in 144 days.
More than any year ever, including last year, and it's 104% of that highest year ever only in 144 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 144 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=3731483&mesg_id=3731489

[ozymandius]

2. Today's Report

10:00 Wholesale Inventories Dec
Briefing.com -0.7%
Consensus -0.7%
Prior -0.6%

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

[UpInArms]

183. U.S. wholesale inventories post record fall in Dec - down 1.4%

http://www.reuters.com/article/economicNews/idUSN1028314320090210

WASHINGTON, Feb 10 (Reuters) - U.S. wholesale inventories plunged by a record margin in December and sales dropped, a government report showed on Tuesday, suggesting that the economy contracted even more than initially estimated in the fourth quarter.

A $6.2 billion build-up in inventories had helped to mask the magnitude of the economy's weakness in the fourth quarter.

The Commerce Department said wholesale inventories plummeted by a historic 1.4 percent in December and wholesale sales fell 3.6 percent.

"It turns out inventories were a bigger drain on fourth-quarter GDP than in the last round. For GDP it's looking like the ultimate outlook will be closer to what economists had expected before the advance report," said Mike Englund, chief economist at Action Economics in Boulder, Colorado.

The government last month had reported fourth-quarter GDP fell 3.8 percent, the fastest decline in nearly 27 years. Analysts had forecast a 5.4 percent contraction.

The shift in inventories added 1.3 percentage points to the change in GDP, meaning the economy would otherwise have contracted by at least 5 percent.

The Commerce Department on Tuesday also revised the November figure on wholesale inventories to a decline of 0.9 percent, compared with its previously reported 0.6 percent fall.

...more...

[ozymandius]

3. Oil below $40 as investors eye US stimulus

SINGAPORE – Oil prices languished below $40 a barrel Tuesday in Asia even as investors looked to a massive U.S. stimulus package as a possible tonic for flagging crude demand.

Light, sweet crude for March delivery rose 42 cents to $39.98 a barrel by afternoon in Singapore on the New York Mercantile Exchange. The contract fell 61 cents overnight to settle at $39.56.

The Senate passed an $838 billion economic stimulus bill in a key test vote Monday, setting up final approval on Tuesday. The plan will then have to be reconciled with an $819 billion package from the House of Representatives.

.....

"The oil market is on its knees demand-wise," Pervan said. "The economic direction is downwards and oil is very leveraged to the health of the economy."

In other Nymex trading, gasoline futures rose 1.18 cents to $1.26 a gallon. Heating oil gained 0.72 cent to $1.36 a gallon, while natural gas for March delivery fell 2.7 cents to $4.78 per 1,000 cubic feet.

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

[UpInArms]

54. March crude up $1.48, or 4%, to $41.06 a barrel on Globex

05. March crude up $1.48, or 4%, to $41.06 a barrel on Globex
8:31 AM ET, Feb 10, 2009

[Hugin]

80. ... and gasoline at the pumps is back up to almost two bucks a gallon.

I'm tellin' ya... During a depression it's easy to tell the 'wants' from the 'needs'.

They'll be throwing the 'wants' at you, but, the 'needs' will become un-affordable.

Look for gouging on the staples...

Food.
Energy.
Housing.

[Demeter]

175. Our gas Went Down to $1.79

although in the high end of town it's 20 cents more. the refineries are shutting down for maintenance--routine, they say--hope they aren't planning to convert over to summer gas already. It may have hit 60F today, but there's snow in the forecast....

It's nice to see the grass and roofs and pavement and roads again, even if they are full of massive tire-killing potholes.

[ozymandius]

4. European stocks slip, with all eyes on Washington

LONDON (AFP) – European stock markets slid Tuesday, reversing recent gains, as cautious investors awaited news from Washington on a major US financial recovery plan and a huge economic stimulus package.

Tokyo dipped slightly in earlier Asian trade as dealers eyed a key US Senate vote on the 800-billion-dollar stimulus package, after Wall Street ended little changed overnight.

In morning European deals, London's FTSE 100 index of leading shares sank 1.45 percent to 4,245.01 points, Frankfurt's DAX 30 shed 1.68 percent to 4,588.65 points and in Paris the CAC 40 dropped 1.51 percent to 3,087.42.

The DJ Euro Stoxx 50 index of leading eurozone shares lost 1.52 percent to 2,313.34 points.

http://news.yahoo.com/s/afp/20090210/bs_afp/stocksworld_20090210104223

[ozymandius]

5. UBS cuts jobs after record ($7.1 B) loss

ZURICH (Reuters) – UBS posted the biggest ever annual loss for a Swiss firm on Tuesday, but said client withdrawals reversed in January and it will axe 2,000 more jobs as it restructures to focus on wealth management.

UBS reported a 8.1 billion Swiss franc ($7 billion) net loss in the fourth quarter, missing a Reuters poll forecast for 7.1 billion. UBS's loss for 2008 came in at 19.7 billion Swiss francs, above analysts' predictions for 18.7 billion francs.

The quarterly loss came on the back of a hefty 8.8 billion Swiss franc trading loss, as well as charges it made after selling billions in toxic assets to the Swiss National Bank when it was rescued by the state in October.

Chief Executive Officer Marcel Rohner told journalists that the world's biggest wealth manager was not paying a 2008 dividend but still aims to return to profit in 2009 after seeing some positive signs at the start of the year.

....

UBS said it was continuing to cut the size of its troubled investment bank, saying it aimed to bring its total staff to about 15,000 from 17,171 now.

http://news.yahoo.com/s/nm/20090210/bs_nm/us_ubs_results

[Demeter]

6. Big U.S. banks dominate COMEX gold, silver: Got Gold Report

http://www.stockhouse.com/Columnists/2009/February/9/Big-U-S--banks-dominate-COMEX-gold,-silver--Got-Go

Strongly positioned for lower gold prices, not so much for silver

ATLANTA -- The very largest traders for gold and silver are, wouldn’t you know it, big U.S. banks. It looks like a few big banks, some of the same ones whose brilliant management helped spawn a global financial crisis, have the largest positioning in gold and silver futures. As of February 3, their positioning in gold and silver futures was big all right – big and short the market for gold, somewhat less short silver comparatively speaking.

A short position means the trader profits if prices fall.

Bank participation in the COMEX

According to the monthly CFTC Bank Participation in Futures and Options Market report released Friday, February 6, two large reporting U.S. banks held zero long and 27,189 short futures positions in COMEX silver futures as of February 3. All commercial traders as a group held a net short silver position of 33,173 contracts that same day; so just two banks held 81.96% of all the COMEX commercial net short positioning for silver.

It should be obvious that these two very large banks could exert a disproportionate share of influence on the small silver futures market if they were so inclined. When just two traders are allowed by the Commodities Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) to accumulate so massive a position that it constitutes an overwhelmingly large percentage of the action; when the authorities allow just two banks to literally dominate a market with the weight of their own trading, traders are left to speculate on what the largest traders are going to do instead of concentrating on the supply/demand fundamentals and legitimate price discovery.

Isn’t that the equivalent of subjects wondering what price the King will decree rather than citizens all haggling in their own self interest to determine a market price? Or, as one trader put it recently, is the COMEX silver market waiting on JP Morgan Chase to show its hand or make a move?

In fairness, it is quite possible that the positions taken by the banks are for the most part legitimate hedges, offsetting corresponding positions in markets outside the COMEX. However, the sheer size of the positions taken by just two banks raise questions as to the legitimacy of the price discovery process on the COMEX, division of NYMEX.

Intuitively, it should be plain to anyone that positions of overly large size could compel defensive, rather than passive, action on the part of the position holders regardless of whether or not they are hedges.

For gold, the bank positioning is similar. Although not quite as dominant as in silver, just three U.S. banks held a collective net short position of 111,190 contracts while all commercial traders as a group reported a net short positioning of 177,589 contracts. So, three U.S. banks represent a shockingly large 60.57% of all the commercial net short positioning on the COMEX for gold.

From January 6 to February 3, the three banks added 27,367 contracts or 34% to their net short positioning as gold rose $37.09 or 4.3% from $864.16 to $901.25. That is about an 8:1 ratio, meaning the banks strongly expect lower gold prices.

Again, the very large commercial net short positioning doesn’t necessarily mean that the commercials are “right.” It just signals clearly what they are positioning for.

Some analysts assume that the banks can actually drive prices lower temporarily if they don’t get what they expect. If true we have to wonder then why they haven’t done so before now? Or if, perhaps, “they” have been doing that all along. We’ll see, but back in October 2005, gold reached an obvious technical resistance zone in the $470s and the big commercial traders took a then staggeringly large net short position of 212,714 contracts, or a huge 57.36% of all open contracts.

Obviously they were even more convinced then, in October 2005, that gold was poised to plunge. As we all know now, gold did indeed pull back $20 or so by November 2005, just before it exploded higher by 55% to $730 the following May.

The point of that anecdote is twofold. First, the commercials are big yes, influential, yes, but infallible they are not. The other point is that although a very high LCNS is usually short-term bearish it can, every so often, be high octane rally fuel if a meaningful and convincing runaway breakout rally gets underway.

Got Gold Report Charts

2-year weekly gold

2-year weekly silver

3-year weekly HUI

2-year weekly Gold:HUI ratio

End notes

Since so many of the smaller resource companies were summarily dumped for any price in panic or to take tax losses at the end of last year, we have all been presented with the rare situation where even the most promising of the lot were reduced to ridiculously low levels. Precisely the kind of the companies Gold Newsletter focuses its attention on for subscribers.

Out of that panic and chaos; from that frightening once-in-a-generation equity collapse experience, comes the seeds of tremendous opportunity in the beaten up small resource company environs. Great fortunes can be made by the careful deployment of modest sums of high-risk capital in such an environment. This report strongly believes that right now is the time to be positioning for resurgence and eventual recovery as a little confidence is beginning to return to our favorite segment of the capital markets.

That’s it for this excerpt of the full Got Gold Report. GoldNewsletter.com subscribers enjoy access to all the Got Gold Report technical analysis and commentary as well as Brien Lundin’s timely advice and analysis of specific resource companies.

Until next time, as always, MIND YOUR STOPS.

The above contains opinion and commentary of the author. Each person should study the issues carefully and, as always, make their own informed decisions. Disclosure: The author currently holds a long position in iShares Silver Trust, net long SPDR Gold Shares and holds various long positions in mining and exploration companies.

ABOUT THE AUTHOR
Gene Arensberg

A land developer, professional numismatist, self-taught bullion trader and investor since 1980, Gene Arensberg analyzes technical and fundamental developments in the precious metals markets. In 2000 Gene started sharing his own market research with fellow traders and fund managers. Those email reports evolved into his popular Got Gold Report, a biweekly look at important indicators for gold and silver published on the web.

Gene’s more in-depth market reports, insights and trading ideas are a new feature for subscribers of the very popular Gold Newsletter (GNL). GNL is edited and published by Jefferson, Louisiana based Jefferson Direct, Brien Lundin, President. Brien hosts the acclaimed New Orleans Investment Conference each year which has brought investors together with some of the best and most sought after financial experts and investment authorities in the world for over three decades. For more information visit GoldNewsletter.com or New Orleans Investment Conferences.

[ozymandius]

7. SCENARIOS - Geithner's plan for U.S. financial stability - SHIT!

(Reuters) - U.S. Treasury Secretary Timothy Geithner on Tuesday will announce a plan to take $500 billion (338 billion pounds) in bad assets off the books of struggling banks and expand a Federal Reserve program to support up to $1 trillion in asset-backed securities, according to sources.

Geithner is scheduled unveil the plan at 11 a.m. (4 p.m. British time). Following is a look at the plan -- the Obama administration's approach to tapping the second half of the government's $700 billion financial bailout fund -- as described by sources.

FUNDING FED PROGRAM

The Treasury will use some of the remaining bailout funds to help the Fed expand a program that had been set up to support consumer and small business lending.

http://uk.reuters.com/article/topNews/idUKTRE51924N20090210

[ozymandius]

13. Geithner’s Bank Rescue May Determine Effectiveness of Stimulus

The only way this plan will work is if the banks are pre-privatized. That is, by another name, nationalized. Only a fool or an accomplice will throw such a massive amount of money at the banks and hope for the best.

---

....

The financial-rescue plan that Treasury Secretary Timothy Geithner will unveil today may determine how effective the stimulus will be. Without the ability to borrow to invest in new business projects, or credit for purchases of new cars, homes and appliances, companies and households won’t be able to follow through on Obama’s tax cuts and spending programs, analysts said.

....

After weeks of debate, the Treasury today will announce a fresh round of injections of taxpayer funds into banks, an expanded Fed-led effort to spur consumer and small-business loans and an initiative to address the toxic assets clogging banks’ balance sheets. Geithner speaks at 11 a.m. in Washington.

Private Capital

It’s unclear how successful Geithner’s plan will be in restarting markets. One of the ideas is to bring private investors into a so-called aggregator bank that would buy devalued securities, according to people familiar with the matter.

The illiquid securities, mainly tied to mortgages, have spooked investors away from putting new money into banks and made lenders loath to extend new credit. Rather than borrow at the Fed’s target rate for overnight funds -- now as low as zero percent -- to lend, banks have instead parked a surplus of $793 billion of cash at the central bank itself.

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

[ozymandius]

20. Geithner Bank Bailout Plan: Fiasco

That one word assessment of the Geithner plan, as previewed in the New York Times tonight, comes from reader Scott, and is good enough to print.

I am so disgusted with this entire proceeding that I am going to dispatch it quickly.

Let's start with the basics. The US banking system is insolvent. Got that? Insolvent. That does not mean every bank in the US is toast, in fact quite a few are probably just fine, and another large group is no doubt hurting and undercapitalized, but a couple of years of not shooting themselves in the foot again would enable therm (via earnings) to rebuild their equity bases sufficiently to proceed more or less as normal.

The problem is that a significant portion of the very biggest banks are insolvent. And on top of that, most of them have very large capital markets operations which have bean the nexus of credit intermediation. The regulators spent the last decade plus being in studious ignorance of those businesses, at least the complicated ones where all the risk resided. The SEC never was very interested in bonds, and the Fed took a hands-off, "let a thousand flowers bloom" approach to risk management, derivatives and what was called innovation. Author and market observer Martin Mayer warned "a lot of what is called innovative is simply a way to find new technology to do that which was forbidden with the old technology."

But the history of major banking crises unambiguously shows that insolvent financial institutions need to be resolved. There are variations on the theme: the government can take them over and recapitalize them, clean them up and re-sell them, a la Sweden; you can wipe out equity investors and bondholders; you can try new twists, like various good bank proposals that have surfaced lately (making new entities out of the deposits and good assets and leaving the dreck with the existing bond and shareholders). While there would be many important details to be sorted out, this is not path breaking, except in the scale at which it needs to occur. And now, having had four actute phases of a credit crunch, the Fed and other central banks have plenty of liquidity facilites ready to deal with any initial overreaction. Rest assured, although radical measures would not be pleasant or easy, there are plenty of models and precedents.

But...here we have another scowling Treasury secretary, with a bit more hair than his predecessor, serving up the same fatally flawed approach as before: let's just throw money at the banks and hope they get better. This is tantamount to using antibiotics to treat gangrene. You waste good medicine and the progression of the rot threatens to kill the patient.

.....

Now to get to the punch line, let us turn to the New York Times. The headline "Geithner Said to Have Prevailed on Bailout," is already bad news, since as we have discussed, Geithner is a living, breathing example of cognitive regulatory capture. But here is the troubling bit:

In the end, Mr. Geithner largely prevailed in opposing tougher conditions on financial institutions that were sought by presidential aides, including David Axelrod, a senior adviser to the president, according to administration and Congressional officials.

Mr. Geithner, who will announce the broad outlines of the plan on Tuesday, successfully fought against more severe limits on executive pay for companies receiving government aid.

He resisted those who wanted to dictate how banks would spend their rescue money. And he prevailed over top administration aides who wanted to replace bank executives and wipe out shareholders at institutions receiving aid.

Because of the internal debate, some of the most contentious issues remain unresolved.

In other words, Geithner followed the Paulson script of pushing hard to make the bailout industry friendly, to the extent of compromising the effort to get the plan fleshed out in adequate detail.

http://www.nakedcapitalism.com/2009/02/geithner-bank-bailout-plan-fiasco.html

[Tansy_Gold]

30. May I?

[girl gone mad]

25. It's a nightmare, ozy.

According to the times, TARP 2.0 is going to provide an initial $250 billion to $500 billion just to "acquire soured mortgage-related assets from banks".

That's at least $100B more than the market cap of our 4 largest banks combined.

Can you say bad deal?

Worse, the limits on executive compensation are essentially gone, and the execs. who wrecked our economy and then used the TARP 1.0 money on bonuses, retreats, jets and hookers get to stay. Shareholders are off the hook, too.

What are these fools thinking? Do they actually want to see blood in the streets?

[ozymandius]

27. At this point - I don't know what they want.

Reason has been abandoned for madness. These actions from the Treasury further the poor examples set during the go-go deregulatory days. Here the massive sums, as you point out, exceed the banks market capitalization. Yeah, sure, that's going to end well.

I am so damned frustrated by these actions from the beltway bubble gang.

[DemReadingDU]

46. All they are doing, is delaying the collapse

Because I think the real issue, is to transfer as many of our tax dollars to the banksters before it all comes to a complete stop.

[Demeter]

28. It's a Demonstrated LACK of Thinking and It Will Lead to Blood in OUR Streets

Usually the citizens of modern "Rome" are satisfied by blood in foreign streets. Pretty soon, they will get to see their own blood in 3-D living color, painting the boulevards. That protest at the bankers' front doors wasn't for publicity or solidarity.

I don't usually get so apocalyptically prophetic in the morning...Tansy is rubbing off on me.

[Tansy_Gold]

33. Well, I'm good for something, I guess

Maybe it's time to re-read Tuchman's "The March of Folly."

:shrug:

[Demeter]

35. The Farts Of Compromise; Hacking The Stimulus

http://informationclearinghouse.info/article21942.htm

Old Politics Undercuts the New As the Senate Reverts To Horse Trading

By Danny Schechter

February 09, 2009 "Information Clearinghouse" -- -It became clear Friday night that our economy may not recover until our politics do.

To President Obama, the delays and endless Congressional carping about his recovery plan was “inexcusable.” He was reduced to reading the latest unemployment numbers aloud as if to say, ‘what world are you guys in?

“Last month, another 600,000 Americans lost their jobs,” Mr. Obama said. “That is the single worst month of job loss in 35 years. The Department of Labor also adjusted their job loss numbers for 2008 upwards, and now report that we have lost 3.6 million jobs since this recession began.”

The President didn’t mention the Center for Responsible Lending’s new counter, ticking off a new foreclosure every 13 seconds. Credit card defaults are at an all time high. There are fears that the bond market could be next to go with the dollar playing demolition derby.

By every standard and statistic, we have not yet hit bottom but, somehow, even in the midst of a national crisis, we can’t transcend the predictable tax cuts vs. spending debate.

So it’s checkmate mates, as paralysis replaces analysis. Is inaction better than action? Will spending do more harm than good? Gag me with a spoon.

In the end, a deal was done. But as Politico.com reported, “The revised bill must pass the Senate, where some Republicans are still threatening a filibuster, and the House, where Democrats may not be happy with the concessions.”

Prediction: it will get done but no one will be happy with the final version.

The problem is that this debate is really not about facts but posturing in the political game of hardball polarization that the right plays so well in the absence of having anything to stand for. It’s only about power and says, “you need us buddy, and you need to do what we want, or else you don’t get what you want.”

With Rahm Emmanuel brokering compromises and chipping away at the solid wall of Republican bluster, the Dems gave up some of Obama’a promised middle class tax breaks in a bill downsizing government spending—which is, as the president noted, what a stimulus is. In the end, GOP favored tax cuts made up 42% of the measure, roughly proportional to the number of seats they hold. This was politics, not principle, at work. .....$91,918,000,000.00 sacrificed. $25,200,000,000.00 in green energy cuts that will only help to decrease our addiction to foreign oil and create many new jobs.

You can bet that the States, led in many cases by GOP Governors, will be back to get help to prevent a deeper disaster. So, this whole psychodrama was mostly a symbolic showdown. And, to please whom? My guess: The rabid right-wing talk radio wing of the Republican Party. You know who they are.

....
At the heart of the problem is the fact that liberals and labor have no media outlets to depend on while the right does. There’s far more institutional support for counterrevolution than Obama’s reformist change agenda, moderate as it is.

Lost in the rhetoric are real issues about what kind of economy we want to save. Is the goal just to return to the corruption of the status quo ante? Political scientist, Ben Barber, author of ‘CONSUMED,’ fears that may be what they are pushing:

"Prime the pump. Let's get people getting those credit cards again. Let's get people to the mall. Let's get people spending again. Back in 2001, after the terrorist attack in America, President Bush said, ‘let's get back to the mall and get back to doing that good American thing of shopping.’ Unfortunately, the new economic team of the new president may be saying somewhat the same thing.”

Are they? Let’s hope not, but they certainly haven’t said much about outrageous credit card finance and interest charges. They don’t seem to be putting money into jobs to fix up neighborhoods or community institutions, or strengthen credit unions or co-ops. There are no programs like FDR’s WPA or CCC. Building roads does not a recovery make. The potholes are in our politricks.

It’s almost as if we may be screwed, no matter what happens; no spending or lots of spending. We are certainly screwed if we sit on the sidelines, restrain our outrage and let others dominate a debate that belongs in the past. This one should be about the future, our future.

News Dissector Danny Schechter blogs for Mediachannel.org. His new book, ‘PLUNDER: Investigating Our Economic Calamity and the Subprime Scandal,’ details “our economic calamity.” (Cosimo Books via Amazon.com) Comments to: [e-mail]

[Demeter]

40. FACTBOX: Where has the U.S. bailout money gone?

http://www.reuters.com/article/idUSTRE5162DI20090207

The Treasury said on Friday it has disbursed $295.02 billion from the Troubled Asset Relief Program but has made further pledges that would leave it with about $320 billion to tap.

Following is an outline of TARP funds spent or pledged so far:

-- $250 billion pledged for purchases of senior preferred shares and warrants in banks and thrifts under the Capital Purchase Program.

In the most recent report on TARP transactions through January 30, the Treasury said it has completed equity purchases totaling $195.33 billion in 359 institutions.

-- $20 billion pledged for Bank of America (BAC.N) as part of a package in which the government agreed to share in losses on $118 billion of assets. The $20 billion is in addition to $25 billion for the bank disbursed under the $250 billion Capital Purchase Program.

-- $20 billion investment in Citigroup (C.N) as part of a package in which the government agreed to share in losses on $301 billion of assets. In addition to the $20 billion investment, the Treasury agreed to cover up to $5 billion in losses on the portfolio with TARP funds.

-- $40 billion investment in troubled insurer American International Group (AIG.N).

-- $20.9 billion to prop up the U.S. auto industry. The amount is made up of $10.4 billion in loans to General Motors Corp (GM.N), including $1 billion for GM to help its financing affiliate GMAC reorganize as a bank holding company; a $4 billion loan for Chrysler LLC CBS.UL; a $5 billion direct investment in GMAC; and a $1.5 billion loan for Chrysler Financial. GM could also qualify for a further loan of $4 billion in March.

-- $20 billion pledged to cover potential losses for a Federal Reserve program aimed at improving consumer access to credit.

For details on money already disbursed and recipients, see www.treas.gov/initiatives/eesa/transactions.shtml.

[AnneD]

72. My two cents about the stimulus package....

using non economic terms.......It's like an inexperienced bride groom on his wedding night. He keeps stimulating the wrong hole and wonders why he doesn't get the results he and his bride wants.

[Dr.Phool]

95. Probably wonders why it tastes like shit!

:rofl: :rofl: :rofl:

[AnneD]

142. I knew I could count on you......

to take the low road with me..... :rofl::rofl::rofl::rofl:

[Dr.Phool]

161. It's always nice to have good company.

:hi:

[Demeter]

176. One Could Continue the Analogy, But Please Don't!

The mind boggles.


As if the PTB gave a shit what the "bride" felt or wanted....selfish bastards!

[AnneD]

199. Maybe it would get more people's.....

attention.

[ozymandius]

8. SEC Reaches Deal With Madoff

The Securities and Exchange Commission announced an agreement with disgraced money manager Bernard L. Madoff that could eventually force him to pay a civil fine and return money raised from investors.

The partial judgment, which renders permanent a preliminary injunction that froze Madoff's assets after his arrest in December, must be approved by the federal judge overseeing the case. The civil proceeding is separate from the criminal case against the prominent Wall Street figure, who is accused of bilking $50 billion from investors.

http://www.washingtonpost.com/wp-dyn/content/article/2009/02/09/AR2009020903410.html

---

Criminal proceedings are still pending.

[Demeter]

37. If They can Clean Up Madoff So Neatly and Fairly, Why Can't They Handle Citi and Morgan and BOA?

these idiot banks did much the same kind of thing--unwind them, prosecute, put them out of business.

Nobody suggested bailing out Madoff.

[Hugin]

70. Isn't the idea NOT to make deals with Ponzi Schemers?

Sometimes I can't believe what I see... :eyes:

[Demeter]

9. France unveils €6bn auto sector bail-out

http://www.ft.com/cms/s/0/68f24efa-f694-11dd-8a1f-0000779fd2ac.html

By Ben Hall in Paris

Published: February 9 2009 11:13 | Last updated: February 9 2009 18:22

The French government on Monday agreed to give Renault and Peugeot-Citroën €3bn ($3.9bn) each in preferential loans in return for maintaining jobs and sites in France in the biggest, most controversial auto industry bail-out so far in Europe.

Under the scheme Renault Trucks, owned by Volvo, will also get a loan of €500m, suppliers will get loans of €600m and the financing arms of the two carmakers will receive loan guarantees of €2bn. Direct loans to carmakers will be for up to five years at 6 per cent interest.

In return, President Nicolas Sarkozy said the carmakers had made a “very important” commitment to keep production in France “to do everything to avoid compulsory redundancies”, a formulation leaving them some scope to restructure.

Mr Sarkozy triggered a furore in the Czech Republic and Slovakia last week when he urged Peugeot-Citroën to close its factories in those countries. But he did not repeat that call, let alone make it a condition of aid.

Carmakers on Monday welcomed the package. The money would finance the vast stocks built up over the summer and autumn, when car sales abruptly collapsed.

The bail-out is particularly crucial for heavily indebted Renault, whose credit rating is under threat owing to the high rate of cash burn since the autumn.

Nissan Motor, the Japanese carmaker 44 per cent owned by Renault, said earlier on Monday it would eliminate 20,000 jobs and that it had abandoned hopes of earning a profit this year....

[Ghost Dog]

68. Car sector 'catastrophe' now global - Peugeot head

Tue Feb 10, 2009 6:56am EST PARIS, Feb 10 (Reuters) - The auto industry is caught up in a catastrophe that has spread across the globe as even the key emerging markets that manufacturers had banked on for growth have now ground to a halt, a top executive said on Tuesday.

Christian Streiff, who heads Peugeot-Citroen, said he expects sales at Europe's second-biggest volume carmaker to fall 20 percent in 2009 and sees further pain in 2010 as there seems no end in sight to the sector's crisis.

"What is striking at the moment is the worldwide catastrophe in the car industry because the Brazilian market, the Chinese market and the Russian market have stopped in their tracks just like the European market. That makes for a fall of over 20 percent," Streiff told RTL radio.

Car sales have been sinking fast in developed economies since the autumn as the credit crunch and worsening economic climate have combined to crimp big-ticket purchases, while a lack of visibility has made most manufacturers unwilling to make predictions for 2009. In January, U.S. auto sales fell 37 percent, according to manufacturers' data, while corresponding figures for Europe due out on Friday are certain to show double-digit declines.

Streiff spoke fresh from signing a deal with the French government that provides 3 billion euros ($3.87 billion) in preferential-rate financing for Peugeot (PEUP.PA) as well as for domestic rival Renault, the conditions of which have met with criticism from other EU nations.

OUTLOOK 'TERRIBLE'

"The outlook for 2009 is terrible. The group is starting the year with a fall of more than 20 percent compared to a year ago in all countries combined," Streiff said. "We are working on the assumption that the market in 2010 remains difficult."

...

"If (the banking system) was working at all, we would not have asked for anything from the state," Streiff said on Tuesday in an interview with French newspaper Le Monde.

...

France is the latest European country to pledge to help its automakers, after Italy on Friday promised 2 billion euros for the flagging sector.

/... http://www.reuters.com/article/marketsNews/idINLA18666020090210?rpc=44&sp=true

[tclambert]

92. Nissan announced layoffs of 20,000

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3729917&mesg_id=3731549

But, Sen. McConnell, they're not "stupid American" automakers, they're "smart Japanese" automakers! Doesn't matter what kind of cars you make now. Even sales of hybrids are down. http://www.mobilemag.com/content/100/354/C16867/

Intel is hiring! They announced plans to build new plants (in the USA) that will employ 7,000: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3731832

[ozymandius]

10. JPMorgan Cracks Down on Unused Credit as Banks Free Up Capital

Feb. 10 (Bloomberg) -- JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp. are among lenders cutting back on $1.6 trillion of credit lines as they face increased demand for loans that threaten to drain capital.

Banks used loan negotiations with retailers Rite Aid Corp. and Ethan Allen Interiors Inc., and with homebuilder Ryland Group Inc. in the past month to reduce credit limits and raise interest rates. After more than $1 trillion of writedowns and credit losses, lenders are moving to lessen the chance that troubled companies will withdraw funds.

While President Barack Obama demands they extend more credit, banks are reluctant to do so until they know how much they’ll need to back with more funds, according to a Jan. 23 Citigroup research report. Companies may need to issue $450 billion of bonds to replace loans that won’t be renewed when they mature in the U.S. and Europe this year, the bank said.

“For those companies unable to get credit, it’s economic Darwinism,” said Josh Rosner, a managing director at Graham Fisher & Co. In early 2007, he predicted mortgage bonds would spark a global financial crisis. “It’s a tightening of credit to rational standards.”

http://www.bloomberg.com/apps/news?pid=20601109&sid=aKRxrqAFx8Pw&refer=exclusive

[Demeter]

11. Obama raises pressure over stimulus bill

http://www.ft.com/cms/s/0/449f3472-f613-11dd-a9ed-0000779fd2ac.html

By Edward Luce and Krishna Guha in Washington

Published: February 8 2009 19:11 | Last updated: February 9 2009 14:29

Barack Obama’s administration has stepped up pressure on US lawmakers, threatening to force them to work through their one-week recess starting on Friday to get the $800bn (£541bn) economic stimulus package enacted as soon as possible.

Amid the worst job losses in a generation, Mr Obama postponed details of a $350bn bank rescue plan to force legislators to focus first on passing the economic stimulus bill.

Barack Obama’s administration yesterday said if necessary it would keep lawmakers working through their one week recess that starts on Friday in order to get the $800bn economic stimulus package enacted as soon as possible...

[radfringe]

17. Dems need to stop pussy-footing around

Get out there with a freaking count-clock showing approx 333 jobs lost every hour due to republicans obstructing

and get the "meme" out that the repubs are against jobs for Americans on Main street, but they bent over backwards for the fatcats on Wall Street

[Demeter]

19. May We All Live to See That Day

I have my doubts, though.

[Tansy_Gold]

34. Won't happen with Timmy handing out goodies to his friends

FRSP desperately needed there.

:grr:

[tclambert]

41. ITA. I liked that Obama kept repeating "we want to save or create 4 million jobs."

I think he gets that jobs are most important.

Here's an interesting thing. A lot of this is emotional. Confidence vs. fear. Fearful companies lay off and make the situation worse. If the population can be made more confident, they will make more long term purchasing decisions (cars and houses), and companies will hire more, or at least hold off on layoffs. And those demonstrations of confidence then become a self-reinforcing feedback loop, a sort of self-fulfilling prophecy that justifies the original confidence. Obama seems to be doing fairly well at that task. As gloomy as we often are on SMW, I feel confident we will see signs of a turnaround within the year.

[Tansy_Gold]

44. Honey, it takes a lot more than confidence

You can have all the confidence in the world that the economy's gonna turn around, that you're gonna get a raise, etc., etc., etc., but if you don't got the money, if you don't got a job, it ain't gonna happen.

What's happened is that THE RICH have sucked up all the real assets. There is only so much ealth to spread around and when they've gobbled it all up, there simply is nothing left for the rest of us.

And what Geithner is doing is taking even MORE of "our" money and handing it on a solid gold platter to the pigs at the trough.

Normally, we'd get some of it back through our labor. The more we worked, the more productive we were, the more we'd get paid. But they've rigged the system so that the more we work, the LESS we get paid.

I listened to Obama last night and I was encouraged by his comments about jobs. He *seemed* to understand that unless we make our own stuff, we're just shippin' our consumer $$$ overseas.

But words are one thing, and I know I'll get flamed for bringing this up, but Hillary had a point when she said pretty speeches are fine but it takes ACTION to get things done.

Obama lost every point he made with me last night; Geithner's actions, Geithner's treatment of the financial institutions wiped out everything. Geithner was a piss-poor choice, as were Rubin and Summers. That was a disaster in the making, and now we've got disaster in the happening.

Confidence and $2.85 will buy you a medium coffee at the Gecko Espresso. Oh yeah, plus tax.



Tansy Gold, who probably won't get coffee 'cause she's behind schedule on work

[antigop]

75. RE: Hillary said it takes ACTION to get things done...unfortunately, the ACTION Hillary supported

was to increase the h1-b visa cap for tech employees and bring cheaper foreign labor here.
http://www.youtube.com/watch?v=UhLBSLLIhUs

Just sayin'.

antigop--who's sick and tired of watching tech workers having to train their foreign replacements
and who's sick and tired of watching all sorts of jobs move offshore.

<edit to add> ..not that I see Obama making any moves about the h1-b visa cap and trying to employ US citizens..

[Hugin]

77. Yeah, and what about that Diana Whatzerface?

Offshoring Queen and Advocate of Displacing American High-tech Jobs.

Appointed to the National Economic Council... :wtf:

Edit: To correctly list the assignment.

[antigop]

79. Diana Farrell:"... has done more to promote outsourcing than nearly anyone else in America."

http://www.openleft.com/showDiary.do?diaryId=11369

She's on the National Economic Council---announced the same day Obama met with the tech industry CEOs.

Cute, huh?

We're sooo screwed.

[Hugin]

81. Exactly.

Thanks for the details antigop.

[Tansy_Gold]

83. Well my point wasn't to say that HRC woulda done any better

Probably not.

But Obama did give the impression that he was gonna DO things and do 'em DIFFERENT.

Seems like he's doin' a lot o' talkin' and not much doin'. Or at least what he's doin' ain't so very much different.


And you're absolutely correct. To take our tax money and then not hire us (and no, I'm not in IT but you get my drift) is an insult of the first water.

[Hugin]

85. Don't worry, Tansy_Gold...

I know what you're saying.

It takes ACTION and for crying-out-loud some sort of action DIFFERENT than what we've seen for the past 30 years.

Don't make me up your Fukitol(r) dosage! That stuff is not cheap.

[Dr.Phool]

90. That was my feeling during the election.

There wasn't a whole lot of "there", there.

I wish him and us the best, but, he's living up to my expectations.

Here's a little rant I posted in my journal about a year ago.

http://journals.democraticunderground.com/Dr.Phool/1

[AnneD]

170. I am still holding out for him to do something different.....

if he dosen't play chess, I think he would be a natural. He is both shrewd and cool. He seems to always be several steps ahead.

He has also never taken a path because it was easy and done what was not popular because it was right. He has often taken up the cause of the powerless.

Until he proves otherwise-I have to take him at his word and trust that as he becomes more comfortable and skilled in this job.....he will look out for my interests and that of the US.

I think the enormity of his power hasn't sunk in yet. But if the GOP keep screwing with him-I think he'll start using it.

[DemWynner]

91. Amen

What I liked about Obama's speeches is he seemed to get that we need to create jobs here to get the economy back on track. He was going to get incentives for companies to keep their workers here in the states.

Companies need to understand that the US consumers are now working as much as we can and still not making enough to buy things and foreign workers are not buying enough to make up for it. At my job, we hire foreign workers, get them trained and then they go off and fins other positions. this happens at a very high rate because we don't want to pay to keep them. it is not saving a lot of money in the long run.

Demwynner - tired of having to work with tech workers offshore that can not answer my questions.

[Demeter]

178. At Least he's Not Making It Worse

That's been the greatest improvement in the nation so far: turning off the terror from the government.

Aside from this anti-stimulus bill, which got a universal round of condemnation from the markets today.

Our state of Perpetual Anticipation has segued to Perennially Pissed Off.

[Dr.Phool]

86. Chucky Shoomer and Hairy Reed would trip over it and break it.

[Demeter]

12. Japan faces ‘unimaginable’ contraction

http://www.ft.com/cms/s/0/97ad993c-f6b9-11dd-8a1f-0000779fd2ac.html

By Mure Dickie in Tokyo

Published: February 9 2009 15:04 | Last updated: February 9 2009 18:46

Japan’s economy faces an “unimaginable” contraction, the chief economist of its central bank warned on Monday, as figures revealed surging bankruptcies and a big fall in machinery orders.



The warning from Kazuo Momma, head of the Bank of Japan’s research and statistics department, underscored the gloom surrounding the world’s second-largest economy as export orders dry up, companies shut down production lines and consumers stop spending.

Japan, where industrial output plunged a record 9.6 per cent month on month in December, is due to announce fourth-quarter gross domestic product data next week. Polls of economists suggest GDP will have fallen more than 3 per cent compared with the previous quarter – an annualised decline of more than 10 per cent.

“From October to December the scale of negative growth may have been unimaginable – and we have to consider the possibility that there could be even greater decline between January and March,” Mr Momma said in a speech on Monday.

His remarks came as a private research company reported a 16 per cent year-on-year rise in the number of bankruptcies among Japanese companies to 1,360 in January, the highest level for six years. Total debts left by failed companies rose 44 per cent from a year earlier to Y839bn ($9.2bn), Tokyo Shoko Research said.

Many of Japan’s companies have suffered from the domestic slowdown and a sudden dearth of demand for exported goods including cars and electronics, as well as problems securing credit from banks. The effect on companies’ capital spending has been marked, with core private-sector machinery orders plunging 17 per cent quarter on quarter in the three months to December, the steepest fall on record.

The month-on-month fall in core machinery orders in December was down just 1.7 per cent – less than expected – but economists drew scant comfort.

“Even after this slightly better-than-expected showing, orders were still down by just under 27 per cent compared with a year earlier,” said Ben Eldred of Daiwa Securities.

“The inescapable conclusion is that the Japanese authorities need to do more . . . if the Japanese economy is to avoid becoming the worst affected of all the developed economies from the current global downturn.”

The Japanese gloom was replicated in Taiwan, Asia’s sixth-largest economy. In January exports fell by 44.1 per cent from a year ago, the biggest decline since government records began in 1972. It was the fifth consecutive month that exports have shrunk.

[ozymandius]

16. This is a prime entree for some comments by Mr. Balls.

'This is the worst recession for over 100 years'

Ed Balls, the PM's closest ally, warns that downturn is ferocious and says impact will last 15 years

Britain is facing its worst financial crisis for more than a century, surpassing even the Great Depression of the 1930s, one of Gordon Brown's most senior ministers and confidants has admitted.

In an extraordinary admission about the severity of the economic downturn, Ed Balls even predicted that its effects would still be felt 15 years from now. The Schools Secretary's comments carry added weight because he is a former chief economic adviser to the Treasury and regarded as one of the Prime Ministers's closest allies.

Mr Balls said yesterday: "The reality is that this is becoming the most serious global recession for, I'm sure, over 100 years, as it will turn out."

He warned that events worldwide were moving at a "speed, pace and ferocity which none of us have seen before" and banks were losing cash on a "scale that nobody believed possible".

The minister stunned his audience at a Labour conference in Yorkshire by forecasting that times could be tougher than in the depression of the 1930s, when male unemployment in some cities reached 70 per cent. He also appeared to hint that the recession could play into the hands of the far right.

"The economy is going to define our politics in this region and in Britain in the next year, the next five years, the next 10 and even the next 15 years," Mr Balls said. "These are seismic events that are going to change the political landscape. I think this is a financial crisis more extreme and more serious than that of the 1930s, and we all remember how the politics of that era were shaped by the economy."

http://www.independent.co.uk/news/uk/politics/this-is-the-worst-recession-for-over-100-years-1605367.html

---

So the global recession/depression is spreading like wildfire.

Hat-tip to Indiana Green who posted this in LBN

[Demeter]

18. And We Have 6=Year-Olds in Charge of the US Economy

when what we need is steely-eyed patriots who are willing to hurt institutions to save lives.

[bread_and_roses]

32. You're too kind, Demeter. Six-year-olds are innocently selfish

Geithner and Summers et al are corporate tools, knowingly so. Protect the 1%, no matter the cost to the rest of us.

[sam kane]

100. 6 year olds have a basic sense of fairness.

This is an insult to the majority of them.

[Tansy_Gold]

149. So do dogs.

http://www.nwaonline.net/articles/2009/02/10/news/021109azwalmartlayoffs.txt


Maybe we should put a bunch of six-year-olds and a litter of mongrel puppies in charge of the economy?




(Chiquita is not a mongrel, grandson is not quite 3 in this pic, but close enough)

[AnneD]

166. AHHHHHHH

I feel better about the economy already. I think you are on to something. Nothing like puppy kisses and their bologna breath and little boys to make one feel better and give one hope.

Thanks for that nice thought, TG.

[ozymandius]

22. Recession? No, It's a D-process, and It Will Be Long

....
Barron's: I can't think of anyone who was earlier in describing the deleveraging and deflationary process that has been happening around the world.

Dalio: Let's call it a "D-process," which is different than a recession, and the only reason that people really don't understand this process is because it happens rarely. Everybody should, at this point, try to understand the depression process by reading about the Great Depression or the Latin American debt crisis or the Japanese experience so that it becomes part of their frame of reference. Most people didn't live through any of those experiences, and what they have gotten used to is the recession dynamic, and so they are quick to presume the recession dynamic. It is very clear to me that we are in a D-process.

Why are you hesitant to emphasize either the words depression or deflation? Why call it a D-process?

Both of those words have connotations associated with them that can confuse the fact that it is a process that people should try to understand.

....

You can describe a recession as an economic retraction which occurs when the Federal Reserve tightens monetary policy normally to fight inflation. The cycle continues until the economy weakens enough to bring down the inflation rate, at which time the Federal Reserve eases monetary policy and produces an expansion. We can make it more complicated, but that is a basic simple description of what recessions are and what we have experienced through the post-World War II period. What you also need is a comparable understanding of what a D-process is and why it is different.

....

When I first started seeing the D-process and describing it, it was before it actually started to play out this way. But now you can ask yourself, OK, when was the last time bank stocks went down so much? When was the last time the balance sheet of the Federal Reserve, or any central bank, exploded like it has? When was the last time interest rates went to zero, essentially, making monetary policy as we know it ineffective? When was the last time we had deflation?

The answers to those questions all point to times other than the U.S. post-World War II experience. This was the dynamic that occurred in Japan in the '90s, that occurred in Latin America in the '80s, and that occurred in the Great Depression in the '30s.

Basically what happens is that after a period of time, economies go through a long-term debt cycle -- a dynamic that is self-reinforcing, in which people finance their spending by borrowing and debts rise relative to incomes and, more accurately, debt-service payments rise relative to incomes. At cycle peaks, assets are bought on leverage at high-enough prices that the cash flows they produce aren't adequate to service the debt. The incomes aren't adequate to service the debt. Then begins the reversal process, and that becomes self-reinforcing, too. In the simplest sense, the country reaches the point when it needs a debt restructuring. General Motors is a metaphor for the United States.

http://online.barrons.com/article/SB123396545910358867.html

[Hannah Bell]

154. He describes it like it's some natural phenonemona like weather, instead of man-made:

"after some time, people 'just decide' to borrow more than they earn..."



"after a period of time, economies go through a long-term debt cycle -- a dynamic that is self-reinforcing, in which people finance their spending by borrowing and debts rise relative to incomes and, more accurately, debt-service payments rise relative to incomes. At cycle peaks, assets are bought on leverage at high-enough prices that the cash flows they produce aren't adequate to service the debt. The incomes aren't adequate to service the debt. Then begins the reversal process, and that becomes self-reinforcing, too."

[tclambert]

36. Are you making up these names? Momma and Mr. Balls?

The world has turned into a Monty Python skit.

[Tansy_Gold]

64. Add Mure Dickie in Tokyo from post #12 above

You can't make this shit up.



Tansy Gold, who really did go to the same high school as David Crockett and Elizabeth Taylor (who married Dean Martin)

[AnneD]

99. Morning Marketeers......

:donut: I was channel surfing lately and noticed that the MSM are hyping this recession for all it's worth. Who knew we could so content with poverty. In keeping with the tradition of milking a dollar for all it's worth.....We will have all kinds of Recession/Depression related theme programs.

Look for these programs in your new guide.

The Walton's 2008 (or How Green Was My Valley)-due to Mountain Top mining approved by the Bush lead Interior, The Walton's now live on what appears to be a plateau or plains. Silt has clogged the rivers and streams and the forest is denuded. They have to close the saw mill. Developers by Walton's Flats for pennies on the dollar when the Walton's can't pay the taxes. The developers build Mc Mansions the Walton's can't afford. Thrown out of work and off their farm, the Walton's set up house near the bus depot using appliance cardboard boxes. Enjoy the humorous and heartwarming dinner conversation over the open barrel as Mrs Walton roasts the days rat that the twins caught and the family discusses how they can get the social security check from senile Grandma Walton.

Martha Stewart Depression Entertaining. Learn how to entertain for nothing. Learn the fine art of dumpster diving as Martha teaches you how to plan a scavenger hunt for dinner ingredients. She will also teach the lost art of mural painting on cardboard as you learn to design a suburban scene for your new box house.

Survivor....Detroit
Unemployed folks in the financial sector are let lose to survive in abandon areas of Detroit. They face hostile natives, fight for scrapes of anything to eat. There is no immunity in this series.

Rachel Ray: Whips up a meal in less than 30 minutes using food bits found in the bus lobby and trash cans-yummo. Special guest-Mrs Walton.

Trading Spaces. The season premiers with Tony 'the shiv' Longoria and Bernie 'the broke' Medoff swap 'cells' and hilarity ensues. Watch Tony fence Bernie's property and start his own Ponzi scheme just so he can get a better cell. Watch Bernie walk to court with an interesting limp after his morning shower. See Bernie sing like canary as he discovers half the cell block lost money in his investment company.

Heads-You WIN.....a exciting new game show where captured WS CEO's and Banking and Financial Exec's are asked tough questions by host Tansy Gold. They play to keep various body parts from the Guillotine. The object of the game is to KEEP YOUR HEAD. A game of both skill and luck, this promises to be the hottest show in the line up.

Happy hunting and watch out for the bears.

[Dr.Phool]

105. Can I get studio tickets for Heads - You Win?

[AnneD]

111. It will be difficult....

but I'll try. It will be the hottest show in the new line up.

And I have to get a box of kleenex. Never could watch the Walton's without it.

[Demeter]

180. Oooh! Oooh! I May have to Get Cable Hooked Up again!

I do hope that Survivor--Detroit and Heads You Win don't run against each other!

[Demeter]

179. Was that in California?

Land of the fruits and nuts?

If you want to have your kid stand out, pick a name like mine--either maiden or married. Of course, the lack of cover of multiple like-named individuals can be a handicap if one goes for a life of crime....

[Demeter]

182. Amazingly enough, there's a woman at NASA with My Birth Name

probably a cousin. Great-Grandma had 17 children, and I think they all reproduced, except the nuns.

[DemReadingDU]

194. Could you explain who these people are?

I must have them mistaken for somebody else.

I know Elizabeth Taylor (actress) married a bunch of fellows, but I don't recall that she married Dean Martin (actor, comedian, singer).

David Crockett? The only Crockett I know is...King of the Wild Frontier


and well, I went to the same high school as John Mellencamp

:P

[Tansy_Gold]

196. You're from Seymour????

Honestly -- I went to Arlington High School in Arlington Heights, Illinois. David Crockett graduated class of '65 I think. Elizabeth "Betty" Taylor was in my class, '66. She married a guy named Dean Martin. I kid you not.


Tansy Gold, who lived in northeastern Indiana for about 15 years and knows someone from Seymour

[DemReadingDU]

197. Too Funny!

No wonder I had a difficult time associating those 'actors'.

T new Miss America, Katie Stam, is also from Seymour!
http://www.theindychannel.com/entertainment/18557741/detail.html

[Demeter]

14. Latvia reports 10.5% contraction

http://www.ft.com/cms/s/0/eb85e56e-f6aa-11dd-8a1f-0000779fd2ac.html

By Robert Anderson in Stockholm and Stefan Wagstyl in London

Published: February 9 2009 13:18 | Last updated: February 9 2009 18:58

Latvia’s economy contracted at an annual rate of 10.5 per cent in the fourth quarter of last year – a much larger decline than many economists had expected – raising fears that the country may be unable to stick to the conditions attached to its recent International Monetary Fund rescue package.

With economists predicting a further drop in gross domestic product of up to 10 per cent in 2009, the country faces the steepest plunge into recession of any European Union member state and the sharpest economic contraction on the continent since the aftermath of the collapse of the Soviet Union in the early 1990s.

The news, announced on Monday, came amid nervousness in east European financial markets. While the region’s currencies mostly finished the day stronger, after recent heavy falls, Poland saw its five-year credit default swap rate – the cost of insuring debt against default – widen slightly to a record high of 343. The finance ministry denied reports that the country was in talks with the IMF over possible support.

Once the fastest growing economy in the EU, Latvia’s bubble burst last year when foreign banks stopped funding a consumer and property boom, leaving the country with huge private sector foreign debts. In December, Latvia was forced to seek an IMF-led €7.5bn ($9.7bn, £6.6bn) stabilisation package to defend its currency peg to the euro when the global financial crisis brought down the country’s largest independent bank.

The depth of the economic contraction in the fourth quarter has increased doubts over whether the government was right to reject devaluation and whether it will be able to stick to its IMF austerity plan. Riga passed a tough package of spending cuts and tax increases in late December amounting to 7 per cent of GDP.

However, because the recession is depressing tax revenues, Latvia is expected to announce new cuts next month to try to keep the deficit below 5 per cent of GDP.

“Continually trying to strive after unrealistic budget targets puts the economy further and further into recession,” said Nigel Rendell, emerging markets analyst at RBC Capital Markets in London.

“I really can’t see how they can maintain their fixed exchange rate in this kind of environment,” he added. “The social unrest and political ramifications will eventually force their hand. If we continue to get figures like this I can’t see how they can stagger on much beyond six months.”

The austerity plan has destabilised a weak administration and demonstrators rioted against the government last month. The ruling coalition survived a vote of no-confidence last week and remains split over whether to hold early elections to try to win broader backing...

[Demeter]

15. Top nations ‘water down’ IMF warnings

http://www.ft.com/cms/s/0/981b3d44-f6f4-11dd-8a1f-0000779fd2ac.html

By Jennifer Hughes in London and Alan Beattie in Washington

Published: February 9 2009 22:09 | Last updated: February 9 2009 22:09

Attempts by the International Monetary Fund to warn of risks posed by large countries’ financial systems have been frustrated by governments wat­ering down the criticism, says the head of the UK’s financial regulator.

Lord Turner, chairman of the Financial Services Authority, said that powerful nations would have to avoid meddling with reports they did not like if they were serious about creating a better early warning system for the global economy.

“One of the problems the IMF has had in the past is that, when it tries to issue warnings, those warnings are watered down under political pressure from large, powerful countries who don’t like the commentary about their financial system,” he said.

“There has, for instance, never been one of the reports on the financial system that the IMF produces, on the US financial system because the US didn’t want there to be one.”

The US, which had resisted having a so-called “financial sector assessment programme” (FSAP), finally agreed to undergo the analysis last year...

I'M SERIOUSLY CONSIDERING A SUBSCRIPTION TO FINANCIAL TIMES. THEY ACTUALLY PRINT REAL HARD NEWS. SHOCKING, ISN'T IT?

[Ghost Dog]

131. Da FT is da Man. n/t

[Demeter]

21. Bot Mot on Executive Pay

"The salary of the chief executive of the large corporation is not a market award
for achievement. It is frequently in the nature of a warm personal gesture by the
individual to himself"

- J K Galbraith - Annals of an Abiding Liberal

[Demeter]

23. Lots of "To Do" About GM / GM fights to avoid bankruptcy protection

http://www.ft.com/cms/s/0/f80a1926-f6d8-11dd-8a1f-0000779fd2ac.html

By Julie MacIntosh and Nicole Bullock in New York and John Reed in Detroit and Bernard Simon in Toronto

Published: February 9 2009 19:37 | Last updated: February 9 2009 23:43

General Motors is working to convince key stakeholders to help it avoid the need to seek bankruptcy protection but, because such an effort would probably require more government money, its most critical task will be addressing the US Treasury’s concerns over the terms of its investment.

GM must present a plan proving its long-term viability to Congress by next Tuesday as a condition of the $13.4bn emergency bridge loan it was granted in December.

Several sets of negotiations are taking place simultaneously. They revolve around GM’s proposal to swap up to two-thirds of its debt for equity, and fresh concessions from the United Auto Workers, including the financing of a new union-administered healthcare fund.

Only advisers to the various parties are currently involved in the talks, which are expected to centre on due diligence issues for the next day or two, one person familiar with the negotiations said.

The US government has the power to either endorse GM’s plans or push it into bankruptcy and the US Treasury’s decision to hire advisers Cadwalader, Wickersham & Taft, Sonnenschein Nath & Rosenthal and Rothschild suggest it may be toughening its stance.

“The government is the biggest stakeholder here,” one person close to the matter said. “Unless they agree the plan is viable and they consent, the debt becomes due.”

If the government gives GM additional funding, the structure and terms of both its old and new investments could come up for debate, including whether taxpayers’ interests should come before those of current debtholders.

The government’s role as stakeholder reduces GM’s options. But it also gives it more weight in negotiations with unions, auto dealers and bondholders.

“The carrot is, this is in everybody’s best interest,” said Don Workman, a bankruptcy lawyer at Baker & Hostetler LLP. “The stick is, they’re saying that if we don’t do this consensually, GM and Chrysler will go into bankruptcy court and the judge will prime you.”

Separately, GM is negotiating with bankrupt Delphi, its largest supplier, to take over some of Delphi’s manufacturing plants, a person briefed on the talks said.

The move could give GM more flexibility in its negotiations with the United Auto Workers, the labour union.

Bondholders said their talks with GM were ongoing. The company’s long-term bonds were quoted at their low of 13 cents on the dollar. In an indication of the severity of the situation, the same bonds were quoted at around 80 cents a year ago.

[Demeter]

24. GM, Chrysler May Face Bankruptcy to Protect U.S. Debt (Update5)

http://www.bloomberg.com/apps/news?pid=20601087&sid=a56N4uO0_XXo&refer=home

By Mike Ramsey and Tiffany Kary

Feb. 9 (Bloomberg) -- General Motors Corp. and Chrysler LLC may have to be forced into bankruptcy by the U.S. government to assure repayment of $17.4 billion in federal bailout loans, a course of action the automakers claim would destroy them.

U.S. taxpayers currently take a backseat to prior creditors, including Citigroup Inc., JPMorgan Chase & Co. and Goldman Sachs Group Inc., according to loan agreements posted on the U.S. Treasury’s Web site. The government has hired a law firm to help establish its place at the front of the line for repayment, two people involved in the work said last week.

.....
Carmaker Opposition

The automakers have dismissed calls to reorganize under bankruptcy protection, saying a Chapter 11 restructuring would scare away buyers and lead to liquidation. They are working toward a Feb. 17 deadline to show progress on a plan put in place as part of the U.S. loans received in December from the Troubled Asset Relief Program. The companies must reduce labor costs and show how they will repay the money by next month.


U.S. Law Firm

Cadwalader, Wickersham & Taft LLP is advising the government on how to make sure it gets paid back first, including by way of intercreditor agreements, the people involved with the talks said. The law firm, hired last month, is working for the government with Sonnenschein, Nath & Rosenthal, a Chicago-based firm with capital-markets experience, and Rothschild Inc., an investment bank, the people said.

The issues are “extremely complex,” said Bruce Clark, a credit analyst at Moody’s Investors Service.

The existing loan agreements appear to give the banks a superior position to the government, Clark said.

“The ultimate position of the government could end up being determined by whatever concessions various creditors make, and the determination of a bankruptcy court if it ever gets there,” he said.

When the automakers were lobbying the government for assistance, lawmakers made a point of saying that the government must be assured that if the companies failed, taxpayers wouldn’t lose the investment.

Existing Lenders

Workman, who isn’t involved in the negotiations, said the U.S. couldn’t force its loans to supersede existing secured lenders, so it built in a measure that allowed the debt to be converted to debtor-in-possession financing...As it stands, the government loans fall below existing debt secured by most assets for Auburn Hills, Michigan-based Chrysler and Detroit-based GM. Prior lenders have first position on some assets. The government has first position on assets not already pledged.

Chrysler has $7 billion in loans from a group of banks, including New York-based JPMorgan, Goldman Sachs and Citigroup. It also has $2 billion in loans from owners Cerberus Capital Management LP and Daimler AG. Cerberus owns 80.1 percent of Chrysler. Daimler owns the remainder.

GM has $6 billion in loans secured by assets from lenders including JPMorgan and Citigroup. JPMorgan spokesman Brian Marchiony, Goldman Sachs spokesman Michael Duvally and Citigroup spokeswoman Danielle Romero-Apsilos declined to comment....

Unless the automakers show by March 31 that they will be able to return to profit and repay the money, the government can demand return of the loans.

To contact the reporters on this story: Mike Ramsey in Southfield, Michigan, at [e-mail]; Tiffany Kary in U.S. Bankruptcy Court in New York at [e-mail].

[Demeter]

26. Wounded banks: Only game left

http://www.washingtontimes.com/news/2009/feb/09/banks-still-standing-amid-credit-collapse/


Banks have become the only game in town for most businesses and consumers looking for loans, and that's why the government is gearing up for what could be the most expensive bank bailout ever.

Entire trillion-dollar markets for securitized loans have frozen or collapsed in the past 18 months, including parts of the corporate debt market known as commercial paper, private mortgages, auto loans, student loans and credit cards. The result: Banks are often the only lenders still able to satisfy critical credit needs.

"We've wiped out the investment banking system. We've frozen the commercial paper markets, and virtually all the asset-backed markets ... are virtually out of existence or frozen," said Martin Regalia, chief economist at the U.S. Chamber of Commerce. "So banks are once again the only game in town."

Treasury Secretary Timothy Geithner is scheduled to present the administration's plan for shoring up banks further Tuesday, using a combination of capital infusions, government guarantees and outright purchases of souring loans through a "bad bank" to help major banks deal with accumulating losses on their loan portfolios.

Before last fall's financial crisis, banks provided only $8 trillion of the roughly $25 trillion in loans outstanding in the United States, while traditional bond markets provided another $7 trillion, according to the Federal Reserve. The largest share of the borrowed funds - $10 trillion - came from securitized loan markets that barely existed two decades ago.

People seeking to buy homes and refinance mortgages since the fall of 2007 have found loans harder to obtain because of the collapse of nearly all but the conventional market for 30-year loans.

Students bound for college started finding financing more difficult a year ago as the market for securitized student loans dried up, while car buyers, small businesses and credit card customers all have seen their usual credit sources evaporate more recently.

Perhaps the most acute shortage of credit is being felt by businesses, which before September got less than a third of their loans from banks. Most businesses preferred to take advantage of the better interest rates and terms offered in securities markets, where they could tap into cheap funding from abroad. For short-term loans of one to six months, businesses went to the commercial paper market, while they secured funding for long-term projects and investments in the corporate bond market.

But the bond market for months has been largely closed or prohibitively expensive to all but businesses with top credit ratings. Portions of the commercial paper market have entirely shut down and may not come back. Moreover, some of the major investment banks that used to underwrite and market those loans have gone out of business.

"It's hard for banks to suddenly take up all this other slack, because it requires a certain expertise to make good loans and service those loans," said Mr. Regalia. "They don't have the back office at this point."

Many legislators in Congress complain that banks aren't lending, and cite that as an excuse to vote against further bank bailout funds. Their constituents are angry that banks seemingly are not meeting their needs despite massive cash infusions from the Treasury Department. But Mr. Regalia said these critics are wrong.

"Banks are lending more, but 70 percent of the system isn't there anymore," he said. "They're doing their jobs. They're being careful. But at the same time, the rest of the system has so collapsed that we're still woefully short of credit."

The Federal Reserve since September has stepped into the void to try to revive collapsed securities markets, starting with the commercial paper market. The Fed, using its own resources and seed money from the $700 billion Treasury bailout program, for several months has been buying top-rated three-month commercial paper. Under a similar program, this month it will start purchasing securities backed by student loans, auto loans, credit cards and small-business loans.

Fed Chairman Ben S. Bernanke noted recently that the Fed's commercial paper program is having modest success at reviving that market. The Fed's presence as a buyer in the market seems to have assuaged worries that companies won't be able to roll over their debt when their paper comes due. He said he hopes the program to revive the securities market for consumer and small-business loans will work the same way.

"If the program works as planned, it should lead to lower rates and greater availability of consumer and small-business credit. Over time, by increasing market liquidity and stimulating market activity, this facility should also help to revive private lending," he said.

The Fed hopes that private lenders eventually will come back into the moribund markets, enabling the central bank to make an exit.

In light of the severe freeze in securities markets, Mr. Bernanke has repeatedly urged lawmakers to stay focused on shoring up banks. He warned that without a strong banking system and functioning markets, the economy will be unable to recover from a deep recession even if Congress passes a massive stimulus program.

Congress' demand that banks fill in for collapsed securities markets poses a dilemma for the banks, not only because most do not have the capacity to ramp up to such large-scale lending quickly.

The securitized loan markets provided an essential part of the machinery that enabled banks to lend in the first place. By selling most of their portfolios of mortgages, business and consumer loans to investors, banks in the past freed up money to make new loans. That machinery is now stalled and no longer able to assist banks that want to lend.

"Now that the securitization markets have dried up, what the government is asking the banks to do is like asking a hospital that delivers a newborn baby to raise him until he's 18 years old," said Nicole Gelinas, an analyst at the Manhattan Institute. "Banks simply don't remember how to be banks - that is, long-term direct lenders to customers - anymore, since the securitization markets have done that job for so long."

While the Fed and Treasury are scrambling to try to piece back together broken markets, some credit analysts say that's like trying to put Humpty Dumpty back together again, and warn that some of the securitized loan markets may never return.

Former Fed Chairman Alan Greenspan mourned the death of the subprime mortgage market, which, for all its abuses and problems, had enabled a generation of low-income renters to pursue homeownership for the first time. The market for pooled subprime loans, known as collateralized debt obligations (CDOs), collapsed at the end of 2007 and, by most accounts, will never come back.

Because of the surging defaults on subprime and other exotic mortgages, investors have shied away from buying the loans, forcing banks and Wall Street firms to hold them on their books and take the losses. Furthermore, the taint that the mortgage crisis gave to especially complex securitized loans like subprime CDOs has made it difficult to sell other loans that were structured like them, often by the same Wall Street firms that created the mortgage securities.

Some foreign investors that gobbled up such debt instruments when the economy and housing market were booming now exhibit a disdain for the securities.

Foreign investors from China to the Persian Gulf started boycotting U.S. corporate bonds of all kinds last summer, even widely held mortgage securities issued by Fannie Mae and Freddie Mac. Countries like Russia, struck by their own economic crises, started selling off substantial amounts of their holdings.

Russian Prime Minister Vladimir Putin and top Chinese officials recently have asserted their belief, shared by many overseas investors, that unregulated Wall Street firms caused the global financial crisis. Wall Street wizards invented securities that were so risky and hard to understand that they even destroyed the banks that created them, including Bear Stearns and Lehman Brothers.

Whether Wall Street will ever again be able to pool loans and securitize them in forms that the rest of the world will buy remains to be seen. But the Fed and many economists say at least a partial revival of the moribund markets will be essential for an economic recovery in the United States, which for years has been dependent on such credit for growth.

Louise Purtle, an analyst with CreditSights, said the securitized loan markets will have to stage a comeback in one form or another, because banks will never be able to replace the massive amount of credit they provided. "The implosion of the shadow finance system left a gaping whole in the credit creation process that traditional banks would find hard to plug even from a state of relative health, let along from their loss-crippled current status," she said.

[Demeter]

29. The rise and (almost) fall of America's banks

http://finance.yahoo.com/news/The-rise-and-almost-fall-of-apf-14288120.html


These days, you can roll up to an ATM at the grocery, the pharmacy, the gas station, the hardware store, the office, even the ballpark. You can check your Bank of America balance on your iPhone. You can text Chase, and Chase will text you back.

That's banking today: It has grown from an almost quaint relationship between teller and customer into a massive, dizzyingly interconnected network that touches almost every adult in this country.

And right now, the federal government -- working without a road map, and without a net -- is putting together a plan to keep U.S. banks from collapsing.

Not just to get the banks lending again. To keep them alive...

Getting it wrong could trigger a replay of what happened after Lehman Brothers collapsed last fall -- the stock market in free fall, seizure of the credit markets, ripples of layoffs. Perhaps even a run on other banks -- so many customers rushing to pull out their cash that it would make the bank run in "It's a Wonderful Life" look like, well, a feel-good holiday movie.

"The banks are at a terrible junction," says Robert Reich, a labor secretary under President Bill Clinton. "The bottom is falling out. Almost every area of the credit markets, we're finding people unable to repay their loans. That means many banks are basically insolvent."

"If one big bank implodes," he says, "the reverberations could be endless."

A CHATTY TRAVELOGUE THROUGH THE CURRENT CRISIS---VERY SURREAL!

[Demeter]

31. Ship of Fools By Paul Craig Roberts

http://informationclearinghouse.info/article21943.htm


February 09, 2009 "Information Clearinghouse" -- -Is there intelligent life in Washington, DC? Not a speck of it.

The US economy is imploding, and Obama is being led by his government of neconservatives and Israeli agents into a quagmire in Afghanistan that will bring the US into confrontation with Russia, and possibly China, American’s largest creditor.

The January payroll job figures reveal that last month 20,000 Americans lost their jobs every day.

In addition, December’s job losses were revised up by 53,000 jobs from 524,000 to 577,000. The revision brings the two-month job loss to 1,175,000. If this keeps up, Obama’s promised three million new jobs will be wiped out by job losses.

Statistician John Williams (shadowstats.com) reports that this huge number is an understatement. Williams notes that built-in biases in seasonal adjustment factors caused a 118,000 understatement of January job losses, bringing the actual January job loss to 716,000 jobs.

The payroll survey counts the number of jobs, not the number of employed as some people have more than one job. The Household Survey counts the number of people who have jobs. The Household Survey shows that 832,000 people lost their jobs in January and 806,000 in December, for a two month reduction of Americans with jobs of 1,638,000.

The unemployment rate reported in the US media is a fabrication. Williams reports that “during the Clinton Administration, ‘discouraged workers’ those who had given up looking for a job because there were no jobs to be had--were redefined so as to be counted only if they had been ‘discouraged’ for less than a year. This time qualification defined away the bulk of the discouraged workers. Adding them back into the total unemployed, actual unemployment, rose to 18% in January, from 17.5% in December.”

In other words, without all the manipulations of the data from a government that lies to us every time it opens its mouth, the US unemployment rate is already at depression levels.

How could it be otherwise given the enormous job loss from offshored jobs. It is impossible for a country to create jobs when its corporations are moving production for the American consumer market offshore. When they move the production offshore, they
shift US GDP to other countries. The US trade deficit over the past decade has reduced US GDP by $1.5 trillion dollars. That is a lot of jobs.

I have been reporting for years that American university graduates have had to take jobs as waitresses and bartenders. As over-indebted American consumers lose their jobs, they will visit restaurants and bars less frequently. Consequently, Americans with university degrees will not even have jobs waiting on tables and mixing drinks.

US policymakers have ignored the fact that consumer demand in the 21st century has been driven, not by increases in real income, but by increased consumer indebtedness. This fact makes it pointless to try to stimulate the economy by bailing out banks so that they can lend more to consumers. The American consumers have no more capacity to borrow.

With the decline in the values of their principal assets--their homes--with the destruction of half of their pension assets, and with joblessness facing them, Americans cannot and will not spend.

Why bail out GM and Citibank when the firms are moving as many operations offshore as they possibly can?

Much of US infrastructure is in poor shape and needs renewing. However, infrastructure jobs do not produce goods and services that can be sold abroad. The massive commitment to infrastructure does nothing to help the US reduce its massive trade deficit, the financing of which is becoming a major problem. Moreover, when the infrastructure projects are completed, so are the jobs.

At best, assuming Mexicans do not get most of the construction jobs, all Obama’s stimulus program can do is to reduce the number of unemployed temporarily.

Unless US corporations can be required to use American labor to produce the goods and services that they sell in American markets, there is no hope for the US economy. No one in the Obama administration has the wits to address this problem. Thus, the economy will continue to implode.

Adding to the brewing disaster, Obama has been deceived by his military and neoconservative advisers into expanding the war in Afghanistan, a large mountainous country. Obama intends to use the draw-down of US soldiers in Iraq to send 30,000 more American troops to Afghanistan. This would bring the US forces to 60,000--600,000 fewer than US Marine Corps and US Army counterinsurgency guidelines define as the minimum number of soldiers necessary to bring success in Afghanistan--and less than half as many as the army that was unable to occupy Iraq.
The Iranians had to bail out the Bush regime by restraining its Shi’ite allies and encouraging them to use the ballot box to attain power and push out the Americans. In Iraq the US troops only had to fight a small Sunni insurgency drawn from a minority of the population. Even so, the US “prevailed” by putting the insurgents on the US payroll and paying them not to fight. The withdrawal agreement was dictated by the Shi’ites. It was not what the Bush regime wanted.

One would think that the experience with the “cakewalk” in Iraq would make the US hesitant to attempt to occupy Afghanistan, an undertaking that would require the US to occupy parts of Pakistan. The US was hard pressed to maintain 150,000 troops in Iraq. Where is Obama going to get another half million soldiers to add to the 150,000 to pacify Afghanistan?

One answer is the rapidly growing massive US unemployment. Americans will sign up to go kill abroad rather than be homeless and hungry at home.

But this solves only half of the problem. Where does the money come from to support an army in the field of 650,000, an army 4.3 times larger than US forces in Iraq, a war that has cost us $3 trillion in out-of-pocket and already incurred future costs. This money would have to be raised in addition to the $3 trillion US budget deficit that is the result of Bush’s financial sector bailout, Obama’s stimulus package, and the rapidly failing economy. When economies tank, as the American one is doing, tax revenues collapse. The millions of unemployed Americans are not paying Social Security, Medicare, and income taxes. The stores and businesses that are closing are not paying federal and state income taxes. Consumers with no money or credit to spend are not paying sales taxes.

The Washington Morons, and morons they are, have given no thought as to how they are going to finance a fiscal year 2009 budget deficit of some two to three trillion dollars.

The practically nonexistent US saving rate cannot finance it.

The trade surpluses of our trading partners, such as China, Japan, and Saudi Arabia, cannot finance it.

The US government really has only two possibilities for financing its budget deficit. One is a second collapse in the stock market, which would drive the surviving investors with what they have left into “safe” US Treasury bonds. The other is for the Federal Reserve to monetize the Treasury debt.

Monetizing the debt means that when no one is willing or able to purchase the Treasury’s bonds, the Federal Reserve buys them by creating bank deposits for the Treasury’s account.

In other words, the Fed “prints money” with which to buy the Treasury’s bonds.

Once this happens, the US dollar will cease to be the reserve currency.

In addition, China, Japan and Saudi Arabia, countries that hold enormous quantities of US Treasury debt in addition to other US dollar assets, will sell, hoping to get out before others.

The US dollar will become worthless, the currency of a banana republic.

The US will not be able to pay for its imports, a serious problem for a country dependent on imports for its energy, manufactured goods, and advanced technology products.

Obama’s Keynesian advisers have learned with a vengeance Milton Friedman’s lesson that the Great Depression resulted from the Federal Reserve permitting a contraction of the supply of money and credit. In the Great Depression good debts were destroyed by monetary contraction. Today bad debts are being preserved by the expansion of money and credit, and the US Treasury is jeopardizing its credit standing and the dollar’s reserve currency status with enormous quarterly bond auctions as far as the eye can see.


Meanwhile, the Russians, overflowing with energy and mineral resources, and not in debt, have learned that the US government is not to be trusted. Russia has watched Reagan’s successors attempt to turn former constituent parts of the Soviet Union into US puppet states with US military bases. The US is trying to ring Russia with missiles that neutralize Russia’s strategic deterrent.

Putin has caught on to “comrade wolf.” He has succeeded in having the president of Kyrgyzstan, a former part of the Soviet Union, evict the US from its military base. This base is essential to America’s ability to supply its soldiers in Afghanistan.

To stop America’s meddling in Russia’s sphere of influence, the Russian government has created a collective security treaty organization comprised of Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Tajikistan. Uzbekistan is a partial participant.

In other words, Russia has organized central Asia against US penetration.

To whose agenda is President Obama being hitched? Writing in the English language version of the Swiss newspaper, Zeit-Fragen, Stephen J. Sniegoski reports that leading figures of the neocon conspiracy--Richard Perle, Max Boot, David Brooks, and Mona Charen--are ecstatic over Obama’s appointments. They don’t see any difference between Obama and Bush/Cheney.

Not only are Obama’s appointments moving him into an expanded war in Afghanistan, but the powerful Israel Lobby is pushing Obama toward a war with Iran.

The unreality in which he US government operates is beyond belief. A bankrupt government that cannot pay its bills without printing money is rushing headlong into wars in Afghanistan, Pakistan, and Iran. According to the Center for Strategic and Budgetary Analysis, the cost to the US taxpayers of sending a single soldier to fight in Afghanistan or Iraq is $775,000 per year!

The world has never seen such total mindlessness. Napoleon’s and Hitler’s march into Russia were rational acts compared to the mindless idiocy of the United States government.

Obama’s war in Afghanistan is the Mad Hatter’s Tea Party. After seven years of conflict, there is still no defined mission or endgame scenario for US forces in Afghanistan. When asked about the mission, a US military official told NBC News, “Frankly, we don’t have one.” NBC reports: “they’re working on it.”

Speaking to House Democrats on February 5, President Obama admitted that the US government does not know what its mission is in Afghanistan and that to avoid “mission creep without clear parameters,” the US “needs a clear mission.”

How would you like to be sent to a war, the point of which no one knows, including the commander-in-chief who sent you to kill or be killed? How, fellow taxpayers, do you like paying the enormous cost of sending soldiers on an undefined mission while the economy collapses?


THIS IS HARSH, EVEN FOR Paul Craig Roberts, BUT I CANNOT FAULT HIS FACTS OR HIS REASONING

[Tansy_Gold]

39. And he's just saying what so many of us here have been saying for months

It makes me sick to my stomach.

Ozy's choice of cartoon is so spot on it isn't funny. It really isn't.

They're still pigs and they still stink and all the perfumes of Arabia. . . . .blah blah blah blah blah




TG, gettin' back to the paying work while she still has it.

[Demeter]

43. Economic Tyranny and How To End It By Harold Hellickson

http://www.opednews.com/articles/Economic-Tyranny-and-How-T-by-Harold-Hellickson-090207-519.html

February 8, 2009


Ronald Reagan said "big government is the problem". George W. Bush proved it. Bigness create complications ignored by an apathetic public and exploited by tyrannical special interests representing no more than two percent of the population at the expense of the other ninety-eight.

Only such a big government could get away with knowingly building an economy based on economic bubbles, empire, and war while, at the same time, deregulating, privatizing to “for profit” legitimate government functions, maintaining the most expensive most inadequate healthcare system in the developed world, reducing taxes on corporate war profits, and making individual tax rates excessively regressive.

The result: deflationary property values, excessive debt, scandalous private companies such as Blackwater, Corrections Corporation of America, et al, a failed economy, loss of credit availability, economic and social welfare inequities pushed to what can only be hoped to be their outer limits.

As to the trillions of dollars in banking losses, unlike Warren Buffet, Obama and Congress apparently favor forking borrowed taxpayer money to bail out the banking industry with only limited ownership and oversight. We cannot do the right thing and simply nationalize our banks because private interests manage so much better. And, just who got us into this current economic mess? Come on folks, just who is BSing whom?

We need to:
1. Nationalize banks.
2. Re-regulate business.
3. Put in place a single payer universal health care program.
4. De-privatize contracted government services.
5. Revert to a heavily progressive tax system.
6. Remove the legal status of personhood of corporations.



Nationalize banks. Banks are broke. Equity owners should take the hit. Revitalization through nationalization would simplify correction for mortgage contracts, reestablish trust and confidence and make credit available. Establishment of profitability would, over time, accrue benefit to taxpayer. Equally if not more important, it would remove the Federal Reserve System from the control of, coupled with it’s monitory policy favoring, private banking interests.

Re-regulate business, Healthcare and Privatization.
Re-regulation of industry and Wall Street is a no brainer as is single payer universal health care. Business has proven it’s ineptness in self-regulation. Excesses, including healthcare costs, at the expense of the public can no longer be tolerated.


Healthcare is undeserving of a profit motive. Single payer universal healthcare would reduce costs and make industry more competitive with foreign competition. Moreover, doctors, nurses, and the public favor it. Opposed are insurance companies, HMO’s, PPO’s, for profit hospitals, pharmaceutical companies, medical equipment manufacturers and their congressional coolies. Nothing is as undemocratic as 47 million, and growing, citizens without healthcare insurance.

Privatization of government functions results in favoritism, pay to play, added cost, scandalous behavior, and lack of accountability. Privatization is a trend that must be reversed.

Progressive Taxation. With the rich not requiring public services, they much prefer not paying for them. Little was more disingenuous to the public interests than the Bush tax cuts; personal income, capital gains, estate, and corporate taxes. Look at reality. Tax cuts increase debt, decrease public services, or both. New jobs where not created. Increased income and wealth accrued to the rich, not the rest. At minimum, the Bush tax cuts must be reversed. Taxes on speculative financial transaction as well as “excessive” income, say above $500,000 per year, must be considered.

Remove the legal status of personhood of corporations. Providing corporations (money) with protected free speech is equivalent to their ownership and control of government, exactly what we continue to have and that which got us into the current economic mess. Nothing will change until or unless government by the people can be established.

Big government is a reality. Class warfare is real. Ninety-eight percent of the population is loosing.

Unless we begin to accept responsibility for our government while holding it accountable for the public good, economic tyranny against the public interest will continue. Implementation of the above six needs would resolve much of the current quagmire.






Author's Bio: I am a retired MBA, former corporate ideologue, current curmudgeon and third party advocate. My interests include investigating and analyzing polity, economic and social inequities, and why egalitarianism has been removed from political discussion or thought.

Back

[florida08]

157. mercy!

but yeah..should have impeached back when Paul was calling for it in '05. This article is not for the faint of heart. Don't like Geithner either but I don't think AIPAC will succeed with what they want for Iran. Didn't Gates warn about Afghanistan just recently?
It just might be the last straw on the camel. Don't believe the economy will collapse..but it will linger in a sick and shallow state for a long time. I have a fear that China will start purchasing real estate (with US dollars). The outsourcing needs to be held to a minimum regardless how much trouble we're in...but California has already started the ball rolling.

It's a fact we're in a world of hurt right now and for a long time to come. We need an economic makeover. Huge project. Like Tansy stated the fat cats screwed us over big time. Check your credit cards. I just dumped one I had with Citigroup but wasn't aware because it came from Sears. It was a matter of principal only. The Saudi Prince will help them. But Roubini as well paints a bleak picture and the big banks are insolvent. We have a debt of 50 trillion which is 350% of the GDP..worse than '29. But we survived that. Course it lasted over 10 years.

Trade deficit is killing us. Our buying their products while they buy our debt was another ponzi scheme. Tax credits won't change that no matter what the republicans say. Hyper-inflation is coming unless jobs and new business come in a big fat hurry. They need to let some of these investment banks fail. Take their deposits to a stable bank. Not all banks are in trouble but if they keep propping up that bad ones they will be.

[UpInArms]

38. dollar watch

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

Last trade 85.124 Change +0.256 (+0.33%)

US Dollar Slumps Amidst Uncertainty Over Fiscal Stimulus, Ahead of Testimony by Treasury's Geithner, Fed's Bernanke

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/US_Dollar_Slumps_Amidst_Uncertainty_1234216185346.html

The greenback ended Monday broadly lower against the majors, as the US dollar index continues its nearly month-long consolidation below the January highs. There was little in the way of news to help drive price action, but the outlook for the currency continues to hinge upon the status of risk appetite. The biggest unknown that could impact risk trends is the status of the $800+ billion fiscal stimulus bill that has been passed by the House, but still needs approval by the Senate. A vote is expected early this week, but even if it does pass, the bill must be reconciled with the House version as many changes have been made. Nevertheless, a failure of the bill in the Senate could have particularly nasty repercussions for sentiment, and could translate into a sharp US dollar rally.

As far as defined event risk goes, US Treasury Secretary Timothy Geithner is scheduled to testify on the oversight of the Troubled Asset Relief Program (TARP) in front of the Senate Banking panel at 10:00 ET on Tuesday, but the most market-moving commentary could come later on. At 11:00 ET, Mr. Geithner is due to speak about the White House’s financial rescue plan and new guidelines for TARP. Then, at 13:00 ET, Federal Reserve Chairman Ben Bernanke is scheduled to testify in front of the House Financial Services Committee on the central bank’s lending programs. If Mr. Geithner’s or Mr. Bernanke’s comments reflect bearish prospects for the financial markets and global economy, flight-to-quality and deleveraging could spark demand for Treasuries, the US dollar, and Japanese yen. A more likely scenario, though, may be for Mr. Geithner’s plans to deal with troubled assets to boost risk appetite, and subsequently lead stocks and equities higher.

...more...

Euro Ends Monday Mixed as Yield Differentials Drive Price Action

http://www.dailyfx.com/story/currency/eur_fundamentals/US_Dollar_Slumps_Amidst_Uncertainty1234217495026.html

The euro started out this week just as it ended Friday: down against the Australian dollar, New Zealand dollar, and British pound but up versus the Japanese yen, US dollar, Swiss franc, and Canadian dollar. There was little in the way of European releases, but improved forex market risk appetite has benefited currencies with central banks that either maintain relatively high interest rates (Australia, New Zealand) or banks that have signaled that they will leave rates steady going forward (UK). On the other hand, currencies associated with interest rates near zero (US, Japan, Switzerland) or with interest rates that have the potential to fall lower (Canada) tumbled. The euro happens to fall right in the middle of this spectrum since the European Central Bank left rates at a relatively high 2 percent last Thursday, but suggested that they may cut rates in March. This dynamic will likely hold over the next few weeks, making risk trends increasingly important to watch, as well as technical levels.

...more...

[Demeter]

42. and Now, a BADLY Needed Humor Break!

http://www.youtube.com/watch?v=dEDIyztZGBA&eurl=http://www.opednews.com/populum/print_friendly.php?p=Stimulis-Because-all-econ-by-Kitty-Antonik-090209-172.html&feature=player_embedded

[Tansy_Gold]

45. And for a depression lasting more than four hours/months/years/decades. . . .

[Demeter]

48. Where Did You Find THAT Horse Pill?

:rofl:

[Tansy_Gold]

50. Actually, I saw it several years ago, maybe four or five

So I just googled "fukitol" and "pill." It's all over the place, in various colors, too.


Unfortunately, like most of the other shit being peddled by pharma, it doesn't work for crap.


:evilgrin:


TG

[DemReadingDU]

55. That's hilarius!

I need to order a large bottle!


:rofl:

[Hugin]

69. Ack! You've stumbled upon the secret of my magnificent placidity!

Drat!

Heavy doses of Fukitol(r) with a Solquako(r) chaser!

:woohoo:


http://www.wordlab.com/tools/drugomatic.cfm <-- Drug name generator.

[Demeter]

47. I must be on crazy pills

http://revolutionaryflowerpot.blogspot.com/2009/02/i-must-be-on-crazy-pills.html

Sometimes it feels like I'm in a small minority group of freakish people who've been given crazy pills in their water, non-stop. I mean ... I MUST be crazy.

Take for example the headlines and the news reports about 'over-paying' the banks while distributing TARP money (read, looted taxes), during the dying months of the former Bush administration, worth a whopping $78 billion.

The way this theft is reported, it is made out as if nothing can be done about it.

As if some fly-by operation run by aliens from another planet had sucked the money right out of our earthly banking system, and disappeared into the outer galaxy. As if these banks were not huge institutions with registered headquarters located on our very planet, to which the U.S. government can deliver a 'You Owe Us' notice, and ask for the money back! Or, just simply, banks whose assets the U.S. Congress has the authority to freeze.

I am sure that I am not the only one whose immediate question is: Well, why haven't the banks just returned the money?



Then there is the issue of canceling the 'torture policies' of the former, very bad and ugly Bush administration that was supposedly 'reversed' by the new, sweet hope Obama administration.

First, of course, as we all know, imperialists always cover all their bases, so there are some loopholes hinted at and other loopholes explicitly stated that make the 'reversal' look more like a gentle bearing to the left on the winding roads comprising the imperial super highway, heading mainly for the far right. Not a U-turn by any means, even if such were to be ill-advisedly considered a good turn of events.

But, more importantly, even if we were to believe that some sort of reversal of rules has happened, the new Obama administration can only pretend that they have done something positive. In fact, though, they have merely reminded the world that the U.S. knows and recognizes that it was acting not so nicely; they can't say 'illegally', for that would be going too far. Still, as for real actions, all is to be dealt with as if all else is, with just the 'stroke of the pen' deal, now A-OK. "Smile!" it is implied, "Keep up the smile, and pretend all is good. Just keep smiling and keep stepping away and past this icky 'issue' since it's now done and dealt with, and best be forgotten. Phew! So GLAD that's done!!"

And, my jaw is hanging down, right above the floor.

'Dealt with'? What, you mean, like it's not an 'issue' anymore? It has been resolved, all the legal ramifications dealt with and the ship of the U.S. State will now move on, continuing to act legally? Of course only somewhat, due to all the 'interrogation techniques' that may be needed, so must be retained or developed, for security reasons that cannot be discussed publicly, for such would aid and abet the terrorists. Ahem!

So, yes, the U.S. is getting there, making progress towards that most difficult of all goal of all, i.e., acting legally, continuing to scramble in the generally well-considered direction willfully, methodically and of course patiently, excruciatingly slowly.

In fact, I wouldn't be surprised to see some Democrat apologists making a positive and hopeful case for the necessarily slow process: the pace is to ensure that no mistakes are made in the undoing of evildoing, never forgetting that it was the haste in their original coming about that brought so many oh, so wrong and evil consequences. In detoxifying the State Apparatuses left behind by that frat boy Bush and his sadistic, jerk friends, we must be patient.

It's as if there has been no egregious violations of the Geneva Conventions, the UN Charter, the U.S.'s own laws, not to forget relevant parts of the U.S. Constitution (the 8th Amendment) prohibiting 'cruel and unusual punishment' (remember that?). It's as if no crimes have been committed, and it's all been just one big misunderstanding.

To use a Malcolm X-like analogy, let's imagine that during the previous eight years, the administration of George Frat Bush had made it legal for people to rob others' houses, provided they met certain, newly legalized conditions. Now, after eight years of people getting their houses robbed, imagine that people are told that the new administration has reversed the rules, and it is no longer legal for people to rob others' houses, no matter what. This is then celebrated as huge progress and treated, in the corporate 'news' media, as a positive 'change'.

But, it is only restoring the status quo ante. This still does not address the wrong done during those eight years. To those thousands and thousands who got robbed, this is the epitome of justice evaded and denied. Getting their belongings back and getting compensated for having been violated all those years; that would be closer to justice, though not completely so yet.

People lost their lives and livelihoods due to those torture policies. Ask Jose Padilla, just for one case. And in matters of torture, one is already too many. What about prosecution of the perpetrators of torture? Or, those who authorized them? If those acts were reprehensible, then surely there should be some penalties for those authorizing and carrying out such reprehensible acts. But, is there any? Is there even a hint of any?

Am I on crazy pills not seeing any, or are there really none to be seen?

The whole matter is treated as if it was some kind of 'mistake' or a 'foolish' policy; on par with a drunken fool acting stupidly and annoyingly, swearing loudly, disturbing the public peace, flaying his arms about wildly, catching passers-by in their jaw, in their eyes, spitting on children while in slurred speech spewing lasciviously about their mothers.

The way Team Obama is behaving is more akin to reacting to an embarrassing moment, something over which you had no control, yet have to apologize for: "Well, well, well ..." (nervous yet broad smile) "Phew! Wasn't that something! Well ... Thank god the drunken fool is home sleeping off his hangover!" Or, like the police dispersing the onlookers hanging out at the scene of a crime long after all evidence of a crime has been removed: Nothing to see here, folks! Go on home! Be thankful the idiot's gone. Ha ha! Whatch you gonna do? Forget about it! C'mon, keep stepping!

Just like that?! And all the Obama zombies are like, 'Well, what more do you want?! He changed the laws back, didn't he? Duh!!'

'Duh', indeed ... These crazy pills are something else!

IF YOU'RE ON CRAZY PILLS, HONEY, SO AM I!!

[tclambert]

49. Got a suggestion for another jobs program, other than construction.

Demolition. We've got a surplus of abandoned houses in this country. In Detroit, this has been a long term epidemic. They have years of backlog in their demolition program. Abandoned houses deteriorate with surprising rapidity. Temperature extremes, vandalism, arson, even slow leaks wreck the interiors. Abandoned houses attract vandals, drug dealers, squatters, arsonists, and scavengers.

Actually, I have mixed feelings about squatters. If people need shelter and houses are available, it seems like there should be some way to match them up, some sort of e-harmony for the homeless and abandoned homes. Of course, the population of squatters overlaps the populations of vandals, drug dealers, and scavengers. The poorest squatters cannot afford to make improvements or repairs or even pay for utilities. How they find a way to heat a house with no utilities may lead to accidental fires. They may see the house as a temporary campsite and a source of the occasional payday selling off plaster and wood trim pieces, hardwood floorboards, and any copper left. Copper thieves these days sometimes steal copper pipe from occupied houses and churches. Abandoned houses are unlikely to have any copper in them for long.

It might be worthwhile to simplify the process for squatters to become legal owners of abandoned properties--say, a year of continuous residence, some improvements, a commitment to bringing the property up to code within five years, and payment of much reduced property taxes. It can't work for all the homeless or all derelict buildings, but it could work for some, thus reducing the number of homeless people and the number of peopleless homes.

Still, there will be a large number of, well, ruins, too damaged, too unsafe to do anything with other than tear down. And that takes labor. Government at some level could make a small return on thorough scavenging. We could recycle intact construction materials (bricks and structural lumber, drywall doesn't hold up).

Don't know if it would reduce the official count of houses on the market, as many of these are not really on the market. It's sad, but it is necessary work. It does make neighborhoods safer and look better. It's mostly about jobs, though. It takes many hours of work to safely erase the wreckage of a house.

[Demeter]

53. I dunno. People Will Destroy things for Free

It might even be a necessary social outlet for frustration and boredom in the near future.

[Theres-a]

88. Really

I was on Detroit google street level the other day,if you "walk" down Alter road,there are alot of new homes.Every once in awhile you see an original from,say,the 50's and they look like post-katrina homes.It would be good to get rid of them.

[tclambert]

101. On the rare occasions I visit Detroit, it always makes me sad to see the remains of grand

old houses, rich in architectural details. These houses would cost small fortunes out in the 'burbs. But they're boarded up, falling down, burned out. Imagine what these streets were like back in their prime, with the houses looking sharp, and the street shaded by giant elm trees.

Like James Earl Jones said in Field of Dreams, "America has rolled by like an army of steamrollers. It has been erased like a blackboard, rebuilt and erased again."

Except it's not like an army of steamrollers all the time. Sometimes it's slow erosion.

[Demeter]

185. I Grew Up in One of Those Homes

They were well kept up until Reagan. Even after the riots.

[InkAddict]

191. East Cleveland, OH is like that too...many homes that had

loads of character, woodwork, hardwood floors, and plaster...suffering from lack of maintenance, split up into smaller units, and torn up as folks fled to the suburbs...so sad. Likewise, the "Golden Triangle" in the Dayton OH area.

[DemReadingDU]

195. ah, those gorgeous older brick houses on the college named streets

some are inhabited by the drug dealers now :(

You familiar with 'the ghetto' over by the University of Dayton?

[InkAddict]

200. My daughter attended UD for a while...

and I worked at MVH - I miss Dominic's house dressing! We actually looked at a home on Oxford, but for the Dayton city schools, ugh!

[DemReadingDU]

201. Uh, Dominic's is gone

:(

The owner had died and his wife was doing her best to manage. Had a lot of great help, but it was just too much to maintain. There was a big auction, very sad. MVH bought the land

http://www.daytondailynews.com/n/content/oh/story/news/local/2007/10/20/ddn102107dale.html

[radfringe]

51. New Stock Market Analysis Team

[Demeter]

52. A Picture Worth a thousand Words from Rachel Maddow's Show

See the Youtube posting on DU.

[DemReadingDU]

58. Came from Pelosi's blog

2/6/09 What 3.6 Million Jobs Lost Over 13 Months Looks Like

This chart compares the job loss so far in this recession to job losses in the 1990-1991 recession and the 2001 recession – showing how dramatic and unprecedented the job loss over the last 13 months has been. Over the last 13 months, our economy has lost a total of 3.6 million jobs – and continuing job losses in the next few months are predicted.

By comparison, we lost a total of 1.6 million jobs in the 1990-1991 recession, before the economy began turning around and jobs began increasing; and we lost a total of 2.7 million jobs in the 2001 recession, before the economy began turning around and jobs began increasing.

http://www.speaker.gov/blog/?p=1683


I like Rachel's picture better, as it shows the number of jobs lost on the graph.

[tclambert]

56. From Bureau of Labor Statistics, a graph of job losses by month:

If you need any interpretation of this graph: the last three months were bad.

Rachel Maddow had a good graph on her show, too, showing this recession compared to two others:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=385x270336

This recession's job loss graph looks like "lemmings falling off a cliff."

[tclambert]

57. D'oh. Demeter beat me to it.

[DemReadingDU]

59. Do u have a link to the BLS for this graph? n/t

[tclambert]

97. Yes.

[tclambert]

98. Sorry. That was silly.

Here it is: http://www.bls.gov/opub/ted/2009/feb/wk2/art01.htm

Lots of charts in the section called "The Editor's Desk."

[DemReadingDU]

115. Thank you, n/t

[Hugin]

78. Interesting how it ramps up after it was clear the Pubs were out on their ear.

Sort of like they were sitting on some of the bad news during the elections, eh? ;)

[tclambert]

102. Well, ya know, Rush admitted he wants America to fail.

How does that song go?

This land is my land.
It is not your land.
I've got a shotgun.
Get off my la-awn.

From Beverly Hi-ills,
To the New York Ha-amptons,
This land is mine,
You filthy punks.

[citizen snips]

60. Qwest profit falls 49 pct in 4Q

NEW YORK (AP) -- Fourth-quarter earnings fell 49 percent at Qwest Communications International Inc. from a year ago, mainly due to tax effects, while cost-cutting helped its underlying performance beat Wall Street expectations.

Its shares rose 28 cents, or 8.3 percent, to $3.65 in premarket trading.

The Denver-based phone company on Tuesday said it earned $185 million, or 11 cents per share, in the October-December period, down from $366 million, or 20 cents per share, a year ago.

The latest results included a charge of a penny per share for severance payments. The company cut 1,700 jobs in the quarter, more than the 1,200 layoffs it had announced.

more...
http://finance.yahoo.com/news/Qwest-profit-falls-49-pct-in-apf-14307951.html

[citizen snips]

61. MillerCoors 4th-quarter profit falls 40 percent

DENVER (AP) -- Molson Coors Brewing and SABMiller say fourth-quarter profit for their joint venture MillerCoors declined 40 percent partly on a decline in sales to retailers.

MillerCoors earnings fell to $54.1 million from an adjusted profit of $90.7 million in the year-ago period.

Excluding integration charges related to the joint venture, profit climbed to $135 million from $116 million a year ago.

Revenue for MillerCoors grew 3.1 percent to $1.74 billion.

Sales to retailers dropped 2.3 percent on weakness in Miller Lite and some above-premium brands.

more...
http://finance.yahoo.com/news/MillerCoors-4thquarter-profit-apf-14306436.html

[citizen snips]

62. Swiss bank UBS loses $7.57 billion in Q4

ZURICH (AP) -- Swiss bank UBS AG said Tuesday it made a bigger than expected loss of 8.1 billion Swiss francs ($7.57 billion) in the fourth quarter and would cut some 2,700 jobs to refocus on its home market.

The loss was bigger than analyst estimates, which foresaw a 6.2 billion francs ($5.79 billion) shortfall.

A year earlier, Switzerland's biggest bank had reported a net profit of 1.33 billion francs. The latest results bring its full-year loss to 19.7 billion francs for 2008, the biggest in Swiss corporate history.

The figures could have been worse had UBS not benefited from a change in international accounting rules that improved fourth-quarter operating profits by 3.4 billion francs before tax.\

The rule change allows companies to value shaky assets at the price they would fetch at maturity, rather than at the current market price -- which can be lower.

more...
http://finance.yahoo.com/news/Swiss-bank-UBS-loses-757-apf-14307102.html

[citizen snips]

63. China monthly auto sales overtake US for 1st time

SHANGHAI (AP) -- China's monthly vehicle sales surpassed those in the United States for the first time in January, moving this country closer to becoming the world's biggest auto market, data released Tuesday showed.

With its growing middle class and vast potential as a consumer market, China is vital for General Motors, Volkswagen and Toyota as they count on demand here to offset weakness in the U.S. and elsewhere.

But China's ascent in the global auto market has been hastened by the plunge in U.S. auto sales, which tumbled 37 percent in January to a 26-year low of 656,976 units.

Chinese vehicle sales also have cooled, but hardly as dramatically. In January, 735,000 vehicles were sold, down 14.4 percent from a monthly record 860,000 last January, the China Association of Automobile Manufacturers said.

Mike DiGiovanni, General Motors Corp.'s executive director of global market and industry analysis, said last week he expected Chinese auto sales could hit 10.7 million units in 2009, more than his estimate of 9.8 million unit sales in the U.S. this year. Autodata forecasts 2009 U.S. sales at 9.57 million.

more...
http://finance.yahoo.com/news/China-monthly-auto-sales-apf-14305191.html

[citizen snips]

65. GM to cut 10,000 salaried jobs

NEW YORK (AP) -- General Motors Corp. said Tuesday it will cut 10,000 salaried jobs, citing the need to restructure itself with a government deadline looming and amid some of the worst sales in the auto industry's history.

The Detroit-based automaker said it will reduce its total number of salaried workers to 63,000 from 73,000 this year. About 3,400 of GM's 29,500 salaried U.S. jobs are expected to be eliminated.

The company's statement said that the separations would be done through GM's severance plan, so there would be no buyout or early retirement packages as GM had offered in the past.

In its plan to Congress submitted late last year, GM said work force reductions would be necessary in order for it to be viable for the long term. Most of the cuts are expected to take place by May 1.

GM said the cuts will vary by global regions depending on staffing levels and market conditions.

more...
http://finance.yahoo.com/news/GM-to-cut-10000-salaried-apf-14308033.html

[citizen snips]

66. EU agree to coordinate on toxic assets

BRUSSELS (AP) -- European Union finance ministers agreed Tuesday to coordinate the way they could tackle toxic assets on banks' balance sheets that have frozen lending and aggravated the recession.

They are aiming to stem a possible rash of go-it-alone government moves among the EU's 27 nations -- such as Britain's plan to insure the bad assets that have punched huge holes in banks' balance sheets.

Speaking on condition of anonymity because the agreement is not yet public, diplomats said ministers had agreed "on the need for a coordinated approach to ensure a level playing filed and avoid distortions among banks."

This would set "a correct and consistent approach to valuation" and call on EU regulators to check that any state program would not damage competition by giving some banks an advantage over rivals.

But EU nations are unlikely to pick one option, instead agreeing a range of tools enabling each country to pick the one they like best for its banking sector.

more...
http://finance.yahoo.com/news/EU-agree-to-coordinate-on-apf-14306332.html

[Ghost Dog]

135. Yup. See: HIGHLIGHTS-EU finance ministers' meeting in Brussels

http://www.reuters.com/article/marketsNews/idINLA13217720090210?rpc=44&sp=true

<snip>

ERNEST-ANTOINE SEILLIERE, PRESIDENT OF BUSINESSEUROPE

"We have known (forex) levels that were really probably destroying European competitivity. We have regained since a better position. Volatility is a source of preoccupation for European business. There are also other preoccupations. Credit -- everyone is looking for money. The companies need the banking system in order to be able to perform their duties, which is to make jobs and growth. You see businesses very supportive of the stimulus plans. We are fighting against protectionism. We are worried because it's floating around but we will fight it."

EUROGROUP CHAIRMAN JEAN-CLAUDE JUNCKER

Asked if he was concerned about member states announcing plans that could impinge on other states, such as car sector:

"I am a little bit concerned that day after day member state after member state are announcing not only their own ideas but their own plans and programmes. All this has to be better coordinated."

[citizen snips]

67. Putin criticizes ratings agencies

MOSCOW (AP) -- So you don't like how the world's largest credit rating agencies rate your economy? Create your own.

That's what Russian Prime Minister Vladimir Putin proposed at a cabinet meeting Monday.

"All of us understand the enormous influence enjoyed by rating agencies and the drastic effects their mistakes, let alone abuses, may have," Putin said, according to a government transcript.

With Russia's economy sinking, the ruble battered, its markets hammered by investors and its sovereign credit rating downgraded, Putin has complained his country isn't getting a fair shake.

He told ministers that Russian companies and the government was too dependent on international agencies like Standard & Poor's, Fitch and Moody's.

more...
http://finance.yahoo.com/news/Putin-criticizes-ratings-apf-14307921.html

[DemReadingDU]

71. CNN: Adding up the bailout dollars - $9.1 trillion

Who is getting the bailout dollars?
Click
http://money.cnn.com/news/specials/storysupplement/bailout_scorecard/index.html

Note: Figures as of Feb. 2, 2009
If you place your cursor over a bailout, it gives you a description

[Hugin]

73. I'll have to bookmark this.

There's also some interesting charts scrolling on the bottom of that page.

:)

[DemReadingDU]

84. UpInArms posted this link last December

12/9/08 Economy rescue: Adding up the dollars.
The bailouts totaled $7.2 trillion as of 12/4/08
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=3637525


Thanks UIA!
This time, this CNN link is going to my Internet favorites where I can click on the direct link to check for updates. :)
http://money.cnn.com/news/specials/storysupplement/bailout_scorecard/index.html


edit for correct date

[Tansy_Gold]

74. Here's the big question:

What difference has it made?

Have any jobs (other than Wall Street execs) been saved?

Have any bad mortgages been turned around?

Have car sales gone up?

Have personal incomes risen?

Have job numbers increased?

If the answer is "not so much," THEN MAYBE PLAN A ISN'T WORKIN' SO GOOD AND YOU MIGHT WANNA THINK ABOUT SWITCHIN' TO PLAN B, you fucking maroons.



Tansy Gold, still behind schedule

[Hugin]

76. Quite.

... and seconded. :|

[DemReadingDU]

82. No difference at all. Nothing in Plan A is working

and there is no Plan B, because it's all gonna collapse. All Plan A is doing, is to delay the collapse. During the delay, more of our tax dollars are being transferred to the wealthy.

I think Plan B is for Obama to figure out how to provide food, clothing, shelter to the hundreds of thousands of unemployed homeless people.


I'm reading too many doomer sites and going crazy.
:crazy:

[Tansy_Gold]

93. My Plan B

If I can, I'm going to take my 500 characters every day and post something at whitehouse.gov.

Today's missive:

I'm sure this is already being done but is anyone on the economic advisory team (or whatever it's called) reading the daily Stock Market Watch thread in the Latest Breaking News forum at DemocraticUnderground.com? Seriously, you ought to do so. And take what you read there very, very seriously indeed. THE CURRENT ECONOMIC POLICIES AS OUTLINE ON 02/09/09 ARE NOT WORKING. There is no change in sight. Throwing billions at the banks didn't work six months ago and it's not going to work now.




My day job just slammed me with more work. I gotta get a move on.


Tansy Gold, not complaining (at least not about the job)

[tclambert]

106. The financial companies are laying off, too, Tansy!

290,000 by Dec. 12th, according to Reuters. http://www.reuters.com/article/marketsNews/idINLC27981720081212?rpc=44 Kind of suggests the Republican theory of giving money to the rich and to corporations will create jobs is possibly, um, not entirely correct.

Oh, wait, you said "Wall Street execs." Right, those multi-millionaires have been protected. Well, I'm sure Madame DeFarge has knitted their names into her scarves.

[cottonseed]

164. What difference has it made? Executives making $10 million + still do.

Doesn't seem that their incomes have been dented at all.

[tclambert]

104. Man, back in 2003 I was so naive.

I thought it would be a lot if they spent $10 billion on the war in Iraq. When they allocated $79 billion for it, I thought to myself, "How can America afford so much? Where is that huge amount of money coming from?"

Now, we're throwing around numbers in the trillions. And for what? I can't see how I even got a pack of gum out of this.

[Hugin]

116. "I can't see how I even got a pack of gum out of this."

I get that same thought through my mind...

Heck, we use to get 6 months of WAR for $10 Billion... Now, pfft...

Anyway, Warren Buffet got some gum, but, he had to buy Wrigley's with a few Billion of his own money.

Gum is expensive... I guess. :shrug:

[tclambert]

114. Hold on. $9T divided by 300 million is

$30,000 for every man, woman, child and teenager in America. Hope they don't need it all at once. It may take me a little while to raise my share.

[Hugin]

119. I prefer to think of it in Family Sized chunks.

So around $120,000 for a family of four.

[Dr.Phool]

122. Can I put it on my Visa?

The interest alone will single-handedly bail out a lucky bank.

[Ghost Dog]

138. The hyperinflation that will quickly follow the deflation

will mop most of that up, easy.

And then there will be (real) war followed by either by a one-world perhaps commodity-based but electronic-only currency or, basically, barter.

[antigop]

87. UBS posts historic loss-, lays off more workers -- but keeps management

I guess Phil Gramm keeps his job, huh?

http://www.financialweek.com/apps/pbcs.dll/article?AID=/20090210/REUTERS/902109995/1036

UBS posted the biggest annual loss in Swiss history and said it would cut a further 2,000 investment banking jobs as it looks to rebuild its damaged wealth management brand.

Outflows from the Swiss bank’s core wealth management business accelerated in the fourth quarter, but UBS said net new money turned positive in both wealth and asset management in January, after three consecutive negative quarters.

The news that UBS was winning back some rich clients helped lift the shares in early trading, but the stock swung between positive and negative territory as investors questioned whether UBS had done enough to turn the corner after massive losses.

Robert Wolf, chairman and CEO, UBS was appointed to Obama's Economic Advisory Board. I guess he's Phil Gramm's boss, huh?

WE ARE SOOOO SCREWED!

[Tansy_Gold]

89. "screwn" the word is "screwn" get with the pogrom, er, program!

n/t


My mind is just totally fried

[Dr.Phool]

94. Wall Street must have loved Geithner's grand debut.

I don't have a tee-vee on, but the Dow has dropped about 200 more points since 11:00.

[Imperialism Inc.]

96. It dropped before he even spoke a single word. And massively.

Now down 300.

[DemReadingDU]

103. Perhaps it's market manipulation?

Trying to herd the people into believing a collapse is just around the corner but they need our dollars to prevent the collapse.

Actually,
The banksters want our tax dollars in their pockets before the system really does collapse.

edit for clarity

[Imperialism Inc.]

107. The latter to be sure. Wall street was hoping that there would be another

big give away. It had already leaked out that there wouldn't. So a massive sell off came. Down 100 pts before he could even get a word out. I must be missing what it has to do with market manipulation. Is it now that Obama is in, the market only "truly" moves up. Like under Bush, where only moves down were real and moves up were trillions and trillions and trillions of dollars worth of "fairy dust". I guess my tin foil hat (aka dunce cap) isn't working properly because I don't see it. I think it went basically like this.

Agenda for the day:
9:30am meeting
10:30am dictate memo
11:00am sell everything I own

[tclambert]

108. One of these days they are gonna trace the market's movement back here to Stock Market Watch.

"Stocks tumbled today after negative financial news was posted on Democratic Underground's Stock Market Watch thread. In related news, several Wall Street executives committed ritual seppuku. Posters on SMW reacted to this news by saying, 'Good riddance.'"

[Tansy_Gold]

109. We can only hope. n/t

.

[tclambert]

112. For the first time in three weeks, I didn't get called in, so I'm feeling chatty.

Yesterday, I missed most of the discussion. Felt left out. Although I did notice Dr. Phool's post that said the intellectual level of Democratic Underground has gone down starting at almost exactly the moment tclambert started posting to the site. I'm sure it's just a coincidence. 'Cause yesterday, on Jeopardy, I woulda cleaned up. Those contestants were numbskulls.

[Dr.Phool]

118. I don't think you caused any of it.

DU used to get the occasional freeper troll, who was quickly tombstoned, and life went on. But a while ago, during the primaries, the tenor of discussion went way down, fast. And it hasn't recovered.

I used to be safe to wander into GD. Not so much anymore. You've got people out there actually sticking up for cc companies, and their tactics.

[Hugin]

125. I've learned to identify and avoid what I call, "The Agenda" threads.

Someone will post an obviously inflammatory and biased thread and then lurk with their buddies (or perhaps a heap of
sock-puppets) until someone happens along into the thread and posts what is obviously a normal thought on a subject
and then they pounce on them...

I think in some cases these are 'paid posters' who probably work either directly or indirectly for the industry the
thread refers to... The Credit Card companies in the case you cite.

I've also seen a few threads like that wrt "The Digital TeeVee Transition."

[Dr.Phool]

132. I've had that same thought about paid posters myself.

Like a guy last night telling people that whatever they do, don't cancel their credit cards (even the ones with annual fees) because it will screw up their credit score.

Pretty obvious.

[Tansy_Gold]

139. They may just be people who have a vested interest . . . like

a job.

[AnneD]

171. Why can't I get a job like that...

sitting around all day, a keyboard warrior getting paid to be outrageous. But no, I have to have sick kids cough and puke on me and the day isn't complete until some one pees there pants.:eyes::sarcasm:

[Demeter]

186. You Want To Be a Limbaugh?

Say it isn't true, AnneD!

[AnneD]

198. No, absolutely not.....

I just want a keyboard sock puppet, one day to get a white house press pass job-with out the porn pictures.

[CabalPowered]

174. Hmm, not sure which thread you're referring to

but canceling cards can have a big impact on your score. I think one of the larger factors in the fico equation is the debt to credit availability ratio. If you cancel a card, you reduce your available credit. :shrug:

[ozymandius]

184. We could have our own webcast show!

With a daily deathwatch poll! Here's an example:

Who is likely to leap from a forty story building today?

* Timothy Geithner
* Rupert Murdoch
* ozymandius
* Dick Fuld

[Demeter]

187. Don't You Dare, Ozy!

shudders in horror

[ozymandius]

193. don't worry

The existence and constant parading of abject idiocy among inhabitants on this plane of consciousness causes the thought of death to lose its sting. It does not, however, inspire me to anesthetize myself. Including ozymandius on the list was a form of dark self-deprecating humor.

[Ghost Dog]

110. Europe shares close lower as U.S. plan disappoints

Tue Feb 10, 2009 11:49am EST LONDON, Feb 10 (Reuters) - European shares closed loser on Tuesday after investors were disappointed with a U.S. Treasury Department plan to help the financial sector, with banks and oils the biggest losers in Europe. The pan-European FTSEurofirst 300 .FTEU3 index of top shares unofficially ended down 2.4 percent at 810.34 points.

...

"The market has been looking forward for a long time on clear and definite steps from policy makers on how to clean up these toxic assets. The statement does not give much away and has now dissapointed as markets were waiting for the detail," said Mike Lenhoff, strategist at Brewin Dolphin.

"It was looking for positive guidance and, if it does not find it, it is going to turn the thumbs down instead of up."

...

Across Europe, the FTSE 100 .FTSE index was down 2.2 percent, Germany's DAX .GDAXI was down 3.5 percent and France's CAC 40 .FCHI was down 3.6 percent.

/... http://www.reuters.com/article/marketsNews/idINLA60221020090210?rpc=44

[Ghost Dog]

113. Dollar, yen rise as US bank plan fails to inspire

Tue Feb 10, 2009 12:24pm EST NEW YORK, Feb 10 (Reuters) - The dollar and yen climbed on Tuesday as investors sought shelter in both currencies on concerns Washington's bank rescue plan would not be sufficient to revive the ailing sector.

Markets had pinned their hopes on the package, aimed at helping banks off-load "toxic assets" and boost capital, but it has failed to reinvigorate a sagging U.S. equities market, leading to buying in the dollar and the Japanese currency.

"I think investors are skeptical about the effectiveness of this investment fund," said Kathy Lien, director of FX research at GFT Forex in New York.

"Overall, what we've been seeing ... is that (U.S. Treasury Secretary Timothy) Geithner is not 100 percent confident in (the) plan and that's causing investors to be skeptical as well. We're still seeing risk aversion ... and that's sending investors back into the safety of the U.S. dollar and Japanese yen."

...

"We do not see convincing evidence that the government is moving away from its Band-aid approach to helping banks," said Axel Merk, president and chief investment officer at Merk Investments in Palo Alto, California.

"By now, the only viable solution left may be to nationalize the financial institutions that are deemed too big to fail; it's then a political decision whether depositors should carry part of the cost."

/... http://www.reuters.com/article/marketsNews/idINN1043768520090210?rpc=44&sp=true

[Pale Blue Dot]

117. THANK GOD IT PASSED!!

Woo hoo. I can hardly contain my enthusiasm. I'm sure everything will be OK now. :eyes:

[Dr.Phool]

120. Fucking "A" Bubba.

To quote Gus Grissom in "The Right Stuff".

[Hugin]

121. Now... Now... I thought we'd agreed not to use that phrase unless we were discussing...

Extinction Event Sized Asteroids or Kidney Stones.

[Dr.Phool]

123. That plan is kind of like a big kidney stone.

[Hugin]

126. How's about...

"It shook like a hound dog passing peach pits?"

[tclambert]

124. The vote was 61-37. 3 Republicans voted Yes.

That's 98. Who's missing? Al Franken is one.

[RantinRavin]

133. Most likely Ted Kennedy

I don't think he is up to the daily work schedule yet.

[specimenfred1984]

127. There's gotta be something good for Main St. in it because Wall St. hates it

They likely hate the very idea that they'll be held accountable for something.

[Pale Blue Dot]

128. No no no.

You can try to spin this collapse any way you want, but if Wall Street thought that stocks would be going up in the future - which they should, if you are to believe the stimulus spin - they would be buying right now. Instead they are selling.

Now I hate Wall Street as much as you do, but not as much as I hate an inability to face reality. The reality is that Wall Street is betting that this won't work. This is exactly the opposite effect that people here on DU, even as much as an hour ago, predicted.

[specimenfred1984]

136. I think Wall St. is cashing in their bets/pumps of the last few days

Wall St. will go in whatever direction it's pumped, not up or down based on some future expectation. It's rigged, manipulated, a fraud and that's all the current culture of corruption likes. Wall St. and corporate propagandists will say whatever they want to, 99% of it is misinformation, including their supposed reaction to "news". Actual regulation, enforcement, infrastructure rebuilding, job creation and other things in the stimulus is not good for Wall St. as it exists but that has nothing to do with today's trading. I know the stimulus package is full of corporate handouts which is criminal but the entire U.S. financial system is criminal now. That's the reality of the situation.

Did you read about 1/2 a trillion being sucked out of the U.S. in 2 hours a few weeks ago? That was likely the Bank of England trying to save itself after a similar run on its banks. There's an entire world of corruption going on that people do now want to acknowledge. The financial system is bankrupt, it's being restructured away from the public eye and the stimulus has very little to do with any of it.

[Demeter]

188. Wall Street KNOWS for a fact that it won't work

the big banks will go down. the only question is when. If Obama does send in the green eyeshades to examine the books, it may well be sooner than the Masters of the Universe expected.

[Renew Deal]

168. I think you have your bailouts mixed up.

:shrug:

[Dr.Phool]

129. Atlas vomited.

Posted by Soupkitchen in GD. Thought I'd share. Great title.

Yesterday the Cato Institute long time defenders of the Rights's right to be consistently wrong published an Ad claiming the real consensus among economists is that the New Deal was an economic failure and any stimulus bill is bound to fail.

In alcoholism this is known as the DTs. They're seeing bugs everywhere. Instead of communal and social libations they've been drinking the damaging wood alcohol of libertarianism for so long they've drunk themselves into an intellectual stupor. Where all they can do is throw up the bilge from the poison they've been inbibing. And moan. Moan about the failure of the New Deal; the abject economic failure the American people so disapproved of that they reelected FDR three times. But then, Atlas Vomited. And surprisingly it smells pretty much like what the Cato Institute calls air freshener.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x5022611

[antigop]

130. Krugman: B.A.R.F. --Bad Assets Relief Fund (Galbraith's acronym)

http://krugman.blogs.nytimes.com/2009/02/10/acronyms/
Entire blog entry:

I was going to dub the new financial plan TANF 2 — temporary assistance to needy financial institutions, without, you know, any of the means-testing or work requirements involved when poor people get help.

But Jamie Galbraith (private communication) has trumped me; he says it’s the Bad Assets Relief Fund.

[antigop]

134. If you read only one thing about the BARF

http://openleft.com/showDiary.do?diaryId=11506

James Galbraith calls Tim Geithner's latest giveaway to Wall Street the BARF - the Bad Assets Relief Fund. Details remain sketchy about what this will and will not do, but if you read only one thing about it, make sure to read this snippet from the New York Times:

As intended largely by Geithner, the plan stops short of intruding too significantly into bankers' affairs even as they come onto the public dole.

The $500,000 pay cap for executives at companies receiving assistance, for instance, applies only to very senior executives. Some officials argued for caps that applied to every employee at institutions that received taxpayer money.

Abandoning any pretense about limiting the moral hazards at companies that made foolhardy investments, the plan also will not require shareholders of companies receiving significant assistance to lose most or all of their investment.

This snippet should go next to the updated dictionary definition of kleptocracy.

[TalkingDog]

137. Which one of you did this?

I go away for a coupla' weeks, the markets are trending down, but mostly stable.

I check in today and see that somebody has made a mess....350 points?!! That's coming out of your allowance youngster!


Hope all are well.

TD

[Hugin]

140. Wasn't me....

I've kept my nose clean.

Quietly doped up on Fukitol(r)... Yes, I am. :silly:

:hi: TalkingDog.

[TalkingDog]

151. Hey! I read the origin story of your name change. Interesting (as usual)

Any side effects from the Fukitol? Brain seepage,toenail warts, Republicans making sense?

[Hugin]

156. Dr. Tansy_Gold says it'll allow me to play the violin!

Which is GREAT!

Cuz, I've never been able to play the violin! :bounce:

Anyway, I don't think there's a drug available strong enough to make Republicans seem sensible. That's crazy talk! :crazy:

[AnneD]

172. Yes, there is a drug hugin....

it's called damnitol. Makes gop seem reasonable. Says so on the label

[Tansy_Gold]

141. I was wondering where you were!

Thought maybe you'd gone and changed you name or sumpin.

It's a lively bunch today.

Welcome home!

:hi:

[TalkingDog]

145. Not ignoring you guys. Mostly lurking due to lack of home ISP and preparing

for what is going to happen when it becomes clear (to those not savvy enough to read the SMW) what comes after "Ummm... guys??? This isn't working."

So prepping the ground for building a small green house. I put green peas in last week, onion sets soon. Spinach, carrots, beets a little after that...and so on.

The Spousal Unit and I, while in excellent health for our age, are feeling just a little dogged. Anybody who likes to play in the dirt and needs a place to crash feel free to stop by. It's hard work, but I'm a good cook and there's good fishing just down the road.

I'll keep lurking and sayin' Hey! when I can, cause this is, bar none, still the best read on the whole InterTube thing.

[AnneD]

143. It was all Ozy's fault.....

he started the thread, she said as she tried to hid the evidence.

[ozymandius]

153. I take full responsibility.

No one can read the stuff I post and feel any confidence about our financial situation.

[TalkingDog]

155. Kinda like the "Not Me" kid in The Family Circle

Once in a while my Mom made the unilateral and rather Calvinist decision that punishment happened. If you weren't the perp this time, well she'd missed you at some other point in the past so it all evened out.

[Ghost Dog]

181. Like mother nature, then

(It all evens out).

Hi there! Good work there, cultivating the land. :hi:

[specimenfred1984]

144. It was me, I was caught trying to corner the puppy market

http://news.yahoo.com/nphotos/Pottsboro2C-Texas/photo//090210/480/12bf8d9282ed4472a2e9c189b2bf6dc3/;_ylt=ArATcURw_nkV8LmLVyLsIUgDW7oF

[specimenfred1984]

146. I'll try again

http://www.startribune.com/lifestyle/pets/39330867.html?elr=KArksLckD8EQDUoaEyqyP4O:DW3ckUiD3aPc:_Yyc:aUnciatkEP7DhUsr

[Hugin]

158. Dogs!

[TalkingDog]

159. Torn between sad/ wow/ oMG awesome! It's a puppy clown car!!! n/t

[Tansy_Gold]

169. True story

Yesterday (Monday) I'm sitting in the local coffee spot (Gecko Espresso in Gold Canyon) and county deputy walks in. Everyone waves and says hi.

"Any of you own an older model blue Toyota with a dog in it?"

Young couple seated at a laptop look up. Young woman says, "I do."

Deputy says, "Well, your car just rolled backward and hit another vehicle."

Likelihood that the dog accidentally shifted gears.

Insurance may or may not cover it.

I have no idea how much damage was done to either car.


TG

[TheWatcher]

147. Don't Worry.

TPTB will be probably be along at 3:30 to buy it back up to a slight gain by the end of the day. :)

Can't have the Sheep thinking the "Stimlus" won't save the world.

[fedsron2us]

177. Big boys did it then ran away.

Honest.

(Actually closer to the truth than I care to admit)

[Pale Blue Dot]

148. People are all over DU inventing excuses for why Wall Street is crashing today.

They desperately want to believe that there is some kind of conspiracy going on. None of them want to entertain the possibility that maybe, just maybe, Wall Street believes that the stimulus bill will do nothing to help the economy.

I've been home sick for the past two days, but I wish I was at school right now. My blood pressure must be going through the roof.

[specimenfred1984]

150. I'm a conspiracy realist

There are all kinds of conspiracies going on, just not the ones most people think.

[wordpix]

152. CNBC : Bernanke getting grilled on TARP, credit markets. Looks like he'll cry whenever asked about

money waste. Asked about $78 billion "lost;" I didn't know about that and Bernanke "explains" that's due to the international monetary meltdown, the $350 billion just couldn't make a dent b/c the meltdown was so bad "way back" in the fall. Nice pat response, right?

I get the feeling he's protecting his puppetmasters - BushCo, maybe?

:shrug:

[Dr.Phool]

162. Bernanke will blame Bernie.

It's just a piddling sum. Hell, Madoff stole almost that much, all by his little lonesome, and nobody noticed.

[cottonseed]

165. Wall Street sold into the good news. Not conspiracy, but they did have a plan.

They know that the big banks are insolvent, and they knew Geitners and Obama's plans were going to be announced. Looked at the upward movement over the last two weeks. People in the know were selling into it.

[Dr.Phool]

160. Roubini and Taleb go on CNBC Comedy Show. Morans ask for stock tips.

These really are clueless people. The one female idiot even said, just the fact that Bill Gates and Michael Dell stood in line at Davos to hear them speak, meant that we've hit the bottom. :crazy: :crazy: :crazy:

Must watch.

http://www.cnbc.com/id/15840232?video=1027496846&play=1

[Robbien]

163. Over at SeekingAlpha: You mean consumer spending may not be coming back?

They are putting forth the question: If banks are fixed and everything banking is hunky dory, the banks may not have consumers gobbling up credit again?

http://seekingalpha.com/article/119608-has-the-economic-crisis-wrought-a-permanent-change-in-consumers

Has the economic crisis wrought a permanent change in consumer attitudes? Will the old consumer complacency towards consumption and debt resume when the Federal stimulus check start arriving or job creation begins again? Or has this crisis changed the US economy by changing the outlook of the US consumer?

Long term changes to consumer attitudes are difficult to track, but there is some indication in retail sales and in consumer credit that this crisis has had an earlier and deeper effect on spending and consumer outlook than usually realized.

Of course it isn't.


Strange that it took this long for anyone (outside of the SMW thead) to even ask the question.

[Dr.Phool]

167. Just like the gas price shocks last summer.

I think it permanently altered people's thinking.

[AnneD]

173. Just like asking....

If the FED interest rate is 0% why aren't houses moving?

[Ghost Dog]

189. US plan to pour $2tn into rescuing banks fails to impress Wall Street

* Andrew Clark in New York
* guardian.co.uk, Tuesday 10 February 2009 22.41 GMT

A $2tn (£1.4tn) plan by the Obama administration to rescue America's ailing banking system suffered a rocky reception tonight as the US markets dived on concern that the strategy lacks detail, costs too much and may not work.

The US treasury secretary, Timothy Geithner, set out proposals to create a public-private partnership to sweep toxic assets from the balance sheets of troubled institutions. He offered a stark warning that the country risks a "complete collapse" in its financial system without urgent action. But his 30-minute speech was greeted with scepticism and disappointment. The Dow Jones industrial average slumped 382 points to 7,888 – its lowest close since November. Banking stocks took a hammering with Bank of America down 19%, Citigroup losing 15% and Morgan Stanley 12%.

The reaction was a severe setback to the newly minted treasury secretary who was sworn in two weeks ago after a lengthy battle with Congress over his personal tax affairs. The White House had hoped the day would mark a turning point for the financial sector but critics said the plans left too many questions unanswered.

"It was too general and it lacked the specifics needed to be credible," said Brian Bethune, chief US financial economist at IHS Global Insight. "The speech and its preamble had too many political overtones that did not set the stage appropriately."

...

Under the proposals, banks in the US are to undergo "stress tests" loosely modelled on medical check-ups, to judge their financial vulnerability.

To vacuum up toxic assets including mortgage-backed securities and high-risk derivatives, the treasury will set up a public-private investment fund which will use taxpayers' money to underwrite private capital. This fund will start at $500bn, rising to $1tn in investment capacity.

But Geithner admitted that this centrepiece of his strategy was yet to be worked out in detail, with "a range of different structures" under consideration and input invited from the public. Market participants expressed frustration.

"The good news is that they are going spend a trillion dollars. The bad news is they don't know how," said James Cox, managing partner at Harris Financial Group.

To encourage banks to extend credit once more, the US government will devote a further $1tn to back loans for new cars, mortgages and commercial enterprises. Fresh money will be pumped into keeping struggling homeowners in their properties. The treasury is setting up a website allowing taxpayers to track how banks are spending their money.

"This strategy will cost money, involve risk and take time," said Geithner. "As costly as this effort may be, we know that the cost of a complete collapse of our financial system would be incalculable for families, for businesses and for our nation."

...

Some criticised the treasury's decision to invite Christopher Dodd, the Democratic chairman of the Senate banking committee, to introduce Geithner. The veteran Connecticut senator took the opportunity to attack the former Bush administration in remarks viewed by some on Wall Street as inappropriately partisan.

...

Analysts at RBC Capital Markets have predicted that more than 1,000 US banks could fail over the next three to five years as struggling businesses default on commercial loans and homeowners fail to keep up mortgage repayments.

The Obama administration has said it will take a tougher line on profligate spending by banks. But Geithner is said to have prevailed over hawks in the White House who wanted even greater steps including the removal of senior executives and the obliteration of any remaining value in banking shares.

Geithner scattered blame for the crisis: "Governments and central banks around the world pursued policies that, with the benefit of hindsight, caused a huge global boom in credit. Investors and banks took risks they did not understand."

/... http://www.guardian.co.uk/world/2009/feb/10/usa-banking

[ozymandius]

192. better late than never for closing numbers

volume leaped by bounds today

Dow 7,888.88 Down 381.99 (4.62%)
Nasdaq 1,524.73 Down 66.83 (4.20%)
S&P 500 827.16 Down 42.73 (4.91%)
10-Yr Bond 2.847% Down 0.18
NYSE Volume 8,091,152,500
Nasdaq Volume 2,500,270,000

4:20 pm : Stocks logged their worst performance since a 5.3% loss on Jan. 20 as investors dumped stocks after Treasury Secretary Geithner failed to deliver the specifics that investors sought from Treasury's financial rescue plan.

The build up ahead of Treasury's financial rescue plan helped stocks climb more than 4% over the prior three sessions. Financial stocks climbed 11% during that time. Enthusiasm quickly turned to pessimism, though, when Treasury failed to provide clarity on how it will handle the toxic assets that are driving losses and write-downs on bank balance sheets. Recognition that this part of the plan has yet to be finalized creates an impression that Geithner still doesn't have a complete solution to the situation.

Still, Geithner did indicate the bank recovery plan will help the flow of credit, strengthen banks, and provide aid for homeowners and small businesses. Treasury intends for institutions that need capital to access a new funding mechanism that uses Treasury funds as a bridge to private capital. Meanwhile, Treasury's investments will be placed in a Trust.

Together with the Fed, FDIC, and private sector, Treasury will establish a public-private investment fund to provide capital and financing to help leverage private capital to get private markets working. There is a range of different structures for this program, but Treasury believes it should ultimately provide up to $1 trillion in financing capacity.

The Federal Reserve Board announced it could expand the Term Asset-Backed Securities Loan Facility (TALF) to encompass other types of newly issued AAA-rated asset-backed securities, such as commercial mortgage-backed securities, and private-label residential mortgage-backed securities. The date that the TALF will begin operations will be announced later this month.

Disappointment in Treasury's plan left market participants disinterested in the Senate's $838 billion economic stimulus bill. The bill was passed midday, but it has been relegated since it aims to drive long-term economic growth, rather than provide a short-term lift.

Federal Reserve Chairman Ben Bernanke's testimony to the Financial Services Committee provided some positive points, but did little to ease selling pressure. He stated extraordinary programs have improved market conditions and eased strains. He also indicated the U.S. remains well capitalized and the Fed will be able to offset any losses through eventual gains on asset sales.

There was little market-moving data beyond the government developments. The only item on the economic calendar was a worse-than-expected December wholesale inventory report. Meanwhile, corporate headlines carried more of the same: job cuts are coming from beleaguered General Motors (GM 2.70, -0.13) and beaten down Swiss financial giant UBS (UBS 11.20, +0.16); UBS also posted a multibillion dollar loss, and; Boeing (BA 40.21, -2.59) and Monsanto (MON 80.85, -2.81) refreshed profit concerns.

Every major sector in the S&P 500 finished substantially lower. Financials led the decline, losing 10.9%. Diversified banks (-14.2%) and regional banks (-17.1%) were primary laggards in the sector. Trading volume was the highest since mid-December.DJ30 -381.99 NASDAQ -66.83 NQ100 -4.1% R2K -4.7% SP400 -4.5% SP500 -42.43 NASDAQ Adv/Vol/Dec 481/2.15 bln/2203 NYSE Adv/Vol/Dec 470/1.76 bln/2621