STOCK MARKET WATCH, Tuesday July 7

[ozymandius]

Source: du

STOCK MARKET WATCH, Tuesday July 7, 2009

Bush Administration Officials Under Indictment = 2
Financial Sector Officials Under Indictment = 0
Financial Sector Officials In Prison = 3

AT THE CLOSING BELL ON July 6, 2009

Dow... 8,324.87 +44.13 (+0.53%)
Nasdaq... 1,787.40 -9.12 (-0.51%)
S&P 500... 898.72 +2.30 (+0.26%)
Gold future... 924.30 -6.70 (-0.72%)
10-Yr Bond... 3.51 +0.02 (+0.49%)
30-Year Bond 4.36 +0.04 (+0.81%)

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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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This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.

Read more: du

[ozymandius]

1. Market Observation

Yellow Light
by RYAN J. PUPLAVA

Green, Yellow, and Red. Those are the colors of an American traffic light. Green means go. Yellow means caution because the red light is about to appear. Stop if you can do so safely. Red means Stop. Currently, the markets are signaling a yellow light which again, means caution. It means take a step back and review your homework. Are your hypotheses proving correct in this market environment?

....

If you’re bullish on the American market, what do you have to say about the consumer sentiment and job report last week as they ticked down? What about all of the secondary economic indicators that haven’t turned positive yet like unemployment, retail sales, and consumer credit?

With all of the economic opinions I’m reading right now it’s no surprise to me just how varied they are. We’ve come to a point in which the market must reflect on its gains and search for the next catalyst to take us higher or correct downwards. The market is signaling a yellow light as momentum and breadth have waned. Caution should be the modus operandi in a portfolio with adequate hedges. It is at times like this without any catalyst to push the market in a given direction that I turn towards market technicals.

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

[Demeter]

2. Ha! Good Morning, Ozy!

What a messy market yesterday. Think GS was pumping like mad to get it up there?

[ozymandius]

4. G'morning, Demeter.

:donut: :donut: :donut:

I had a similar take on yesterday's trading. The Dow trading volume within certain sectors, especially financials, late in the session was particularly surprising. The system worked hard to keep that area afloat.

[Hawkowl]

42. Turning point

I think that the premier market makers know that they can no longer prop up the market and we are headed into a major correction. I think this is why we are being offered up scapegoats and tentative excuses such as "someone stole our program and is manipulating markets!" and "a rogue trader caused the latest oil bubble!"

I'm speculating that GS will now ride the wave down as they assist the market in deflating the very bubble they created.

[Ghost Dog]

56. I recall commenting here nine months or so ago that GS

could just have been (as they themselves were claiming) very clever and/or lucky.

They could also have been very well-informed, to say the least, as these days we're speculating.

Observers point out what may look to some like their de facto access to an 'inside track'. That is increasingly well-documented.

However, in my part of the world, possible so-called 'libel' laws can potentially be very strict, and tend to favor the rich and powerful.

So, to summarise,

Fuck them.

Edit to add:

[Festivito]

3. Debt: 07/03/2009 11,490,988,069,885.84 (UP 1,427,070,575.10) (Down a touch.)

(We had a big increase, a small drop, a big drop and now down a touch .017B$ or .000017T$ -- FICA doing its own thing. Good morning.)

= Held by the Public + Intragovernmental(FICA)
= 7,139,790,892,443.39 + 4,351,197,177,442.45
DOWN 17,140,719.16 + UP 1,444,211,294.26

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 307-Million person America.
If every American, man, woman and child puts in $3.26 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.78, ABOUT TEN BUCKS for a 1B$ 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 12 seconds we net gain a another American, so at the end of the workday of the report, there should be 306,789,542 people in America.
http://www.census.gov/population/www/popclockus.html ON 05/25/2009 01:14 -> 306,504,012
Currently, each of these Americans owe $37,455.61.
A family of three owes $112,366.82. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 days.
The average for the last 23 reports is 5,074,875,620.87.
The average for the last 30 days would be 3,890,737,976.00.

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$/day.
There were 113 reports in 164 days of Obama's part of FY2009 averaging -0.23B$ per report, -0.07B$/day so far.
There were 188 reports in 276 days of FY2009 averaging 7.80B$ per report, 5.31B$/day.

PROJECTION:
There are 1,297 days remaining in this Obama 1st term.
By that time the debt could be between 13.3 and 18.4T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
07/03/2009 11,490,988,069,885.84 BHO (UP 864,111,020,972.76 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: 1,466,263,172,973.40 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
06/15/2009 +022,279,783,785.91 ------------********** Mon
06/16/2009 +000,300,303,919.12 ------------********
06/17/2009 -000,017,732,893.60 ----
06/18/2009 -005,859,665,194.24 --
06/19/2009 -000,316,361,675.40 ---
06/22/2009 +000,024,707,752.58 ------------******* Mon
06/23/2009 +000,354,103,704.29 ------------********
06/24/2009 -034,732,231,983.69 -
06/25/2009 -002,856,149,844.34 --
06/26/2009 +000,335,751,413.22 ------------********
06/29/2009 +000,126,971,012.08 ------------******** Mon
06/30/2009 +084,349,097,965.60 ------------**********
07/01/2009 -009,218,801,329.89 --
07/02/2009 -025,885,550,566.82 -
07/03/2009 -000,017,140,719.16 ----

28,867,085,345.66 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,826,356,266,626.77 in last 288 days.
That's 1,826B$ in 288 days.
More than any year ever, including last year, and it's 180% of that highest year ever only in 288 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 288 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=3955232&mesg_id=3955255

[Festivito]

57. Debt: 07/06/2009 11,520,570,236,023.37 (UP 29,582,166,137.53) (Up 30B$.)

(Back to a noticeable increase. FICA not moving much.)

= Held by the Public + Intragovernmental(FICA)
= 7,169,780,092,481.21 + 4,350,790,143,542.16
UP 29,989,200,037.82 + DOWN 407,033,900.29

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 307-Million person America.
If every American, man, woman and child puts in $3.26 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.78, ABOUT TEN BUCKS for a 1B$ 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 12 seconds we net gain a another American, so at the end of the workday of the report, there should be 306,811,142 people in America.
http://www.census.gov/population/www/popclockus.html ON 05/25/2009 01:14 -> 306,504,012
Currently, each of these Americans owe $37,549.39.
A family of three owes $112,648.16. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 to 31 days.
The average for the last 22 reports is 6,028,489,743.57.
The average for the last 30 days would be 4,420,892,478.62.
The average for the last 31 days would be 4,278,283,043.82.
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$/day.
There were 114 reports in 167 days of Obama's part of FY2009 averaging -0.12B$ per report, -0.02B$/day so far.
There were 189 reports in 279 days of FY2009 averaging 7.91B$ per report, 5.36B$/day.

PROJECTION:
There are 1,294 days remaining in this Obama 1st term.
By that time the debt could be between 13.3 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)
07/06/2009 11,520,570,236,023.37 BHO (UP 893,693,187,110.29 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: 1,495,845,339,110.90 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
06/16/2009 +000,300,303,919.12 ------------********
06/17/2009 -000,017,732,893.60 ----
06/18/2009 -005,859,665,194.24 --
06/19/2009 -000,316,361,675.40 ---
06/22/2009 +000,024,707,752.58 ------------******* Mon
06/23/2009 +000,354,103,704.29 ------------********
06/24/2009 -034,732,231,983.69 -
06/25/2009 -002,856,149,844.34 --
06/26/2009 +000,335,751,413.22 ------------********
06/29/2009 +000,126,971,012.08 ------------******** Mon
06/30/2009 +084,349,097,965.60 ------------**********
07/01/2009 -009,218,801,329.89 --
07/02/2009 -025,885,550,566.82 -
07/03/2009 -000,017,140,719.16 ----
07/06/2009 +029,989,200,037.82 ------------********** Mon

36,576,501,597.57 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,855,938,432,764.30 in last 291 days.
That's 1,856B$ in 291 days.
More than any year ever, including last year, and it's 182% of that highest year ever only in 291 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 291 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=3956853&mesg_id=3956859

[ozymandius]

5. no goobermental reports today n/t

[ozymandius]

6. Oil falls below $64, extending past week's plunge

SINGAPORE – Oil prices fell below $64 a barrel Tuesday in Asia extending a 13 percent drop over the last week on investor doubts about a global economic recovery.

Benchmark crude for August delivery fell 43 cents to $63.58 a barrel by afternoon Singapore time in electronic trading on the New York Mercantile Exchange. On Monday, it fell $2.68 to settle at $64.05.

....

Analysts expect the EIA's crude inventory numbers to fall 3.2 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

In other Nymex trading, gasoline for August delivery fell 0.63 cent to $1.73 a gallon and heating oil dropped 0.59 cent to $1.62. Natural gas for August delivery slid 2.0 cents to $3.47 per 1,000 cubic feet.

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

[ozymandius]

11. Verlerger on Oil Glut: "There has never been anything like it"

From Naked Capitalism:

While oil is a finite resource, focusing on the long term can blind one to near-term dynamics. There has been surprisingly little mention in the mainstream media of how large the current oil surplus is. The collective view seems to be that this will take care of itself in short order. But that may be longer in coming than most believe.

Some veteran oil analysts, in particular Philip Verlerger, beg to differ. From the Los Angeles Times (hat tip reader Michael):

Downward pressure on oil prices is so great that crude could trade for as little as $20 a barrel by the end of the year -- less than a third of what it traded for this week and an 86% drop from its peak last year, analysts said...

The reasons are simple, said Philip K. Verleger Jr., an expert on energy markets at the University of Calgary in Canada: The still-sputtering economy has lessened demand at a time when there is already a big surplus of oil.

For eight straight months, oil supplies have been running about 2 million barrels a day higher than the global demand of 83 million barrels a day, Verleger said. Eventually, he and others predicted, suppliers will tire of paying to store all of the surplus oil and flood the market.

"That is the largest and longest continuous glut of supply that I have seen in 30 years of following energy prices," Verleger said. "It's a huge surplus. There has never been anything like it."

....

With so much oil available and so little need for that amount, investors, oil companies and even some banks have bought and stored surplus oil everywhere they can. By one estimate, before oil surged to its high this year of $73.38 a barrel in June, as many as 67 supertankers -- each capable of carrying 2 million barrels of oil -- were being used as floating storage.

Wanna guess which banks have loaded up on a risk-free commodity?

[Demeter]

13. I Don't Want to Guess - I Want to Know. Goldman Sachs?

BofA, Citi...and others?

[ozymandius]

15. Goldman Sachs? Of course.

Morgan Stanley, too. Banks that are no longer in existence were in this bidness too (i.e. Bear Stearns, Lehman, etc.)

Edit: Matt Taibbi's interview piece has a bit of hard data on this trading scheme.

[Hawkowl]

25. Taibbi is a hero

A 21st century muckraker. I'm predicting his work will go down in history as important as Upton Sinclair's "The Jungle".

[InkAddict]

29. Here you go:

http://www.reuters.com/article/marketsNews/idUSL365078320090603

LONDON, June 3 (Reuters) - JPMorgan Chase & Co (JPM.N) has hired a crude tanker vessel to store gas oil off Malta's coast, shipping sources said on Wednesday.

[Warpy]

51. The robber baron a couple of blocks away

has gone from a high of $2.99 to $2.48 today. Still, that wasn't enough that the cab I rode home from the hospital in had the AC running. I told the cabbie I wasn't going to whine and let him keep the change at the end of the ride, I know prices have been killing them for a long time.

It's just another obvious sign that people around here are still conserving like crazy. People who discovered the bus system and commuter train when gas was $4.00 didn't abandon them when gas prices started to drop.

Hence, the glut.

So what is driving the price rise? It seems our friends the hedge funds and oil commodities manipulators are trying to relive their glory days of $145/barrel spot market futures.

I sincerely hope they lose it all. They richly deserve to lose it all.

Oil is a finite resource. However, it's not the only resource and some of those other resources are renewable.

[Demeter]

7. On the coming neo-feudalism

http://animalspiritspage.blogspot.com/2009/06/on-coming-neo-feudalism.html

It does seem as if the vast majority of people in the United State of America are going to become like medieval serfs, living at what feels in the post-gilded-age new realities like subsistence, watching a small slice of society from a distance as they jet in and out of the country, monopolize the ski resorts, continue to live in big houses with two or three thousand square per person, and so on.

The Baby Boom doesn’t have enough money to retire (quaint notion) and will be working till they drop, which will actually extend their lives. The Gen X’ers will continue to live on scraps. The Millennials are idealistically waiting their turn to be heroes while trying to find a way to support themselves in a workforce that is top-heavy with whining Boomers and cagey Gen X’ers. Most of us will work for large or small corporations at a wage that is enough to support a modest lifestyle, but holidays will be spent close to home. We will worry that we may be next to join the ranks of the unemployed, many of whom and whose stories we know—stories of lost jobs, houses, children’s sense of security in forced moves to strange communities. The health consequences of the current crisis are no doubt predictable. In a PBS special on other countries’ health programs, a German was asked if unemployed people lose their health benefits there. Of course not, he said. They are under great stress and risk to their health. They need health benefits more than anyone.

For a developed nation, America is a barbaric place.

Demand will not recover. The Stimulus, piling upon preexisting terrifying trillions in deficits courtesy of Bush, will not work. Spending will be cut to satisfy our external creditors. The sheer weight of the debt will slow the economy. The narrow U3 unemployment rate will rise into the double digits and stay there through the president’s term. The “real” under- and unemployment rate U6 will hit twenty percent, and stay in the high teens.

The poor and disenfranchised may even take to the streets at some point. Americans are pretty timid now, worried that they’ll be called terrorists and disappear in the night or be put on the no-fly list. Habeas corpus is gone. Last September Hank Paulson said we may need martial law. The government has been preparing for it. There are empty prison camps standing ready, according to reliable reports. (Many were built by Halliburton, allegedly.) The Katrina experience showed us what to expect: mercenaries will disarm the public; impose martial law; tell you to stay in your house or get shot. FEMA’s National Level Exercise scheduled for late July is supposedly a counter-terrorism drill, but I would bet it involves practicing how to impose martial law. Some believe the true purpose of the exercise itself will be to disarm the public. Lots of luck with that. That might provoke the first shots of a revolution. But perhaps that is the intent, to show force and discourage any further dissent. Like Iran now. Like China twenty years ago.

Will President Obama be able to prevent this? I don’t think so. His government has thrown trillions at financial institutions, but we don’t even have workfare or income support for the long-term unemployed, and not everyone is even covered by unemployment insurance. There are 25 million people in the U6 category today. What happens when there are 50 million? Will the government help them, or try to lock them all up? We have a higher percentage of our population behind bars than any other developed country. Will the fortunate just sit in their houses and hope that the Xe guys (formerly Blackwater—great name for a mercenary outfit) will protect them and their property from roving gangs?

Americans have lost confidence in their government and themselves. Their elected representatives do not listen to them. The President is an agent of the status quo. He has enabled the largest wealth transfer to a privileged elite in American history during the financial crisis, at the expense of the American taxpayer for years to come. Does any American believe the new financial regulations will break the grip of the rich upon the resources of the nation? Will we all come together all can-do, gung-ho style and pitch in together and the income distribution suddenly become more equal as it did in World War II and pull ourselves out of this?

It ain’t happening.

These problems, of course, are replicated in many other countries, including our ostensible long-term rival and enemy, China. Which is why the next ten years are a breeding ground for fascism around the world, and for the seeds of war. We went into Iraq to build military bases to protect “our” oil, if push comes to shove. But our military policies are backward-looking to the last war, as John Robb and others point out. We will look pretty stupid when someone pulls off what Robb calls a systempunkt right here at home while we’re blowing billions in Afghanistan. We don’t require our kids to get educated well. Obama is backing off a single-payer health insurance plan, the one preferred by the American people and the one that makes the most sense from an insurance point of view. The American social contract is broken.

People say Europe will be a museum in a decade, a lot of pretty castles and tourist attractions and mamoni hanging around at cafes. America might be like a ski resort, with some beautiful neighborhoods in the cities and trailer parks outside where the workers and retired people live. The Chinese will buy up real estate and companies and immigrate in large numbers, as they did to Vancouver from Hong Kong, having bought enough members of Congress to get their way. They won the financial war, fair and square. They might even teach us how to make state capitalism work, as the Japanese taught us how to make quality automobiles.

Or we could try democracy, for a change.

[Dr.Phool]

14. "For a developed nation, America is a barbaric place".

It sure is.

[tclambert]

18. Is it really "neo?"

"Out of this modern civilization economic royalists carved new dynasties. New kingdoms were built upon concentration of control over material things. Through new uses of corporations, banks and securities, new machinery of industry and agriculture, of labor and capital-all undreamed of by the fathers—the whole structure of modern life was impressed into this royal service.

"There was no place among this royalty for our many thousands of small business men and merchants who sought to make a worthy use of the American system of initiative and profit. They were no more free than the worker or the farmer. Even honest and progressive-minded men of wealth, aware of their obligation to their generation, could never know just where they fitted into this dynastic scheme of things.

"It was natural and perhaps human that the privileged princes of these new economic dynasties, thirsting for power, reached out for control over Government itself. They created a new despotism and wrapped it in the robes of legal sanction. In its service new mercenaries sought to regiment the people, their labor, and their property. And as a result the average man once more confronts the problem that faced the Minute Man.

"The hours men and women worked, the wages they received, the conditions of their labor—these had passed beyond the control of the people, and were imposed by this new industrial dictatorship. The savings of the average family, the capital of the small business man, the investments set aside for old age—other people's money—these were tools which the new economic royalty used to dig itself in."

________________________________________

Who said it, and when? Franklin Delano Roosevelt at the Democratic National Convention in 1936. Much of what Roosevelt said applies equally well today. The "economic royalists" maybe went into hiding for a while. With the "new Hoover," George W. Bush, they came back. If they ever left at all.

[Hugin]

23. "The American social contract is broken." -- Yup, pretty much.

Anybody know Latin? Demeter? ... I'd like this translated, "We fall as Rome fell."

Some online translator says... "Nos cado ut Rome socius."

Did Shakespeare have anything better to say?

[tclambert]

27. The Romans had Goldman Sachs?

[Dr.Phool]

28. Yeah, they called themselves Caligula Saccus back then.

[Hugin]

31. My bad... I was reading this and I thought it was a current article.

"Foreign dominance led to internal strife. Senators became rich at the provinces' expense, but soldiers, who were mostly small-scale farmers, were away from home longer and could not maintain their land, and the increased reliance on foreign slaves and the growth of latifundia reduced the availability of paid work. Income from war booty, mercantilism in the new provinces, and tax farming created new economic opportunities for the wealthy, forming a new class of merchants, the equestrians. The lex Claudia forbade members of the Senate from engaging in commerce, so while the equestrians could theoretically join the Senate, they were severely restricted in terms of political power. The Senate squabbled perpetually, repeatedly blocking important land reforms and refusing to give the equestrian class a larger say in the government. Violent gangs of the urban unemployed, controlled by rival Senators, intimidated the electorate through violence. The situation came to a head in the late 2nd century BC under the Gracchi brothers, a pair of tribunes who attempted to pass land reform legislation that would redistribute the major patrician landholdings among the plebeians. Both brothers were killed, but the Senate passed some of their reforms in an attempt to placate the growing unrest of the plebeian and equestrian classes. The denial of Roman citizenship to allied Italian cities led to the Social War of 91–88 BC. The military reforms of Gaius Marius resulted in soldiers often having more loyalty to their commander than to the city, and a powerful general could hold the city and Senate ransom. This led to civil war between Marius and his protegé Sulla, and culminated in Sulla's dictatorship of 81–79 BC."

[tclambert]

32. Come to think of it, the efforts of Crassus, the richest man in Rome,

led to Julius Caesar and the end of the Republic. History is boring because it's repetitious, redundant, and says the same damn thing over and over.

[tclambert]

30. "Socius" sounds suspect. And Romans didn't call Roma Rome.

I try running translators back and forth as a double-check, often with hilarious results. "Nos cado ut Rome socius" translated back to American came out "We perish when Rome partner." (Almost sounds cowboy.)

How 'bout this? "Quam Romanorum, sic cado nos."

Or "Sic transit Goldmania Sachsii."

[tclambert]

33. All I know is this girl, Gloria, threw up on the bus yesterday.

Sick - Transit - Gloria - Monday

[Hugin]

34. Sadly, the whole of the Internet is lacking a Visigoth to English x-lator.

or I'd say what was really on my mind.

[Ghost Dog]

58. .

:rofl:

[Demeter]

35. The fault, dear Brutus, is not in our stars, But in ourselves, that we are underlings.

Why, man, he doth bestride the narrow world
Like a Colossus, and we petty men
Walk under his huge legs and peep about
To find ourselves dishonourable graves.
Men at some time are masters of their fates:

[Demeter]

36. I Don't Even Remember the Latin Mass, Hugin

and the Baptists aren't into singing much in other tongues...

[Demeter]

8. Chrysler Can't Make Cars Yet, Needs to Secure Access to Tools

THIS REPORT IS TWO WEEKS OLD TODAY...NOT SURE IF IT STILL HOLDS


http://www.nakedcapitalism.com/2009/06/chrysler-cant-make-cars-yet-needs-to.html

Readers may recall that we've been of the view that the expedited bankruptcy planned for GM would run into more snags than its advocates assume. We have not felt as strongly on that point as far as Chrysler is concerned, since that deal has vastly fewer moving parts.

Nevertheless, a hold-up on Chrysler illustrates the sort of impediments that need to be cleared up. The number three automaker has not yet secured the right to use all the tools it needs to manufacture cars. That is not to say Chrysler won't get this matter resolved, but the sticking point illustrates how messy big bankruptcies are.

From Bloomberg (hat tip reader Scott):

Chrysler Group LLC, created out of the best assets from its bankrupt predecessor, can’t make new cars until it gets needed tools tied up in legal disputes,....

The streamlined carmaker, created two weeks ago, may need mediation to resolve disputes over access to tools, Frank Oswald, a Chrysler lawyer from Togut, Segal & Segal LLP, told U.S. Bankruptcy Judge Arthur Gonzalez in Manhattan today. Oswald was updating Gonzalez at a hearing on disputes over “cure costs,” or amounts owed to suppliers to resolve contracts signed before Chrysler’s bankruptcy.

“We don’t want to have a situation where, after rushing to get the sale closed in 42 days, Newco is unable to start up production because we don’t have necessary parts,” Oswald said, referring to the new Chrysler entity.

Of 500 objections to Chrysler’s proposed cure amounts, only 70 remain unresolved, Oswald said in an interview after the hearing. He said he doesn’t know of specific tools Chrysler Group is missing. Oswald said lawsuits may need to be filed “to the extent that there are recalcitrant suppliers.”

[Demeter]

9. New banks: No better than old banks Felix Salmon Tags: banking

http://blogs.reuters.com/felix-salmon/2009/06/22/new-banks-no-better-than-old-banks/

When the TARP was being unrolled last fall, a simple question was often asked: rather than pouring good money after bad into banks which clearly had inadequate risk controls, why not just use that cash to start up fresh new banks unencumbered by toxic assets?

Well, for one thing, the banks needed to be saved, to protect the economy from the systemic consequences of them failing. But more to the point, no one had any particular reason to believe that fresh new banks would be any better at banking than the old ones were. And Daniel Massey has a great example: Herald National Bank, which opened up last fall with an impressive $62 million of initial capital.

In its first full quarter of operation, its return on average assets was negative. Which might be predictable, for a startup. But it wasn’t just negative, it was -27%. Which is insane. Oh, and despite the fact that the bank has only been operating for a few months, it has already started laying people off, including nine managing directors.

And that’s not all:

The loss of Executive Chairman Daniel Healy, an industry veteran who is believed to have attracted many of the bank’s initial investors, may loom even larger than the one on the balance sheet. Mr. Healy had been the chief financial officer at North Fork Bancorp. for 14 years before it was sold to Capital One Financial Corp. He resigned his post at Herald on May 19, leaving for “personal reasons,” according to a regulatory filing.

Mr. Healy did not return several calls seeking comment.

In general, scrapping failed old firms and replacing them with something new is something which is often very attractive in theory, but which can be highly problematic in practice. During the airline rescue after 9/11, for instance, there was a strong case made that the lumbering old legacy airlines should be allowed to fail: small nimble upstarts would surely take their place and be much more successful. But the history of, say, JetBlue since then has hardly been particularly glorious.

The fact is that most startups fail. As a result, placing one’s hope in startups to replace large and established institutions is generally foolish. They can help drive change at the margins, but it’s rare indeed for the mammals to overthrow the dinosaurs entirely, and it’s a bad idea to enshrine such an overthrow as part of public policy.

[ozymandius]

10. U.S. should plan 2nd fiscal stimulus: economic adviser

SINGAPORE (Reuters) – The United States should be planning for a possible second round of fiscal stimulus to further prop up the economy after the $787 billion rescue package launched in February, an adviser to President Barack Obama said.

"We should be planning on a contingency basis for a second round of stimulus," Laura D'Andrea Tyson, a member of the panel advising President Barack Obama on tackling the economic crisis. said on Tuesday.

....

Tyson dispelled concerns about the ballooning U.S. fiscal deficit that is estimated to hit nearly 10 percent of gross domestic product, and its possible inflationary consequences.

"The Federal Reserve is not going to allow the U.S. to inflate away its debt," she said.

....

Turning to the Federal Reserve's near-zero rates policy and credit easing, Tyson said inflationary expectations remained "well-grounded", giving policymakers room to pursue these expansionary policies.

http://news.yahoo.com/s/nm/20090707/bs_nm/us_economy_stimulus

---

Not a lot of substance there. Although it was a no-brainer that a second stimulus would be necessary. I'm glad that somebody connected to the White House came out and said it.

[Demeter]

12. Harvard Grads "Relieved" That There Aren't Wall Street Jobs Available

http://www.businessinsider.com/harvard-grads-relieved-that-there-arent-wall-street-jobs-available-2009-6

Ah the mental burdens of graduating from an elite institution.

In times past, a young Harvard or Amherst grad may have sported theory-soaked ambitions to change the world, end suffering or bring art and beauty to the masses. But there was always that temptation of a fat paycheck from Wall Street -- the lure of serving Mammon against better judgment.

That pressure is gone, and graduates can follow their bliss without having to make that difficult choice.

Bloomberg: Amherst College President Anthony Marx spent six years at the school extolling public service and teaching. His efforts were rewarded this year when eight new graduates took jobs with Teach for America, now the largest employer of Amherst students besides the college itself.

As U.S. President Barack Obama urges young people to make a difference in the world and the recession crimps opportunities, new graduates are pursuing public-interest careers. At Amherst, at least 53 percent of May graduates with jobs are working in education, nonprofit groups or governments, an increase from 43 percent in 2003 when Marx started at the school, said Allyson Moore, director of the campus career center.

The same scene is playing out all over the place...

At Harvard University in Cambridge, Massachusetts, undergraduates are relieved that they no longer have to fight the temptation of high-paying Wall Street jobs, President Drew Faust said, in an interview in New York.

[Hugin]

24. Ah, following in my footsteps! Making the world a little more beautiful...

by pumping out septic tanks and digging out sump pits one at a time. :wipestearfromeye:

Tho, it's long been a dream of mine for this to happen. In reality, they'll probably take their "Archeology is a science best performed with bulldozers and dynamite" ways and take a "top job" away from some un-anointed one down at their Uncle's Fast Food joint.

(There... Is this reply enough to counter that syrup and ponies laden article? :blech: )

[Demeter]

37. Sometimes It's One Damn Lemon After Another

[UpInArms]

16. dollar watch

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

Last trade 80.091 Change -0.289 (-0.37%)

Pound Under Pressure as Drop In Industrial Production Makes Case For Additional BoE Measures
Tuesday, 07 July 2009 10:09:09 GMT

http://www.dailyfx.com/story/bio1/Pound_Under_Pressure_as_Drop_1246961364197.html

The Pound surprisingly found brief support following a disappointing industrial production release helping reverse earlier losses which saw the GBP/USD fall to test 1.6150. Sterling had been under pressure as speculation that the BoE would increase their quantitative easing measures was reinforced by the British Chambers of Commerce says recovery 'is not guaranteed,' and urging the central bank to expand its asset purchase program by £25B. Industrial activity in the country unexpectedly fell by 0.6% versus forecasts of a 0.2% gain led by a 2.1% drop in mining. Manufacturing production also missed expectations of 0.2% improvement with a 0.5% decline.

The first drop in activity in the last three months will raise concerns over the viability of a recovery for the U.K. and may be enough to inspire the BoE to add to their assets purchase program. The central bank was widely expected to stand pat until they assessed the impact of the initial £125 which they are scheduled to complete at the end of the month. However, as we head into earning season there is a concern that corporate profits will be subdued which could weigh on optimism and threaten to stall current momentum. Downside risks remain for the Pound as we get closer to Thursday policy decision with a test of support at 1.600 likely. We could see a test of the 6/8 low of 1.5801 if bearish sentiment continues.

The Euro reversed earlier losses as positive equity markets have helped spur demand for the single currency. The biggest gain in German factory orders helped fuel further Euro demand as activity rose by 4.4% versus expectations of 0.5%. The data supported earlier comments from ECB member Miguel Fernandez Ordonez who was touting a global recovery by 2010. The Bank of Spain governor also said that deflation risks didn’t exist for the region and that in Spain that it would actually be a positive for the competitiveness of their industries. Concerns over Spain has been a weighing factor for the Euro as there are concerns that outside of the major economies on the region the rest will struggle to find growth over the near-term. The upcoming G-8 meeting will provide some event risk for the Euro as we have started to see ECB President Trichet call for the U.S. to defend the dollar which could be a veiled attempt to try and spur Euro weakness. Additionally, if we see more talk of replacing the dollar as the world reserve currency then the Euro could find support as a possible substitute.

The dollar started to regain its footing overnight after a reversal in risk appetite yesterday had the greenback under pressure. An improvement in ISM Non-manufacturing to 47.0 from 44.0 helped spur optimism, as the indicator also showed a significant pick up in the employment component which helped eased concerns over the disappointing NFP report. We may see price action continue to oscillate as traders weigh the significance of each piece of fundamental data. ABC consumer confidence is the only release due today and the second tier indicator shouldn’t have an impact on price action as the expected improvement to -50 from -51 is relatively unchanged. U.S. futures are pointing toward a lower open which could lead to dollar strength if risk aversion prevails on the day. However, we are seeing bullish sentiment in Europe which is starting to lead to dollar weakness.

...more...

Australia Keeps Interest Rates at 3% but RBA Sees 'Scope' For Further Easing

http://www.dailyfx.com/story/special_report/special_reports/Australia_Keeps_Interest_Rates_at_1246947452782.html

The Reserve Bank of Australia kept interest rates on hold at 3% as expected but said that there is still “scope for further easing of monetary policy” and identified credit conditions and the effects of economic weakness on asset quality as “a challenge”. May’s UK industrial production report headlines the calendar in European hours.

Key Overnight Developments

• New Zealand Business Sentiment Rebounded From Record Low, Says NZIER
• Australia Keeps Interest Rates at 3% but RBA Sees ‘Scope’ For Further Easing


Critical Levels



The Euro slipped -0.2% against the US Dollar in overnight trading, while the British Pound slumped 0.4% against the greenback. Commodities and related stocks traded lower in Asian trading, boosting demand for the Dollar as a safe haven asset.

Asia Session Highlights



As we speculated in our weekly New Zealand Dollar forecast, the second-quarter edition of the NZIER Business Opinion Survey ticked higher to register at -25, meaning that a net 25% of the companies polled for the report believe the economy will deteriorate over the next six months. A record 65% of respondents were expecting worse conditions in the three months to March. Leading indicators were telegraphing a relative improvement, with the monthly NBNZ measure of business confidence rising steadily through the second quarter, swinging into positive territory in May for the first time since September 2008. Still, it remains to be seen if positive momentum can be maintained considering the soaring public deficit has seen Prime Minister John Key’s government abandon a hefty portion of the fiscal stimulus measures that had been included in the latest budget. Indeed, additional monetary easing may be in the cards in the weeks ahead despite RBNZ Governor Alan Bollard’s forecast that that economic growth will pick up by the end of this year.

...more...

(edited because the world is not red

[UpInArms]

17. U.S. office market continues to spiral down

http://www.reuters.com/article/businessNews/idUSTRE5660MQ20090707?feedType=RSS&feedName=businessNews&sp=true

NEW YORK (Reuters) - The U.S. office market vacancy rate reached 15.9 percent in the second quarter, its highest in four years and rent fell by the largest amount in more than seven as demand from companies and other office renters remained weak, real estate research firm Reis said Inc.

"It's bad," Reis director of research Victor Calanog said. "It's decaying and getting worse. Given the depth and magnitude of the recession, you can argue that we are facing a storm of epic proportions and we're only at the beginning.

The weak demand helped push up the average weighted U.S. office vacancy rate 0.70 percentage points during the quarter and 2.7 percentage points compared with a year ago, according to the report released on Tuesday.

Asking rent during the quarter fell 1.4 percent to $28.43 per square foot. Factoring in rent-free months and improvement costs to landlords, effective rent -- the net amount of cash landlords take in -- fell 2.7 percent in the quarter to $23.42 per square foot. The second-quarter drop was more severe than the first quarter's 2.3 percent, dampening hopes the office market is bottoming out, Reis said.

Year over year, rent was down 6.7 percent, the largest one- quarter decline since the first quarter 2002.

"This is really only the third quarter that we've experienced negative effective rent growth," Calanog said. "Last time, the office sector had four years of negative effective rent growth."

...more...

[UpInArms]

21. - oops! posted in wrong spot

:blush:

[Demeter]

19. Insurers face $6bn bill for board protection

http://www.ft.com/cms/s/0/49bdfdae-5f71-11de-93d1-00144feabdc0.html

By Saskia Scholtes in New York

Published: June 22 2009 23:35 | Last updated: June 22 2009 23:35

The financial crisis could cost insurers $6bn (€4.3bn) on policies that protect US companies and directors from legal costs, insurance consultants have warned.

Disgruntled investors hoping to recover their losses have filed a spate of lawsuits against companies and their executives since 2007, resulting in a dramatic increase in claims activity under so-called directors and officers (D&O) policies.

Towers Perrin and Cornerstone Research, which track class action lawsuits, said 210 securities class actions were filed last year, up 19 per cent on 2007. Almost half of the litigation activity in 2008 involved financial services companies.

Combined with rising settlement costs for class action suits and the extent of policy coverage for targeted US financial companies, insurance companies could be on the hook for about $6bn of payouts, says Advisen.

But the costs to insurers could mount, says Advisen, as insurers face legal fees to help resolve contract disputes. The complex nature of D&O coverage frequently leads to legal wrangling between insurers, executives and companies.

David Bradford, executive vice president of Advisen said: “You don’t have to go very far before there are disputes on how to allocate limited assets of a policy between insured parties.”

Mounting claims and contract disputes over D&O policies in the financial services industry have prompted providers of D&O coverage to raise premiums, tighten policy terms or refuse coverage for some financial companies with large exposure to subprime mortgages.

American International Group, itself a large insurer of liability for other companies, is wrangling over its D&O policy proceeds with insured former executives including Hank Greenberg, AIG’s ex-chief executive and chairman.

Great American Insurance, a Cincinnati-based provider of D&O coverage for AIG and its directors and officers, last month sought help from a New York district court in the $15m dispute. Great American is asking the court to determine who should get $15m in policy proceeds and that the court keep AIG and Mr Greenberg from suing the insurer or taking it to arbitration. Great American, AIG and Mr Greenberg declined to comment on the case.

[Demeter]

20. JPMorgan on “Exit Strategies”

http://acrossthecurve.com/?p=6531


This is an excerpt from a very long piece by JPMorgan economists which discussed management of the Federal Reserve balance sheet and various exit strategies from the array of unconventional policies which the Fed currently employs.

When will the Fed hike rates?

The FOMC has stated an intention to keep rates low “for an
extended period.” Now that the economy has moved from
free-fall to controlled descent, the question of what an “extended
period” means is becoming more interesting. Over
the last 15 years, the dominant paradigm for understanding
monetary policy has been interest rate rules and, in particular,
the Taylor rule. In its simplest form, the Taylor rule says
that the fed funds rate is set in response to deviations of inflation
from a target inflation rate and of output from its
full-employment, or potential, level. (Alternative variants
include the lagged funds rate or forecasts of future output
and inflation). The popularity of the Taylor rule stems from
two factors: first, the empirical success of the Taylor rule in
fitting the actual behavior of monetary policy has meant that
the rule is often used to describe and predict the path for the
funds rate, and second, in more theoretical derivations of
the optimal policy rule that central banks should use, Taylor-
like rules are usually prescribed as the ones central
bankers should follow.

If one takes this latter proposition seriously, and believes
the FOMC does as well, then the prospect of a hike in the
funds rate anytime before 2011 looks exceedingly unlikely.
The main reason for this is that even under fairly optimistic
assumptions about the outlook for growth over the next 18
months, the output gap should remain negative and large in
absolute value. The J.P.Morgan forecast sees negative output
gaps persisting until 2013. Because inflation is also expected
to persist at a rate below the Fed’s 2% target, the prediction
of a standard Taylor rule would predict the that the
funds rate would not turn positive for at least another two
years, even with core inflation hovering near 1.5%. If instead,
core inflation were to turn flat, Taylor-rule predicted policy
rates could stay at zero for three years or even longer.

[Po_d Mainiac]

44. The aircraft may look under control as it descends

But all those rivets that popped out around the horizontal stabilizers are about to lead to a catastrophic structural failure. :nuke:

[UpInArms]

22. U.S.consumer loan, card delinquencies set records

http://www.reuters.com/article/bondsNews/idUSN0730242620090707

NEW YORK, July 7 (Reuters) - Soaring U.S. unemployment and a shrinking economy drove delinquencies on credit card debt to an all-time high in the first quarter as a record number of cash-strapped consumers fell behind on their bills.

Fallout from a still deteriorating housing market caused the rate of consumer loan payments at least 30 days late to rise to 3.23 percent in the January-to-March period from 3.22 percent in the 2008 fourth quarter, the American Bankers Association said.

Delinquencies were the highest since the ABA began tracking the data in 1974. Late payments on home equity borrowings set records, rising to 3.52 percent from 3.03 percent on loans and to 1.89 percent from 1.46 percent on lines of credit.

The overall delinquency rate actually understates consumer pain because it excludes bank-issued credit cards, where credit deterioration was severe.

Delinquencies on the value of all card debt soared to a record 6.60 percent from 5.52 percent in the fourth quarter. The rate of delinquent accounts rose to 4.75 percent from 4.52 percent, near the record 4.81 percent in the spring of 2005.

"The biggest driver is job losses," ABA Chief Economist James Chessen said in an interview.

...more...

[DemReadingDU]

26. TAE - articles discussing deflation

7/6/09 'The Automatic Earth' has posted several articles discussing deflation by Steve Keen, Martin Weiss, Hugh Hendry (video), Niels Jensen, John Mauldin, Antal Fekete and Minyanville's Mr. Practical.
http://theautomaticearth.blogspot.com/2009/07/july-6-2009-inflation-least-of-your.html

Yesterday Stoneleigh (co-editor of TAE) wrote the introduction, about deflation. Interesting comments at the end after all the articles.
http://theautomaticearth.blogspot.com/2009/07/july-5-2009-unbearable-mightiness-of.html


Reading these articles will show that we are not going to have inflation anytime soon, but deflation. Just because prices rise, it does not indicate inflation.
Think of inflation when times are good and there is lots of credit and people buy lots of stuff using credit cards. Deflation is opposite where most people don't buy much because they have little money, and credit dwindles.

[Demeter]

38. Our Future Price Rises Will Be Due to Dollar Devaluation and

real scarcity as goods stop coming in, or being made at all. Time to Do It Yourself. Buy useful tools and raw materials. Learn survival skills.

[DemReadingDU]

41. Another way to look at prices in deflationary times

Take milk. Just about everybody drinks it or use milk on cereal, etc. And we buy it whether the gallon costs $2 or $3. And if people don't have cash, they will use a credit card.

In deflationary times, people have very little money, and NO CREDIT. Even if milk cost 0.50 cents per gallon, who can buy it if they have no income nor credit cards? Better get your own cow or goat.

[Dr.Phool]

46. The chimp was a visionary.

Laura said he learned how to milk the bull a long time ago.

[DemReadingDU]

50. LOL

:rofl:

[Po_d Mainiac]

45. Very much so.

People are going to be shocked when the CPI goes down, but their actual day to day living expenses increase. Stating a period of deflationary pricing is the near term future, is over simplifying the true picture.

[DemReadingDU]

54. It's going to be deflationary for quite a long time

And as more and more people lose jobs, have no income nor savings nor credit, EVERYTHING will appear to be expensive (to them) even if something costs mere pennies.

[DemReadingDU]

39. ZeroHedge: Stock Manipulation?

7/7/09 Manipulation? Authored by Joe Saluzzi of Themis Trading

We have talked extensively on our blog and in our white papers about the power of high frequency trading and program trading. We have noted that these trading strategies can move the market quickly during the trading day. We have always suspected that there have been certain major players that can dominate this space. Now comes the case of the stolen proprietary trading code from Goldman Sachs.

http://www.bloomberg.com/apps/news?pid=20601087&sid=axYw_ykTBokE

Most interesting in this Bloomberg article is the following statement by Assisitant U.S, Attorney Joseph Facciponti:



“The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,” Facciponti said.



Is this an admission by Goldman Sachs that there is the possibility of manipulation in the market? Does anyone think that this is the only program in the world that can “manipulate” markets? With all the programmers in the world, we can only imagine how many more manipulative programs are out there. Now here is the best part according to the assistant U.S. Attorney:

The proprietary code lets the firm do “sophisticated, high- speed and high-volume trades on various stock and commodities markets,” prosecutors said in court papers. The trades generate “many millions of dollars” each year.

Markets are a zero sum game - somebody wins and somebody loses. Where do you think these “many millions of dollars” are coming from? They are coming from you - the average retail investor and the large institutional investor. These programs are taking advantage of real order flow and are siphoning off small profits throughout the day that belong in the pockets of the retail investor and the traditional money manager.

So, who is out there to protect you from these “machines” and their army of programmers? One would think the SEC has your back. But what did they have to say about high frequency trading. According to an article in the WSJ (http://online.wsj.com/article/BT-CO-20090618-707189.html )

The Securities and Exchange Commission believes institutional money managers are “sophisticated” enough to trade against the machines without further regulation.

“We don’t want to curtail liquidity,” said Gene Gohlke, associate director for the SEC. Gohlke said it’s up to the managers themselves to make sure other traders aren’t manipulating their models.

This story is just at the beginning stages and we here at Themis Trading intend to keep a careful watch on it.

http://www.zerohedge.com/article/guest-post-manipulation

[DemReadingDU]

40. Denninger: US Attorney Kicks Own Goal (On Goldman)?

7/7/09 Karl Denninger: US Attorney Kicks Own Goal (On Goldman)?

One has to wonder....


“The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,” Facciponti said, according to a recording of the hearing made public today. “The copy in Germany is still out there, and we at this time do not know who else has access to it.”


Uhhhhhhhhh.....

Let's see.... so someone who knows how to use this program can use it to manipulate markets can they?

Is that manipulation "in fair ways" if Goldman uses it, but "unfair ways' if someone other than Goldman uses it?

That seems to be a rather different claim than this:

July 6 (Bloomberg) -- Goldman Sachs Group Inc. may lose its investment in a proprietary trading code and millions of dollars from increased competition if software allegedly stolen by a former employee gets into the wrong hands, a prosecutor said.

Well of course. That's what these sorts of cases are usually about. Someone misappropriates some trade secret material and by using it they would give someone the same advantages in a marketplace that the rightful owner (who spent plenty to develop it) has.

But that's not market manipulation, is it?

Once again, the claim made in open court:

“The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,” Facciponti said, according to a recording of the hearing made public today.

Did Assistant US Attorney Facciponti make an erroneous statement, or did he just lay a nuclear egg on the table, step back, and set it off - on accident - admitting in open court that the software in question "can be used to manipulate markets"?

Inquiring minds would like to know.
http://market-ticker.org/archives/1183-US-Attorney-Kicks-Own-Goal-On-Goldman.html

[Hugin]

43. Wasn't Timmeh an early advocate of this super-fast electronic trading?

I seem to remember that was the claim... Back in about the 1998 to 2000 time frame?

Naw, pure coincidence... There's so many of them these days... I get confused.

[mullard12ax7]

47. Most peoples 1st thought: "I wish I could do that"

Just look at all of Madoff's "investors", most knew he was a criminal and didn't care, they wanted returns. It's a fact that American culture has to deal with or we're going to collapse in a heap of corruption. In fact, we already have, the banks went bankrupt and are being held up solely by the Feds so the next question is, how does the U.S. go about cleaning up Goldman's and others corruption, like Morgan Stanley, when the U.S. is feeding the criminals 100s of billions?

Answer is: we can't. The corruption is being protected, the U.S. financial system is 100% corrupt now.

[DemReadingDU]

52. The banksters like this corrupted system with gov's protection

But eventually more and more people will wake up to the amount they've been deceived and be going after all the crooks.

[Zenlitened]

48. "...the government would be better off giving the money directly to struggling borrowers..."

Lenders avoid redoing loans, Fed concludes
Study cites lack of profit in aiding the distressed

By Jenifer B. McKim
Boston Globe Staff / July 7, 2009

Mortgage lenders don’t try to rework most home loans held by borrowers facing foreclosure because it would probably mean losing money, a study released yesterday by the Federal Reserve Bank of Boston concludes.

The Boston Fed’s findings suggest the Obama administration’s major effort to solve the foreclosure crisis by giving the lending industry $75 billion to rewrite delinquent loans to more affordable levels is not likely to work.

One of the study’s coauthors, Boston Fed senior economist Paul S. Willen, said the government would be better off giving the money directly to struggling borrowers to help them with their payments, rather than to lenders that are averse to working out the troubled loans.

More:
http://www.boston.com/business/articles/2009/07/07/lenders_avoid_redoing_loans_fed_concludes/

[Dr.Phool]

49. Denninger takes on health care reform.

Boy, have I ever been in this situation before.


http://market-ticker.denninger.net/authors/2-Karl-Denninger


Health Reform: Who Are They Trying To Fool?

Health care "reform" is the current hot-button, with the Obama administration now talking about a "public" health-insurance system to "keep the system honest."

Uh huh.

Look folks, you want to know why we have the health cost problems we have? I'll lay it out for you - in a way you can't refute or argue with:

1. There are no published prices. In no other line of work is it legal to do this. Nowhere. You can't sell someone a hot dog and tell them after they eat it what it just cost them. You can't hire a lawyer and have him tell you "I'll tell you what this will cost when we're done." You can't hire an electrician and have him tell you "I'll make up a bill when I'm done." In every line of work except health care, this is illegal. There are even laws for "major" consumer work (e.g. contracting, auto repair, etc) where they must give you a binding written estimate before beginning work!
2. Robinson-Patman makes it illegal to discriminate against like kind purchasers of goods in pricing decisions when the effect of doing so is to lessen competition. While it does not apply to services, it darn well should. Whether you are paying privately, you have private insurance or you're a Medicare patient if you need to have a breast reconstructed due to cancer the complexity of the procedure does not change. Yet it is a fact that the privately-billed amounts for uninsured ("rack rate") patients are often ten times or more that billed to insurers or Medicare. Try charging a cash purchaser 10x more for a TV than someone who finances that TV on your in-house credit facility and you would be shut down and thrown in jail.

#1 and #2 exist because of explicit efforts by the "health care" industry to exempt themselves from the laws that every other merchant of every other good and service in the United States must adhere to.

To put this bluntly the medical industry has intentionally put forward a system by which it can screw you with impunity, obtaining exemptions from the laws that cover every other area of commerce, thereby effectively forcing you to buy overpriced services you do not want to purchase lest an unexpected life event literally wipe you out.

(snip) more

[Joanne98]

53. Ruby Tuesday kicks off earnings season. Reports at 5pm. UP 12%

http://finance.yahoo.com/q?s=RT

On nothing.

[Hawkowl]

55. California is doomed- IOU's rejected

"RYAN KNUTSON--WSJ

A group of the biggest U.S. banks said they would stop accepting California's IOUs on Friday, adding pressure on the state to close the $26.3 billion budget gap.

The development is the latest twist in California's struggle to deal with the effects of the recession. After state leaders failed to agree on budget solutions last week, California began issuing IOUs -- or "individual registered warrants" -- to hundreds of thousands of creditors. State Controller John Chiang said that without IOUs, California would run out of cash by July's end."

http://online.wsj.com/article/SB124692354575702881.html

Correlate the timing of this announcement with the stock market indices and you can see the implosion.