STOCK MARKET WATCH, Tuesday July 14

[ozymandius]

Source: du

STOCK MARKET WATCH, Tuesday July 14, 2009

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

AT THE CLOSING BELL ON July 13, 2009

Dow... 8,331.68 +185.16 (+2.22%)
Nasdaq... 1,793.21 +37.18 (+2.12%)
S&P 500... 901.05 +21.92 (+2.49%)
Gold future... 901.05 +21.92 (+2.49%)
10-Yr Bond... 3.35 +0.04 (+1.30%)
30-Year Bond 4.23 +0.03 (+0.69%)

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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

Alchemists in Action
BY ROB KIRBY

On Saturday, July 11, 2009, GATA board member Adrian Douglas published a paper titled, The Alchemists. Disturbingly, what this paper chronicles is how the New York and Tokyo commodity exchanges have been permitting their gold futures contracts to be settled not in real metal but in shares of gold exchange-traded funds (ETFs) in a transaction known as an Exchange of Futures for Physicals (EFP).

Douglas points out that,

“this means is that contracts can essentially be settled without going through the COMEX warehouse. Futures contracts and a physical commodity equivalent can be exchanged outside of the exchange and an EFP form can be filed to the clearing department at the COMEX. What's more, the physical commodity doesn't have to meet the specification of the COMEX Gold Contract of being a 100 troy ounce bar or three 1Kg bars of .995 fineness.”

It used to be that the COMEX standard for good delivery gold was .995 fineness ONLY.

So, why was this standard altered?

....

Whether or not the U.S. Treasury is / has employed gold swaps, a picture is beginning to emerge that, given the obsequious COMEX rule changes, at least some of the world’s precious metals ETFs have perhaps been created with the expressed purpose of creating “stealth supply” - aiding in the suppression of the gold price.

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

[willing dwarf]

4. Yet the price of gold is trending up?

I've never fundamentally understood the value of gold. I mean it's delightful stuff, and I'd love to have a block of it just to feel its smooth weighty softness. But honestly, what work can gold do? It's not like oil or timber or corn. It drives nothing, feeds nothing, supports nothing really. So why do we make gold the most important thing?

And gold futures? I ask you, is there anything of less value, really?

[ozymandius]

6. It is international currency.

Much like the US$. Nations can pay their debts to each other in gold. There are gold fans who pass through the SMW. I would love to hear their personal interest in gold expressed here. I've never thought of gold as something that would be of great value to the individual investor but more the currency of really big players that trade in large quantities.

Any gold fans wish to chime in?

[philly_bob]

26. Gold is a pretty reliable hedge against inflation

... and spikes up when there's bad news.

Since I foresee inflation ahead -- not to speak of bad news -- I have 30% of my IRA in one of the top three gold mining companies (GoldCorp).

I resist a relative's advice to get physical gold because of the hassles of acquiring and safeguarding it. And I'm suspicious of Exchange Traded Funds, so I don't have the ETF GLD.

G'luck everybody.

[AnneD]

37. Heard some wise words once...

you have gold to retain your wealth, you hold gold stocks to (hopefully) gain wealth. I have gold as a hedge against inflation and for worst case scenarios. Can't remember whether it was 54anickle or UIA that compared it to a big yellow dog you like to have hanging around for security. I am not a gold bug but it does have a place in my investment portfolio- if only for my piece of mind.

[ozymandius]

2. Today's Reports

08:30 Core PPI Jun
Briefing.com 0.1%
Consensus 0.1%
Prior -0.1%

08:30 PPI Jun
Briefing.com 0.7%
Consensus 1.0%
Prior 0.2%

08:30 Retail Sales Jun
Briefing.com 0.4%
Consensus 0.4%
Prior 0.5%

08:30 Retail Sales ex-auto Jun
Briefing.com 0.4%
Consensus 0.5%
Prior 0.5%

10:00 Business Inventories May
Briefing.com -1.0%
Consensus -0.8%
Prior -1.1%

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

[UpInArms]

22. confusing 8:30 reports:

U.S. June retail sales up 0.6% vs. 0.5% expected
8:30am Today

U.S. June producer price index rises 1.8%
8:30am Today

U.S. June retail sales ex-autos up 0.3%
8:30am Today

U.S. June retail sales ex-gasoline up 0.3%
8:30am Today

U.S. June retail sales ex-auto, ex-gas down 0.2%
8:30am Today

U.S. retail sales down 9.0% yr-on-yr in June
8:30am Today

U.S. June energy producer prices rise 6.6%
8:30am Today

U.S. June producer prices down 4.6% year over year
8:30am Today

U.S. June core producer price index rises 0.5%
8:30am Today

****************************

retail sales rise but down y-o-y

PPI skyrockets but down y-o-y

:shrug:

when it makes no sense, it's nonsense

[ozymandius]

27. Brain food: Shedlock on CPI

What's the Real CPI?

Inquiring minds are asking "What is the Real CPI?" It's a good question, too. However, you can find many widely differing opinions. For example, you will get one answer from the government, a different answer from sites like Shadowstats, and a third opinion from me.

....

Should housing be in the CPI? How?

Bear in mind the government considers housing a capital good not a consumption item. Based on the idea that one would be renting a house if one did not own it, the government uses Owners Equivalent Rent (OER) and not housing prices in the CPI. OER is the largest component in the CPI.

By the same measure one might argue that lawn mowers and automobiles are capital goods. Lawn mowers are durable, not immediately consumed, and if one owns buildings and uses lawn mowers to maintain their properties (or if one hired someone to cut their lawns for them), the mowers would indeed be depreciated over time as a capital expense. The same logic also applies to auto leases.

Let's explore this from a practical standpoint starting with theory.

....

Here are a few excerpts of note from the Consumer Price Index Manual, Theory and Practice By Ralph Turvey.

Page 47: The treatment of owner occupied housing is difficult and somewhat controversial. There may be no consensus on what is the best practice. The distinctive feature is that it requires the use of an extremely large fixed asset in the form of the dwelling itself.

Page 147: The treatment of owner-occupied housing is arguably the most difficult issue faced by CPI-compilers. Equally important it may be difficult to identify a single principal purpose for the CPI.

In particular, the dual use of CPIs as both macroeconomic indicators and also for indexation purposes can lead to clear tensions in designing an appropriate treatment for owner-occupied housing costs.

....

CS-CPI fell at the fastest pace on record to measure at -6.2% year over year (YOY). Meanwhile the government’s CPI-U declined at the fastest rate since the 1950s at a -1.3% YOY pace.

The diverge is to due to the government’s housing metric of Owners’ Equivalent Rent (OER) continuing to show price increases (+2.1% YOY) vs. Case-Shiller data showing price decreases (-18.1% YOY). In fact, since the housing market peak in June 2006 OER is up +7.6%, while the Case-Shiller index is down -32.6%, an amazing 4020 basis point divergence!

CS-CPI Year over year has now fallen for 8 consecutive months and 11 of the past 15. High Year over year comparison data points for the next several months will likely result in CPI deflation coming in at -7% to -8% in the coming months.

.....

From a consumer standpoint, what's more important, home prices dropping 25% to 50% in value over the course of a few years or the price of gasoline going from $2.00 a gallon to $4.00 a gallon over the course of those same few years?

From a macroeconomic standpoint, the correct answer to the above question is housing. People complain about gas prices when they rice because they buy gasoline every week. However, the destruction of housing wealth matters far more. Here is the question to ponder: How many tanks of gas will it take to equal the loss of $50,000 on a house?

---

These are significant points to ponder. Since there are 1001 ways for the consumer to get screwed squeezed, both actually and intrinsically, I feel we need to take into account every facet of advantage and disadvantage.

[ozymandius]

3. Oil rises above $60 on signs Asia growth reviving

SINGAPORE – Oil prices climbed back above $60 a barrel Tuesday in Asia on signs the region be may emerging from an economic slump.

Benchmark crude for August delivery was up 70 cents to $60.39 a barrel by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. On Monday, the contract fell 20 cents to settle at $59.69.

Singapore said Tuesday its economy surged an annualized, seasonally adjusted 20.4 percent in the second quarter, adding to hopes that Asia could lead the world out of recession and fuel crude demand.

....

In other Nymex trading, gasoline for August delivery rose 1.66 cents to $1.66 a gallon and heating oil gained 1.52 cents to $1.519. Natural gas for August delivery jumped 7.3 cents to $3.34 per 1,000 cubic feet.

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

[hamerfan]

31. Why?

If oil is $60/bbl., why am I paying $2.29/gal for gasoline? Shouldn't it be more like $1.50/gal?
I know, why ask why?
hamerfan

[Coes]

33. 60 dollar = on budget

Asamblea Nacional of Venezuela has set its 2009 budget at 60$/barrel crude

Iranian government has set its 2009 budget at 50 to 60 dollar/ barrel crude

So two big players set ~ 60

Ever since 9/11, price of barrel went from 20/40-dollarzone to 40/60-dollarzone

Even though these budgets are a major factor in the price of crude, price manipulation by traders is a whole different balgame...



P.S. @ Ozy: I'm a regular reader of SMW, but I don't post much. It's a pleasure to recommend ^_^

[ozymandius]

5. Bernanke sees possibility of "jobless recovery"

Bernanke to lawmaker: Jobless recovery may loom

WASHINGTON (Reuters) – Federal Reserve Chairman Ben Bernanke sees the possibility of continued high unemployment even after the recession loosens its grip, a key U.S. senator said on Monday after talking to him.

---

Idiot! I wish Econ professors from Chopper Ben's college days could go back and retroactively change his grades to 'Fs' with his belief in this 'jobless recovery' bullshit.

There is no such thing as a 'jobless recovery'!

Here's a quick lesson for Bernanke. GDP = (C+I+G+N); whereas 'C' is consumer spending and represents 71% of this equation. Without a stable and sustained means of income, there can be no spending. What a damned idiot the Chairman is.

[Dr.Phool]

25. They just love to say the word "recovery".

Hey Ben, if there ain't no jobs, there ain't no recovery! All you have is a Wall Street casino, betting on prices, not production.

[ozymandius]

7. Madoff Moved to Federal Prison in Atlanta, U.S. Says

Whattayaknow! Looks like I have a new neighbor - just a ten minute drive from my place. - ozy

July 14 (Bloomberg) -- Conman Bernard Madoff was transferred to the U.S. Penitentiary in Atlanta, where he will begin serving his 150-year sentence, the Bureau of Prisons said on its Web site.

The agency transferred Madoff, 71, from a high-security lockup in lower Manhattan, where he’s been since his March 12 guilty plea, to the medium-security prison in Atlanta. Madoff is scheduled to be released on Nov. 14, 2139, the bureau said.

....

Madoff will only be held temporarily at the Atlanta facility before being transferred again to the federal prison in Butner, North Carolina, the Associated Press reported, citing an unidentified official who spoke on condition of anonymity.

http://www.bloomberg.com/apps/news?pid=20601103&sid=aJcrHC5gZxYM

---

I'll bet he can see the $4 hookers from his location.

[Demeter]

11. There Goes Your Neighborhood, Ozy

Congrats on yesterday's 42 recs! A new record?

[ozymandius]

14. The $4 hookers will be looking for a classier neighborhood.

Luckily, though, his stay is only temporary.

Edit: 42 rec's! Wowee! That is a record. Maybe we garnered some sympathy from people's reaction to the GS bootlickers unrec'ing the thread? :shrug:

[Dr.Phool]

34. He didn't last long there. He's in Buttner, NC already.

Maybe he'll have the "Blind Sheik" for a cellie. That would be fitting for them both.

Madoff admitted to North Carolina prison
Disgraced financier set to start 150-year sentence in Butner, N.C.

updated 20 minutes ago

WASHINGTON - Disgraced financier Bernard Madoff arrived Tuesday at a federal prison in North Carolina to begin serving a 150-year sentence for what is believed to be the largest Ponzi scheme in history.

Federal Bureau of Prisons spokeswoman Linda Thomas said Madoff arrived at the Butner, N.C., facility after leaving federal jail in New York City on Monday.

Madoff has a projected release date of November 14, 2139, assuming he gets early release credit for good behavior while in prison. He is listed in Bureau of Prisons records as prisoner number 61727-054.

(snip)

http://www.msnbc.msn.com/id/31896684/ns/business-us_business/

[hamerfan]

36. I hope he has

A REALLY big wall to mark time on. 2139 (with early release).
Was it worth it, Bernie?

[Po_d Mainiac]

8. More shameless self promoting

:donut: good morning

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x67280

[ozymandius]

10. rec'd and commented

He is so slippery in his reasoning. How can anyone take him seriously?

[ozymandius]

9. Obama’s Chief Auto Adviser Steps Down (Rattner's firm under investigation)

Steven Rattner is quitting his post as President Obama’s chief adviser on the troubled automobile industry at a time when an investigation into his former Wall Street firm’s role in a scandal involving public pension funds has intensified.

Mr. Rattner, who has won plaudits for directing the rapid restructuring of General Motors and Chrysler, has been under a cloud since shortly after arriving in Washington in late February after it was disclosed that his firm, the Quadrangle Group, made payments to middlemen that helped it win state pension business.

It is unclear whether Mr. Rattner’s departure is directly connected to the inquiry, or whether he felt that it was time to leave because Chrysler and G.M. effectively had emerged from bankruptcy. A person who has worked with him in Washington said he understood that Mr. Rattner had decided to leave because his role on the task force had come to its natural end. Mr. Rattner could not be reached for comment. A spokesman for Quadrangle declined to comment.

.....

A fine against Quadrangle could make it difficult for Mr. Rattner to remain in a position of authority in Washington, given his role in the matter. Mr. Rattner, according to people close to the investigation, arranged for his investment firm to pay $1.1 million to an agent who helped Quadrangle obtain New York pension business. The agent who received most of that money has been indicted and accused of selling access to the pension fund, but neither Mr. Rattner nor Quadrangle is expected to face criminal charges, according to people close to the matter. The Securities and Exchange Commission is also investigating pension fund abuses.

http://www.nytimes.com/2009/07/14/business/14rattner.html?_r=2&hpw

[Demeter]

12. Gee, That Didn't Take Long, and Was Almost Painless

Would that Obama would shed all his embarrassments so quickly and cleanly--like the Goldman Gang and AG Holder the Clinton war criminal.

Obama had better get his moral clarity cleaned and polished, or somebody will do it for him.

[Po_d Mainiac]

16. In our dreams n/t

[ozymandius]

13. A Bit of Goldman Schadenfreude

from Naked Capitalism:

Wellie, we get a bit of cheery news of sorts to take the edge off the sting that Goldman, presumably alive today thanks to the many ministrations of the government, ultimately borne by chumps like you and me, is off again looting making money hand over fist.

It appears that quite a lot of Goldman employees sold stock when it was pretty depressed, between November and March. This is similar to what happened when the firm was still private, and had a very bad year in 1994. Many partners went limited. That did not mean they got to take their money and run; Goldman staged the withdrawals over many years. But it did mean the value of their partnership interest was set at that point in time. Why did that matter? If you expect equity to go down (the firm to lose money), you want your percentage interest applied to the level of equity pre the reduction, not post.

It was a massive vote of no confidence in the future of the firm (that was also the first time Goldman had ever had layoffs). A mini version of the same took place around the turn of the year. What a difference a few months makes.

That is a warning as well as an observation.

On the one hand, the MDs sold $700 million at comparatively low prices. On the other hand, cash was coming in from the TARP and in part going directly to these MDs. Insiders were also selling as the company was peddling shares to the public, Not a pretty fact set. So we will have a few days of fulminating and this too, like all misdeeds by Goldman, will soon pass. In particular, no one will care, since the stock has traded up and it looks like, for once, the chumps did well.

From the Financial Times:

Executives at Goldman Sachs sold almost $700m worth of stock following the collapse of Lehman Brothers last September....

Most of the sales occurred during the period in which the investment bank enjoyed the support of $10bn from the troubled asset relief programme...

The surge in selling among Goldman partners, at a time when the US government had thrown a lifeline to Wall Street, is likely to draw criticism from lawmakers on Capitol Hill. Having survived the crisis, the bank is expected to report strong second-quarter earnings on Tuesday on rebounding trading profits.

For the eight-month period for which figures are available, Goldman partners sold more than $691m in company stock, even as the firm expanded its public float from 395m to 503m shares in several capital raises.

....

Some of the sales could have been motivated by margin calls, which are said to have afflicted a number of Goldman executives who used company stock as collateral for loans....

Goldman agreed to the unusual buy-backs last September to obviate the need for the two officers to sell stock on the open market, the company said in March. “Stock sales would easily have covered their requirements but, given the turbulent market conditions, we and they were concerned that such sales would be misconstrued by the market as indicating a lack of confidence in Goldman Sachs.”

Ozy here: this is how the "brightest and the best" behave? Sheesh.

[Po_d Mainiac]

15. What I read of Whitney's statements yesterday was bizarre.

One can only assume she gave her clients a heads-up before going on the air. CIT is jumping on the idea that they are TBTF and we taxpayers will bail them out AGAIN!

Gotta love their reasoning: Too many marginal businesses need our financing!

Which I read as: Their only customers are unworthy of getting credit. Therefore they have to borrow at the high end of the spectrum. Looks great on the banks books till they file chapter 11, or 7... :nuke:

[ozymandius]

18. Sounds like the defensive reasoning of a parasite.

CIT is making the case that their relationship with their clients is symbiotic. I don't buy it. Not in a climate like this when credit is hard to come by under any circumstances.

[ozymandius]

17. The Goldman trading scandal news has slowed to to trickle.

Here's the latest I could find:

Can Goldman Sach’s Stolen Code Be Used to Manipulate the Markets?

By Jennifer Johnson
Associate Editor
Money Morning

The financial-services industry is closely watching the mysterious case of Goldman Sachs Group Inc. (NYSE: GS) and its stolen code: a proprietary computer program that some think could be used to manipulate the financial markets.

According to federal authorities, the program rapidly processes market developments and uses mathematical formulas to make lucrative automated trades.

....

"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," U.S. Attorney Joseph Facciponti told the judge at the July 4 hearing, Bloomberg News reported. "The copy in Germany is still out there and we at this time do not know who else has access to it and what’s going to happen to that software."

In an intriguing note in the saga, Aleynikov’s arrest immediately followed the disappearance of Goldman Sachs from the New York Stock Exchange (NYSE) weekly tally of program trading, which Goldman typically dominates.

....

Mistake or not, the coincidence has raised eyebrows.

Do you know of further developments in this story?

[ozymandius]

20. From Dailykos diarist bobswern:

Greenwald: Mass Outrage Over Goldman's "Blowout Profits"

Greenwald:

Other than those individuals whose life purpose is to serve as reverent apologists and servile defenders for the most powerful financial elites, is there anyone who would be willing to claim with a straight face that the last event is unrelated to all the ones that preceded it? Add to that all the Serious consensus-talk about how the country can't afford health care reform and how Social Security, Medicare and Medicaid must be cut because they're too expensive, and the picture couldn't be clearer.

...UPDATE III: It's worth recalling this bit of central truth, blurted out in April by the number two Democrat in the U.S. Senate, Dick Durbin:

And the banks -- hard to believe in a time when we're facing a banking crisis that many of the banks created -- are still the most powerful lobby on Capitol Hill. And they frankly own the place.

That was nice and blunt. That same week, it was announced that the newly-hired top lobbyist for Goldman Sachs, Michael Paese, was -- immediately prior to his hiring -- the top staffer to Rep. Barney Frank on the House Financial Services Committee chaired by Frank. If one's goal were to make all of this as blatant as possible, what else could one do besides what's being done?

-- Glenn Greenwald

Then again, maybe Goldman's obscene profits over the past few months had something to do with the reality that 40% of their net comes from the highly underregulated world of derivatives trading? Or, maybe it had something to do with this?

When too big to fail morphs into too powerful to jail it's time for Progressives to prevail.

[ozymandius]

19. Report: Option ARMs Performing Worse than Subprime

From the WSJ: Pick-a-Pay Loans: Worse Than Subprime

For the third straight month, option adjustable-rate mortgages are generating proportionally more delinquencies and foreclosures than subprime mortgages ...

As of April, 36.9% of Pick-A-Pay loans were at least 60 days past due, while 19% were in foreclosure, according to data from First American CoreLogic, a unit of Santa Ana, Calif.-based First American Corp. In contrast, 33.9% of subprime loans were delinquent, with 14.5% of those loans in foreclosure, the figures show.

We knew this day was coming.

---

There's more at Calculated Risk.

[UpInArms]

21. dollar watch

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

Last trade 79.919 Change -0.142 (-0.18%)

Higher U.S. Retail Sales Could Spark Optimism and Weigh on The Dollar

http://www.dailyfx.com/story/special_report/special_reports/Higher_U_S__Retail_Sales_Could_1247544655370.html

U.S. Advance Retail Sales are forecasted to rise by 0.4% in June following the 0.5% gain the month prior. Consumers are starting to increase their purchases on non-discretionary items. Discounts and government incentives are also helping lift automobile sales which can significantly contribute to the headline number. Last month saw a surge in gasoline receipts, which may regress this month as prices have started to stabilize. We could also see a pick up in electronics after three consecutive months of negative sales. The category has seen items like cell phones and MP3 players become less discretionary. However, last month’s 1.3% gain in building materials may be difficult to duplicate as waning optimism may have limited new construction. Indeed, the overall growing pessimism may limit the positive reaction to the positive consumer consumption print and may generate limited price volatility. Nevertheless, domestic demand is a critical component to growth and any gain will be viewed as a positive. If the dollar continues its current negative correlation to risk appetite then we could see a firmer EUR/USD which would contradict the short-term bearish technical outlook.

...more...

Forex Markets to Trade with Risk Appetite, Goldman and J&J Earnings in Focus

http://www.dailyfx.com/story/special_report/special_reports/Forex_Markets_to_Trade_with_1247547846228.html

Forex markets are likely to look past the data docket to follow risk trends in European hours, with second-quarter earnings reports from Goldman Sachs and Johnson & Johnson likely to prove particularly market-moving. The UK Consumer Price Index and German ZEW Survey of investor confidence are also on tap.

<snip>

The UK Consumer Price Index is expected to show that the annual pace of inflation fell to 1.8% in June, the first time that prices slipped below the Bank of England’s 2% target rate since September 2007. The leading producer price index fell more than economists expected last week, opening the door for a downside surprise this time around as well. The BOE acknowledged in their latest inflation report that “CPI inflation is likely to drop below the 2% target later this year” and still opted to keep monetary policy unchanged at this month’s meeting. Still, the British Chamber of Commerce has urged policymakers to expand their asset-buying scheme by 25 billion pounds, saying a recovery is “not guaranteed”; the call for further easing has been echoed by the Shadow Monetary Policy Committee, a group of independent economists that meet at the Institute of Economic Affairs. The disparity in growth forecasts is also notable: the IMF expects the UK economy will grow 0.2%, a survey of economists conducted by Bloomberg points to a 0.9% result, while the OECD says growth will be flat in 2010. If reality proves to side with the pessimists in the days ahead, slower output growth could well translate into a steeper than expected decline in inflation, calling for the BOE to step up easing efforts. Separately, the DCLG House Price measure is set to show property values fell -12.6%, the smallest drop since February.

Turning to the continent, Germany’s ZEW Survey of investor confidence is expected to see the headline figure rise to 47.8 in July from 44.8 in the previous month, the ninth consecutive improvement and the highest reading since May 2006. The broader Euro Zone ZEW result is set to follow a similar trajectory, rising to 44.0 in July. Still, improvements in the metric are unlikely to offer much near-term support to the Euro: the ZEW reflects the forward-looking perspective of the poll’s respondents, meaning the reading tends to lead the single currency by a significant margin such that the trend in the closely watched Expectations component of the report has corresponded inversely with major tops and bottoms in the exchange rate. Indeed, the ZEW began to trend lower in the beginning of 2006 and bottomed out in July of last year; the same end-points mark the boundaries of the last major uptrend in EURUSD that saw the pair test record highs above 1.60. If the same dynamic continues to hold, traders can expect the European unit to set a bottom as the ZEW tops out, a scenario that seems unlikely for the time being considering how much ground remains to be covered before the economy regains firm footing. In fact, according to the International Monetary Fund (IMF), the Euro Zone as a whole and Germany in particular stand apart from most industrialized countries in being expected to see GDP contract in 2010.

Overall, risk sentiment is likely to usurp the limelight once again in European trading hours. Second quarter earnings announcements from Goldman Sachs and Johnson & Johnson late into the session are likely to be of particular significance, with traders looking to Wall St to set the pace for where risky assets go in the days ahead. Indeed, forex markets largely oscillated in overnight trading despite hefty gains across Asian stock exchanges with the upswing in confidence already priced in during US hours.

...more...

[UpInArms]

23. Surprise! (NOT) Goldman Sachs posts stronger-than-forecast quarterly profit

http://www.marketwatch.com/story/goldman-sachs-profit-rises?siteid=bnbh

NEW YORK (MarketWatch) -- Goldman Sachs Group Inc (GS 149.19, -0.25, -0.17%) said on Tuesday that its second quarter net income rose to $3.44 billion, or $4.93 a share, compared to $2.05 billion, or $4.58 a share a year ago. Analysts polled by Thomson Reuters had expected the company to earn $3.54 a share in the quarter. Net revenues at the firm were $13.76 billion in the second quarter, compared to $9.42 billion last year. Goldman switched from a fiscal reporting schedule to a calendar schedule last year, and this year's second quarter ended in June, while the year ago data is for the period ended May 31, 2008.

see! it's easy when you CHEAT!

[cal04]

24. U.S. stock futures up after Goldman, retail sales beats

http://www.marketwatch.com/story/us-futures-up-before-goldman-results-sales-data

U.S. stock futures inched higher on Tuesday as Goldman Sachs Group beat even the most optimistic estimate of its second-quarter results and as retail sales results also beat estimates.

S&P 500 futures rose 2.1 points to 897.70 and futures on the Dow Jones Industrial Average rose 26 points to 8,285.00, while futures on the Nasdaq 100 slipped 2.5 points to 1,440.00.

(snip)
Besides Goldman, Johnson & Johnson (JNJ 58.06, +0.34, +0.59%) reiterated its 2009 view, and after the close, Intel (INTC 16.52, +0.03, +0.18%) results are due. J&J shares rose over 1% in pre-market trade.

(snip)
On the data front, U.S. retail sales rose a better-than-expected 0.6% in June, the best gain in five months, the Commerce Department estimated Tuesday. Strong auto and gasoline sales offset weakness in many sectors.

The consensus forecast of Wall Street economists was for retail sales to rise 0.5%.

Producer prices rose a hotter-than-forecast 1.8% in June, the largest increase since November 2007.

[neverforget]

28. Autos Lift US Retail Sales; Inflation Perks Up

http://www.cnbc.com/id/31903601

<snip>
A jump in auto and gasoline sales boosted U.S. retailers in June, while a measure of inflation soared by twice as much as expected, bolstering hopes the economy was finally beginning a modest recovery.

<snip>
Excluding autos and parts, which recorded a 2.3 percent gain, retail sales were up a more modest 0.3 percent, short of analysts' expectations for a 0.5 percent advance.

"It's not horrible, but clearly there's not much of an acceleration," said Keith Hembre, chief economist at First American Funds in Minneapolis.

<snip>
Excluding both autos and gasoline, sales were down 0.2 percent, the fourth consecutive monthly decline. Department stores and restaurants were among the laggards, suggesting that consumers remained reluctant to resume discretionary spending despite signs the recession may be drawing to a close.
<snip>

Okay so what is it? Retail sales are up! No! They're down! :eyes: Talk about a bipolar article! Unless Goldman Sachs and the other elites can fuel an economic recovery by themselves, we're fucked. No jobs = no recovery. The Goldman Sachs of the world are the parasites that are sucking Americans dry.

[mullard12ax7]

29. Misdirection 101: Let's blame Goldman Sachs so when someone bashes them...

we can smear them with the "Jew-hater" meme. Reality avoided once again. The reality that shall never be mentioned to casual acquaintances or in the media is: our country is steeped in corruption at every financial firm and in the government and worst of all, the American people like making money as a warring, civilian-killing country that has no moral compass and lets torturers go free.

Go ask someone what they think, you'll get a mind-numbed robotic response learned from decades of propaganda. Mission accomplished.

[mullard12ax7]

30. Case in point

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3968002

ALLAHASSEE — Florida will receive a record $2.3 million settlement from a Morgan Stanley subsidiary that state officials say unconscionably increased gas prices during Hurricane Ike last year, state officials announced.

It's at least the second time the company, TransMontaigne, has been involved in a price gouging settlement with the state. The company paid $5,000 for its role in alleged price gouging in Fort Lauderdale and Pensacola in the aftermath of the Sept. 11 terrorist attacks.
After Ike, in September 2008, the company increased the cost of its gas by $1.60 per gallon during the storm, bringing prices to over $5 per gallon. One retailer in Boca Raton, NexStore, shut down its pumps rather increase its pump prices to $5.20 per gallon.

The deal marks the first time the state has gone after a gas supplier instead of a retailer and the amount far exceeds any price gouging settlement the state has won in recent years. Nationally, the amount is topped by a pair of billion-dollar price gouging settlements California received, including a $1.5 billion deal Enron in 2005.

.....

Morgan Stanley was featured in a Jan. 11 60 Minutes report that examined the role of Wall Street speculation in the historic spike in oil prices last year. Despite miserable economic conditions, the company reported a $1.6 billion annual profit in December.

[Tansy_Gold]

40. "Florida" will receive; who got gouged?

Will the consumers be recompensed, or is this just a nice windfall for the state?

I know, I shoulda read the article. Sue me. I'm lazy today.


TG

[DemReadingDU]

32. Denninger: Economic Fundamentals

7/14/09 Karl Denninger: Economic Fundamentals

Let's take the basics: We had a $14 trillion economic (GDP) in 2008, of which 70% is consumer spending. The rest is government and exports.

The consumer has spent two decades pulling forward demand via credit - that is, through the chimera of extracting home equity and charging up the credit cards. After the 1981 recession this really started to accelerate; prior to that point most Americans lived largely off their paychecks, rather than pulling out the "magic plastic card" any time they wanted to buy something. Checks were common as was good old-fashioned cash.

In 1981, US GDP was $3.1 trillion dollars.

In 1992 it was $6.3 trillion, a double.

In 2005 it was $12.4 trillion dollars, another double.

Doubling in roughly 12-13 years. Not bad, right?

Let's look at it a different way, this time in "current" (not inflation-adjusted, since GDP isn't) dollars.

In 1981 the per-capita income in the US was $8,476.

In 1992 it was $14,847, a 75% gain.

In 2005 it was $25,036, a 69% gain.

Notice anything?

Its not really that subtle, is it?

GDP slightly more than doubled in each of those above periods, but per-capita income lagged, and the lag rate is increasing.

How's that possible, since consumer spending is 70% of GDP?

We haven't been spending income - that is, human productivity. We're pulling forward demand to the tune of 25-30% of income through the use of credit and as we have continued to do it we have started to pay interest on interest; ergo, the amount of debt being taken on has exploded in an exponential spiral!

The following graph makes clear "how we did it":



more...
http://market-ticker.denninger.net/archives/1212-Morning-Madness-Economic-Fundamentals.html

[DemReadingDU]

35. Dmitry Orlov's latest video, posted yesterday's SMW

For anyone trying to download Orlov's latest video, there is a note on his blog
Bruce Darrell said...

This video has become so popular that it caused a 100x spike in the download from the Feasta server and we hit our download limit of 150GB after 3 days!

Quite the community. It really caught us off guard and we have had to make the file unavailable as we cannot afford the charges.

I have rushed and made the video available on at:

http://www.vimeo.com/5592536

This should also solve the compatibility issues.

I will look into getting the Q+A session uploaded as well.

We hope to get recordings of the rest of the conference up on the Vimeo site ASAP, including another presentation by Dmitry.

Thanks again, Dmitry, for coming over to Dublin and taking part in the conference.

Bruce
Feasta
http://tinyurl.com/mrw9sj

[Festivito]

38. Debt: 07/10/2009 11,524,606,290,165.04 (DOWN 1,697,768,660.50) (Down a bit.)

(Small moves down. Waited until 6:40 this morning and missed it.)

= Held by the Public + Intragovernmental(FICA)
= 7,180,648,435,929.38 + 4,343,957,854,235.66
DOWN 364,273,300.28 + DOWN 1,333,495,360.22

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 306,839,942 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 $37,559.02.
A family of three owes $112,677.05. (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 6,113,855,870.70.
The average for the last 30 days would be 4,687,289,500.87.

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$/day.
There were 118 reports in 171 days of Obama's part of FY2009 averaging -0.26B$ per report, -0.08B$/day so far.
There were 193 reports in 283 days of FY2009 averaging 7.77B$ per report, 5.30B$/day.

PROJECTION:
There are 1,290 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)
07/10/2009 11,524,606,290,165.04 BHO (UP 897,729,241,251.96 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: 1,499,881,393,252.60 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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
07/07/2009 +000,215,166,015.48 ------------********
07/08/2009 +000,621,025,720.38 ------------********
07/09/2009 +010,396,425,012.59 ------------**********
07/10/2009 -000,364,273,300.28 ---

53,338,300,889.86 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,859,974,486,905.97 in last 295 days.
That's 1,860B$ in 295 days.
More than any year ever, including last year, and it's 183% of that highest year ever only in 295 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 295 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=3966304&mesg_id=3966320

[Festivito]

39. Debt: 07/13/2009 11,525,392,902,001.60 (UP 786,611,836.56) (Down a tiny bit.)

(Small move down 0.6M$, 0.0006B$, 0.000,000,6T$.)

= Held by the Public + Intragovernmental(FICA)
= 7,180,647,818,637.96 + 4,344,745,083,363.64
DOWN 617,291.42 + UP 787,229,127.98

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 306,861,542 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 $37,558.94.
A family of three owes $112,676.81. (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 6,838,189,656.06.
The average for the last 30 days would be 5,014,672,414.44.
The average for the last 31 days would be 4,852,908,788.17.
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$/day.
There were 119 reports in 174 days of Obama's part of FY2009 averaging -0.29B$ per report, -0.13B$/day so far.
There were 194 reports in 286 days of FY2009 averaging 7.74B$ per report, 5.25B$/day.

PROJECTION:
There are 1,287 days remaining in this Obama 1st term.
By that time the debt could be between 13.3 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)
07/13/2009 11,525,392,902,001.60 BHO (UP 898,515,853,088.52 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: 1,500,668,005,089.20 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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
07/07/2009 +000,215,166,015.48 ------------********
07/08/2009 +000,621,025,720.38 ------------********
07/09/2009 +010,396,425,012.59 ------------**********
07/10/2009 -000,364,273,300.28 ---
07/13/2009 -000,000,617,291.42 ------ Mon

53,312,975,845.86 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,860,761,098,742.53 in last 298 days.
That's 1,861B$ in 298 days.
More than any year ever, including last year, and it's 183% of that highest year ever only in 298 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 298 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=3967795&mesg_id=3968986