STOCK MARKET WATCH, Thursday July 16

[ozymandius]

Source: du

STOCK MARKET WATCH, Thursday July 16, 2009



Bush Administration Officials Under Indictment = 2

Financial Sector Officials In Prison = 3

AT THE CLOSING BELL ON July 15, 2009



Dow... 8,616.21 +256.72 (+2.98%)

Nasdaq... 1,862.90 +63.17 (+3.51%)

S&P 500... 932.68 +26.84 (+2.96%)

Gold future... 939.40 +16.60 (+1.80%)

10-Yr Bond... 3.60 +0.13 (+3.78%)

30-Year Bond 4.49 +0.12 (+2.65%)

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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

A Bipolar Market
by Chris Puplava

It was only a few days ago when everyone was commenting on the head and shoulder topping pattern and expecting a decline in the S&P 500 to the low 800s. CNBC anchors who know nothing of technical analysis were even commenting on it as the financial media were all abuzz with the pattern, with Google Trends key word search showing a dramatic increase in Internet search and news reference volume highlighting the frenzy behind the pattern.

.....

Often at times when everyone has the same view of the markets and have positioned themselves in a similar manner, the market will end up doing the very opposite of what market participants expect, with this week's action in the stock market a perfect example. The S&P 500 initially broke its neckline late last week and quickly recovered this week back up to its right shoulder, and it appears as though we are currently stuck in a trading range between 870 and 956 on the S&P 500. The question now is which will be the final outcome, a break above resistance or a break below support?

.....

Bearish Concerns

Of the most glaring inconsistencies in the rally off the March lows relative to prior bear market bottoms is a lack of volume. A hallmark of bear market bottoms is an expansion of volume as buyers aggressively purchase stocks with growing enthusiasm, and that dynamic has been absent since the March lows. One of the most fundamental laws of economics is the law of supply and demand, where rising demand and falling supply lead to rising prices. Similarly, rising investor demand for stocks and a decline by investors to sell leads to rising stock prices. Lowry Research has indicators that measure the demand (buying power) and supply (selling pressure) of the stock market, and have maintained their database going back to the Great Depression.

What is most troubling is that Lowry’s Buying Power Index peaked in May and subsequently fell below the March 9th lows while their Selling Pressure Index is also on the rise and approaching its peak seen in November of last year.

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

[ozymandius]

2. Today's Reports

08:30 Initial Claims 07/11
Briefing.com 550K
Consensus 552K
Prior 565K

09:00 Net Long-Term TIC Flows May
Briefing.com NA
Consensus $7.5B
Prior $11.2B

10:00 Philadelphia Fed Jul
Briefing.com -5.0
Consensus -5.0
Prior -2.2

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

[UpInArms]

35. Initial Claims @ 522,000 - last wk rev'd up 4k

US weekly initial jobless claims down 47K to 522K
8:30am Today

US 4-wk avg initial claims fall 22,500 to 584,500
8:30am Today

US ongoing claims down 642K to 6.27M
8:30am Today

US 4-wk avg ongoing claims down 110,250 to 6.67M
8:30am Today

[UpInArms]

40. Long-Term TIC Flows - May @ -$19.8B

Jul 16 9:00 AM
Net Long-Term TIC Flows May
report -$19.8B
briefing.com NA
concensus $16.5B
last report $11.5B
rev'd from $11.2B

and that was 2 months ago!

June won't be reported until August

:scared:

(fixed title line on edit)

[amandabeech]

43. That means a net flow out of the country, right?

Please correct me if I'm wrong.

[UpInArms]

46. you are correct -

:(

[UpInArms]

45. July Philly Fed index -7.5 vs -2.2 June

U.S. July Philly Fed index -7.5 vs -2.2 June
10:01am Today

U.S. July Philly Fed below consensus -3.3
10:01am Today

http://www.marketwatch.com/story/philly-fed-index-weakens-in-july

WASHINGTON (MarketWatch) - Steady improvement in manufacturing index in the Philadelphia region over the past few months paused in July.

The Philadelphia Fed's manufacturing index slipped to negative 7.5 in July from negative 2.2 in June.

Economists were expecting a slide, but the drop was more than the negative 3.3 reading that was expected.

The index has jumped from negative 22.6 in May to negative 2.2 in June and analysts thought this probably overstated the improvement.

Readings below zero in the Philly Fed diffusion index indicate contraction in activity. The index measures the breadth of economic activity across firms.

The Philly Fed index has been below zero since last September.

Earlier in the week, the New York Fed said its July Empire state index improved to nearly zero. This was a better performance than expected.

The Philly Fed and Empire state indexes are seen as providing good clues about the national manufacturing index to be released in early August by the Institute for Supply Management. The ISM, in turn, is considered the best real-time gauge of the health of the economy.

...more...

(edited 'cuz my figners won't work) :blush:

[ozymandius]

3. Oil holds above $61 on positive US Fed news

SINGAPORE – Oil prices hovered above $61 a barrel Thursday in Asia after a more positive economic outlook from the U.S. central bank buoyed investor confidence.

Benchmark crude for August delivery was down 29 cents to $61.25 a barrel by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. On Wednesday, the contract added $2.02 to settle at $61.54.

Oil surged Wednesday on signs from the Federal Reserve that the U.S. economy may be performing better than expected.

....

Meanwhile, signs of weak U.S. crude demand weighed on prices. The Energy Information Administration said Wednesday that the country's supply of crude oil dropped more than expected last week, falling by 2.8 million barrels.

....

In other Nymex trading, gasoline for August delivery was steady at $1.70 a gallon and heating oil held at $1.58. Natural gas for August delivery rose 2.1 cents to $3.30 per 1,000 cubic feet.

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

[Wednesdays]

63. And gas prices jumped 15 cents overnight around here.

Whatever.

[hamerfan]

67. Gas is steady here in Central Missouri

At least for now...
$2.29/gal for regular unleaded.
hamerfan

[ozymandius]

4. Fed Raises Outlook For U.S. Economy Despite Job Woes

The U.S. economy will rebound faster than expected despite still-weak labor markets, the Federal Reserve said Wednesday.

The Fed expects GDP to shrink 1%-1.5% this year vs. its April forecast for a 1.3%-2% contraction.

....

A tepid recovery should start soon, leading to solid growth of 2.1%-3.3% in 2010, slightly better than its prior range. Growth would then accelerate further in 2011.

"They continued to expect that sales and production would begin to recover gradually during the second half of the year," due to monetary and fiscal stimulus and improved access to credit, the statement said.

But the Fed hiked its 2009 unemployment forecast to 9.8%-10.1%, possibly even 10.5%, higher than previously expected. It was 9.5% in June. Policymakers expect it to fall back to 9.5%-9.8% in 2010 and to 8.4%-8.8% in 2011.

http://news.yahoo.com/s/ibd/20090715/bs_ibd_ibd/20090715feature

[Hugin]

42. x-lates to: "Jobless Recovery"

:hide:

[ozymandius]

5. Rally stalls as caution builds ahead of results

LONDON (Reuters) – World stocks hovered around flat on Thursday despite strong Chinese growth data that provided reassurance on the global economy as investors braced for the spate of U.S. and European corporate results due this week.

....

Better-than-expected results from companies like Goldman Sachs (GS.N) and Intel (INTC.O) added to investors' optimism over the global economic recovery this week but with a spate of earnings still to come -- including banking giants JP Morgan (JPM.N) and Citigroup (C.N) and tech firms IBM and Google (GOOG.O) -- nervousness is building.

By 0850 GMT the FTSEurofirst 300 (.FTEU3) index of top European shares was flat, its performance mirrored by London's FTSE100 (.FTSE), Germany's DAX (.GDAXI) and France's CAC-40 (.FCHI).

....

Markets are also keeping a wary eye on the fate of CIT Group Inc (CIT.N), a U.S. lender to thousands of small and mid-sized businesses, after bailout talks with the government ended, a move that could drive it to bankruptcy.

http://news.yahoo.com/s/nm/20090716/bs_nm/us_markets_global_15

[Po_d Mainiac]

6. Ayuh

:donut:

Morning +1

[ozymandius]

7. Good morning!

:donut: :donut: :donut:

Site's been a bit slow for me today. Anyone else?

[Po_d Mainiac]

13. Just like being back on dial-up n/t

[Demeter]

16. I Couldn't Get on At All, Earlier

[florida08]

20. my circles

won't stop spinning

[mbperrin]

29. It's good now.

+1

[Tansy_Gold]

37. And you do know there is going to be DU downtime today?

They're doing some server maintenance or something, so maybe that's affecting access this morning.


TG

[ozymandius]

8. Denial of CIT bailout unlikely to rattle markets

WASHINGTON – CIT Group Inc.'s inability to get emergency government funding drew a muted reaction from investors, suggesting the commercial lender's possible failure won't have widespread economic consequences.

CIT said late Wednesday that negotiations with regulators about a possible rescue had broken off after days of round-the-clock talks, raising expectations that the New York-based company will file for bankruptcy. The move marked a defining moment for the Obama administration and showed it's drawing a line in the sand on federal rescues for troubled financial firms.

Investors seemed unfazed by the news.

....

CIT's small size relative to other big commercial banks may also ease worries of a ripple effect. Though a major lender to small and midsize U.S. business with about a million clients, CIT is one-eighth of the size of Lehman Brothers when massive credit losses forced the investment bank into bankruptcy last fall.

CIT had also begun cutting back on lending in recent months, diminishing the risk a possible bankruptcy could cause significant damage to the broader economy. The lender had $5.3 billion in credit lines to customers as of March, down from $6.1 billion at the end of 2008.

http://news.yahoo.com/s/ap/20090716/ap_on_bi_ge/us_cit_group_crisis_26

---

Jeffrey Peek probably feels about three inches tall right now. Despite all his bluster - his company isn't all that crucial.

[Demeter]

17. suggesting the commercial lender's possible failure won't have widespread economic consequences.

Well, I guess we will find out. Talk about senseless risk. And double standards.

[Ghost Dog]

50. Suggests some other corp will take over those credit lines

and the whole small-business financing area CIT's been specialised in (a million clients, huh)? :shrug:

Some GS and/or Carlyle-type outfit perhaps?

[ozymandius]

24. Treasury Bets U.S. Financial System Can Weather CIT Collapse

July 16 (Bloomberg) -- The U.S. spurning of CIT Group Inc.’s aid request suggests officials are betting they’ve fixed the financial system enough to withstand the bankruptcy of a mid-sized lender.

“I hate to say this, but it was probably expendable,” said Dennis Santiago, chief executive officer of Institutional Risk Analytics, a Torrance, California, research firm that studies systemic risk. “It may have just missed the boat” on federal rescues, Santiago said.

Yesterday’s decision to forego a lifeline for CIT came 10 months after Lehman Brothers Holdings Inc. filed for bankruptcy. Lehman’s collapse ushered in the depths of the credit crisis to date, and resulted in the establishment of a $700 billion bailout fund; officials yesterday indicated programs created with that money would help fill any lending gap left by CIT.

Treasury Secretary Timothy Geithner, en route to Paris as CIT acknowledged policy makers had turned it down, is also wagering the administration will weather any political fallout. Unlike Bear Stearns Cos. or American International Group Inc., which got extraordinary aid last year, New York-based CIT specializes in loans to smaller firms, counting 1 million enterprises, including 300,000 retailers, among its customers.

http://www.bloomberg.com/apps/news?pid=20601109&sid=au7g7OjDYZ10

[Tansy_Gold]

38. Yeah, who cares about them little guys.

You know, those 1 million small businesses, those 300,000 retailers.

As long as the big guys keep rollin' along, suckin' in all the money, nothin' else matters.



Assholes. All of 'em assholes.




TG

[Demeter]

28. Lender CIT faces bankruptcy filing

http://www.ft.com/cms/s/0/1cefff8c-7198-11de-a821-00144feabdc0.html

By FT Reporters

Published: July 16 2009 01:02 | Last updated: July 16 2009 01:02

CIT faced the prospect of a bankruptcy filing or other restructuring on Wednesday as hopes of a government-led rescue plan for the troubled US middle-market lender were dashed.

“There is no appreciable likelihood of additional government support being provided over the near term,” CIT said in a statement late on Wednesday. “The company’s board of directors and management, in consultation with its advisers, are evaluating alternatives.”

CIT has battled a liquidity crisis and faces $1bn of debt maturing next month, but it is locked out of the wholesale funding markets.

The lender may be short of potential buyers, say people close to the company, because CIT’s funding model is flawed and few banks are willing to take over its book of middle-market business loans.

If the group were to file for Chapter 11 protection, it would be likely to be the fourth-largest bankruptcy by assets. A bankruptcy filing by CIT would probably mean the Treasury would lose its $2.3bn in bail-out funds it gave the company.

Until late Wednesday, CIT was in tense negotiations with the Federal Deposit Insurance Corporation, the Federal Reserve and the Treasury over measures that could keep it afloat.

It was seeking permission to issue government-backed bonds and transfer assets to its banking subsidiary to bolster its balance sheet after eight consecutive quarters of losses.

However, CIT’s requests faced “too much resistance” in Washington, according to a person close to the company.

Tim Geithner, Treasury secretary, told a press conference on Tuesday that he was confident that the government had the authority and the ability to address the crisis at CIT.

The fact that thousands of small businesses depend on CIT for funding had fuelled a debate in recent days about whether a failure could arrest a tentative recovery in the US economy.

CIT has lent more than $60bn to 760 manufacturing clients and 300,000 retailers.

On Wednesday night the US Treasury said that it had assembled a “powerful set of innovative financing mechanisms” to restart the flow of credit.

However, it added: “Even during periods of financial stress, we believe that there is a very high threshold for exceptional government assistance to individual companies.”

Reporting by Saskia Scholtes, Henny Sender, Francesco Guerrera and Julie MacIntosh in New York and Tom Braithwaite in Washington

[fasttense]

30. Goldman Sach's competition is disappearing quickly. n/t

[amandabeech]

44. So GS is going to finance all those small and medium sized businesses?

Only in Geithner's dreams.

[ozymandius]

9. Nokia Drops After Cutting Forecasts for Market Share, Margin

July 16 (Bloomberg) -- Nokia Oyj, the world’s biggest maker of mobile phones, dropped as much as 9 percent in Helsinki trading after cutting its forecast for market share and profitability because of competition in high-end handsets.

Nokia’s market share will be little changed this year, it said in a statement today, after previously forecasting an increase. The company also predicted a second-half non-IFRS operating margin in the main devices and services unit at about the same level as in the first half. Nokia, which had earlier forecast the margin would be in the “teens,” had a margin of 10.4 percent in the first quarter and 12.2 percent last quarter.

Nokia, based in Espoo, Finland, repeated its forecast that the global handset market would decline about 10 percent this year.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aZRUuRn5rBv4

[ozymandius]

10. Further losses for Sony Ericsson

Mobile phone maker Sony Ericsson has reported another quarterly loss and warned that the rest of the year will remain difficult for the company.

It made a loss of 213m euros (£183m; $300m) in the April to June quarter, slightly less than the 293m euros deficit in the first quarter.

The downturn has hit demand for phones, particularly the mid-range music and camera phones Sony Ericsson focuses on.

http://news.bbc.co.uk/2/hi/business/8153616.stm

[ozymandius]

11. Harley-Davidson Cuts More Jobs as Profit Slides

Harley-Davidson Inc.'s second-quarter earnings plunged 91% amid its planned decline in shipments as the motorcycle maker will cut 1,000 more jobs and slashed its forecast for shipments again.

The company said it would cut another 700 hourly production workers and 300 nonproduction, mostly salaried workers, as a result of the lowered shipment volume. It slashed its expectations for this year's shipments, saying it now expects to ship 212,000 to 228,000 motorcycles this year, compared to April's estimate of 264,000 to 273,000.

Harley Davidson had already cut 1,400 to 1,500 hourly jobs earlier this year. The company has about 9,300 workers.

The high-end motorcycle manufacturer, which for years couldn't make enough motorcycles to meet demand, has been curtailing production and cutting jobs during the downturn. The credit crunch wreaked havoc on its finance unit, its main source of financing for buyers. However, Harley said in May that it had secured the $1 billion it needs to fund the finance unit for the year. The company also has been working to diversify its customer base to include women and young riders.

....

Meanwhile, Harley Davidson the company reported a profit of $19.8 million, or 8 cents a share, down from $222.8 million, or 95 cents a share, a year earlier. The latest period included $101.1 million in write-downs and charges.

http://online.wsj.com/article/SB124773998282250595.html

[Dr.Phool]

39. The Harley dealer in my neighborhood is having a big repo sale.

Three days starting tomorrow. Free hot dogs and beer.

I know where I'm spending the week-end!

[rfranklin]

41. Where is that?

I always wanted a Harley.

[Dr.Phool]

57. The dealer is in New Port Richey, Florida.

Gulf Coast Harley-Davidson.

I'll sell you my '97 Electra Glide. I want to buy a new hawg.

[florida08]

12. Foreclosures at record high

Reuters July 16

Foreclosure filings jumped to a record 1.9 million on more than 1.5 million properties in the first six months of the year, RealtyTrac said on Thursday....

"Despite everybody's best efforts to date we're not really making any headway against the problem," Rick Sharga, senior vice president at RealtyTrac in Irvine, California, said in an interview.

Loans that were temporarily frozen by various state and federal programs, which mostly ended in March, started pushing through the process in the past three months.

One in every 84 households with loans got at least one foreclosure filing in the first half of this year.

"I don't think this suggests the economy is any worse than anyone expected but I certainly don't think it shows by itself any signs of improvement," Sharga said.
http://news.yahoo.com/s/nm/20090716/bs_nm/us_usa_housing_foreclosures


BUT..thank goodness

JPMorgan Chase posts 2Q profit, surpasses Street

CHARLOTTE, N.C. – JPMorgan Chase says its second-quarter profit easily surpassed expectations as profit was buoyed by strength in its investment banking business.

[Demeter]

14. Where's the Money in Today's Economy?

http://www.cartoonbank.com/product_details.asp?sitetype=1&sid=131033&did=4&utm_campaign=CartoonOfTheDay&utm_medium=RSS-Feed&utm_source=RSS-Feed

[DemReadingDU]

18. The banksters have the money, n/t

[Demeter]

15. What a Cartoon! So True!

BTW I saw the Half Blood Prince last night. It was truly a work of art. The screenwriter took an unedited, inferior book, cut out 90% of the useless crap, and made a tight, supenseful, thoroughly satisfying film and a coherent story out of it. It was truly the best adaptation yet of the series. And I must say the acting was far superior, so the new director is worth keeping, too.

I don't know what they were thinking, letting Rowling write without an editor.

[ozymandius]

25. I saw it yesterday too. Truly a masterpiece.

Either see the first five films or read the first five books. This film will not make much sense without the history behind the screenplay.

There are symbolic elements that the book explains best. However, the absence of these explanations did not diminish the quality of the story. Like a really good piece of art - these allegorical elements tickled my curiosity.

[Demeter]

19. Dave Lindorff: Say 'Goodbye' to the Nice Health Care Reform, Kids!

http://blog.buzzflash.com/lindorff/255

Of course I could be wrong. Congress could turn around and pass some cockamamie scheme to kick the issue of health care reform down the road, offering some kind of minimal insurance coverage to a few million more people, and cracking down on this or that particularly egregious health provider ripoff, and then staging a "mission accomplished" photo op.

But real health care reform of the kind that Democratic candidates were promising during last year's presidential campaign is dead, killed by the timidity of the promiser-in-chief, President Barack Obama (and by the massive corruption of the Democrats in Congress, who have accepted the tainted coin of the health care industry).

Obama could have come to the American people as a newly elected leader and addressed us as adults, saying: "Look, we know what needs to be done. Plenty of countries in Canada, Europe, and elsewhere have figured it out already. They set up the government as the single payer to health providers -- doctors and hospitals, etc. -- and the government bargains and sets the prices those private providers of health care can charge. Of course, that means you'll all pay higher taxes to finance such a plan, but the record of all those countries shows that you'll be saving money overall, because you won't be paying for health insurance, your employer won't be paying for health insurance, you won't be paying co-pays and deductibles, and you won't be getting gouged for drugs or hospital stays or doctors' bills. You won't be paying state taxes for Medicaid either, nor will your insurance and local property taxes have to subsidize the hospital care of indigents. On balance, you'll all be saving money, and you'll never have to worry about disease or injury bankrupting you. Nor will employers be able to hold you hostage any longer. The reality is that the countries that have a single-payer plan are spending half of what we spend per capita for health care, they have no uninsured citizens, and their health overall, as measured by such things as longevity, infant mortality, etc., is better than ours."

The president could have said all this and rallied the tens of millions of Americans who desperately want a health care system modeled on the single-payer idea to his side, forcing Congress to go along or pay the price in 2010.

Instead, this president who, in years past as a senator, as a state representative, and as an activist had praised the idea of single-payer, has taken to saying it's important to keep the private health insurance industry in business. Instead of inviting Canadian administrators of that country's successful system down to talk about how it works up there, he barred even American advocates of single payer from speaking at his talk-fests on health care reform at the White House. Instead of taking an axe to the U.S. Medical Industrial Complex, he has pretended he could reform the current profit-crazed system we have in the U.S. without raising taxes. Instead of pointing out that we already have a well-functioning single-payer system for our elderly and disabled in the form of Medicare, he has spent his time badmouthing the single-payer idea, even claiming that it's not part of our "American" tradition.

But let's note that Obama's sellout on health care reform was aided and abetted by the progressives, the left groups, and political organizations and the unions that failed to hold him to his earlier espousal of single-payer, that instead of calling him out on his cave-in, bought into his initial compromise of a so-called "public option" insurance alternative, and even into his subsequent backdown to an even more watered-down version of possibly state-run or "cooperative" plans.

Now his political cowardice and mendacity have caught up with him. His "plan," if it can even be called that, of mandating employer health coverage and then adding a government-run alternative "public option" to existing private insurance, has understandably failed to excite the public, while still arousing the passionate opposition of conservative Republicans and conservative members of his own party, and meanwhile does nothing to limit soaring health costs that already eat up a fifth of the entire gross domestic product of the nation, requires an increase in taxes and reductions in Medicare, will probably, if established, lead to more companies actually dropping their current benefit programs in favor of a cheaper, stripped-down government plan, and yet will still leave millions of people unable to get access to timely, quality, affordable medical care.

Furthermore, his apparent failure to deliver on this key initiative will deal a body blow to his political clout on other initiatives, such as tackling climate change and dealing with an acute economic crisis.

If I'm right that health reform is dead, so is Barack Obama's presidency. President Bill Clinton's new administration foundered early on following his shameless backdown on a pledge to guarantee the right of gays and lesbians to serve openly in the military. It never recovered. President Obama's new administration is foundering on his equally shameless backdown on a promise to establish a system of quality affordable health care for all.



DAVE LINDORFF is a Philadelphia-based journalist. He is author of "Marketplace Medicine: The Rise of the For-Profit Hospital Chains" (Bantam Books, 1992), and of "The Case for Impeachment" (St. Martin's Press, 2006). His work is available at www.thiscantbehappening.net.

[Demeter]

21. Demanding an End to Fed Secrecy, Sen. Bernie Sanders Questions Bonuses at Goldman Sachs and Other Bi

http://blog.buzzflash.com/alerts/686

Demanding an End to Fed Secrecy, Sen. Bernie Sanders Questions Bonuses at Goldman Sachs and Other Big Banks

Stepping up a campaign for Federal Reserve accountability, Sen. Bernie Sanders (I-VT) today questioned whether some of more than $2.2 trillion in secret subsidies went to Goldman Sachs and other bailed-out banks now planning to shower executives with huge bonuses.

Sanders voiced his concern in a letter to Fed Chairman Ben Bernanke and Treasury Secretary Timothy F. Geithner and during remarks at an Economic Policy Institute conference.

Goldman Sachs yesterday reported that its profits surged on second-quarter income of $3.44 billion. The turnaround came less than a year after reckless investments by Goldman and other Wall Street firms triggered a worldwide recession and drove many rivals out of business.

With the good times rolling again on Wall Street, Goldman repaid its $10 billion taxpayer bailout and now plans to dole out the biggest bonuses in its 140-year history. The investment bank reportedly plans to pay as much as $20 billion this year in bonuses and other compensation, about $700,000 per employee. Goldman is one of 10 big banks that announced plans to return bailout funds so they could evade restrictions on executive compensation and bonuses.

"The question I have is how do we know that right after Goldman and other banks pay back billions to the Treasury, the Federal Reserve doesn't turn around and provide them with billions more with no strings attached?" Sanders asked. "The answer is that we don't know. Ben Bernanke refuses to say."

In a keynote speech at an Economic Policy Institute conference, Sanders argued that any firm that received a taxpayer bailout through the Troubled Asset Relief Program or the Federal Reserve should be subject to strict limits on compensation and should not be rewarding bonuses to senior executives.

The Senate in April approved 59-39 an amendment by Sanders calling on the Fed to disclose the names of all of the institutions that received more than $2.2 trillion in taxpayer assistance, how much each received, and what they are doing with this money. The amendment was included in the final version of the Budget Resolution.

Sanders also is the chief sponsor of legislation to require the Fed to name the financial institutions that have received what could total more than $7 trillion in loans and loan guarantees. A separate Sanders bill would require the Government Accountability Office to conduct a comprehensive and independent audit of the Federal Reserve. It now has 13 cosponsors, including Sens. Russ Feingold (D-WI), John McCain (R-AZ), Blanche Lincoln (D-AR) and John Barrasso (R-WY). Rep. Ron Paul (R-TX) has introduced an identical bill in the House. It now has 261 cosponsors, including 85 Democrats.

"Chairman Bernanke and the Federal Reserve have got to understand that this money does not belong to the Federal Reserve. It belongs to the American people," Sanders said. "As long as the Federal Reserve is allowed to keep the information on their loans secret, we will never know the true financial condition of the banking system."

[florida08]

23. From CNBC

The Federal Reserve's balance sheet is so out of whack that the central bank would be shut down if subjected to a conventional audit, Jim Grant, editor of Grant's Interest Rate Observer, told CNBC...

With $45 billion in capital and $2.1 trillion in assets, the central bank would not withstand the scrutiny normally afforded other institutions, Grant said in a live interview.

"If the Fed examiners were set upon the Fed's own documents—unlabeled documents—to pass judgment on the Fed's capacity to survive the difficulties it faces in credit, it would shut this institution down," he said. "The Fed is undercapitalized in a way that Citicorp is undercapitalized."

[Festivito]

22. Debt: 07/14/2009 11,528,990,866,940.74 (UP 3,597,964,939.14) (Up some.)

(Small moves up.)

= Held by the Public + Intragovernmental(FICA)
= 7,180,892,052,603.57 + 4,348,098,814,337.17
UP 244,233,965.61 + UP 3,353,730,973.53

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 306,868,742 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 $37,569.78.
A family of three owes $112,709.34. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 32 days.
The average for the last 23 reports is 6,697,310,320.54.
The average for the last 30 days would be 5,134,604,579.08.
The average for the last 32 days would be 4,813,691,792.89.
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$/day.
There were 120 reports in 175 days of Obama's part of FY2009 averaging -0.32B$ per report, -0.14B$/day so far.
There were 195 reports in 287 days of FY2009 averaging 7.71B$ per report, 5.24B$/day.

PROJECTION:
There are 1,286 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)
07/14/2009 11,528,990,866,940.74 BHO (UP 902,113,818,027.66 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: 1,504,265,970,028.30 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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
07/14/2009 +000,244,233,965.61 ------------********

53,203,106,107.18 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,864,359,063,681.67 in last 299 days.
That's 1,864B$ in 299 days.
More than any year ever, including last year, and it's 183% of that highest year ever only in 299 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 299 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=3969602&mesg_id=3971014

[Festivito]

66. Debt: 07/15/2009 11,579,428,713,952.53 (UP 50,437,847,011.79) (Up 57B$.)

(Debt goes up fast for today while FICA side goes down a bit.)

= Held by the Public + Intragovernmental(FICA)
= 7,238,613,847,252.09 + 4,340,814,866,700.44
UP 57,721,794,648.52 + DOWN 7,283,947,636.73

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 306,875,942 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 $37,733.26.
A family of three owes $113,199.77. (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 7,769,781,804.36.
The average for the last 30 days would be 5,956,832,716.68.

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$/day.
There were 121 reports in 176 days of Obama's part of FY2009 averaging -0.10B$ per report, 0.02B$/day so far.
There were 196 reports in 288 days of FY2009 averaging 7.93B$ per report, 5.40B$/day.

PROJECTION:
There are 1,285 days remaining in this Obama 1st term.
By that time the debt could be between 13.3 and 19.2T$.
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)
07/15/2009 11,579,428,713,952.53 BHO (UP 952,551,665,039.45 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: 1,554,703,817,040.10 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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
07/14/2009 +000,244,233,965.61 ------------********
07/15/2009 +057,721,794,648.52 ------------**********

145,657,132,739.39 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,914,796,910,693.46 in last 300 days.
That's 1,915B$ in 300 days.
More than any year ever, including last year, and it's 188% of that highest year ever only in 300 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 300 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=post&forum=102&topic_id=3971295&mesg_id=3971369

[Demeter]

26. Citi close to secret deal with regulator

http://www.ft.com/cms/s/0/a44b5690-7182-11de-a821-00144feabdc0.html

By Francesco Guerrera, Joanna Chung and Julie MacIntosh in New York

Citigroup is close to a secret agreement with one of its main regulators that will increase scrutiny of the US bank and force it to fix financial, managerial and governance issues.

People close to the situation said that the deal had been discussed in recent weeks amid increased pressure on Citi from the Federal Deposit Insurance Corporation, the regulator, and could be finalised soon.

The proposed agreement requires, among other things, that Citi strengthens its board and governance, improves asset quality, better manages expenses and provides more information to regulators on its capital and liquidity, these people added.

The regulator’s action highlights concern over Citi’s financial health, governance and the strength of its management team, led by Vikram Pandit, chief executive. The FDIC is known to be frustrated with the slow pace of Citi’s “toxic” assets sales, its losses and the lack of commercial banking experience at the top.

An agreement would strengthen the FDIC’s position in its dealings with Citi and its demands for detailed financial information as it deliberates over whether to include it on its list of “problem banks”.

Citi, which is about to cede a 34 per cent stake to the US government as part of its latest rescue, struck a similar agreement with another regulator late last year, industry executives say.

The bank and its main regulators – the Office of the Comptroller of the Currency, the Federal Reserve and the FDIC – declined to comment.

Agreements between regulators and a bank’s management and board – known as “informal actions” – are not made public to avoid stoking investors’ fears. They can be in a “memorandum of understanding” or a “commitment letter” from the bank to the authorities and are fairly unusual and less serious than formal enforcement actions.

Some MOUs and commitment letters can restrict the company’s ability to operate in certain markets or products but it is unclear whether Citi’s latest agreement contains such provisions.

Citi, which is expected to report a second-quarter loss on Friday, is already addressing some of the regulators’ concerns. It has hired five new directors and is looking for three more, bolstered its balance sheet and recruited executives with commercial banking expertise. It has also pledged to sell billions of dollars in non-core businesses and assets.

The proposed agreement with the FDIC focuses on Citi’s business and governance rather than its executives and was not a direct cause for last week’s switch of its finance chief Ned Kelly to another role, said people close to the situation.

[Po_d Mainiac]

32. Then called Shiticorp, was one of the driving forces

behind The Gramm-Leach-Bliley Act that really greased the skids for where we are today. They've been a zombie institution for 3 years. Let GobermInt Sachs bail them out, and take the hit.

They can afford it, WE can't! :puke:

[Demeter]

27. DoJ demands CDS trading data from dealers

http://www.ft.com/cms/s/0/ce0b0d48-7085-11de-9717-00144feabdc0.html

By Aline van Duyn, Joanna Chung and Michael Mackenzie in New York

Published: July 14 2009 16:47 | Last updated: July 15 2009 12:06

The US Department of Justice has started investigating a data provider and dealers in the credit derivatives market for potential violations of the US Sherman Act, which prohibits abuses of monopoly power or other forms of collusion.

Demands were sent to more than a dozen dealers for several years’ of detailed information about trading and pricing, according to people who received the letter. The DoJ letter was sent to banks with an equity stake in Markit Group, which provides pricing data on markets including the credit default swaps (CDS).

The move comes as the regulatory spotlight shines on the CDS market and other privately traded derivatives markets, parts of which grew dramatically in the last decade and generated huge profits for Wall Street.

Markit, which has also been asked for information, has developed many of the most closely watched derivatives pricing benchmarks for CDS such as the mortgage sector’s ABX and the corporate credit CDX and iTraxx Europe indices.

According to people who have seen the letter from the DoJ’s antitrust division, the requests are made under sections one and two of the Sherman Act. The DoJ declined to comment.

Markit said that it “has been informed of an investigation by the Department of Justice into the credit derivatives and related markets. We will work with the Department to provide any information requested.”

Shareholders in Markit include JPMorgan Chase, Goldman Sachs, Citigroup, Deutsche Bank, Bank of America and Morgan Stanley, among others. Banks either declined to comment or were not available for comment.

The DoJ started looking into Markit last year when it sought approval for a joint venture with the Depository Trust and Clearing Corp that would combine their respective front and back office operations for processing and confirming derivative transactions. The new company is awaiting regulatory approval.

Questions about the way the CDS market works and how information is made available, and at what prices, come as regulators press for efforts to lessen the dominant position held by dealers in many privately traded markets.


WOW~! MAYBE SOMEBODY'S FINALLY GETTING SERIOUS! AND THEY'RE GOING TO LET ANOTHER LAMB BE SACRIFICED? I PREDICT PANIC IN AUGUST, JUST LIKE WHEN LEHMAN'S WAS SACRIFICED.

[Tansy_Gold]

47. Are you holding your breath, Demeter?

I didn't think so. Me neither.


(edit to fix typo. I'm tired and I'm pissed off and my fingers are not cooperating :grr:)

[Demeter]

49. Tansy, I Can't Even Catch My Breath

Just got back from the dentist, who had to numb me just to get the crown seated....I thought I arrived 10 minutes early (for once) and actually I was 1 hour and 10 minutes early....

And to make the day complete, we are being strafed by the Blue Angels, in town for an airshow this weekend.

Why they have to practice over a city of 100,000, when we are surrounded by sparsely populated townships, Is anyone's guess. But they've made a pass a day over my roof, literally for the past 3 days. It's unnerving. They are close enough to see the windows on the planes.

[Dr.Phool]

59. The Sherman Act?!!!

When is the last time they used that?

It should be dusted off, and used with a vengeance.

[Tansy_Gold]

64. It'll only get dusted off for purposes of repeal, I'm sure. As soon as

GS takes over and they MIGHT come under some kind of scrutiny, I'm sure they'll find a Phil Gramm II to get Sherman repealed. Can't have such nuisances in the way of "progress" now, can we?



Assholes. They're all assholes.





Tansy Gold

[ozymandius]

31. Calpers: Rating Agencies to Blame for Huge Losses

Barry Ritholtz has an interesting take on this litigation:

These Left Coasters want their pound of flesh. They don’t care for the Ratings Agency folks, and consider them a blight on the investment landscape.

The goal of the litigation (as I see it) isn’t to make the rating agencies pay a financial penalty; rather, it is to publicly try them just as the regulatory rules are being rewritten. I also predict that CALPERS is going to attempt to not just win, but humiliate these agencies, call them out in the most embarrassing way possible, trash the senior executives, and make things very uncomfortable in general for these firms.

Since I am the vindictive and petty sort when it comes to matters of rampant fraud and senseless speculation that cost millions of people their economic security - nothing would please me more to see these oligarchs bloodied, humbled and humiliated.

[Po_d Mainiac]

34. Draw enough fraudsters

out into the open. Instead of being a tight family circle jerk, maybe they'll start pointing fingers and save the Justice Dept. a shitload of time.

[Demeter]

48. Omerta' will prevent that

Now we know why the govt. was working so hard to put the Mafia out of business... the banksters don't like competition. Especially GS.

[Dr.Phool]

60. From knowing people in both businesses.

The Mafia is more honorable.

[florida08]

33. I sure hope they're getting serious

because right around the corner is another bubble

The Carbon Cap: The Newest Form of Taxation

http://www.financialsense.com/editorials/casey/2009/0715.html

This is what’s coming to your town, if Congress capitulates to the White House. The bill that will bring us cap-and-trade recently squeaked through the House with just a single vote to spare. It faces an uncertain future in the Senate, where opposition is stiff. Modifications surely will be made. But with Al Franken having cemented the Democratic super-majority, it’s a lock to pass in some form or other.

Ever-savvy, the market isn’t waiting. Although no cap is yet in place, carbon credits have already arrived. There’s even a place to trade them, the Chicago Climate Exchange (CCX), founded in 2003. And companies are busily buying and selling in anticipation.

How does it work? CCX’s website explains: “CCX emitting Members make a voluntary but legally binding commitment to meet annual GHG emission reduction targets. Those who reduce below the targets have surplus allowances to sell or bank; those who emit above the targets comply by purchasing CCX Carbon Financial Instrument® (CFI®) contracts.”

In other words, some outfits are stocking up on purchased credits, against the day when they’ll be required by law. Others are speculating that the value of those credits will go up once the federal cap is in place. And some are making a lot of money simply by selling carbon reductions they’ve already made.....

There’s no secret key to why so many want a piece of this action. It’s going to be a very, very big business. If European standards are applied to the U.S., we’re talking about a quarter-trillion dollars of credit trading a year.


A good day to all--out

[Demeter]

51. Another Organized, Government Sanctioned Fraud

which will only rob the poor and give to the rich, without anyone else getting anything for it, like clean air...

[natrat]

61. sadly it does little to actually reverse warming,kind of like the Healthy Forests Initiative

but the banks will make money and that's what matters, having a viable planet , whatever

[UpInArms]

36. dollar watch

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

Last trade 79.244 Change -0.185 (-0.24%)

Earnings Season Looks to Take Control of Risk Appetite and the Markets

http://www.dailyfx.com/story/topheadline/Earnings_Season_Looks_toTake_Control_1247712984766.html

So far this week, we have seen Goldman Sachs report a record profit through the second quarter while Dow Jones Industrial Average components Intel and Johnson & Johnson both beat analyst expectations with their own numbers.

Beyond officially marking the beginning of earnings season, these few companies have set the tone for investors. With such a strong start, market participants will expect a strong rebound in earnings across the board. Optimism and risk appetite have already been driven higher on just such an outlook so far this week; and equities, currencies, commodities and fixed income have all reflected the shift. However, will the wave of accounting be as consistent as this rally in the markets would suggest? More importantly, is an expected rebound in income necessarily a clear catalyst for long-term bullish trend change? We need to look at this data and its potential for market movement more closely.

A Rebound in Earnings Does Not Necessarily Mean a Rebound in Growth

It may seem a clear signal that a recovery in revenues for corporations is a sign that the economy is recovering and financial conditions have normalized. However, one does not lead into the other so easily. A rebound in earnings has been expected – and not just according to analysts’ consensus forecasts. In the grander scale of things, a color change in corporate bottom lines is inevitable after such a sharp plunge into recession as cost cutting efforts and a stabilization of demand push earnings per share (EPS) back into the black. From this standpoint it is a little clearer that positive accounting does not directly translate into growth – rather this is actually more like GDP data: it hasn’t returned to positive territory but has eased its pace of contraction.

Seeing strong earnings and company expansion is likely a ways off. Demand is still a missing component. The IMF expects the global economy to 1.4 percent this year before returning to growth of 2.5 percent through 2010. In the meantime, consumer spending will dampen the rebound for production. In the world’s largest economy – the US – the FOMC estimates the nation’s unemployment rate will hit 9.8 to 10.1 percent. What’s more, a lack of liquidity outside the circle of the core financial players means investment will remain anemic.

The Health of The Financial Leaders

There will be a particularly sharp focus over the next few weeks on the banking sector. This sector has been at the center of the original meltdown (the subprime collapse) and has spurred on the biggest crises along the way (like the Bear Stearns, Lehman Brothers and AIG failures). Therefore, it makes sense that this specific sector will be the litmus test for the entire season. If the banks, insurers, money managers, and other financial firms cannot pull themselves up; the specter of another bankruptcy could threaten to destabilize the financial system once again. Government’s are already scraping the bottom of the barrel in terms of liquidity; and further bailouts or guarantees will only go to those that hold systemic risk (just look at CIT). What’s more, tax payers will be paying particular attention to the health of those banks that borrowed money from the government to pull them through the worst. Most of those banks that borrowed TARP funds to pass the Treasury’s Stress Test have already paid the government bank. If this was more a move to appease investors than to move out of the umbrella of a conservative lender, then the companies may be in a worse situation after the cycling out the aid than before they took it. Furthermore, it will be important to take the earnings with a grain of salt. Accounting can be legally manipulated to bolster numbers and the weight of liabilities can be played down.

...more...

Euro, Pound Range Bound As Traders Await Earnings News, J.P. Morgan Chase To Report

http://www.dailyfx.com/story/bio1/Euro__Pound_Range_Bound_As_1247739743422.html

The Euro has become range bound between 1.4100-1.4050 after giving back some of its gains from yesterday. Forex traders are awaiting the next significant news event to determine sentiment as the global economic outlook has become cloudy. French consumer prices crossed the wires with very little reaction with prices falling 0.5% versus expectations of -0.4% on a yearly basis. Falling crude prices continue to filter through the economy and declines in food and apparel underline the weak domestic demand. Yet, EUR/JPY falling nearly 200 pips from its high yesterday may be a sign that concern is creeping back into the market.

Overnight we saw some signs that a global recovery may not be imminent with the Japanese Tertiary index declining 0.1% versus expectations of a 0.4% gain as the service sector remains weak. Meanwhile, New Zealand saw its credit rating downgraded by Fitch to negative which fueled concerns that an economic recovery may be protracted. Additionally, we also saw a report from Realty Trac Inc that U.S. foreclosures hit a record high 1.5 million in the first six months of the year. Unless we see corporate earnings results continue to impress, we could see a reversal in risk appetite which could weigh on the Euro as the single currency has been highly correlated with equity markets. The 20-Day SMA at 1.3999 may be a support level that is tested.

The Pound has traded in a tight range due to an empty economic calendar and markets awaiting more earnings news. The better than expected U.K. employment figures have fueled speculation that the BoE will not have to add to their quantitative easing efforts. However, BoE policy maker Kate Barker that it is too early to asses the impact of their efforts on banks ability to lend. Therefore, next month the central bank may decide to add tot heir asset purchase program as they look to limit the risks of a double dip recession. Deputy Governor Charles Bean stated that too much shouldn’t be read into last month’s pause which could be a sign that more easing will come in August. Indeed, Prime Minister Gordon Brown stated today that the economic outlook still remains uncertain.

The dollar has consolidated its losses overnight as investors await the next wave of earnings news. The greenback has been under pressure from positive earnings from Goldman Sachs and Intel. J.P. Morgan Chase will report today and give insight into whether the banking names are truly rebounding. Initial jobless claims are expected to remain below 600,000 for a second week at 550K which may reignite risk appetite and dollar weakness. However, the expected decline in the Philadelphia Fed manufacturing reading to -5 from -2.2 could reverse optimism found from yesterday’s strong industrial production results. Additionally, small business lender CIT is reporting that bankruptcy may be imminent as a government bailout is unlikely which could sink optimism. Its 300,000 customers may be forced to cut workers as they look to shed costs if they see their access to credit dry up.

...more...

[Demeter]

52. Geithner upbeat on economy (watch for spin!)

http://www.ft.com/cms/s/0/5c59a1e6-6fd6-11de-b835-00144feabdc0.html

By Chris Giles in London

Published: July 13 2009 18:58 | Last updated: July 13 2009 23:40

Tim Geithner, the US Treasury secretary, sounded an optimistic note on the US and global economy on Monday, suggesting a recovery was at hand and saying there was no need at the moment for another fiscal stimulus.

Speaking in London at the start of a tour of European and Gulf capitals, he said: “There is a very good chance for seeing the US economy and the world economy get back to the point when it is growing again over the next few quarters.”

The tone could not have been further from the irritation felt in the US administration at the perceived lack of European stimulus this spring.

The Treasury secretary repeated the administration’s insistence that the stimulus policy was working and its power would intensify in the months ahead. “Policy has been very successful in arresting and mitigating the force of the storm and we’re starting to see a better basis for recovery,” he said.

Rejecting calls from Laura Tyson, a member of the White House’s Economic Recovery Advisory Board, for a bigger stimulus, Mr Geithner said: “I don’t mean ... we’re in a position now that you can think about more additional response.”

Instead he focused on the $787bn (€563bn, £487bn) programme already in place. “Our stimulus package was designed so ... its maximum impact takes effect in the second half of this year ... so we’re just beginning to come to the point when you’re going to see the largest effective boost to the employment-intensive parts of the stimulus coming on stream.”

US officials are perplexed as to the reasons why unemployment in this recession has risen faster than would be expected from the loss of output so far in the downturn, while the reverse has been true in large European economies.

Underpinning the Treasury secretary’s optimism has been the stabilisation of the global economy and financial markets in recent weeks alongside the reduction in catastrophic risks, which he believes represent an essential condition for a recovery. He said, given that the US entered recession early, it was natural that it would be one of the first countries to emerge from the downturn.

Apart from monitoring the early stages of recovery in the world economy, Mr Geithner was also canvassing support for regulatory reforms to the financial system, which will be on the table for discussion at the Group of 20 summit in Pittsburgh in September.

Mr Geithner and Alistair Darling, the UK chancellor, said there was a broad consensus on the core issues of international co-operation on banking regulation and resolution regimes for international banks. But neither held out hope that the summit would result in agreement on how much more capital banks would be required to hold, nor what additional penalties would apply to large or risky banks, nor how regulators would operate to tighten regulations in the next boom.

Instead Mr Geithner said much of the onus for toughening banking regulation would come from countries acting alone: “The principal burden for these reforms will rest on on what we do as individual sovereign nations at the national level.” :puke:

[Demeter]

53. French workers threaten to blow up plant

http://www.ft.com/cms/s/0/88b42742-6fd2-11de-b835-00144feabdc0.html

By Peggy Hollinger in Paris

Published: July 13 2009 18:45 | Last updated: July 13 2009 18:45

Workers at a failed French car parts supplier are threatening to blow up their factory unless the company’s two biggest clients – Renault and PSA Peugeot Citroen – stump up extra compensation.

Employees of the engine parts maker New Fabris have rigged up a series of gas canisters inside a factory workshop which they say will be detonated on July 31 if the two carmakers fail to pay €30,000 to each of the 366 workers facing unemployment.

The company, which went into receivership for the second time in two years last month, holds an estimated €2m of stock ordered by the two carmakers, as well as a machine belonging to Renault valued at about €2m.

The threat could still be an empty one as government officials said there appeared to be some doubt as to whether the gas canisters were full. Nonetheless, the government is taking the threat seriously, fearful that the lastest hold up marks a significant increase in labour tensions that have been present for several months. The fire brigade has been put on stand-by and emergency service reinforcements sent to the area near the factory in Châtellerault in western France, according to a news agency report.

Earlier this year France was hit by a wave of boss-nappings, where workers held factory managers hostage, sometimes for several days, to force better redundancy payoffs or protest at factory closures. Most ended without violent incident.

However there is real concern within the government that tensions could rise in the autumn, when unemployment and company failures are expected to increase sharply, especially in the car parts sector - hard hit by the automobile crisis. There is already widespread resentment at bailouts for banks and carmakers, while the government has refused to consider a fiscal stimulus package to boost consumer spending.

Christian Estrosi, industry minister, had invited the workers to meet him to discuss the situation, but on Monday withdrew the invitation saying he would not negotiate while the threat of explosion remained in place.

Guy Eyermann, member of the hardline CGT union that appears to be leading the protest, insisted that the battle would not be abandoned. “”Are we capable of blowing up the factory? Yes we are,” he told a gathering of about 100 workers yesterday. “Renault and Peugeot have killed us. We want a share of the cake. They have been helped by the state.”

Both Renault and Peugeot also insisted that they would not give in to the threats from New Fabris workers. “It is not for us to pay,” said a Renault spokeswoman.

Both companies said they had had contributed financially ever since New Fabris ran into difficulties last autumn, with early advances and some wage payments.

“We have done all we could,” the Renault spokeswoman said. “In a way it is understandable. We have not seen a crisis like this before. But in this case they are knocking on the wrong doors.”

[DemReadingDU]

58. Does anyone think they will blow up the plant?

This could get really nasty.

[Demeter]

54. EU seeks to double cost of banks’ bets

http://www.ft.com/cms/s/0/380ac8c8-6fd7-11de-b835-00144feabdc0.html

By Patrick Jenkins and Brooke Masters in London

Published: July 13 2009 19:11 | Last updated: July 13 2009 23:44

Europe’s banks will find the practice of betting with their own money twice as expensive in future, cutting their profits, under the terms of a proposed European Union directive published on Monday.

The proposal, which coincided with the publication of draft global rules by the Basel Committee on Banking Supervision that went in the same direction, would require banks to “roughly double current trading book capital requirements”, the European Commission document said.

Proprietary, or “prop” trading, whereby banks use their own money to bet on trading positions, has been lucrative for banks for years. But some in the ind­ustry believe that the rule changes could make the practice far less economic.

“This is the first time we’ve actually seen a number. It’s what people were expecting,” said Michael Raffan, a partner at Freshfields.

Simon Gleeson, a partner at Clifford Chance, said the Commission’s proposed rule changes were “not as bad as they could have been” for the banking industry.

The toughest clampdown would come for banks’ holdings in so-called “resecuritisations”, financial products that are derived from existing securitisations. Such repackaging of already packaged securities is widely deemed to be more risky than had been generally accepted before the financial market crisis.

The Commission proposal also spells out how regulators plan to make banks do a better job of understanding and explaining the risks they run when they resecuritise assets into collateralised debt obligations.

If the bank cannot demonstrate that it has done the necessary due diligence, then it will have to multiply the CDO by 12½ times in calculating its risk weighting for capital requirements. The rule would apply only to new resecuritisations issued from 2011.

The proposals are not final and are likely to be amended after consultation, UK officials say.

The remuneration proposals – suggesting that pay should be linked to risk, though the Commission gave scant detail – are closely aligned with the Financial Services Authority’s proposal on pay, UK officials also say.

Senior US officials say they have so far shied away from specifying what the new capital requirements will be. They are afraid that announcing the rules could weaken banks that would have to rush to deleverage ahead of them.

But on Monday the Basel Committee announced it had adopted the final version of its new rules, which will force banks to tie up more capital to offset risky trading-book activities.

The reforms to the so-called Basel II rules, which prescribe capital allocation for banks in the bulk of the world’s main markets, are designed to make the rules less prone to the distortions of market downturns and upturns.

Like those of the Commission, the Basel Committee’s rule changes will also demand that more capital is held against resecuritised products, as well as better disclosure of securitised assets. But full details will not be published until later in the year.

[Demeter]

55. Antigua sued by Stanford ‘victims’

http://www.ft.com/cms/s/0/f95ab348-6fd3-11de-b835-00144feabdc0.html

By Sheila McNulty in Houston and Stacy-Marie Ishmael in New York

Published: July 13 2009 18:53 | Last updated: July 13 2009 23:43

A group of plaintiffs identifying themselves as “victims” of Sir Allen Stanford’s alleged $7bn Ponzi scheme on Monday filed a $24bn lawsuit against the government of Antigua, where the bank at the epicentre of the alleged fraud was based.

The complaint, filed in federal court in Houston, alleges that the government of the twin-island nation “became a full partner in fraud”.

The US government has accused Sir Allen of defrauding investors through so-called certificates of deposits issued by Stanford International Bank, based in the Antiguan capital of St John’s.

Sir Allen has extensive business and personal ties to the island, of which he is a citizen.

“Antigua worked tirelessly to protect and nurture Stanford’s criminal enterprise and, in return, eagerly accepted its share of criminally procured funds,” attorneys for the plaintiffs claimed in the filing.

“Stanford stuffed Antigua’s coffers – and its officials’ pockets – with money stolen from unsuspecting customers throughout the United States, Canada, Central America, South America and elsewhere.”

This month, US officials accused Leroy King, a former top Antiguan financial regulator, of accepting thousands of dollars in bribes and of turning a blind eye to the alleged fraud.

Mr King is currently under house arrest in Antigua, while Sir Allen, who has denied all the allegations against him, is in custody pending trial.

Representatives of the Antiguan government could not be reached for comment.

Another defendant in the Stanford case – James Davis, former chief financial officer of Stanford Financial Group – on Monday pleaded not guilty to criminal charges related to the alleged fraud at the group.

However, his lawyer, David Finn, confirmed that Mr Davis planned to enter a formal guilty plea within two weeks in a deal with the authorities.

Under US law, victims must be notified of any deal before it can be accepted by the courts.

“This thing was smoke and mirrors and duct tape for at least the last 15 years,” Mr Finn said.

Mr Davis, the second-highest ranking executive at the group, has been charged with conspiracy and fraud.

He remained subdued throughout the proceedings and spoke softly in the small and tightly packed court room.

Mr Finn told the court Mr Davis had co-operated with prosecutors for several months, meeting last week alone with the Federal Bureau of Investigation, Internal Revenue Service, the Department of Justice and the Securities and Exchange Commission.

Mr Davis was released on a $500,000 bond, requiring a $5,000 cash deposit. He had to surrender his passport.

Mr Davis, 60, waived his right to a grand jury hearing to decide whether there was probable cause to bring the charges against him, signalling his plans to co-operate with prosecutors.

Sir Allen Stanford has been charged on 21 counts including fraud and obstruction to which he has pleaded not guilty.

[Demeter]

56. Business Week sale may fetch only $1

http://www.ft.com/cms/s/0/bd68cdc6-6fdc-11de-b835-00144feabdc0.html


By Andrew Edgecliffe-Johnson in New York

Published: July 13 2009 20:09 | Last updated: July 13 2009 23:28

McGraw-Hill could reap just $1 from a sale of Business Week, according to people familiar with the 80-year-old financial magazine’s losses.(A BFEE Enterprise, by all acounts, McGraw-Hill)

The publisher has appointed Evercore, the boutique investment bank, to sell the business after concluding it was non-core, two people familiar with the decision said.

McGraw-Hill, which owns the Standard & Poor’s rating agency and a large educational publisher, would only say it was “exploring strategic options” for Business Week. Evercore did not return calls.

Auctioning a predominantly print business exposed to financial advertisers during a media recession will be challenging.

According to the Publishers’ Information Bureau, Business Week’s advertising revenues fell by a third to $77.8m in the first half of 2009. The magazine says its circulation is 936,000.

Bankers said it was unlikely that Time Inc, publisher of Fortune, or Forbes would bid. Condé Nast closed Portfolio, a business glossy, in April.

Reed Phillips, managing partner of DeSilva & Phillips, the media investment bank, said more likely buyers were OpenGate Capital, which bought TV Guide; Platinum Equity, owner of the San Diego Union Tribune; and Mansueto Ventures, a publisher.

Platinum and OpenGate would not comment. Mansueto did not return calls.

The $1 for which OpenGate bought TV Guide “is probably the kind of deal that would be obtainable for Business Week”, Mr Phillips said. Another banker said: “I think they’ll end up giving it away.”

Peter Appert, an analyst with Piper Jaffray, estimated that McGraw-Hill would receive minimal proceeds from the sale, but would cut annualised losses of ”at least $10m-$20m” this year and remove ”a continuing distraction”.

In April, McGraw-Hill reported a 76.4 per cent drop in first-quarter operating profit from its information and media division – which includes Business Week, JD Power & Associates and Platts – to $2.8m.

Among the few groups investing in print media, Bloomberg would not comment and Bonnier said it had always favoured niche acquisitions. News Corp, owner of the Wall Street Journal and Barron’s, said it was not interested.

The news came as Mary Schapiro, chairman of the Securities and Exchange Commission, announced plans for a group of examiners to focus on supervising credit rating agencies such as S&P and Moody’s.

[Dr.Phool]

62. This is good. The Daily Show...Lenny Dykstra's Financial Career.

http://www.thedailyshow.com/watch/tue-july-14-2009/lenny-dykstra-s-financial-career

[Po_d Mainiac]

65. piss your pants funny!!!

[UpInArms]

68. oh how can I say - THANK YOU - for that clip

I rolled on the floor

[Dr.Phool]

69. About the only reason to have cable.

John Stewart, Stephen Colbert, and Kieth Olbermann. And Amy Goodman.

[DemReadingDU]

72. That was hysterical!

:rofl:

[Dr.Phool]

70. Roubini says CNBC is full of shit. As usual.

I was watching Dennis Kucinich giving Kudlow, and some female idiot hell, while I was on the treadmill. It just don't come out right in CC.

But, anyway, here's Roubini's release from this evening.


FOR IMMEDIATE RELEASE

July 16, 2009

STATEMENT ON U.S. ECONOMIC OUTLOOK BY DR. NOURIEL ROUBINI


The following is a statement from Dr. Nouriel Roubini, Chairman of RGE Monitor and Professor, New York University, Stern School of Business:


“It has been widely reported today that I have stated that the recession will be over “this year” and that I have “improved” my economic outlook. Despite those reports - however – my views expressed today are no different than the views I have expressed previously. If anything my views were taken out of context.

“I have said on numerous occasions that the recession would last roughly 24 months. Therefore, we are 19 months into that recession. If as I predicted the recession is over by year end, it will have lasted 24 months with a recovery only beginning in 2010. Simply put I am not forecasting economic growth before year’s end.

“Indeed, last year I argued that this will be a long and deep and protracted U-shaped recession that would last 24 months. Meanwhile, the consensus argued that this would be a short and shallow V-shaped 8 months long recession (like those in 1990-91 and 2001). That debate is over today as we are in the 19th month of a severe recession; so the V is out of the window and we are in a deep U-shaped recession. If that recession were to be over by year end – as I have consistently predicted – it would have lasted 24 months and thus been three times longer than the previous two and five times deeper – in terms of cumulative GDP contraction – than the previous two. So, there is nothing new in my remarks today about the recession being over at the end of this year.

“I have also consistently argued – including in my remarks today - that while the consensus predicts that the US economy will go back close to potential growth by next year, I see instead a shallow, below-par and below-trend recovery where growth will average about 1% in the next couple of years when potential is probably closer to 2.75%.

“I have also consistently argued that there is a risk of a double-dip W-shaped recession toward the end of 2010, as a tough policy dilemma will emerge next year: on one side, early exit from monetary and fiscal easing would tip the economy into a new recession as the recovery is anemic and deflationary pressures are dominant. On the other side, maintaining large budget deficits and continued monetization of such deficits would eventually increase long term interest rates (because of concerns about medium term fiscal sustainability and because of an increase in expected inflation) and thus would lead to a crowding out of private demand.

“While the recession will be over by the end of the year the recovery will be weak given the debt overhang in the household sector, the financial system and the corporate sector; and now there is also a massive re-leveraging of the public sector with unsustainable fiscal deficits and public debt accumulation.

“Also, as I fleshed out in detail in recent remarks the labor market is still very weak: I predict a peak unemployment rate of close to 11% in 2010. Such large unemployment rate will have negative effects on labor income and consumption growth; will postpone the bottoming out of the housing sector; will lead to larger defaults and losses on bank loans (residential and commercial mortgages, credit cards, auto loans, leveraged loans); will increase the size of the budget deficit (even before any additional stimulus is implemented); and will increase protectionist pressures.

“So, yes there is light at the end of the tunnel for the US and the global economy; but as I have consistently argued the recession will continue through the end of the year, and the recovery will be weak and at risk of a double dip, as the challenge of getting right the timing and size of the exit strategy for monetary and fiscal policy easing will be daunting.

“RGE Monitor will soon release our updated U.S. and Global Economic Outlook. A preview of the U.S. Outlook is available on our website: www.rgemonitor.com”

[Zenlitened]

71. Hopeful sign seen in low inventories

"Hopeful sign seen in low inventories carried by industry and retail; about as low as ever compared to volume of business. Retailers have been buying "hand to mouth" for months. This differs from the 1921 depression, when inventories were at record highs. This should add a large boost when the economy turns."

News From 1930