STOCK MARKET WATCH, Thursday July 23

[ozymandius]

Source: du

STOCK MARKET WATCH, Thursday July 23, 2009



Bush Administration Officials Under Indictment = 2

Financial Sector Officials In Prison = 4

AT THE CLOSING BELL ON July 22, 2009



Dow... 8,881.26 -34.68 (-0.39%)

Nasdaq... 1,926.38 +10.18 (+0.53%)

S&P 500... 954.07 -0.51 (-0.05%)

Gold future... 953.30 +6.40 (+0.68%)

10-Yr Bond... 3.54 +0.06 (+1.75%)

30-Year Bond 4.45 +0.05 (+1.23%)

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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

Positive Quarters Happen
by Chris Puplava

While the financial media is certainly going to be clamoring over the all but certain improvement in Q2 GDP numbers set to be released later in the month, should investors? Is the worst behind us and are there clear skies ahead, or is the picture far from rosy? These are the vital questions investors need to ask themselves as their answers to them will dictate how they invest going forward.

In a Bloomberg interview yesterday Martin Feldstein, a professor of economics at Harvard University and former head of the National Bureau of Economic Research (NBER, the recession arbiters), does not believe that happier times are here again. He casts a different light on the U.S. economy compared to others such as BofA Merrill Lynch that told investors that the recession is over last week (Click for BofA article). Mr. Feldstein sees the possibility of a double-dip recession, and excerpts from the article are provided below (emphasis added):

Harvard’s Feldstein Sees Risk of ‘Double-Dip’ Recession in U.S.

“There is a real danger this is going to be a double dip and that after six months or so we’ll have some more bad news,” Feldstein, the former head of the National Bureau of Economic Research and Reagan administration adviser, said today in an interview on Bloomberg Television. “We could slide down again in the fourth quarter.”

The economy could “flatten out” or “even be positive” in the third quarter, and then it’s likely to contract again in the last three months of the year as the effects of the federal stimulus program wear off and companies finish rebuilding inventories, he said.

“There isn’t going to be enough to sustain a really solid recovery,” he said, even though recent data has provided some “good news” on the economy.

A significant improvement in Q2 GDP numbers relative to Q1 is likely as residential real estate’s drag on the economy is lessening, which is a leading economic indicator. Typically the percent contribution to GDP from residential fixed investment serves as a leading indicator while equipment and software spending serves as a coincident indicator and nonresidential real estate serves as a lagging indicator. We can say that the trough appears to be in for residential fixed investment which should be subtracting less to GDP going forward, but it will be interesting to see if equipment and software spending bottoms. If it doesn’t then the comments from BofA Merrill Lynch will likely prove premature.

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

[Demeter]

6. The Recession Ended Last Week? Gee, I Must Have Missed It

Demeter, checking in from 15.4% unemployed (officially) Michigan

[ozymandius]

12. How could you miss it?

It was all over the Bazooka Joe horoscopes.

[tclambert]

39. "End of recesson" may be a long way from "recovery"

if you define the end of a recession as GDP going up by a penny.

Don't worry, Demeter, one day we in Michigan will be sitting pretty while the rest of them are dying of thirst.

[Demeter]

32. As we all know, the depression is over.

Friday, two more banks - the Bank of America and Citigroup - announced impressive results. Between them, they made $5.4 billion in the last quarter.

These follow announcements earlier in the week from JPMorgan and Goldman. As reported in this space, Goldman set the pace by reporting that it has managed to earn more than $1 billion per month, in the 2nd quarter of this year. It said it did so by helping clients raise money...refinance...and restructure. Deals. Deals. Deals.

Goldman made so much money that it has set aside more than $11 billion so far this year in compensation for its executives - or about half of its revenues, according to The Economist. During the same period, shareholders got $4.4 billion, barely a third as much.

This, by the way, is the same firm that suffered a near-death experience along with the rest of Wall Street about six months ago. In order to save itself, it turned to Washington for cash. It was at that point that we at The Daily Reckoning noticed the appalling state of modern American capitalism - the capitalists didn't have any capital. What happened to the money? They had paid it out to the managers and proles. Lehman Bros., for example, ran out of cash in 2008 and had to be put down. It was a very profitable firm during the bubble years; but $55 billion was paid out to employees in the 10 prior years.

When it was flush, Lehman should have given more money to the politicians. The feds had cash; heck, they make the stuff. Its competitor, Goldman, only had to whistle and the United States government - dominated by former and future Wall Street pros - rolled over. The feds put up the money, lickety split. And now that Goldman is rolling in dough again, does it carefully husband its resources, restocking its shelves and refilling its vaults, so it will no longer be a burden on the taxpayer if things go bad?

Nooooo...like a welfare queen in a pink Cadillac, it spends every penny, confident that it can lean on the feds next month as well as the last.

But now, look. After all our whining and complaining about the bailouts - they must be working, right? The big banks are making money again...big money. And that must mean the economy is on the mend. They're lending...they're speculating...they're rolling the dice and...hallelujah...a pair of boxcars!

But wait. Ken Lewis of Bank of America says, "Profitability in the second half of the year will be much tougher than the first half..."

How come?

Because the banks' core business is actually getting worse! The core business of banking is lending to people who are capable of paying it back - out of earnings. If the borrower is counting on higher house prices...or higher stock prices...to allow him to refinance on better terms, the lender is asking for trouble. Prices may go up...or they may go down. And if they go down, down goes the lender's collateral too...and his hope of getting repaid.

The banks made big mistakes in the bubble years. And now they're paying the price. But so far, they've only made the first installment payment. Subprime loans started going bad two years ago. Then, people began losing their jobs...and loans of all sorts were in trouble.

There is no sign that this process is over. Instead, it is merely proceeding in good order...just as you'd expect.

California lost another 65,000 jobs in June. And in Pennsylvania, 17,800 people are running out of jobless benefits. This group is on the cutting edge of a huge new trend - people not only unemployed, but out of unemployment benefits. One estimate says there will be more than half a million of them nationwide by the end of September. You think they were cutting back on spending last month? Let's see what they do in October. And let's see what happens to their debt...those Alt-A, jumbo, and prime mortgage loan...

..and let's see what happens to credit card debt...and to commercial loans too. There's a report that New York commercial properties are running up towards a 23% vacancy rate... Shoppers not shopping...stores and restaurants closing their doors...unemployment going up - sounds like the depression might not be over yet...

[ozymandius]

2. Today's Reports

08:30 Initial Claims 07/18
Briefing.com 540K
Consensus 557K
Prior 522K

10:00 Existing Home Sales Jun
Briefing.com 4.85M
Consensus 4.83M
Prior 4.77M

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

[AnneD]

8. Darn...

3rd rec and it is so early. Some of you guys need to lay off the caffeine.

I take back the niece today so I will be out of pocket for the next 2 days. Good luck at the casinos. Around here all the casinos are run (or fronted) by Indians. You don't lose your shirt-you get scalped. Although to be honest, I don't think that the Cherokee every took scalps-we tend to take folks to court for a more public scalping. We are the civilized Indians, as Chief Dan George once proclaimed (rather tongue in cheek).

[ozymandius]

14. I grew up about seven miles from New Echota.

The Cherokee were highly civilized. Not just from the standardization of the language with Sequoyah's alphabet - they established what a European transplant would describe as civilization. The Cherokee did not scalp like plains Indians did as far as I know. They did have some ferocious fights with the Seminoles south of here.

Have fun outside the pocket, Anne. Enjoy your weekend.

:hi:

[tclambert]

33. When the white men came for Cherokee land, the Cherokee filed a lawsuit.

They eventually won in the Supreme Court. Unfortunately, President Andrew Jackson decided to ignore the Supreme Court and ordered the Cherokee forcibly removed anyway. Thus began the "Trail of Tears."

I have not yet discovered how Goldman Sachs was behind all this, but I'm sure they were.

[AnneD]

45. Well, there is a....

Fox Sac tribe. The Cherokee were one of the few tribes that was actually reimbursed for the loss of their farmland and homes. They were finally paid and the money has been held in trust since. That is what pays for our health care and land grants. But you have to be on the Dawes roll (the list of Indians that made it through the death march). Both my Grandmother and Grandfather on my fathers side were from that list. The Fox Sac do not handle the trust money as far as I know. It was that settlement money that got my relatives out of those tar paper shacks that I remember in my early childhood. Kids finally got real education like lawyers, and petroleum land management specialists and not vocational training. That is what kept our land (and mineral rights) being grabbed in Oklahoma again. We still have a boarding school, but the tribe runs it. The head start teaches in Cherokee AND English and you can enroll for Cherokee language classes. The tribe is big into media esp with cartoons and games. I love to play the language games when I can.

I cannot claim any casino money because I am half. If I could trace Indian on my Mother's side I could, however Mom's Indian goes further back to a Buffalo hunter and a 13 yo plains Indian girl. Grammie was up into her 90's when Mom met her as a child. Mom said she was defiantly Indian. Funny thing, Mom said great Grandmother could accurately smell rattlesnakes. She never thought much about it until I started smelling tornadoes as a child. Spooky huh.

Now if we could just go after the clothing apparel folks......
Cherokees-we don't kill you, we just sue the shit out of you and win.

[tclambert]

34. Duplicate post.

Computer hiccuped.

[UpInArms]

43. Initial claims @ 554,000 - last week rev'd up 2k

U.S. 4-wk. avg. initial claims fall to 566,000
8:30am Today

U.S. continuing jobless claims fall to 6.22 mln
8:30am Today

U.S. initial jobless claims up by 30,000
8:30am Today

U.S. initial jobless claims rise to 554,000
8:30am Today

[UpInArms]

44. U.S. June existing home sales up 3.6% to 4.89 mln

U.S. June existing home sales up 3.6% to 4.89 mln
10:00am Today

U.S. June home resales above consensus 4.85 mln
10:00am Today

June home resales concentrated in low price homes
10:00am Today

[ozymandius]

3. Oil above $65 after mixed US inventory data

VIENNA – Oil prices remained above $65 a barrel on Thursday as traders looked to stock markets for direction after U.S. crude inventory data gave mixed signals on demand.

Benchmark crude for September delivery was down 3 cents to $65.37 a barrel by noon European electronic trading on the New York Mercantile Exchange. On Wednesday, the contract dropped 21 cents to settle at $65.40.

Oil prices have jumped from $58.78 a barrel during the last two weeks on growing investor optimism that the global economy will recover this year. But sluggish U.S. gasoline demand so far this summer has tempered some of that enthusiasm. Jittery traders continue to watch Wall Street and other major stock markets as they look for clues on the state of the economy.

....

While the EIA said U.S. crude inventories fell by 1.8 million barrels last week, gasoline stocks rose by 800,000 barrels and inventories of distillates, including heating oil and diesel, reached their highest levels since 1984.

The report said U.S. gasoline in storage has risen about 3 percent from last year.

....

In other Nymex trading, gasoline for August delivery was up by close to a penny at $1.85 a gallon and heating oil was flat at $1.72. Natural gas for August delivery jumped more than 6 cents to $3.85 per 1,000 cubic feet.

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

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Woe unto anyone who uses the stock market as an economic gauge.

[Demeter]

7. Gas Went Up 16 Cents as I was filling the tank Tuesday

I turned around, loked at the sign board, and felt a bit faint. Then I checked the receipt. I got in under the wire....

[AnneD]

10. It has held within...

2.17-39...with 2.33 as average on our trips. But gas prices here have always been a bit odd, I guess because we produce the stuff here.

[tclambert]

36. I really thought they would sneak the price up for the 4th of July.

I got that one . . . WRONG! (For those who are keeping score.)

My tiny investment in Fannie Mae has been steadily going down, too. But that's just short term, and as we all know, the market is totally insane in the short term. My bet on Fannie Mae was based on a 2 to 5 year time frame. So, that one doesn't count as wrong until at least 2014. (And if 2014 proves me wrong, I can pretend to have forgotten the original prediction. See, that's why open-ended or long-range predictions work better.)

[ozymandius]

4. Research Firm Cited by GOP Is Owned by Health Insurer

The political battle over health-care reform is waged largely with numbers, and few number-crunchers have shaped the debate as much as the Lewin Group, a consulting firm whose research has been widely cited by opponents of a public insurance option.

To Rep. Eric Cantor of Virginia, the House Republican whip, it is "the nonpartisan Lewin Group." To Republicans on the House Ways and Means Committee, it is an "independent research firm." To Sen. Orrin Hatch of Utah, the second-ranking Republican on the pivotal Finance Committee, it is "well known as one of the most nonpartisan groups in the country."

Generally left unsaid amid all the citations is that the Lewin Group is wholly owned by UnitedHealth Group, one of the nation's largest insurers.

More specifically, the Lewin Group is part of Ingenix, a UnitedHealth subsidiary that was accused by the New York attorney general and the American Medical Association, a physician's group, of helping insurers shift medical expenses to consumers by distributing skewed data. Ingenix supplied its parent company and other insurers with data that allegedly understated the "usual and customary" doctor fees that insurers use to determine how much they will reimburse consumers for out-of-network care.

http://www.washingtonpost.com/wp-dyn/content/article/2009/07/22/AR2009072202216.html

[ozymandius]

5. Obama says recovery depends on healthcare

WASHINGTON (Reuters) – President Barack Obama said on Wednesday he realized Americans were skeptical about his healthcare overhaul, but that the country's economic recovery depended on implementing the $1 trillion plan.

Obama, insisting the "stars are aligned" for approval this year despite discord in Congress over the plan, warned inaction would undermine the economy, worsen the deficit and cripple millions of Americans financially.

.....

Obama said people were "understandably queasy" about government spending and the debt piling up, but argued the health of the economy depended on stemming healthcare costs, which account for 17.6 percent of gross domestic product.

.....

He also cited the ballooning costs of spending on government health programs for the poor and elderly, Medicare and Medicaid. He said that without a healthcare revamp, those costs would explode the budget deficit.

http://news.yahoo.com/s/nm/20090723/ts_nm/us_obama

[Demeter]

9. Obama's Re-Election Depends on Health Care

because if he doesn't get something, he'll actually have to end the wars, plural, and then where would we be? Not to mention throw out the GS Gang!

[AnneD]

13. Thanks for the clarification.....

the economy will weigh heavily on the DEMS too. This is our puppy now, like it or not. To borrow a page from the Bush playbook-we need to under promise and over deliver (instead of live up to expectations as Bush did:P)

[ozymandius]

16. Indeed!

I feel a strong sense of impatience and frustration whenever regular people express their current conditions after eight years of Bush. Who would blame anyone for being angry if, after all this talk and stomping, we do not have universal health coverage? If anyone wants to make themselves politically irrelevant and widely reviled, they will save the Banksters and let everyone else drop from the fringes.

[Loge23]

37. Not to mention..."looking backwards"! (eom)

[tclambert]

38. The GOP argument seems to be "This is so important, we need to get it right."

"Therefore, if it's not perfect, let's do nothing at all."

That and slandering Canada seem like their strongest points. Sadly, it may work. And thousands of Americans will die because they couldn't afford to get a minor medical problem treated until it became a major medical problem. The uninsured and under-insured still won't be able to afford it. Then they or their survivors may have to file bankruptcy. Just heard a Congressman on the TeeVee say medical bills caused 62% of bankruptcies.

[Hugin]

46. "..medical bills caused 62% of bankruptcies."

If not more.

[AnneD]

48. US HEALTH CARE VS CANADA (OR ANY OTHER UNIVERSAL COVERAGE)...

In the US we do a great job at saving that one life at the expense of everyone else. If it requires a triple transplant-we got ya covered. Universal coverage means getting the biggest bang for the buck-taking care of most peoples problems. Now, if you are that one person needing something right away, then you think the Canadian system sucks, esp when you can schedule it right now in the US. But if you are one of the growing number of unemployed American with high blood pressure and you can't afford the pills-which system looks better. You burden the system at the expensive emergency level if you aren't able to get preventative care. I would gladly wait several month for a knee replacement it it meant my diabetic husband gets his routine meds.

In other countries, folks don't go bankrupt over medical bills and that, as Congress has found out after the bankruptcy bill, it the main reason folks go bankrupt here. Now add to the mix an entire middle and working class that have been downsized and newly poor that can't even get care for their kid...folks, you have a revolution brewing. They glossed over how close we came during the Depression and history forgot the riots that broke out-but this time the Revolution will be aired on the 6 o'clock news.

[Dr.Phool]

47. My usual pessimistic self

I actually liked some of what I was hearing from him last night. But, as usual, the devil will be in the details, and we didn't hear any of those last night.

And, I'm not used to hearing someone at a press conference speaking in coherent sentences, either.

[ozymandius]

11. Credit Suisse Profit Rises 29% on Gains From Trading

July 23 (Bloomberg) -- Credit Suisse Group AG, the biggest Swiss bank by market value, said second-quarter profit rose 29 percent as revenue from trading stocks and bonds doubled.

Net income increased to 1.57 billion Swiss francs ($1.47 billion), or 1.18 francs a share, from 1.22 billion francs, or 97 centimes, a year earlier, the Zurich-based company said in a statement today. Credit Suisse advanced as much as 5.2 percent in Swiss trading.

Chief Executive Officer Brady Dougan cut 4,900 jobs since December, closed unprofitable businesses at the investment bank and reduced risk-taking to return the bank to profit this year. Earnings at the investment bank rose fivefold in the second quarter, while profit declined less than analysts estimated at the wealth management unit.

.....

Bank of America Corp., JPMorgan Chase & Co. and Citigroup, the three biggest U.S. lenders, last week reported a total of $10.2 billion in profits for the second quarter, relying on investment banking and asset sales to counter widening losses on consumer loans. Goldman Sachs Group Inc., which gets almost none of its revenue from retail banking, had a record quarter, reporting earnings of $3.44 billion.

http://www.bloomberg.com/apps/news?pid=20601087&sid=agAl4UVdWQ_s

---

For a little exercise in fantasy, let's pretend that we forget how much money central banks have pumped into the system.

[Demeter]

15. Good Morning, Ozy!

We are getting a gentle but thorough soaking this morning. We have had more spring this summer than we've had in the past 3 years, at least. I am enjoying it, to be sure!

Tomorrow is the last day of the Ann Arbor News. 174 years, and poof!

Advertising revenue fell off the floor, it's true. But advertising rates never dropped, even in the face of Michigan's early descent into the Depression.

There is a nasty rumor that the whole point of this exercise is to break the union. That makes a lot more sense than destroying one's business for the hell of it. Look at the facts:

The brand-new press, built by AANews so they could print the NYTimes locally, is still there. It may have been paid off already, for all I know. They ran the damn thing 24/7, no job too small...a nice little asset for somebody! And they STILL have the NYTimes contract, although I would think that a very shaky reed to support a venture on, given the Times's own financial difficulties and union struggles...

The paper was run by Fundies. Evidence? The relatively new publisher brought in this horrible hold music: dreary hymns and execrable renditions of patriotic marches, so old and worn that the sound quality is like a vinyl record played 10,000 times with a darning needle. Other signs of Fundiness included some of the worst syndicated whackjobs in the business on the Op Ed page, the endorsement for Bush twice, and the rightward slant on everything (in this more liberal than not city and county). There was no match between the paper and the populace. I'm not saying that one should slavishly feed junk food because the public demands it, but the fact that the NYTimes had a greater circulation than the AANEws would be a clue as to what KIND of news people wanted to pay for. A smart, going concern meets the customer demand.

So, I will see if the successor publication is a reasonable replacement source of income. It comes out Thursday and Sunday mornings, with a Total Market Coverage free paper (think advertising, folks, there won't probably be any news in it, which is no change from the past performance) on Saturdays, which most homes will probably call and ask not to get it thrown in their driveways...

One nice thing about this change, I'm going to get my afternoons back!

[ozymandius]

19. I know a few folks in Ann Arbor, MI. Progressives, every one.

If this is the new content for the local paper - no wonder it failed to satisfy the broad interests of the community. The way you describe this operation leads me to ponder if breaking a union workforce was a perk rather than goal. I lament that its closure has effected you so immediately. And I wish you luck in pursuit of the replacement.

Edit: Good morning, Demeter, and everyone.

:donut: :donut: :donut:

[Demeter]

17. HERE WE GO AGAIN! Investors regain appetite for credit risk (CDS!)

http://www.ft.com/cms/s/0/b29b9c52-50f1-11de-8922-00144feabdc0.html

By Ed Hammond

Published: July 21 2009 14:38 | Last updated: July 21 2009 18:23

An important barometer of European appetite for risk in the credit market on Tuesday improved to a level not seen since just before the collapse of Lehman Brothers last year.

The Markit iTraxx Europe, the continent’s main credit default swap index, which tracks the 125 most liquid names in the investment-grade class, fell below the 100 basis points mark for the first time since September 2008. It closed at 97.37bp.

CDS are over-the-counter derivatives that offer insurance against the non-payment of unsecured debt, usually corporate or sovereign bonds. The cost of cover is measured in basis points, each point being equivalent to €1,000 payable annually on €10m of debt.

The recent tightening of CDS indices comes on the back of a strong rally in European equities, which have risen for seven consecutive sessions.

Gary Jenkins, head of fixed income research at Evolution, said: “It’s a reflection of the fact that credit remains the asset class of choice. Companies are focused on cash flow generation, debt reduction and improving balance sheet strength, which is close to being the perfect backdrop for credit.”

In spite of some fears that uncertainty surrounding the economic outlook will continue to pose challenges for credit, the market is likely to take heart from the an upsurge in companies raising money via a spate of bond and rights issues. Following the implosion of Lehman, the cost of insuring against the risk of default on European corporate debt shot up by almost 20 per cent in two days and continued rising until it peaked at 215bp last December.

“Lehman created the prospect of total collapse of the financial system, which was priced in after it fell, but the market is now saying ‘we are no longer looking for this complete meltdown’. Governments have done enough to prevent that,” said Willem Sels, head of credit strategy at Dresdner Kleinwort.

Some analysts worry that the index is close to being over-priced.

[Demeter]

18. Hedge funds buoyant after assets surge (DEFINITION OF INSANITY?)

http://www.ft.com/cms/s/0/a1e5e912-75ef-11de-84c7-00144feabdc0.html

By Sam Jones in London

Published: July 21 2009 13:23 | Last updated: July 21 2009 20:23

Hedge fund managers forecast that a wave of investor cash would flow into the industry in coming months after evidence of the best quarterly performance by many funds in a decade.

Total assets under management by the world’s hedge funds rose more than $142bn in the second quarter of 2009, reflecting the strong performance of the industry as a whole, according to figures published on Tuesday by Hedge Fund Research.

Outflows from clients slowed to $42bn, from a peak of $152bn in the quarter following last September’s collapse of Lehman Brothers, and are expected to turn positive in the coming months as investors begin to reallocate funds to the industry.

A leading hedge fund manager, who declined to be named, said “This is the best time for generating alpha in 10 years.

“These are historic times to invest both for funds themselves and investors in funds.”

Net of client outflows, the hedge fund industry currently manages assets worth $1,430bn, according to HFR, up $100bn from its nadir in March.

Many of the world’s larger hedge funds have begun to see net inflows from investors. Pension funds and other large institutional players are beginning to look at increasing their allocations.

Some UK-based hedge-fund managers said they were expecting large allocations about September, by which time many pension fund trustees would have met to approve portfolio allocation strategies.

Another manager said: “If you’re a pension fund looking at increasing your portfolio’s alternative asset weighting from 1 per cent to 10 per cent, that’s an absolute wall of money”.

The Universities Superannuation Scheme, the UK’s second-largest pension fund,, said this month that it was quintupling its hedge fund allocation to about £1.25bn, to be invested over the next two years.

Pension funds are coming under increasing pressure to deliver higher returns on their portfolios. US funds were likely to be a particularly large source of hedge fund investment in coming months, said managers.

Research by Standard & Poor’s shows defined benefit pension plans at S&P 500 companies will be underfunded by $312bn by the end of this year.

One investor said it was actively “seeking capacity” in investment deals - having the option to invest more as and when they can.

“We anticipate many funds will start closing their doors to investment before too long.”

[ozymandius]

22. Jeebus! Stop them before they kill again!

This is nuts. You know - they would not have an appetite for this toxic shit without the Fed holding the safety net.

[rfranklin]

25. Speeding toward another crash?

Speeding towards another crash?
One final word about predicting a crash in 2011: Back in October we ended with this warning: "The German finance minister blames the current crisis on Wall Street's 'insane drive for higher and higher profits... Wall Street will never be what it was ... The global financial system will become more multi-polar.'" Unfortunately, that "insane drive" is back, fast. And the system has not diversified globally, instead consolidating into a small number of "too big to fail" mega-banks.

That underscores the final prediction I made back then before the November election:

"The moral hazard created by the 2008 bailout will eventually backfire. We relieved Wall Street of the consequences of their costly stupid blunders this time. But we also released them to chase a new raging bull ... blowing a newer, bigger, more lethal credit bubble that will bring down the global economy before the end of the presidential term."

http://www.marketwatch.com/story/nudgers-theory-has-fatal-flaw-2009-07-23

[Hugin]

41. Yup, Double-dip... Here we come!

Lock you doors kids!

[AnneD]

49. And when the shit hits the fan....

remember to close your mouth.

[Demeter]

20. Wall Street's Love Affair with Ben Bernanke By Mike Whitney

http://informationclearinghouse.info/article23124.htm

-- A careful reading of Federal Reserve chairman Ben Bernanke's op-ed in Tuesday's Wall Street Journal, shows that Bernanke thinks the economy is in a deflationary spiral that will last for some time.

Ben Bernanke:

"The depth and breadth of the global recession has required a highly accommodative monetary policy. Since the onset of the financial crisis nearly two years ago, the Federal Reserve has reduced the interest-rate target for overnight lending between banks (the federal-funds rate) nearly to zero. We have also greatly expanded the size of the Fed’s balance sheet through purchases of longer-term securities and through targeted lending programs aimed at restarting the flow of credit....My colleagues and I believe that accommodative policies will likely be warranted for an extended period."

No talk of recovery here; just a continuation of the same radical policies that were adopted after the collapse of Lehman Bros. The only sign of improvement has been in the stock market, where Bernanke's liquidity injections have jolted equities back to life. The S&P 500 is up 40% since March. Conditions in the broader economy have continued to deteriorate as unemployment rises, the states find it harder to balance their budgets, and the real estate bubble (commercial and residential) continues to unwind. The Fed's policies are Bernanke's way of saying, "The states are not the country. The banks are the country." The public seems slow to grasp this message.

Bernanke's op-ed is a public relations ploy intended to soften the effects of his visit to Capital Hill today. Congress wants to know the Fed chief's "exit strategy" for soaking up all the money he's created and avoiding inflation.

Bernanke again:

"The exit strategy is closely tied to the management of the Federal Reserve balance sheet. When the Fed makes loans or acquires securities, the funds enter the banking system and ultimately appear in the reserve accounts held at the Fed by banks and other depository institutions. These reserve balances now total about $800 billion, much more than normal. And given the current economic conditions, banks have generally held their reserves as balances at the Fed."

This is the core issue. The Fed has built up bank reserves by accepting (mainly) mortgage-backed garbage (MBS) that is worth only pennies on the dollar. Bernanke assumes that investors will eventually recognize their mistake and begin to purchase these toxic assets at a price that won't bankrupt the banking system. It's a complete hoax and everyone knows it. In essence, Bernanke is saying that he is right and the market is wrong, which is why he continues to conceal the fact that he provided full-value loans for collateral which the banks will never be able to repay. The costs, of course, will eventually be shifted onto the taxpayer.

Bernanke knows that the country is in a Depression and that inflation won't be a problem for years to come. It's all politics. Bank lending is way off and the shadow banking system--which provided over 40% of consumer credit via securitization--is still on life-support. At the same time, the savings rate has spiked to 6.9%--a 15 year high--as consumers cut back on spending to service their debt-load, and try to make up for the $14 trillion in lost household wealth since the crisis began. If the banks aren't lending and consumers aren't spending, inflation is impossible.

Bernanke's zero-percent interest rates and lending facilities have been a total bust. The velocity of money (how fast money changes hands) has stopped. Retail is down 9% year-over-year. Imports/exports down 20%. Rail freight and shipping at historic lows. Travel, manufacturing, hotels, restaurants are all in the tank. The economy is flat-lining. Only Goldman and JPM have done well in this environment, and that's because the White House is a Goldman-annex.

The only Bernanke policy that's worked so far has been flooding the market with money, which has has sent equities into orbit while the real economy continues to twist in the wind. Here's how former hedge fund manager Andy Kessler summed it up last week in the Wall Street Journal:

"By buying U.S. Treasuries and mortgages to increase the monetary base by $1 trillion, Fed Chairman Ben Bernanke didn't put money directly into the stock market but he didn't have to. With nowhere else to go, except maybe commodities, inflows into the stock market have been on a tear. Stock and bond funds saw net inflows of close to $150 billion since January. The dollars he cranked out didn't go into the hard economy, but instead into tradable assets. In other words, Ben Bernanke has been the market." (Andy Kessler, "The Bernanke Market" Wall Street Journal)

Bernanke's quantitative easing (QE) has pumped up bank stocks enough so that Geithner won't have to grovel to Congress for another TARP bailout. The banks now have access to the capital markets and can withstand the stormy downgrades ahead. Thus, the nagging problem of toxic assets has been solved (temporarily) just as Bernanke had planned.

Bernanke will continue to monetize the debt (by purchasing more US Treasuries and MBS) until securitization is restored and there are signs of life in the failed wholesale credit-system. That's the real objective; to keep credit expansion in the hands of privately-owned financial institutions that are beyond the reach of government regulation. The Fed's so-called mandate of "full employment and price stability" is pure malarkey. The Fed's job is to provide an endless stream of cheap capital to Wall Street. By that standard, Bernanke has performed his task admirably.

[DemReadingDU]

27. last paragraph says it all, n/t

[AnneD]

50. Of course...

who doesn't like free money.

[Demeter]

21. Older Prisoners Denied Social Security— By James Ridgeway

http://www.motherjones.com/mojo/2009/07/older-prisoners-denied-social-security

Not long ago I described the plight of the growing numbers of older prisoners filling up the country’s prisons and jails. They receive poor health care and are subject to any number of cruel and inhuman punishments—people with bad arthritis are required to climb into upper bunks to sleep; it's next to impossible for inmates in wheelchairs to access parts of prisons available to younger people, like baths. Among the worst sights described to me by a medical consultant were sick and often older inmates of an Alabama women’s prison who were forced to get out of bed at 3 a.m. and stand in lines to obtain medicine.

Another major issue faced by older prisoners is that they do not receive Social Security from the fund they paid into for years before being convicted of a crime. Lois Ahrens, who runs the indispenable Real Cost of Prisons Project, alerted me to the situation of David Hinman, a prisoner in Iowa. Now 65 years old, he contributed to Social Security for years while in the free world. He is not eligible for parole for a number of years. He wrote to Ahrens:

Currently the government will not pay people in prison social security. I am speaking about paying social security to those who paid into the fund. Payment is based on what they paid in. Even though I am now 65 and paid into the fund, since I am in prison I am not allowed to collect unless I am released from prison. By not paying inmates the social security to which they are entitled, I believe this is in some manner, theft.

He continued: "My question to readers is: should prison inmates who paid into social security and reached 65 be allowed to collected social security while incarcerated or not." (You can reach David Hinman (#25374), Anamosa State Penitentiary, 406 North High Street, P.O. Box 10, Anamosa, IA 52205-0010.)

Asked about this situation Paul Wright, editor of Prison Legal News, the excellent magazine which tracks prison issues, wrote me:

Part of the problem I have with this is that someone can work their whole life, pay into Social Security, commit a crime at a later age, and go to prison for the rest of their life and never see a penny of the money they paid into SS. The lie used to justify this is prisoners have no need for money but that is not true. I think it is a backdoor way to trim the SS.rolls ... To put it into context, retirees can get their pensions in prison, veterans can get their VA benefits in prison. It follows that if you earn something you are entitled to it. It is not a freebie the government can take away because it doesn’t like you and that is exactly what they do here.

Wright attached an article from a 1998 isssue of Prison Legal News that explains the situation in the bleakest of terms:

Denial of Social Security Benefits to Prisoners Upheld

The court of appeals for the Ninth circuit held that a statute denying Social Security benefits to prisoners is constitutional. Robert Butler is a 77 year old Nevada state prisoner. Butler was granted social security retirement benefits in 1983. He was later incarcerated and the Social Security Administration (SSA) determined he was not entitled to benefits while he was incarcerated pursuant to 42 U.S.C. § 402(X). An administrative law judge affirmed the SSA’s decision. Butler filed suit in federal court and it was dismissed for failing to state a claim upon which relief could be granted. The court of appeals affirmed.The appeals court noted that every court to consider the constitutionality of 42 U.S.C. § 402(X), this includes the Second, Fourth, Eighth, Tenth and Eleventh circuits, had upheld the law. Congress has wide discretion in administering welfare resources. The court held that § 402(X)’s ban on social security benefits to prisoners does not violate constitutional guarantees to due process, equal protection and protection against ex post facto laws and bills of attainder. The court also held that Butler was provided with ample due process before his benefits were terminated because he participated in the SSA hearing by telephone. Since the statute leaves no room for agency discretion and the only fact issue was whether or not Butler was a felon doing time in prison, the telephone hearing was sufficient to safeguard Butler’s due process interest in his social security benefits. See: Butler v. Apfel , 144 F.3d 622 (9th Cir. 1998)

[ozymandius]

23. S&P Commits Professional Suicide With Ratings Round Trip, Underlying CRE Remains Toxic Garbage

All whores on deck!

---

Rare? Medium Rare? Medium? Well Done? S&P? Indeed, as the last peg in the gradation of burnt to a crisp, S&P smells completely done. As in there isn't even left a shadow of a doubt that all S&P does is pander to the solicitations of whatever few remaining clients it may have, or, as the case may be, the U.S. government. Any credibility S&P, which one would be excused for confusing with Sycophantic & Pathetic, may have tried to salvage over the past 6 months has been gutted and left to dry after this most recent fiasco, which is the final straw on the McGraw-Hill subsidiary's expedited route to the NRSRO utterly discredited trash heap. From Bloomberg:

Standard & Poor’s backtracked on ratings cuts issued last week and raised the ranking on commercial mortgage-backed debt from three bonds sold in 2007.

The securities, restored to top-ranked status, had been downgraded as recently as last week, making them ineligible for the Federal Reserve’s Term Asset-Backed Securities Loan Facility to jumpstart lending.

S&P lowered the ratings on a class of a commercial mortgage-backed bond offering from AAA to BBB-, the lowest investment-grade ranking, on July 14. The New York-based rating company reversed the cut today, S&P said in a statement. In a related report, S&P said it adjusted assumptions on the timing of projected losses on the mortgages.

“It is a stunning reversal and certainly raises questions concerning the robustness of their revised model,” said Christopher Sullivan, chief investment officer at United Nations Federal Credit Union in New York. “It may engender further uncertainty with respect to ratings outlooks.”

Debt rated below AAA isn’t eligible for the Federal Reserve’s TALF. Investors sought $668.9 million in loans from the Fed to purchase so-called legacy commercial mortgage-backed bonds on July 16, the first monthly deadline to finance the purchase of the securities.

To recap: AAA to BBB- and back to AAA in one week. How many pieces of silver from disgruntled affected CMBS clients (or how many persuasive phone calls from the NY Fed) did it take for S&P to vomit in the face of the few remaining people who had been willing to give the rating agency one last chance at redemption? At this point, nobody cares, just as nobody will ever care again about any bullshit lettering this "rating" agency assigns as an indication of creditworthiness for any entity. For all intents and purposes, undertakers are now shoving S&P's shrivelled carcass deep into the bowels of the credibility morgue where it will remain forever entombed in an unmarked grave, with a final forensic assessment of professional suicide. As expected, nobody will shed any tears of mourning.

http://zerohedge.blogspot.com/2009/07/s-commits-professional-suicide-with.html

[ozymandius]

26. Ratings Agency Showdown: Treasury vs Barney Frank

From Ritholtz:

One of my Pet Peeves: The Payola business models at Moody’s Investors Services, Standard & Poor’s and Fitch Ratings – meaning the debt securities underwriters pay them for ratings — is unchanged in Obama’s Treasury Department reforms. All they want is some more disclosures and a few restrictions.

A certain Congressman is now convinced these measures are inadequate; Here is the FT:

Credit rating agencies would face a raft of new disclosure rules and restrictions but would not be forced to overhaul their business models under proposed US legislation sent to Congress on Tuesday.

The plan by the US Treasury is aimed at reducing conflicts of interest at rating agencies, boosting the regulatory authority of the US Securities and Exchange Commission over the agencies and reducing the financial system’s reliance on credit ratings.

But critics said the plan, an element of the Obama administration’s broader financial regulatory blueprint, fell far short of what was needed. The proponents of an overhaul of ratings agencies charge that they overlooked the risks of investing in complex, “structured” securities linked to risky mortgages, many of which carried triple A stamps of approval.

Barney Frank, head of the chairman of the House financial services committee, on Tuesday endorsed measures that would overturn requirements that require the use of the credit ratings agencies.

“There are a lot of statutory mandates that people have to rely on credit rating agencies. They’re going to all be repealed,” he told Reuters. (emphasis added)

Barney Frank vs Geithner & Summers.

[DemReadingDU]

29. vomiting, suicide

It's enough to make anyone sick

:puke:

[mullard12ax7]

52. Those criminals will be right back with another agency

because they won't be held accountable. All the pretty people will cheerlead the criminals the whole way too, because look at all we've accomplished!

[Demeter]

24. An Intelligence Test for Bankers by Bill Bonner

http://dailyreckoning.com/an-intelligence-test-for-bankers/


It's a good day for robbing a bank - they've got money for a change!

How fast the bankers redeemed themselves...just a few months ago, we were making jokes about them:

"What do you say to a banker who has lost his job on Wall Street?"

"Uh...can I have fries with that?"

But now they're geniuses again. And they can prove it...just look at their pay stubs!

And if there's any fear that these dumbbells might blow themselves up again, you can forget it. They've got the full faith and credit of the United States of American behind them....It takes our breath away. The feds are squandering money faster than we can keep up with it. Each time we think we've got it measured - the total doubles.

Twenty-four trillion is real money. It's getting close to two full year's worth of the entire output of the United States...

Is there any wonder Americans' hate bankers? They are chiselers and scalawags...making huge profits for themselves when the getting was good...and then whining for the protection of Uncle Sam when their own debt bombs blow up on them.

But hatred for bankers is cyclical. It follows the credit cycle.

Of course, bankers are always rogues and idiots. No doubt about that. But sometimes we like them and sometimes we don't. In the movie, It's a Wonderful Life, Jimmy Stewart plays the sort of banker we like. His bank made money the old fashioned way - by helping its clients finance houses and businesses. That's what bankers do on the upside of a credit cycle.

The business model is remarkably simple. So simple even a banker can get it. You borrow from depositors at one rate. And you lend to borrowers (who are also depositors, usually) at a higher rate. What could go wrong?

Well...that's what makes bankers bankers. They manage to mess it up.

Messing it up is pretty simple too. Deposits are a cost. Loans are a revenue stream. The more you lend, the more you make. Naturally, bankers have a tendency to lend too much. As the quantity increases, quality decreases. The most creditworthy borrowers get their money first. By the end of the cycle, borrowers are marginal...such as the people who got subprime loans in 2004-2007. They were often people without jobs...without assets...and with no fixed addresses.

Bankers lend too much in a predictable rhythm - at precisely the wrong time. They work with numbers and put on a good show. But when it comes to lending, they are all heart. Give them a good boom and they are ready to believe it will last forever. Booms raise asset prices. People borrow to expand and take advantage of the boom-like conditions. Bankers lend for the same reason - to take advantage of customers' willingness to borrow. So, they are inevitably drawn to lending most at the height of a boom...that is, just before it turns into a bust.

To this tendency towards self-destruction, you can add in the modern finance industry's delightful innovations - such as its leveraged derivative instruments. Making these available to bankers is like inviting a dipsomaniac for the weekend and leaving the liquor cabinet unlocked; it's asking for trouble.

But everybody loves bankers in the boom stage. They make it possible to buy houses...expand businesses...and become upstanding, slavish citizens. A man without credit might be a freethinker or even a troublemaker. But give him a mortgage and he will show up for work on Monday and vote in the next election.

In small towns, bankers are leading citizens. They sit on the boards of hospitals and churches. They write letters to the editor of the local paper. They contribute to political campaigns, often keeping an eye open...hoping their state senator dies so they will have a chance to take his place. People ask their opinions and are careful not to offend them. They play roughly the same role...and hold roughly the same status of the local priest. The priest reveals the mysteries of holy orders. The banker reveals to the locals the mysterious truths of economics. When the going is good, he tells them it is because of their hard work, thrift and discipline. When the going is not so good, he shuts up.

When the cycle turns, bankers are pariahs. Nobody hates a banker like someone deep in debt. And at the end of a credit expansion, people are more deeply in debt than ever. The poor banker has to stay at home and draw the drapes, pretending to have gone to Florida for the winter...or to be out of town on business.

Now you can see why busts are so important. They are like an intelligence test for bankers. The dumb and the greedy are eliminated. That is, unless the government steps in to save them...

[Demeter]

28. Ummm, Bernanke and the Fed Did Cause 10 Million People to Lose Their Job

http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=07&year=2009&base_name=ummm_bernanke_and_the_fed_did

This minor point might have been worth noting in a piece discussing the Fed's efforts to prevent more congressional oversight. The Fed's decision to let the housing bubble grow unchecked was the cause of the current economic disaster, leading to a cumulative loss in output that is likely to exceed $5 trillion ($17,000 per person).

Most people would get immediately fired from their jobs if they made a mistake that was remotely near this serious. It would be difficult to imagine how the Fed could have done worse at its job, yet because of the almost complete lack of accountability, no one there has lost their job or even missed a promotion because of its failure. Good reporting would point this out.

--Dean Baker

[Demeter]

30. Fox on 15th Stands Up For the Little Guy

http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=07&year=2009&base_name=fox_on_15th_stands_up_for_the



No doubt many of you have been concerned about Goldman Sachs getting a bad rap. People have been getting down on them just because they made $3.4 billion in profits last quarter, betting with the taxpayers' money, and that they intend to hand out this bounty in bonuses to their executives. Fortunately, the Washington Post is there to come to Goldman's aid with a column by Mark Gimien telling us not to punish success.

Gimien's basic line is that we should be glad that Goldman made lots of money; would we rather be bailing them out? Here he has a point. After all, Goldman had borrowed $10 billion from Treasury through TARP (recently repaid), $28 billion in FDIC insured bonds, and untold billions from the Fed's special lending facilities. If its bets had not paid off, then the taxpayers would potentially be out some really big bucks.

Of course Goldmans' profits do come from somewhere. Insofar as they come from trading, Goldman's gains will largely still come from the rest of us, albeit through a a different pocket than their subsidized loans. There is nothing inherently pernicious about this behavior -- it's just like gambling in Los Vegas. We don't bad gambling, we just tax it.

Of course speculation can occasionally serve a productive purpose. Informed speculators share their knowledge with the markets and society. If we had more informed speculators 4-5 years ago, they could have bet against the stock and bonds of Citigroup, Fannie, Freddie and the rest. Perhaps by driving the price of these stocks down enough it might have called attention to the housing bubble. But, those trading on real information will be able to cover the cost of a modest transactions tax. We need not worry if some of those trading on gossip and hunches get driven away by higher transactions costs.

Let's take the case of oil. Suppose that Goldman was smart enough or lucky enough to catch oil on the way up. This means that Goldman bought oil at a lower price and sold it to an end user (or another speculator) at a higher price. Due to Goldman's good fortune, an oil producer received less money than otherwise would have been the case or a consumer ended up paying more. In the former case, the oil industry will have less money to invest in new production. (Okay, no one really believes that.) In the latter case, consumers will end up paying higher prices than they might have otherwise.

In other words, Goldman's profits were in part the higher prices we paid at the pump. Note that this story assumes no manipulation, just good wholesome speculation.

Suppose that the speculation was driven by irrational exuberance about oil prices that Goldman rose up and then jumped ship. In that case, we got hosed, as perhaps did a few speculators who got left holding the bag when oil prices turned. (Think back to last summer when speculators bought oil at $150 a barrel.)

In these stories, Goldman did nothing wrong -- they just bet with our money and won. Their gain helped to raise our gas prices. There is nothing illegal in this picture, it is just a simple story of rent-seeking where Goldman won.


--Dean Baker

[tclambert]

31. Apparently McDonald's has found a way to cut costs AND solve the unemployment problem

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3981962

It reminds me of Jonathan Swift's "A Modest Proposal," in which he suggested a solution to "the Irish problem."

Okay, I apologize for the tastelessness . . . I mean, lack of sensitivity to the sadness of this tragic accident. (There's no saving myself on this one, is there?)

[Hugin]

40. Here, I was going to suggest they had translated the cookbook found in the Roswell Incident.

Which, I had thought was... Tasteless.

But, your insensitivity superseded mine in both magnitude and direction.

You win.

[Dr.Phool]

42. I like the Agnes Burger!

[AnneD]

51. You guys are rank amatures....

I've heard and said worse in a Nurse's lounge. And no, I won't even go there for fear of being tomb stoned. I'll just say Wendy's new chili nuggets-the new finger food and leave it be.

[UpInArms]

35. dollar watch

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

Last trade 78.815 Change +0.029 (+0.04%)

U.S. Dollar, Japanese Yen on Defense Ahead of U.S. Open

http://www.dailyfx.com/story/market_alerts/fundamental_alert/U_S__Dollar__Japanese_Yen_on_1248344703565.html

The market remained in risk seeking territory, which weighed on the USD and JPY. EUR-USD traded up to 1.4266 as a result, but was unable to sustain upward momentum amid strong Asian central bank offers. Meanwhile, Cable was boosted to 1.6544 highs, with U.K. data also supporting the bid tone, which saw EUR-GBP trade back in to 0.8600. There were reports of some JPY short positioning ahead of tomorrow's large investment trust launches, which are expected to favor the Aussie and other higher yielding currencies. AUD-USD traded up to 0.8208 highs as a result, but was capped by standing offers and mooted central bank supply, although unsubstantiated at current levels. Elsewhere, EUR-CHF traded back in to 1.5200 amid strong Swiss and German demand ahead of very good bids under 1.5150.

...more...

Dollar on The Verge of Collapse as Earnings Ease, Growth Firms

http://www.dailyfx.com/story/topheadline/Dollar_on_The_Verge_of_1248303369919.html



The Economy and the Credit Market



The previous week has been an alarming one for dollar bulls. With domestic data taking a back seat through the period, we have seen the benchmark currency’s correlation to broader risk appetite trends revived just as risk appetite ignited following the strong Goldman Sachs numbers. With a series of major financial institutions and blue chips confirming a rebound in profit, speculators’ forecasts for rising yields, capital investment and ultimately growth were bolstered. This momentum lasted just long enough for the dollar to meet support that has kept the currency up for 10 months and resistance for equities that defines the highs for the year. Just as these significant milestones came into view, however, optimism was curbed. The quality of earnings data diminished significantly this week, leading participants to reevaluate their forecasts for business activity and growth through the second half of this year and beyond. In addition, the potential fallout from commercial lender CIT’s troubles along with a shifting focus to upcoming GDP figures has drawn investors’ sentiment elsewhere. This does not mean an immediate recovery for the greenback and tumble in risk appetite is inevitable; but it does complicate the fundamental situation.

A Closer Look at Financial and Consumer Conditions



The integrity of the financial markets was cast in shadow this past week after the Treasury rejected US lender CIT’s request for a second round rescue. And, while the firm would later secure a private infusion of some $3 billion from debt holders later, uncertainty would continue to cloud the outlook for this credit market node as a forecasted $10 billion in debt maturing over the coming year along with a regulatory filing suggesting they did not have the liquidity to cover its August obligations put its survival into question. In the grader scheme of things, this single firm did not threaten the larger markets on its own; but its troubles suggested there were many more like it on the verge.



It now seems the general consensus among market participants, economists and policy officials that the US economy has passed the worst of its economic recession and a turn to positive expansion could be seen by the end of this year or very beginning of 2010. Fed Chairman Ben Bernanke’s testimony before Congress Tuesday and Wednesday confirmed as much. However, the central banker unexpectedly joined a growing call around the world for governments to start withdrawing its stimulus and work down deficits or risk stifling the recovery. This will be a contentious policy point moving forward; but in the meantime, the focus will turn to GDP numbers - the UK’s this week and US next.

...more...

[mullard12ax7]

53. 554,000 lose their jobs and crude oil is way up, Let's Party!

Thousands of people got kicked out of their homes after being scammed, it's time to BUY! It's all behind us now, the worst of the worsiness is less worse!

[Robbien]

54. "I generally don't respond to people who don't matter on Wall Street.

. . . If someone named Janet thinks I'm selling out, she's entitled to her opinion, which I hate to break it to her, really doesn't matter." Charlie Gasparino
http://dealbreaker.com/2009/07/charlie-gasparino-doesnt-respo.php


Although it is surprising that Gasparino came right out and said it, this attitude seems to be exactly what all elites feel about the we, the rabble.

[Robbien]

55. UAE central bank has directed banks to take provisions up to 75% against two Saudi firms

The central bank held a meeting with bankers last Thursday to review the lenders' reports on their exposure to Saad Group and Ahmad Hamad Algosaibi & Bros.

"According to the guidance of the central bank, banks should take provisions of 50 percent over two years on exposure to Al Ghosaibi and 75 percent on exposure to Saad," a banker who attended the meeting said.

"Basically, banks are required to take 25 percent provisions on Al Ghosaibi and about 37 percent provisions on Saad this year and the same next year," he said, declining to be named due to confidentiality reasons.

http://www.arabianbusiness.com/562797-uae-central-bank-tells-its-banks-to-lift-provisions-sharply

[Festivito]

56. Debt: 07/21/2009 11,604,364,019,085.61 (UP 3,093,324,136.97) (Debt down a little.)

(Debt moved down a small amount, FICA side went up.)

= Held by the Public + Intragovernmental(FICA)
= 7,254,662,502,679.06 + 4,349,701,516,406.55
DOWN 321,987,025.18 + UP 3,415,311,162.15

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: $9.77, ABOUT TEN BUCKS for a 1B$ 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 306,919,142 people in America.
http://www.census.gov/population/www/popclockus.html ON 05/25/2009 01:14 -> 306,504,012
Currently, each of these Americans owe $37,809.19.
A family of three owes $113,427.57. (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 8,984,887,524.59.
The average for the last 30 days would be 6,888,413,768.85.
The average for the last 32 days would be 6,457,887,908.30.
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$/day.
There were 125 reports in 182 days of Obama's part of FY2009 averaging -0.13B$ per report, -0.01B$/day so far.
There were 200 reports in 294 days of FY2009 averaging 7.90B$ per report, 5.37B$/day.

PROJECTION:
There are 1,279 days remaining in this Obama 1st term.
By that time the debt could be between 13.4 and 19.9T$.
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)
07/21/2009 11,604,364,019,085.61 BHO (UP 977,486,970,172.53 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: 1,579,639,122,173.20 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ------------**********
07/16/2009 +016,136,405,834.08 ------------**********
07/17/2009 +000,062,427,388.38 ------------*******
07/20/2009 +000,171,809,229.69 ------------******** Mon
07/21/2009 -000,321,987,025.18 ---

79,750,117,619.80 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,939,732,215,826.54 in last 306 days.
That's 1,940B$ in 306 days.
More than any year ever, including last year, and it's 191% of that highest year ever only in 306 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 306 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=3980467&mesg_id=3980488

[Festivito]

57. Debt: 07/22/2009 11,595,495,788,840.05 (DOWN 8,868,230,245.56) (Debt up little, FICA down.)

(Debt moved up a small amount, FICA side went down more.)

= Held by the Public + Intragovernmental(FICA)
= 7,254,923,561,984.67 + 4,340,572,226,855.38
UP 261,059,305.61 + DOWN 9,129,289,551.17

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: $9.77, ABOUT TEN BUCKS for a 1B$ 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 306,926,342 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 $37,779.41.
A family of three owes $113,338.23. (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 8,471,270,473.37.
The average for the last 30 days would be 6,494,640,696.25.

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$/day.
There were 126 reports in 183 days of Obama's part of FY2009 averaging -0.22B$ per report, -0.06B$/day so far.
There were 201 reports in 295 days of FY2009 averaging 7.81B$ per report, 5.32B$/day.

PROJECTION:
There are 1,278 days remaining in this Obama 1st term.
By that time the debt could be between 13.3 and 19.9T$.
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)
07/22/2009 11,595,495,788,840.05 BHO (UP 968,618,739,926.97 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: 1,570,770,891,927.60 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ------------**********
07/16/2009 +016,136,405,834.08 ------------**********
07/17/2009 +000,062,427,388.38 ------------*******
07/20/2009 +000,171,809,229.69 ------------******** Mon
07/21/2009 -000,321,987,025.18 ---
07/22/2009 +000,261,059,305.61 ------------********

89,229,978,255.30 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,930,863,985,580.98 in last 307 days.
That's 1,931B$ in 307 days.
More than any year ever, including last year, and it's 190% of that highest year ever only in 307 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 307 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=3982249&mesg_id=3987290