STOCK MARKET WATCH, Friday September 18

[ozymandius]

Source: du

STOCK MARKET WATCH, Friday September 18, 2009

Bush Administration Officials Under Indictment = 2
Financial Sector Officials In Prison = 6

AT THE CLOSING BELL ON September 17, 2009

Dow... 9,783.92 -7.79 (-0.08%)
Nasdaq... 2,126.75 -6.40 (-0.30%)
S&P 500... 1,065.49 -3.27 (-0.31%)
Gold future... 1,014 -6.70 (-0.66%)
10-Yr Bond... 3.38 -0.08 (-2.40%)
30-Year Bond 4.17 -0.09 (-2.02%)

---

U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES..............................................S&P FUTURES

Market Conditions During Trading Hours

GOLD, EURO, YEN, Loonie, Silver and US$

---

Handy Links - Market Data and News:
Economic Calendar    Marketwatch Data    Bloomberg Economic News    Yahoo! Finance
    Google Finance    LayoffDaily    Bank Tracker    Credit Union Tracker

Handy Links - Economic Blogs:
The Big Picture    Financial Sense    Calculated Risk    Naked Capitalism    Credit Writedowns
    Brad DeLong    Bonddad    Atrios    goldmansachs666

Handy Links - Government Issues:
LegitGov    Open Government    Earmark Database    USA spending.gov

Handy Links - Videos:
The Coming Collapse of the Middle Class    Charlie Rose talks with Roubini    Charlie Rose talks with Krugman    William Black: This Economic Disaster

---

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

The Bull Gets the Benefit of the Doubt
BY MARTIN GOLDBERG

The stock market is going up. This is regardless of the crash that bottomed in early March of this year. For technicians, it doesnt matter what their long term perspective is because the appropriate technical strategy is simple - stay long. The picture may change over time, but in technical terms, there is no reason to sell or go short now and a lot of reasons to hold long positions. This is especially true of stocks that have lagged the general market, where catch up rallies have been especially dangerous for the bears and rewarding for the optimists. Typical of this performance is that of Amazon.com (AMZN). Here you can see the lagging relative performance of AMZN dating back to the beginning of the rally off of the March bottom. Any strategist considering the poor relative strength as a sign of weakness in Amazon got punished with a sharp and large rally in the stock over the last eight trading days. This is not an isolated incident. Such behavior is prevalent all over today's financial markets.

-see chart-

Strategically speaking, it is a time where optimism should accompany bullish action and skepticism should accompany any bearish action you may be seeing. This is very much apparent when looking at the charts of indices and individual issues. In short, for now it is best to put on your rose colored glasses.

.....

Of course as always, the technical picture could change at any time; but to suggest that THIS is the time would be purely a guess or a crapshoot. Any responsible technical analysis method requires confirmation of a new trend beginning, and such a new trend is not there at present and there are no signs.

In my view, a likely intermediate term scenario is that the market may soon advance in a parabolic manner - an advance at an accelerating rate - before it undergoes its first significant correction since March. The reason I see this as likely is the consistency and lack of any significant correction since the March bottom. Such a steady uptrend without a much-awaited-for correction is a perfect motivator for “panic buying”.

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

[ozymandius]

2. no goobermental reports today n/t

[Ghost Dog]

50. Majority of U.S. state jobless rates rose in August

Fri Sep 18, 2009 11:48am EDT WASHINGTON (Reuters) - Jobless rates rose in the majority of U.S. states in August, tracking national trends, but unemployment rates fell in the Midwest and South, a government report showed on Friday.

The Labor Department said 27 states reported higher jobless rates compared with July, 16 states reported lower rates, while seven reported no change. In July, 26 states reported higher rates with 17 reporting lower rates compared with June.

The national unemployment rate rose to 9.7 percent in August from 9.4 percent a month earlier and 6.2 percent a year earlier.

The unemployment rate for the Midwest fell to 9.7 percent from 10.2 percent in July, despite continued job losses in Michigan and other key states.

Jobless rates for the South fell to 9.3 percent in August from 9.4 percent in July, while in the Northeast, they rose to 8.8 percent from 8.7 percent. The West's rate was flat at 10.5 percent.

Michigan's rate rose 0.2 percentage points to 15.2 percent, while Ohio's rate fell 0.4 percentage points to 10.8 percent. Minnesota's rate fell 0.2 points to 8.0 percent while the Illinois rate fell 0.4 points to 10.0 percent.

In August, nonfarm payroll employment decreased in 42 states and the District of Columbia and increased in 8 states, the Labor Department said. The biggest month-on-month drop in employment occurred in Texas (-62,200), followed by Michigan (-42,900), Georgia (-35,000), and Ohio (-30,100).

/. http://www.reuters.com/article/GCA-Economy/idUSTRE58H3W020090918?rpc=401&

[Ghost Dog]

51. House may extend unemployment benefits

It appears that the House may be ready to extend unemployment benefits for another 13 weeks.

On Wednesday, September 23, Congress will consider legislation to add 13 weeks to unemployment benefits in what are termed "high-unemployment states." In order to be considered a high-unemployment state, the unemployment rate must be greater than 8.5%. With unemployment at record highs nationwide, this status includes 26 states and the District of Columbia. What about the other 24 states? The unemployed workers there could qualify if their state is expected to hit 8.5% unemployed or it meets other criteria.

Congress has already voted twice to extend benefits, yet it is estimated that 400,000 people will lose their unemployment benefits by the end of the month and 1.4 million by the end of the year. Beth Shulman, Chair of the National Employment Law Project hit the nail on the head when she stated, "Now is not the moment to pull the plug on America's jobless workers or to deal a body blow to the nation's nascent economic recovery."

/... http://www.bloggingstocks.com/2009/09/18/house-may-extend-unemployment-benefits/

[Ghost Dog]

66. U.S. joblessness becoming more permanent

"Long duration structural unemployment … now represents a record 3.2 per cent of the labour force and a record 33.7 per cent of the unemployed," BMO chief economist Sherry Cooper wrote in a research note issued Friday.

...

The U.S. economy needs eight million new jobs simply to return to employment levels seen in 2006 and 2007, Cooper notes.

Rising unemployment, declining hiring levels and an anemic voluntary separation rate have combined to put job turnover at historic lows, Cooper says.

Compensation consultants Watson Wyatt said recently that to maintain morale for remaining employees, companies are opting to lay off workers and cut hiring as opposed to reducing paycheques, which further exacerbates the difficulty in finding permanent employment.

"This concentrates the pain of the recession on the unemployed, who find themselves jobless for a very long time," Cooper noted.

/... http://www.cbc.ca/money/story/2009/09/18/structural-unemployment-bmo-cooper.html

[tclambert]

67. Well, ultimately isn't the goal of the industrial revolution to replace all human labor

with the machines? Steam engines, then internal combustion engines, then robots and computers, ATMs and self-serve checkout lines at the supermarket, armed Predator drones, and eventually Terminators and Bolos. People can then live lives of A) leisure and plenty, or B) jobless poverty. How do we get to Option A, though?

[ozymandius]

3. Oil below $72 on concerns economic recovery slow

KUALA LUMPUR, Malaysia – Oil prices weakened Friday in Asia, dampened by concerns that a recovery in the U.S. economy may be slower than expected.

Benchmark crude for October delivery fell 81 cents to $71.66 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell 3 cents to settle at $72.47 on Thursday.

Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore, said oil prices pulled back in tandem with a slide in regional stock markets and a stronger U.S. dollar.

.....

In other Nymex trading, gasoline for October delivery slipped 0.72 cent to $1.8440 a gallon, and heating oil fell 0.8 cent to $1.8329 a gallon. Natural gas rose 6.7 cents to $3.515 per 1,000 cubic feet.

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

[Warpy]

44. Why do these "analysts" still have jobs?

The price of oil is dropping slightly because the dollar is rebounding slightly.

Can't these jokers read charts?

[ozymandius]

4. U.S. Proposes Ban on ‘Flash’ Trading on Wall Street

The S.E.C. on Thursday proposed banning what are known as flash orders, which use powerful computers to glimpse at investors’ orders. The practice is often associated with a controversial corner of finance called high-frequency trading, which has grown, largely hidden from view, into a potent force in the markets.

.....

Critics say flash orders favor sophisticated, fast-moving traders at the expense of slower market participants. Using lightning-quick computers, high-frequency traders often issue and then cancel orders almost simultaneously and get an early peek at how others are trading.

Mary L. Schapiro, the chairwoman of the S.E.C., said on Thursday that in proposing the ban, the commission was trying to balance the often competing interests of long-term investors and short-term traders. The proposal requires a second vote by the commission to become binding.

.....

Fast-moving electronic exchanges have upended old-fashioned stock trading. Buyers and sellers no longer must interact on exchange floors and haggle over prices. Today, traders employ powerful computer programs to execute millions of orders a second and scan dozens of marketplaces simultaneously.

http://www.nytimes.com/2009/09/18/business/18regulate.html

---

As regular readers here may know - Sen. Schumer proposed this idea weeks ago. It comes as some relief that his cause is gaining traction where it counts the most: the SEC.

[Roland99]

9. A little encouraging. And an aside....

It seems the Obama administration is slow-moving at replacing the Bush admin cronies and corporate goons from key positions.



As an aside, HR 676 (Universal Single-Payer Healthcare) would tax each stock transaction with a 0.25% fee.

Just sayin'.... :-)

[Roland99]

10. Oh, and a personal aside...

I start a FULL-TIME job after next week! Saying goodbye to this contract position that got me down to FL but has been delayed twice in going full-time which hasn't left the best taste in my mouth.

I'll have to commute downtown every day now but I'll get in rather early and at least beat morning traffic. Going home is another story. lol

Been checking into houses here, too, and HOLY CRAP! Housing price crash? Doesn't feel like it! Houses here are still a good 1/4 - 1/3 higher than back in Louisville. And property taxes? Yikes...and going up more. Kissimmee just announced a huge increase in property taxes and Volusia County (Daytona Beach area) is hiking theirs by Oct. 1.

There are a LOT of foreclosure and short sales going on, though. Some incredible bargains can be had with a bit of patience and time is on my side soooo...

Anyway, off to get my little one to the bus stop and get myself ready for work.

Y'all be havnfn!

[ozymandius]

12. Good on ya, Roland!

That's fabulous news about the job. :toast:

I'm not -too- surprised about the real estate prices. I have started to think of the whole bubble aftermath as Geithner Syndrome. Either sellers, tax assessors or banks work very hard to support perceptions of what they believe property should be worth. Florida has a long history of doing that. Charles Ponzi worked Florida in a similar fashion during the roaring '20s.

[AnneD]

42. Roland-three words for you.....

books on tape. That will make the drive home tolerable. Pod casts of shows like the Prairie Home Companion helps too.

Ozy, your perception of the housing market is what I get too. I subscribe to a bank home foreclosure site and hubby and I have started going to auctions. The "foreclosure" houses (95%) are still beyond our price range and they really aren't much of a bargain. The ones that are reasonable are boarded up and in such bad repair. I would say they have been reduced to 2006-2007 levels because we have been pricing them that long and longer.

I remember hearing recently that homes in the homes under 95K were selling like hot cakes, all the others weren't selling. FUNNY THING, THAT IS EXACTLY THE PRICE RANGE WE HAD SET, SO THAT MUST BE THE TRUE MARKET RANGE FOR THE MIDDLE CLASS NOW. Every thing else they set is not real and true market value.

[Roland99]

71. Thanks, everyone! And good ideas there, AnneD!

I do have my old iPod Nano that's a permanent resident in the dash console (it's old and decrepit and doesn't work except when hooked into the adapter connected to my car stereo's head unit) so I really should listen to more podcasts (and not just Disney ones! lol)

[tclambert]

23. Congratulations.

Both personally and for the sake of our society, it's good to hear some good employment news.

[Tansy_Gold]

25. Congratulations!

It's so good to "hear" some happy news on this board!

:yourock:



All good thoughts goin' out to ya.



Tansy Gold

[Hugin]

39. How come we still don't have an individual post recce feature here on DU, yet?

Great news, Roland99! :D

[Demeter]

46. Congratulations!

Where is the fireworks smiley?

[Mojorabbit]

76. Good luck neighbor.

I am in Orange County.

[ozymandius]

13. 0.25% fee on each transaction is something I could support.

Flash trading, not to be confused with Flasher Trading (see below), if it were not banned would be a huge boon toward funding HR 676. Consider, too, the unfairness of the Bush tax cuts on capital gains and the appeal is amplified manyfold.

[tclambert]

24. On a $2000 trade (many people's annual IRA contribution), that would be $5.

Scottrade charged me $7 for my last such transaction. I could live with that going to $12.

It's the giganto traders who will complain. On a $10 million trade, why, that's $25,000! Part of our defective numerical wiring makes $25,000 sound like a lot while ten million sounds a lot, too, big enough to feel a little unreal. So, we kinda feel like they're close to the same, closer than $5 is to $2000, 'cause $5 is just a little. Yet, it really is the exact same percentage, .25%.

This is a weird human failing. I can feel it in myself, and I'm mongo good with numbers. If I had $2000, I wouldn't think too hard about spending a fiver. But if I had ten million bucks, I'd still feel like $25,000 was quite a bit, worthy of a little care. Maybe those who grow up with great wealth develop a different feeling for what constitutes "a lot." I can't help thinking my parents bought their first house for $16,000. And my son just bought a sporty little car for $24,000.

[DemReadingDU]

40. Yeh, $5 bill. Just about everyone has one in their wallet

Easy come, easy go.

But $25,000? Who carries that much in their wallet, even if they are a millionaire?


BTW, our first house cost $21,900, in 1971. Had to have 20% down payment, and interest rate was 7.5%. Second house the rate was 7.5%, third house the rate was 9% in 1987, but refinanced in 1990, for 7.5%.

People whine today having a 'high' interest rate of 6%.

[Ghost Dog]

16. There has been a push to apply a "financial transaction tax"

across the board, not only on currency trading as the original Tobin Tax proposal had it.

However, "for now":

EU leaders reject idea of global transaction tax, for now (Extra)

Sep 17, 2009, 20:42 GMT Brussels - The European Union will not push for a global tax on financial transactions at next week's Group of 20 (G20) summit in Pittsburgh, in the absence of an immediate agreement within the 27- member bloc.

Speaking after a meeting of EU leaders in Brussels, German Chancellor Angela Merkel said that while 'many countries' supported such a tax, the idea would have to be explored further.

The so-called Tobin Tax, named for economist James Tobin, had been strongly backed by Germany and France. But it was greeted with some scepticism by Britain and Sweden, the current holder of the EU's rotating presidency.

'We've looked at this very carefully. The problem is this: if one or two countries refuse to adopt the common levy ... then it makes it very difficult to implement,' British Prime Minister Gordon Brown said in Brussels.

/... http://www.monstersandcritics.com/news/europe/news/article_1501837.php/EU-leaders-reject-idea-of-global-transaction-tax-for-now-Extra

[Joe Chi Minh]

72. Our financial spivs in the UK were almost hysterical with fear.

[Hugin]

38. Good news!

:faint:

:clatter:

[Demeter]

45. Makes One Wonder What Kind of Pressure It Took

to get even this far in stopping this scam.

[ozymandius]

5. Bankers Face Sweeping Curbs on Pay

Policies that set the pay for tens of thousands of bank employees nationwide would require approval from the Federal Reserve as part of a far-reaching proposal to rein in risk-taking at financial institutions.

The Fed's plan would, for the first time, inject government regulators deep into compensation decisions traditionally reserved for the banks' corporate boards and executives.

Under the proposal, the Fed could reject any compensation policies it believes encourage bank employees -- from chief executives, to traders, to loan officers -- to take too much risk. Bureaucrats wouldn't set the pay of individuals, but would review and, if necessary, amend each bank's salary and bonus policies to make sure they don't create harmful incentives.

A final proposal is still a few weeks from completion and could be revised along the way, according to people familiar with the matter. It requires a vote by the central bank's board, but no congressional approval.

http://online.wsj.com/article/SB125324292666522101.html

---

The banks under the most scrutiny are the largest 25 in the United States. :woohoo:

[ozymandius]

6. Protectionism rising despite G-20 vows on trade

WASHINGTON – Leaders of the world's 20 top economies vowed to resist protectionism last November and again in April as they charted a joint strategy for confronting the worst global downturn in generations. As they meet again, they'll get this progress report: Most of their economies are on the mend — and trade tensions and protectionism are on the rise.

As economies escape the grips of recession, the pressure to work together appears to be lessening.

National self-interest is reasserting itself. That includes a desire to protect battered home industries from overseas competition as governments look toward the day when they can dial back stimulus measures such as extra government spending and low interest rates.

.....

Steps taken by the United States widely seen by other nations as protectionist include "Buy American" provisions in the Obama administration's $787 billion stimulus package, restrictions keeping Mexican trucks off most U.S. roads and provisions of auto bailouts requiring vehicles benefiting from the program to be built in the United States.

China has funneled its extensive stimulus spending to Chinese-only companies and enterprises. Russia plans sweeping tariff increases. Japan is taking steps that will further restrict food imports. And South Africa is changing its purchasing rules to favor domestic producers.

http://news.yahoo.com/s/ap/20090918/ap_on_bi_ge/us_g20_tensions

[Joe Chi Minh]

73. It seems to me an indispensible component for the economic recovery of any country,

when a key cause of this economic crisis has been outsourcing employment abroad.

With its continental-scale, the US seems to me be in a strong position in that regard. Having such close family ties, in every sense of the term, I hope the UK is still able to trade with Australasia, which has a relatively small population.

[ozymandius]

7. Asian Stocks Decline as Aiful Seeks Suspension of Debt Payments

Sept. 18 (Bloomberg) -- Asian stocks fell, dragging the MSCI Asia Pacific Index from a one-year high, as Aiful Corp. sought to reschedule debt payments and Hong Kong’s central bank said competition on mortgages may hurt the city’s lenders.

.....

The MSCI Asia Pacific slipped 0.4 percent to 118.36 as of 5:08 p.m. in Tokyo, falling from its highest close since Sept. 8, 2008. The index climbed 68 percent from a five-year low on March 9 through yesterday as stimulus measures around the world pulled economies out of recession. Stocks in the gauge traded at 1.6 times book value, the highest since September 2008.

....

The Nikkei 225 Stock Average dropped 0.7 percent in Japan, where markets will be shut for holidays until Sept. 24. Sumitomo Osaka Cement Co. tumbled 9.6 percent after cutting its profit forecast. Share-sale plans dragged Shandong Huatai Paper Co. down by 6.2 percent in China, where the Shanghai Composite Index fell 3.2 percent. BOC Hong Kong (Holdings) Ltd. sank 7.1 percent after its chief executive officer sold shares in the company.

....

Deepening Recession?

“Investors are pulling back from the euphoria of the economic recovery and starting to see the reality,” said Kiyoshi Ishigane, a senior strategist at Mitsubishi UFJ Asset Management Co., which oversees the equivalent of $55 billion. “Aiful is just the tip of the iceberg. What’s behind Aiful’s slump is a deepening recession.”

http://www.bloomberg.com/apps/news?pid=20601080&sid=atVVTO8JbLRc

[Ghost Dog]

20. Equity rally pauses, dollar rebounds

Fri Sep 18, 2009 7:37am EDT LONDON, Sept 18 (Reuters) - Global equities came under pressure on Friday after having scaled an 11-month peak as investors took stock of recent hefty gains, giving the downtrodden dollar a reprieve and shoring up government bonds.

Wall Street, which snapped a three-day run-up in the previous session on concerns recent gains were overextended, showed some signs of steadying with U.S. stock futures SPc1DJc1NDc1 flat to 0.1 percent higher.

Commodity prices also retreated. Oil shed 62 cents to $71.86 a barrel and copper fell 1.3 percent to $6,282 a tonne. Spot gold was little changed at around $1,010 an ounce.

"Whilst it is almost inevitable that there will be a pullback on some days, it is the strength of the dips that will be in focus," said John Murphy, an equity analyst at ODL Securities.

"If we truly are in a bull run, investors will buy the dips. If confidence is fragile, any dip could be perceived as the start of the slump. Markets tend to over react on both the long and short side, so today could well be a barometer for market confidence."

The MSCI's all-country world stock index .MIWD00000PUS, which scaled an 11-month peak on Thursday, slipped just 0.3 percent, having earlier fallen as much as 0.6 percent, while the FTSEurofirst 300 index .FTEU3 of top European shares edged down 0.2 percent.

...

According to global fund tracker EPFR, investors have been drawing money market funds and allocating them to developed market equity and bonds, including Europe Equity Funds.

During the second full week of September, $47.2 billion were taken out of money market funds, marking the second biggest weekly outflow this year and taking total year-to-date outflows to $331.9 billion, around 10 percent of their assets, EPFR said.

/... http://www.reuters.com/article/marketsNews/idCNLI16513620090918?rpc=44&pageNumber=2&virtualBrandChannel=0&sp=true

[ozymandius]

8. Merrill Bonus Judge Called Stickler on Transparency

Sept. 17 (Bloomberg) -- Jed Rakoff, the federal judge who rejected a $33 million settlement between the Securities and Exchange Commission and Bank of America Corp. over Merrill Lynch & Co. bonuses, is a stickler for fairness and transparency.

His ruling this week in the Bank of America case came six years after he pressured WorldCom Inc. to pay an extra $250 million after investors criticized a proposed $500 million settlement of an SEC lawsuit as inadequate. Before that, he struck down the federal death penalty in a case before him. The U.S. Justice Department appealed that ruling and won.

The bonus ruling by Rakoff, who will preside over a Feb. 1 trial of the case, may spur changes in how the SEC does its job. His rejection of the Bank of America settlement challenged an agency practice of having shareholders pay to settle allegations of wrongdoing against executives who manage their companies. Lee Ginsberg, a New York defense attorney who was involved in the death-penalty case, said Rakoff has a record of exposing an issue of public importance and pushing for a solution.

http://www.bloomberg.com/apps/news?pid=20601109&sid=a4KoSMXG2Qjc

---

We, the people, seem to be extremely fortunate that Rakoff was assigned this case.

[UpInArms]

18. (SEC) practice of having shareholders pay to settle allegations of wrongdoing against executives who

who manage their companies.

OMG! These people are freakin' unbelievable!

The shareholders get no say-so about what these criminals creeps do and then they get the bill????

[tclambert]

26. What if it's the shareholders who sued?

Would they have to pay themselves damages?

Let's say, like, hypothetically a group of executives lied about the financial health of, say, a large Wall Street firm, and a large stockholder sued because it cost him millions. I'm not saying this actually happened. I'm not specifically thinking of AIG and Maurice "Hank" Greenberg (who won his suit). I'm just saying HYPOTHETICALLY. Who did you say pays?

Just when you think people can't get any stupider . . . just wait five minutes.

[AnneD]

53. Most of us here have held stock.....

how many time have you protested a decision and been listened to. Do you think I approve of these executive salaries-yet I have no impact when I protest at share holder meeting I can get to.

If they are going to hold shareholders responsible, apportion it by who has most authority. We have the same problem in Health care. Bean counter set the staffing level (always low to contain cost). Dr writes illegible order, pharm mis reads it and gives wrong drug or wrong strength. So you are overloaded with too many patients and give the med and the patient dies. WHO IN ALL THIS FIASCO GET HAULED INTO COURT AND LOSES A LICENSES-YOU GOT IT -THE NURSE. This has happened in at least two cases that I know of. Now blame was apportioned but the Nurse bore the unnecessary brunt. The hospitals always say work safe but they ride your ass, write you up, fire or demote you if you refuse an unsafe assignment and do little to get extra staffing. The pharm goes to extra schooling and has more knowledge in drugs than I do (even though I am constantly reviewing to stay up to date) and he filled it. And what about the Doc not verbally telling the Nurse about order changes and the care he wants for the patient. I don't mind owning up to my mistakes but the wrong person is being blamed and force to bear the brunt of the blame. Nurses have fighting for patient ratios and better safety guidelines for year but here we are today-and who looses the career.

Just a thought.

[ozymandius]

11. Wells’ Commercial Real Estate “Ticking Time Bomb” And Coming CRE Woes

by Yves Smith at Naked Capitalism

Reader Scott pointed out this BankImplode story, “Exclusive – Wells Fargo’s Commercial Portfolio is a ticking time bomb.” I can’t verify it, but it sounded plausible and contained some juicy details:

Wachovia, which Wells purchased last fall as it teetered on the brink of collapse, was so desperate to increase revenue in the last few years of its existence that it underwrote loans with extremely shoddy standards and paid traders to take them off their books.

According to sources currently working out these loans at Wells Fargo, when selling tranches of commercial mortgage-backed securities below the super senior tranche, Wachovia promised to pay the buyer’s risk premium by writing credit default swap contracts against these subordinate bonds. Dan Alpert of Westwood Capital says these were practices that he saw going on in the market at large.

Now I am not familiar with credit default swaps practices in CMBS, and informed readers are encouraged to correct me. My understanding prior to the credit contraction, CDS for subprime, and I’d assume commercial real estate bonds, were incredibly cheap (in fact, this applied across the credit spectrum). An investor could enter into a so-called negative basis trade on a raft of bonds and structured credit tranches. A “negative basis trade” occurs when the market yield on an instrument is greater than the cost of hedging it. That means you still had a positive yield if you bought an instrument even after you paid for a CDS against it. And that was lovely for a whole host of reasons. A lot of investment banks would treat the two positions as offsetting and let the investor lever his brains out against it (ignoring the new risk that had been introduced, that of counterparty risk). Eurobanks could and did treat the resulting position (if the original position was an AAA instrument and then hedged with an AAA counterparty) as requiring NO capital; some US investment banks were close to being that aggressive.

more at link...

---

My take on this is that banks were making shoddy loans, covering their tracks with efforts to sweep them off their books and then betting that portions of the bundled loans, certain tranches, would fall into default. So they get paid either way. Furthermore - this analysis seems to say that banks were hedging (without being hedged in the traditional sense) without the capital-on-hand to back up their bets.

It's going to be a long 2010.

[ozymandius]

14. Mortgage related post a CR: Iowa Attorney General: "Option ARMs are about to explode"

From Reuters: "Option" mortgages to explode, officials warn

"Payment option ARMs are about to explode," Iowa Attorney General Tom Miller said after a Thursday meeting with members of President Barack Obama's administration to discuss ways to combat mortgage scams.
...
In Arizona, 128,000 of those mortgages will reset over the the next year and many have started to adjust this month, the state's attorney general, Terry Goddard, told Reuters after the meeting.

"It's the other shoe," he said. "I can't say it's waiting to drop. It's dropping now."

http://www.calculatedriskblog.com/2009/09/iowa-attorney-general-option-arms-are.html

[tclambert]

27. I'm trying to be the optimistic one around here, and there you go harshing my buzz.

This could lead to a new round of foreclosures because the mortgage payments will adjust upwards, and a lot of people can't afford it. People I know counted on being able to refinance their mortgages before the rate adjusted upwards, but now find themselves underwater on the original mortgage, making it pretty hard to refinance.

[Tansy_Gold]

31. This will hit Arizona really hard

Because we've already been hit hard by all the previous housing crimes.

A friend was saying just yesterday that he kinda felt sorry for Gov. Jan Brewer, who has inherited a catastrophic mess. I just laughed and said I didn't feel sorry for her at all. She's a rightwing puke nutcase and she inherited only what her fellow rightwing puke nutcases in the AZ legislature bequeathed her. Maybe they thought they were handing it to Janet Napolitano, but when she as tapped for the homeland security post, the pukes ended up with one of their own in charge here.

It ought to be interesting to see how they get out of this one. They've already used "stimulus" funds to stay afloat for a while, but if the housing market goes further south -- like, into Mexico???? -- things could get really, um, interesting around here.



Tansy Gold, checkin' the popcorn supply.

[Ghost Dog]

47. But Mexico has a very comfortable, well-off bourgeois elite class,

with lots of servants & wage-restraint, and the stash offshored in Miami.

And little of a left-wing threat. So, all good, there, then. :(

[Tansy_Gold]

52. Actually thought of retiring to Mexico

That was before my husband passed away.


Now, if I go anywhere other than where I am, it's Spain.





Tansy Gold, who is beginning to obsess. . . . .

[Ghost Dog]

62. Hablas español?

The only way to live in Spain is to go native, imho. Living in one of those Brit ex-pat/tourist ghettoes would be soul-destroying.

[Tansy_Gold]

64. Sí, un poquito. (Yeah, a little)

O, un poco más que un poquito. Suficiente. (Or, a little more than a little. Enough.) (anyway, it's better'n my French!)

I spent two months in Spain in '69 and loved it, and have always wanted to go back. I actually considered it in '05 when I sold the house, but I had two dogs and a pile of sh**. Now I have four dogs and more piles of sh**. . . . so ¿Quién sabe? Tal vez en dos o tres años, cuando la economía se mejora. (Who knows? Maybe in two or three years, when the economy improves.)





Tansy Gold, who probably writes and reads it better than she speaks it

[tclambert]

68. Does Spain have Universal Health Care?

Oh, of course they do. America stands alone against the evils of people having access to health care.

[Joe Chi Minh]

74. Ever the bastion against Commonist fascism.

[ozymandius]

15. Fed: Household Net Worth Off $12.2 Trillion From Peak

The Fed released the Q2 2009 Flow of Funds report today: Flow of Funds.

According to the Fed, household net worth is now off $12.2 Trillion from the peak in 2007.

.....

This includes real estate and financial assets (stocks, bonds, pension reserves, deposits, etc) net of liabilities (mostly mortgages). Note that this does NOT include public debt obligations.

.....

Note that this ratio was relatively stable for almost 50 years, and then ... bubbles!

---

You will find many fine graphs here charting equity fluctuations over many decades. Funny how the line goes all squiggly once "Bubbles" Greenspan takes the Fed's helm.

[FBaggins]

17. but up two Trillion from last quarter

I was actually surprised that it was so high. Given the ~50% decline in stocks and the significant decline in home values (with a leverages impact on net equity and thus net worth)... I would have expected something larger.

That 12T decline leaves it at 53T.

Less than a 20% decline? There must be a present value calculation being applies to pensions/SS/etc that's being boosted by the low interest rates.

[tclambert]

28. I've heard there is a lot of cash sitting on the sidelines.

Trillions more than normal in money market accounts apparently waiting for better investment opportunities.

http://www.marketwatch.com/story/stock-market-lifted-by-idea-of-pent-up-demand-2009-09-16

Oh, wait, they're saying that's only 1.5 to 2 trillion more than normal. Must be a bunch of lumpy mattresses out there.

And welcome to SMW, Mr. Baggins. Or is it Underhill?

[FBaggins]

33. Well... you know what they say...

A trillion here a trillion there... :-)

You could read it as money waiting to get back into the market (and some no doubt is)... or you could read it as dollars that don't trust the market any longer even after a significant run up.

Either way, I think that the money on the sidelines "waiting" is really waiting for a pullback because the market is ahead of itself.

Me? I've been expecting a pullback for at least the last 10% of the climb and it just keeps going. What do I know?

Thanks for the welcome. It's always Baggins to my friends. Underhill is for when you can't trust the company you're in. :)

[tclambert]

54. Looking forward to many LOTR jokes.

"Rings of Power futures took a dive in the market today, as news of the collapse of Barad Dur reached Wall Street."

[Tansy_Gold]

65. Oh, that's funny!

I love clever.

[tclambert]

69. "Geithner announces bailout for Mordor, Inc."

[UpInArms]

19. dollar watch

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

Last trade 76.406 Change +0.189 (+0.24%)

Euro Halts Four-Day Advance, British Pound Weakens for Second Day

http://www.dailyfx.com/story/dailyfx_reports/daily_brief/Euro_Halts_Four_Day_Advance__British_1253270788926.html

The EUR/USD halted the four-day rally and fell back from the yearly high (1.4770) on the back of U.S. dollar strength, and the pair may continue to retrace the advance from earlier this week as market participants curb their appetite for higher yielding currencies. The euro-dollar tipped lower during the overnight session to reach a low of 1.4646 as the pair remains overbought however; the pair has pushed back above 1.4700 during the last hour of trade and may continue to retrace the overnight decline going into the U.S. trade as European equities turn higher.

Meanwhile, producer prices in Germany increased 0.5% in August amid expectations for a 0.2% rise, with the annual rate of inflation falling 6.9% from the previous year. The breakdown of the report showed energy prices jumped 1.1% during the month, with the cost of heating oil advancing 11.2%, while prices for basic goods rose 0.5% from July. At the same time, the Euro-Zone current account surged EUR 6.6B seasonally adjusted in July after falling 4.3B in June, with the flows of goods and services increasing for the second consecutive month. The data reinforces an improved outlook for the region as policy makers take unprecedented steps to stem the downside risks for growth and inflation, and the European Central Bank is likely to hold a neutral policy stance going forward as price pressures pick up. As the central bank raises its growth outlook and expects economic activity to improve throughout the second-half of the year, long-term expectations for higher interest rates may continue to drive the euro higher over the near-term as market participants speculate the ECB to tighten policy over the next 12 months.

The British pound weakened against the greenback for the second-day and slipped below the 20-Day SMA at 1.6404, but bounced back from the intraday low (1.6295) as the GBP/USD continued find near-term support ahead of the 100-Day moving average at 1.6243, and the pair is likely to hold a broad range over the following week as investors weigh the outlook for future policy. Public sector borrowing in the U.K. jumped GBP 16.1B in August amid forecasts for a GBP 17.6B rise, and is up from GBP 9.9B in the previous year. Government spending jumped GBP 45.6B during the month while inflows slumped 9.1% from the previous year to GBP 34.1B, which raised the public debt to GBP 804.8B, 57.5% of GDP. As policy makers attempt to steer the nation out of the worst recession since the post-war period, the Chancellor of the Exchequer Alistair Darling said that the government must continue to support the economy as the Bank of England sees a risk for a slower recovery, and the government may take additional steps to stem the downside risks for growth and inflation as the economic outlook remains highly uncertain.

The U.S. dollar strengthen across the board after weakening against its currency counterparts throughout the week, and the greenback may hold steady over the next few hours of trade as the economic docket lacks market moving potential. However, as risk trends continue to drive price action in the foreign exchange market, the reserve currency may face increased volatility going into the North American session as U.S. equity futures pare the overnight decline and turn higher ahead of the open, and a rebound in risk appetite is likely to weigh on the reserve currency as investors move into higher-yielding assets.

...more...

What will be the Next Catalyst for Risk Appetite behind Stocks, Currencies?

http://www.dailyfx.com/story/trading_reports/dynamic_carry_trade_basket/What_will_be_the_Next_1253239288622.html

Defining the underlying trend is not as important as determining the next catalyst when assessing the health of the markets. Risk appetite has extended its steady advance for yet another week; but the confidence that supports this trend grows increasingly taxed from a fundamental perspective with each day. At this point, the dollar has plunged to a new yearly low and the Dow has forged to an equivalent high; but what will keep these benchmark assets on pace – and will a steady appreciation necessarily confirm the next long-haul bull trend? One of the most influential drivers behind the now, six-month recovery is momentum. One of the side effects of the steady climb from March’s low is capital returns. There are two general methods for making money in the market: profit from asset appreciation (depreciation if you are short) or collect interest. With the global economy still struggling to facilitate expansion and policy makers the world over holding benchmark lending rates at recent record lows; there is little premium from traditional yields. Therefore, the development of a bull phase relies primarily on the market’s ability to maintain trend. What happens then when there is a retracement (an inevitability)? Whether a natural correction, wave of profit taking or genuine reversal in sentiment; the market will turn lower eventually. When it does, market flows or fundamentals will have to step in to buffer the turn momentum. For market flows, there are still vast sums of money in safe havens like money market funds and Treasuries. If capital pours into the speculative arena fast enough to counter the bearish forces, the markets may still hold up; but would obviously cautious investors diversify in a heavy market?

Looking beyond the mechanics behind market flows, fundamentals are still the foundation for the long-term trend. Conditions are certainly improving in the sense that the worst of the financial crisis has passed and the threat of another seizure has been reduced dramatically. However, that does not mean that we will automatically transition into the next, multi-year bull phase. The loss of wealth through the near market collapse of 2007/2008 was unprecedented. Not only will investors be cautious with their remaining capital for some time; but the access to leverage and credit will be as limiting as the reduced buying power. Eventually, the markets will have to align themselves to the general pace of economic activity (the natural source of returns). In this respect, conditions are improving with the US, Euro Zone, Japan and other industrialized nations expected to expand through the second half of the year. However, policy makers from most of these economic leaders caution growth will be “weak, “stagnate,” and “gradual.” Naturally, we would expect returns from capital markets to take up the same tempo. What’s more, there are still potential road bumps down the line. Naming a few of the lingering issues: leverage is nearing its highest level since before the subprime meltdown; the Federal Reserve is reviewing banks’ exposure to commercial real estate debt; and many emerging market economies have yet to find the bottom to their recessions. One event that comes with a time frame is the G20 meeting in Pittsburgh over September 24th and 25th. This timing means the market can react to announcements in real time – and a close eye will be kept on stimulus, financial regulation and exit strategies.

...more...

[Ghost Dog]

34. Pound Falls to Four-Month Low Beyond 90 Pence per Euro on Banks

Sept. 18 (Bloomberg) -- The pound weakened beyond 90 pence per euro for the first time in four months and gilts climbed on concern U.K. banks need to do more to purge their balance sheets of toxic assets.

Britain’s currency also tumbled against the dollar after Lloyds Banking Group Plc, the nation’s biggest mortgage lender, said it may pull out of the government’s asset-insurance program after the Financial Times reported that the bank’s capital position was too weak to do so. Two-year government bonds rose for the first time in three days.

“They’ve highlighted some of the problems in the U.K. banking system,” said Ian Stannard, a currency strategist at BNP Paribas SA in London. “Rates are going to remain low in the U.K. for some time, so that’s going to weigh on sterling. The pound is going to come under significant pressure.”

The pound depreciated 0.4 percent to 89.99 pence per euro at 12:59 p.m. in London, after earlier dropping to 90.11, the weakest level since May 13. The pound fell about 2.7 percent against Europe’s single currency this week in the biggest drop since March. Sterling slid 0.7 percent to $1.6343, extending its loss this week to 1.9 percent.

The pound lost more than 5 percent against the euro since the end of June after climbing 12 percent in the first half as the Bank of England increased the size of its asset-purchase program and concern deepened that the economic slump may persist. The pound will fall to parity against the euro in the first quarter of 2010, according to BNP Paribas.

Lloyds Discussions

Lloyds said today in a statement it’s in discussions with the Treasury over possible alternatives to entering into a program to insure 260 billion pounds of risky assets.

The pound stayed lower after Britain posted the biggest budget deficit for any August since modern records began in 1993 as the recession destroyed taxes and jobless benefit costs soared. The 16.1 billion-pound ($26.3 billion) shortfall compared with a 9.9 billion-pound deficit a year earlier, the Office for National Statistics said in London today. The median of 16 forecasts in a Bloomberg survey was 17.6 billion pounds.

/... http://www.bloomberg.com/apps/news?pid=20601083&sid=ah_cvjBFz4Gw

[Ghost Dog]

35. Russian premier Putin says US dollar issuance 'uncontrolled', calls for diversified reserves

SOCHI, Russia - Russia's Prime Minister Vladimir Putin on Friday said other currencies besides the dollar should be used as global reserves to reduce the risks posed by swelling U.S. debt.

Putin, who spoke at an international investment forum in the Black Sea resort of Sochi, chided the United States for "an uncontrolled issue of dollars" and said the American currency's dominance had been "one of the triggers" of the global crisis.

Putin renewed Russia's call on the U.S. administration and global community to give the green light to alternative reserve currencies: "If there are several reserve currencies, this will not harm the U.S. economy in any way."

President Dmitry Medvedev's economic advisor, Arkady Dvorkovich, said Thursday that Russia would at next week's G20 summit in Pittsburgh press for more follow-through on measures to confront the global downturn and to change Western-dominated international financial institutions.

/... http://www.canadianbusiness.com/markets/headline_news/article.jsp?content=b182949323

[UpInArms]

21. Ex-Morgan Stanley Hong Kong banker gets 7 years for insider trading

http://www.reuters.com/article/businessNews/idUSTRE58H1PI20090918?feedType=RSS&feedName=businessNews

HONG KONG (Reuters) - Former Morgan Stanley managing director Du Jun was sentenced to a maximum seven years in jail on Friday after a district court found him guilty of insider trading in the city's highest-profile case of its kind.

A judiciary spokeswoman said Du was also fined HK$23.3 million ($3.01 million).

The stiff jail term underscores the determination of the Securities and Futures Commission (SFC), the financial industry watchdog, to crack down on financial crime and follows a series of convictions secured by the Commission.

"This sentencing sends the strongest possible message to anyone tempted to commit an insider dealing offence in the future," Mark Steward, the Commission's Executive Director of enforcement told reporters outside the court.

Du was charged with acquiring shares worth HK$86 million in CITIC Resources between February and April 2007 while he had material and price-sensitive information not known to the market on the firm's plans to acquire oil field assets in China.

He was also charged with advising his wife to deal in CITIC Resources shares in that period.

The verdict comes 14 months after Du was arrested at the Hong Kong airport.

...more...

[Tansy_Gold]

32. Former Interior Secretary Gale Norton focus of corruption probe

(Oooh, goody! We might get to add one to the SMW front page soon!)

http://www.latimes.com/news/nationworld/nation/la-na-norton17-2009sep17,0,6215749.story

The Justice Department investigation centers on a 2006 decision to award oil shale leases in Colorado to a Royal Dutch Shell subsidiary. Months later, the oil giant hired Norton as a legal counsel.




The investigation's main focus is whether Norton violated a law that prohibits federal employees from discussing employment with a company if they are involved in dealings with the government that could benefit the firm, law enforcement and Interior officials said.

They said investigators also were trying to determine if Norton broke a broader federal "denial of honest services" law, which says a government official can be prosecuted for violating the public trust by, for example, steering government business to favored firms or friends.




Ya think??????


TG

[Ghost Dog]

48. "denial of honest services" law.

MMmmm. Nice one. If applied.

[tclambert]

56. Would such a law apply to Richard "Dick" Cheney and Halliburton?

I'm suspecting he arranged special legislation to cover his butt on any sweetheart deals involving the war.

[Hugin]

36. Ex-Morgan Stanley MD jailed for insider trading (Guardian)

District court judge Andrew Chan said Du had been 'driven by sheer greed' (My comment: ... and what part of Wall Street or the whole 'Free Market' system isn't?)

Graeme Wearden


A former Morgan Stanley managing director has been jailed for seven years for insider trading in a Hong Kong courtroom today.

Du Jun was sentenced a week after being convicted of buying shares in an energy company which he was also advising about the acquisition of an oil field. He was also fined HK$23.3m (£1.84m).

District court judge Andrew Chan said Du had been "driven by sheer greed" when he bought shares worth HK$86m in Citic Resources.

"This sentencing sends the strongest possible message to anyone tempted to commit an insider dealing offence in the future," said Mark Steward, the executive director of enforcement for Hong Kong's Securities and Futures Commission (SFC).

Du's conviction came as part of a growing crackdown by financial regulators in Hong Kong, where insider trading was not actually illegal until 2003.

More... http://www.guardian.co.uk/business/2009/sep/18/former-morgan-stanley-md-insider-trading

_________________________________________________________________________________________________________________

I'm guessing we're starting to see all the nekkid people Warren was talking about. 8|

[tclambert]

55. Does that count on the toteboard?

Or do the convicted criminals have to be American?

[UpInArms]

22. Citigroup CEO says $100 million annual pay is too much

Ya think????

http://www.reuters.com/article/businessNews/idUSTRE58H08G20090918?feedType=RSS&feedName=businessNews

NEW YORK (Reuters) - Citigroup (C.N) Chief Executive Vikram Pandit said on Thursday that $100 million is too much for an employee to earn given the bank's circumstances.

In an interview before an audience in New York, when asked if $100 million was too much money for a Citigroup employee to earn given the government support the bank has received, Pandit said, "Yes."

Andrew Hall, a trader at a Citigroup unit, is contractually entitled to a 2009 pay package that could be worth $100 million. Prior Citigroup management signed the agreement that compels the bank to pay Hall so much, Pandit said.

Hall's massive pay package is a serious challenge for Kenneth Feinberg, the man U.S. President Barack Obama appointed to review executive pay at banks that accepted government bailouts. If the "pay czar" is seen as soft on Hall's pay, the public outcry could be strong. Hall's potential $100 million payday is equal to about 2,000 times median household income in the United States in 2008.

But it is not clear if Feinberg has authority to limit Hall's pay, given that the trader's contract was put in place well before February 11, 2009, the cut-off date for the pay czar's authority over compensation agreements.

Hall works at Citigroup energy trading unit Phibro, a business that Pandit said he is working to turn into an asset manager that invests money from outside investors, instead of a unit that trades Citigroup's money.

Citigroup has received more government support than other major U.S. banks after suffering big losses from bad assets linked to consumer debt. It has collected more than $45 billion of government capital in two separate transactions last year.

...more...

[tclambert]

29. Unexpected, this is.

I would have thought a CEO, especially at Citigroup, would say, "Why no, I don't think infinity is too much to pay one of our executives."

[Hugin]

37. How's about we offer Goldilocks the median salary?

What is it now? $40,000 and change per annum?

He'd probably say that was too little... Why he couldn't even afford Health Insurance! :geeze:

[Festivito]

30. Debt: 09/16/2009 11,827,966,342,208.43 (DOWN 6,224,303,092.62) (Up little, FICA down.)

(Debt up .121 billion, FICA drops over six billion. A week without home internet.)

= Held by the Public + Intragovernmental(FICA)
= 7,522,975,289,278.60 + 4,304,991,052,929.83
UP 121,771,969.62 + DOWN 6,346,075,062.24

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 $3.25 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.76, ABOUT TEN BUCKS for a 1B$ 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 10 seconds we net gain a another American, so at the end of the workday of the report, there should be 307,461,621 people in America.
http://www.census.gov/population/www/popclockus.html ON 08/24/2009 13:24 -> 307,261,605
Currently, each of these Americans owe $38,469.73.
A family of three owes $115,409.2. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 to 33 days.
The average for the last 22 reports is 7,190,148,133.30.
The average for the last 30 days would be 5,272,775,297.75.
The average for the last 33 days would be 4,793,432,088.87.
There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 75 reports in 112 days of GWB's part of FY2009 averaging 8.03B$ per report, 5.38B$/day.
There were 164 reports in 239 days of Obama's part of FY2009 averaging 7.28B$ per report, 5.03B$/day so far.
There were 239 reports in 351 days of FY2009 averaging 7.54B$ per report, 5.14B$/day.

PROJECTION:
There are 1,222 days remaining in this Obama 1st term.
By that time the debt could be between 13.5 and 18.1T$.
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)
09/16/2009 11,827,966,342,208.43 BHO (UP 1,201,089,293,295.35 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: 1,803,241,445,296.00 so far this fiscal year, broken down below:
Borrowed in FY2009: 0,602,152,152,000.59 in part from time during Bush reign.
Borrowed in FY2009: 1,201,089,293,295.35 in part since Obama takes over.


LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
08/25/2009 +000,287,748,587.67 ------------********
08/26/2009 -000,466,043,865.86 ---
08/27/2009 +008,131,449,864.04 ------------*********
08/28/2009 +000,123,059,531.85 ------------********
09/01/2009 +087,210,147,628.98 ------------********** Tue
09/02/2009 +000,313,556,741.81 ------------********
09/03/2009 -005,471,580,596.27 --
09/04/2009 +000,000,664,126.38 ------------*****
09/08/2009 -000,191,031,319.46 --- Tue
09/09/2009 +000,137,837,081.44 ------------********
09/10/2009 +012,326,876,265.82 ------------**********
09/11/2009 +000,017,033,887.43 ------------*******
09/14/2009 -000,193,915,837.32 --- Mon
09/15/2009 +034,695,222,864.03 ------------**********
09/16/2009 +000,121,771,969.62 ------------********

137,042,796,930.16 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power JUST BEFORE fiscal year end.
Bush admin borrowed $962,245,245,654.01 in those last 124 days in office crossing two fiscal years.
$360,093,093,653.42 in last 12 days of FY2008, and $602,152,152,000.59 in subsequent 112 days before leaving office.

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=4064282&mesg_id=4064326

[Festivito]

63. Debt: 09/17/2009 11,809,239,038,438.40 (DOWN 18,727,303,770.03) (Down a lot.)

(Debt down nearly eight billion, FICA drops just under one billion. I might get and new modem today. Yipee!)

= Held by the Public + Intragovernmental(FICA)
= 7,505,033,339,846.05 + 4,304,205,698,592.35
DOWN 17,941,949,432.55 + DOWN 785,354,337.48

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 $3.25 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.76, ABOUT TEN BUCKS for a 1B$ 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 10 seconds we net gain a another American, so at the end of the workday of the report, there should be 307,470,261 people in America.
http://www.census.gov/population/www/popclockus.html ON 08/24/2009 13:24 -> 307,261,605
Currently, each of these Americans owe $38,407.74.
A family of three owes $115,223.23. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 to 31 days.
The average for the last 22 reports is 5,758,845,209.53.
The average for the last 30 days would be 4,223,153,153.66.
The average for the last 31 days would be 4,086,922,406.76.
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$/day.
There were 165 reports in 240 days of Obama's part of FY2009 averaging 7.12B$ per report, 4.93B$/day so far.
There were 240 reports in 352 days of FY2009 averaging 7.44B$ per report, 5.07B$/day.

PROJECTION:
There are 1,221 days remaining in this Obama 1st term.
By that time the debt could be between 13.5 and 18.0T$.
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)
09/17/2009 11,809,239,038,438.40 BHO (UP 1,182,361,989,525.32 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: 1,784,514,141,526.00 so far this fiscal year, broken down below:
Borrowed in FY2009: 0,602,152,152,000.59 in part from time during Bush reign.
Borrowed in FY2009: 1,182,361,989,525.32 in part since Obama takes over.


LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
08/26/2009 -000,466,043,865.86 ---
08/27/2009 +008,131,449,864.04 ------------*********
08/28/2009 +000,123,059,531.85 ------------********
09/01/2009 +087,210,147,628.98 ------------********** Tue
09/02/2009 +000,313,556,741.81 ------------********
09/03/2009 -005,471,580,596.27 --
09/04/2009 +000,000,664,126.38 ------------*****
09/08/2009 -000,191,031,319.46 --- Tue
09/09/2009 +000,137,837,081.44 ------------********
09/10/2009 +012,326,876,265.82 ------------**********
09/11/2009 +000,017,033,887.43 ------------*******
09/14/2009 -000,193,915,837.32 --- Mon
09/15/2009 +034,695,222,864.03 ------------**********
09/16/2009 +000,121,771,969.62 ------------********
09/17/2009 -017,941,949,432.55 -

118,813,098,909.94 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power JUST BEFORE fiscal year end.
Bush admin borrowed $962,245,245,654.01 in those last 124 days in office crossing two fiscal years.
$360,093,093,653.42 in last 12 days of FY2008, and $602,152,152,000.59 in subsequent 112 days before leaving office.

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=4066239&mesg_id=4066417

[AnneD]

41. Social Security's New Math: Who Wins, Who Doesn't

January 2010, seniors may do a double take after seeing their Social Security checks. The two to three percentage-point increase in benefits they usually get each year won’t be there.

That’s because, for the first time in three decades, there likely won’t be a cost of living adjustment (COLA). “People notice when their checks don’t change, says Bruce Meyer, a professor at the University of Chicago’s Harris School of Public Policy.

In the context of degraded home prices and investment losses, the change will feel like a loss to many seniors, even though benefit amounts for 2010 won’t shrink. Social Security benefits are adjusted every year to keep up with inflation, so that seniors can retain their purchasing power. Adjustments are based on the consumer price index for urban wage earners (CPI-W) between the third quarter (July-September) of the previous year and the third quarter of the current year. The 2010 COLA will be based on a period marked by sharp drops in prices and deflation.

Democratic lawmakers are trying to lessen the perceived pain. Rep. Carolyn McCarthy (D., N.Y.) introduced legislation last week that would provide a one-time $150 payment for Social Security beneficiaries to compensate for the lack of an adjustment.

more.......


http://www.smartmoney.com/personal-finance/retirement/social-securitys-new-math-who-wins-who-doesnt/?cid=1230

I remember when they first introduced the COLA in the 70's. Much like theminimumm wage today-the SS check were sopitifullyy small that there were stories of seniors eatingcat foodd to survive. This will be our future. They are doing everything in their power to do away with SS. File this one under small enough to drown in a tub. Shame on these democrats that are doing this. I recommend we cut the congressional COLA if we are to be fair about this.

[tclambert]

57. Ah, the protien-like taste of melamine.

Mac and cheese and Fancy Feast.

Found cat food (9 Lives) at about 41 cents for a 5.5 ounce can at Target. 3 ounce can of Tuna fish for humans about a dollar. The cat food is definitely a bargain.

[truedelphi]

75. One thing to look out for - if the cat food has

Bonemeal added, it might make you very ill.

[Robbien]

43. Nearly Half Of US Households Hit By Job Losses Or Pay Cuts

ABC/WaPo's boring headline is:
POLL: Deep Damage From Economic Crash One Year On
http://abcnews.go.com/PollingUnit/Politics/economic-crisis-abc-news-washington-post-poll/Story?id=8568179&page=1


A remarkable 41 percent say that in the last year someone in their household has had their pay or work hours cut. Twenty-seven percent -- one in four -- say a layoff or the loss of a job has hit their home. The total with either a pay cut or job loss is 47 percent, nearly half the country.

Sixty-five percent have been hurt financially; one in three, hurt "a great deal."

And it's a country still on tenterhooks. Fifty-three percent are concerned about a pay cut in the months ahead, and nearly as many, 46 percent, worry about a layoff hitting their household. Those levels of anxiety are unchanged since February, despite reports the recession may have bottomed out.

Industry self-regulation fares even worse: Only 41 percent say they're confident the nation's financial institutions themselves will change their business practices to make another meltdown less likely. Fifty-eight percent, instead, think not.

[Hugin]

49. Yep, it has been a double whammy in my household.

If you count my extended immediate family it has been a quadruple whammy.

Not minor hits either... Job losses and work hours cut by a fifth.

But! There's sunshine just over the horizon! :bounce:sarcasm:

[tclambert]

58. Maybe that's just Dick Cheney's butt.

Sorry, got to adjust to the new times. That's where the sunshine USED to come from. Replace Dick Cheney with . . . Ben Bernanke. Yeah, that works.

[Doctor_J]

60. Best wishes, Hugin

Sucks to be a wage slave these days. Hope the "turnaround" :rofl: reaches huginhouse soon.

[snot]

61. And a lot of those NOT hurt probably had nothing to lose to begin with.

[wordpix]

70. job loss here & difficulty finding new despite 3 decades as a professional

i guess i'm just too old with all that experience and good health, too.

[Demeter]

59. That Cartoon Says It All, As Usual

Here he comes again! With an ambulance (health care) to assist.