STOCK MARKET WATCH, Monday September 21

[ozymandius]

Source: du

STOCK MARKET WATCH, Monday September 21, 2009

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

AT THE CLOSING BELL ON September 18, 2009

Dow... 9,820.20 +36.28 (+0.37%)
Nasdaq... 2,132.86 +6.11 (+0.29%)
S&P 500... 1,068.30 +2.81 (+0.26%)
Gold future... 1,010 -3.20 (-0.32%)
10-Yr Bond... 3.45 +0.07 (+2.01%)
30-Year Bond 4.22 +0.05 (+1.10%)

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

Market Conditions During Trading Hours

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

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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

More or Less
BY BRIAN PRETTI

You already know that a number of headline economists/strategists are starting to “talk up” and anticipate a very meaningful economic recovery bounce ahead based on the fact that the present economic downturn has been so deep in terms of historical context – the old slingshot theory, so to speak. The first table below gives you a little glimpse of historical context. The harder they fall the more violent the upside recovery? Perhaps. Yes indeed, the very deep recessions ending in 1958 and 1975 were followed by on average 7% real GDP growth in the following twelve months post recession end. Will that be the case again in the current cycle? We certainly all wish we knew with certainty.

What is important to investment decision making near term is not necessarily the ultimate fundamental reality of what is to come in terms of strength of economic recovery immediately ahead, but rather investor’s perceptions of what is to come. It’s these collective perceptions that will form consensus and move financial asset prices short to intermediate term. That and a tsunami of liquidity, of course. We know the government is trying desperately to positively kick start two key fundamental drivers of historical economic recovery that are pent up demand for autos and housing. For now, the government has made some positive short-term impact. Sustainability is the bigger and longer-term issue that is a major question mark. But the other two intertwined drivers/characteristics of prior historical cycle economic recovery are currently missing in action. And those are growth in personal income and acceleration in household debt assumption (debt used in good part for consumption purposes). Again, regardless of ultimate fundamental outcomes that will only be told well after investors anticipate that reality, it is gauging investor perceptions that will be important in the months ahead. So what is it that investors may be watching in order to make an educated guess about potential strength of economic recovery to come? Today I’ll take a look at one of those issues, and that is unemployment claims.

The data for the history of initial unemployment claims only travels back to the late 1960’s, so let’s start with a quick look at the big post recession economic recovery snapbacks since that time. Highlighted below are the two largest post recession twelve-month real GDP gains that were seen after the recession conclusions in 1975 and 1982. In very sharp contrast, the post recession initial GDP lift-off experiences in 1991 and 2001 were very shallow.

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

[ozymandius]

2. Today's Report

10:00 Leading Indicators Aug
Briefing.com 0.9%
Consensus 0.7%
Prior 0.6%

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

[Ghost Dog]

36. Leading Indicators August 0.6%; July revised to 0.9%

Washington - A key gauge of US economic health rose for the fifth straight month in August, according to a private research group Monday, as the country continues to look for signs that its deepest recession in decades is over. The New York-based Conference Board's index of leading economic indicators rose 0.6 per cent on the month, following a revised 0.9- per-cent rise in July and 0.8-per-cent increase in June. The July figure was revised upward from an earlier estimate of 0.6 per cent.

"This suggests that the recession is bottoming out. These numbers are consistent with the view that after a very severe downturn, a recovery is very near. But, the intensity and pattern of that recovery is more uncertain," Conference Board economist Ken Goldstein said.

...

The index evaluates the economy's expected performance over the next three to six months.

/.. http://www.earthtimes.org/articles/show/286627,us-economic-index-climbs-for-fifth-straight-month--summary.html

Conference Board press release: http://www.conference-board.org/economics/bci/pressRelease_output.cfm?cid=1

"...Supplier deliveries, the interest rate spread and stock prices made large positive contributions to the index this month, more than offsetting the substantial negative contribution from real money supply..."

[ozymandius]

3. Oil falls to near $71 in Asia amid weak demand

BANGKOK – Oil prices fell to near $71 a barrel Monday in Asia as high crude stockpiles and weak demand tempered enthusiasm about recent signs of improvement in the world's largest economy.

Benchmark crude for October delivery was down 88 cents at $71.16 a barrel by late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract gave up 43 cents Friday to settle at $72.04 a barrel.

The recession has sapped American fuel consumption, and U.S. oil stockpiles are 14 percent larger than last year even as recent data suggests the economy is clawing out of recession.

.....

In other Nymex trading, gasoline for October delivery slipped 1.58 cents to $1.8166 a gallon, and heating oil fell 1.74 cents to $1.8105 a gallon. Natural gas fell 5.0 cents to $3.728 per 1,000 cubic feet.

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

[Roland99]

9. Interesting how consistent of a range oil has held for weeks. Still twice as $$ as it should be, tho

[Ghost Dog]

22. World stocks slip as G20, Fed loom

LONDON (Reuters) - World stocks retreated further from last week's 11-month high on Monday as lower commodity prices and caution ahead of a Federal Reserve meeting and G20 summit prompted investors to trim risky trades.

Leaders of the Group of 20 meet on Thursday and Friday in Pittsburgh and U.S. President Barack Obama said on Sunday he would push world leaders for a reshaping of the global economy in response to the crisis. World stocks have risen over 26 percent this year, recouping more than half of last year's losses, underpinned by repeated pledges by G20 leaders and finance chiefs to keep emergency support for the economy in place.

"We are still quite bullish," said Nick Nelson, European equity strategist at UBS. "The market might look slightly overbought near term, but the economy is definitely improving, corporate profits are definitely improving, interest rates are staying low, valuations aren't expensive." MSCI world equity index fell 0.5 percent, while the FTSEurofirst 300 index (^FTEU3 - News) lost 0.6 percent. Emerging stocks (^MSCIEF - News) dropped more than 0.5 percent.

...

U.S. crude oil lost more than 1 percent to $71.25 a barrel after Asia's No.1 refiner Sinopec that diesel China continued to lag economic recovery with fuel sales so far this year still below the rates seen a year ago.

/... http://finance.yahoo.com/news/World-stocks-slip-as-G20-Fed-rb-2731264567.html?x=0&.v=4

[Ghost Dog]

43. Oil tumbles on economic worries

LONDON (Reuters) -- Oil prices fell 3.2% Monday, to below $70 a barrel, as further signs of weak fuel demand raised expectations that prices may have raced ahead of the nascent economic recovery.

...

"There will be little or no sustained upward pressure on oil prices until global economic recovery is firmly established and reviving oil demand begins to draw down bulging oil inventories," analysts at the Center for Global Energy Studies said in their monthly oil market report on Monday. "Even next year prices are unlikely to rise much unless clear signals emerge that the world is pulling out of recession in a sustainable fashion."

U.S. crude for October delivery settled down $2.33 to $69.71 a barrel, having earlier hit a low of $68.96.

Oil stockpiles have risen around the world as the global economic crisis has cut sharply into energy demand.

The International Energy Agency said world electricity output was likely to drop this year for the first time since 1945, while Sinopec, Asia's top oil refiner, said demand for industrial fuels remains depressed in China, the world's second largest oil consumer.

/... http://money.cnn.com/2009/09/21/markets/oil.reut/index.htm

[ozymandius]

4. IRS extends amnesty program for tax cheats

WASHINGTON – Tax dodgers who hid assets overseas will get a few extra weeks to apply for an amnesty program that has been flooded with applications ahead of the Wednesday deadline.

The Internal Revenue Service plans to announce Monday that the deadline will be extended until Oct. 15, said a government official who spoke on condition of anonymity.

More than 3,000 Americans have applied for the program, which promises no jail time and reduced penalties for tax cheats who come forward, said the official who was not authorized to speak on the record ahead of the public announcement.

http://news.yahoo.com/s/ap/20090921/ap_on_go_ot/us_tax_haven_crackdown

[Demeter]

12. How Very Generous of the IRS

What? They don't want to put people in jail? Not if they can buy their way out?

I guess the bottom line is: pay them. Enforcement is a whole 'nother thing.

[MattSh]

35. Sadly, it's not that simple. It's never that simple...

The Sept. 23 deadline applies to two groups of taxpayers. One consists of U.S. citizens and residents who haven't been paying tax on foreign income. The IRS wants these taxpayers to confess under the voluntary-disclosure program. All applications are inspected first by the criminal division of the IRS.

The other group includes those who have been paying tax on foreign income but not filing the form because they were unaware or believed it wasn't required. Among others, it now includes U.S.citizens and residents with signature authority over a foreign account, such as executors or employees of a business; those with interests in foreign partnerships or controlled foreign corporations; beneficiaries and even potential beneficiaries of trusts, and investors in foreign-based Individual Retirement Accounts and pension plans.

Although taxpayers are exempt from filing if the total value of accounts never tops $10,000 at any point during a year, there is no exemption for even small amounts of income if the account goes above that point. The IRS also allows an exemption for non-income-producing properties, such as artwork. The agency has suspended, just for this year, a provision forcing foreigners doing business in or with the U.S. to file as well.

Says Eileen Sherr, a manager of the American Institute of Certified Public Accountants in Washington: "If your daughter spends her junior year abroad and has an account there, or your Brazilian wife never closed an account in São Paulo, you might have an FBAR filing requirement." (Or you live overseas and need to buy a house or a car). Filings are likely to jump this year because of multiple filings on the same accounts, especially by trust firms and money managers, she says, adding, "If there are 30 potential beneficiaries of one trust, even children, all may have to file or risk the $10,000 nonfiling penalty."

http://online.wsj.com/article/SB124804796387763807.html#articleTabs%3Darticle

[Ghost Dog]

37. "a provision forcing foreigners doing business in or with the U.S. to file as well"?

:wtf: What is the definition of "doing business with the U.S.", huh?

[Demeter]

39. All of Blackwater, for one thing

Not that they will get any such enforcement...

[Ghost Dog]

42. Hmm. And the likes of Haliburton, and other such 'offshored'

US Corps...

But, for non-US individuals, what about just buying & selling US stocks or other instruments - or indeed having anything to do with the US dollar? That would certainly spook some markets. :shrug:

Edit: And, what if some other jurisdictions turn the tables and require the same of US persons doing business with them?

[ozymandius]

5. Housing Suffering Relapse Confronts Bernanke Credit Conundrum

Sept. 21 (Bloomberg) -- The recovering housing market may be heading for a relapse as President Barack Obama and Federal Reserve Chairman Ben S. Bernanke consider ending support for the source of the global financial crisis.

The Obama administration is studying whether to let a first-time home buyers’ tax credit expire as scheduled at the end of November. Bernanke and his Fed colleagues may continue talking this week about how to wind down purchases of mortgage- backed securities, according to Peter Hooper, chief economist at Deutsche Bank Securities Inc. in New York. The two programs have helped stabilize real-estate demand, with new-house sales rising 9.6 percent in July from the prior month, the most since 2005.

Ending these efforts may stifle the housing rebound by depressing sales and pushing up both mortgage-backed bond yields and interest rates on home loans, even in the face of the record-low zero to 0.25 percent short-term rates the Fed has engineered, said economist Thomas Lawler. A weaker housing market would likely dampen the economic recovery and undercut shares of builders including Fort Worth, Texas-based D.R. Horton Inc. and Miami-based Lennar Corp., that have risen 40 percent this year, based on the Standard and Poor’s Supercomposite Homebuilding Index of 12 companies.

.....

The yield on the benchmark 10-year Treasury note is 3.22 percentage points more than the federal-funds rate, compared with an average of 1.45 percentage points during the past 20 years, according to data compiled by Bloomberg. Thirty-year mortgage rates average 1.69 percentage points more. While that is down from 3.19 percentage points in December, it is still above the average of 1.4 percentage points for this decade before the credit markets seized up in the second half of 2007.

http://www.bloomberg.com/apps/news?pid=20603037&sid=aI1Eso1VomfE

[ozymandius]

6. Merkel, Steinmeier Face Economic ‘Mess’ as Stimulus Peters Out

Sept. 21 (Bloomberg) -- Germany’s recovery from recession came in time to give a boost to Chancellor Angela Merkel’s re- election bid in the Sept. 27 vote. It may not last much longer.

Unemployment is set to jump and consumer spending to fall in 2010 as government stimulus runs out, according to the Halle- based IWH institute, an adviser to the government. Companies are warning of a credit crunch, and debt at a post-World War II high leaves policy makers with few options to counter a double dip.

.....

Germany, the world’s biggest exporter, was hammered by the global contraction as sales of Wolfsburg-based Volkswagen AG cars and Munich-based Siemens AG equipment slumped. The government has forecast a 2009 economic contraction of as much as 6 percent.

Spurred by extra spending equal to 1.6 percent of gross domestic product in 2009, the economy grew 0.3 percent in the second quarter, confounding economists’ forecasts. It may expand another 0.8 percent in this quarter. Growth may reach 0.9 percent in 2010, the IWH institute says.

http://www.bloomberg.com/apps/news?pid=20601109&sid=agZcz8dchOKY

---

I expect a similar scenario in the United States.

[Demeter]

13. And A Lot Harder and Faster

because the US "stimulus" only stimulated the speculators, and the safety net is full of holes.

[Ghost Dog]

25. Wall Street risks red October as rebound looks frothy

Fri Sep 18, 2009 3:00pm EDT NEW YORK (Reuters) - Financial markets are off to the races and Wall Street has all but declared victory.

A surge in prices for both risky and safe assets is alarming some analysts who say emergency rescue measures that helped markets rebound may be setting them up for a new fall.

But most institutional investors just aren't listening. Talk of a virtual circle of recovery in asset values and the real economy abounds at big banks, a sharp if cautious contrast to the dire pessimism which prevailed until recently.

Unusual simultaneous rallies in equities, U.S. government bonds and commodities are linked to one factor: super-cheap monetary policies adopted around the world.

Bank stocks have led the runaway U.S. equity markets which have catapulted indexes nearly 60 percent above March lows. This has meant better earnings, rising profits and bigger bonuses. "We're in a sweet spot for the financial cycle," said Jonathan Basile, economist at Credit Suisse in New York. "Central banks are in no hurry to remove stimulus so that suggests risky assets could do better and fixed income could also do better."

An analysis from Bespoke Investment Group captures the lightning speed of the rush into equities. Six months ago, the S&P 500 .SPX was trading further below its 200-day moving average than at any other time since the Great Depression. "Today, we are in the midst of one of the strongest bull market rallies since the 1930s," Bespoke said in a report. "This has helped to lift the S&P 500 further above its 200-day moving average than at any other time since 1983."

...

One obvious candidate for an abrupt turnaround is the U.S. stock market. Not only has it recovered more than half its value in the past six months, but the rebound has also been largely predicated on a rally in shares in financial firms, many of which are still believed to rest on shaky ground.

An ongoing deterioration in consumer debt repayments and a worsening picture in commercial real estate are all putting additional strain on already-heavy balance sheets.

Joseph Stiglitz, a prominent economist and Nobel Laureate from Columbia University in New York, argued last week that the U.S. banking sector is now in worse shape than before the collapse of major investment bank Lehman Brothers in September 2008, because banks seen as too big to fail before the crisis had grown even larger.

...

The pace of job losses has abated but the unemployment rate continues to climb, and is soon expected to breach 10 percent. That will be more than double its level before the recession started, the biggest jump since the Great Depression. The average time people are left without a job has also grown and is now close to 6 months, the highest on record.

...

It remains to be seen whether the unprecedented quantities of central bank funding can be removed before it has any unwanted side-effects. Already, a swooning dollar is making inflation-adjusted returns look less favorable. Stock valuations are also increasingly less attractive. The ratio between share prices and expected company is almost 16 from 11 in March, when the equity market hit its 12-year low.

Moreover, many believe Americans are undergoing a secular shift from spending freely to saving avidly. A report from the Fed on Thursday offered more evidence of rising savings, showing household ownership of U.S. Treasury bonds rose to $605.9 billion in the second quarter from $576.4 billion in the prior period, a trend which suggests serious limitations to any investment strategy that relies on a quick bounce-back from battered U.S. consumers.

/... http://www.reuters.com/article/wtUSInvestingNews/idUSTRE58H53320090918?sp=true

[fasttense]

30. I'm not convinced that the pace of job losses has abated.

I've been watching the unemployment numbers in a rural county in TN. We normally have a cycle where January is our highest percentage of unemployment and then it drops throughout the year, only to rise again in January. There have been swings as wide as 6% in one year.

But in 2008 we did not get the expected decrease in unemployment. Instead, the unemployment rate rose a month early in December by 1.6 and has continued to rise. Last month it rose by almost 1%. We now stand at 17.4% unemployment. That number should be declining not continuing to rise.

[Ghost Dog]

23. European shares fail to hold 1,000-mark

LONDON, Sept 21 (Reuters) - European shares fell early on Monday, with the main FTSEurofirst 300 index dipping below the 1,000 mark and further slipping from an 11-month high on worries the market may have sped ahead of economic fundamentals.

Miners and banks were among the main losers, but defensive drugmakers were in demand, lending support to the market.

By 0819 GMT, the FTSEurofirst 300 .FTEU3 of top European shares was down 0.8 percent at 998.07 points. The index rose above the 1,000 level on Wednesday after an 11-month gap and hit a year high of 1,013.63 a day later. But it closed down 0.5 percent on Friday.

/... http://www.reuters.com/article/marketsNews/idCALL46784320090921?rpc=44&sp=true

[ozymandius]

7. Thomson Reuters to buy Hugin, terms undisclosed

OSLO, Sept 21 (Reuters) - Thomson Reuters (TRI.TO) (TRI.N) said on Monday it has agreed to buy from NYSE Euronext (NYX.N) (NYX.PA) the Oslo-based Hugin Group, a company which distributes news releases for companies in Europe.

Terms were not disclosed.

Thomson Reuters said in a statement the acquisition was part of a strategy of providing corporate clients with investor relations and public relations services.

http://www.reuters.com/article/mergersNews/idUSLL64052420090921

---

On a related note: ozymandius has not been bought despite standing on the street corner for several hours with a sign that reads "Get It Here".

[Hugin]

11. It's news to me!

:rofl:

That would explain the horse head I woke up with this morning. :o

I'm never told anything!

[DemReadingDU]

19. Too funny

Who'd known you owned a company!

:rofl:

[Demeter]

20. Hugin Doesn't Own the Company. He IS the Company!

and we are blessed to post in the same thread!

[DemReadingDU]

21. This is too much for a Monday!

:P

[tclambert]

50. Wait! We gotta come up with a counter-offer to keep 'im!

Let's see, I have two dimes, a paperclip, and . . . some lint in my pocket. What do the rest of you have? fbaggins, what do you have in YOUR pocketses, hey?

[Tansy_Gold]

52. I found two pennies in the parking lot this morning

I knew today would be my lucky day!!!!

[Demeter]

57. I've Spent Every Last Cent I Have on the Parking Garage At the Hospital

Sorry.

[Demeter]

16. I'd REALLY Like to Hear Those Undisclosed Terms

You've been holding out on us, Hugin.

Gonna have to change your name, too, I'll betcha!

[Hugin]

18. They're just trying to silence me!

I won't go quietly... Not me! I'm not the 'goes quietly' type. It's something I don't do! Quiet, not.. That is I!

:tantrum:

Just a second... Phone's ringing.

Now, as I was saying... It's been nice knowing y'all. But, I've been meaning to spend some 'me' time. Y'know... Quality time. Quietly, by myself. Counting things... A new hobby! Solitude is good for the soul. Maybe catch up with some old friends. It's very therapeutic. Take a cruise... Someplace, quiet.

:yoiks:

[Demeter]

26. Congrats, Then

We can always say, we knew him when....

[tclambert]

51. Great find, Ozy!

That's hilarious. Although they got one thing wrong: "Hugin Group (is) a company which distributes news releases" on Democratic Underground.

[ozymandius]

8. Edolphus Towns Is Latest Shark In Ken Lewis Chum-Filled Pool

There is blood in the water... that of Ken Lewis, and the sharks are all over it. The latest to join the dismemberment party of one Bank Of America Chief Executive Officer, is New York Representative, and Chairman of the Committee on Oversight and Government Reform, Edolphus Towns. And while the traditional defense provided by Lewis, BofA, and respective lawyers, has been one which delegates any wrongdoing to the attorney-client privilege gray area, Towns has told the bank it "cannot use attorney-client privilege when dealing with Congress." The last piece of armor that Lewis had has just been torn off. From a strategic point of view, the question now becomes whether Ken Lewis, soon to be faced with the traditional prisoner's dilemma, will out his "dealer" Hank Paulson, in exchange for a slap on the wrist, as the alternative could be a much more gruesome fate easily involving an 8x10 cell.

From the New York Times:

In a sternly worded letter on Friday, Mr. Towns, a New York Democrat, said the bank must divulge when it became aware of the enormous losses at Merrill last year, when it received a commitment from the federal government for a second round of bailout money and what legal advice its management received about whether it had to disclose those developments to the bank’s shareholders.

Mr. Towns gave the bank until noon on Monday to provide answers and relevant legal documents. He said it seemed that the bank was “hiding information.” The bank replied to Mr. Towns’s committee late on Saturday, asking him to delay that request until after Tuesday, when Mr. Towns meets with Anne Finucane, the bank’s chief strategy and marketing officer, who oversees public policy at the bank. But a spokesman for Mr. Towns said on Sunday that he was sticking to the deadline.

At this point Lewis is done. Whether it is the judicial track spearheaded by Rakoff, the criminal one where Andrew Cuomo shows no signs of relenting, or the Congressional, now that Towns has joined the fray, the CEO is over. The question is will he go down quietly, and be the sacrificial lamb for a confluence of many different interests, or will his fall be one of flames not only for the former Treasury Secretary but also for the current Chairman of the Fed, both of whom have been indirectly implicated in a massive conspiracy to defraud BofA shareholders in exchange for the "greater good" (and Ken Lewis' job).

more...

http://www.zerohedge.com/article/edolphus-towns-latest-shark-ken-lewis-chum-filled-pool

[Demeter]

14. OMG! Even the Thought That Justice Could Get that Close Sends Tingles Up My Spine!

I wonder who is orchestrating the combined attack? And do they really have Paulson as the ultimate target?

[Demeter]

10. That Is the Most Disgusting Cartoon I've Ever Seen

How could you?

It is unfortunately also the truest one.

[Tansy_Gold]

53. Yeah, well,

Max Baucus is himself a pretty disgusting cartoon.






Tansy Gold, who thought the cartoon was right on the mark

[tclambert]

54. Surely you've seen enough excrement to become desensitized by now.

If not, you could watch a little Fox "News," or tab over to freerepublic.com. Oh, it makes me shudder to think of it.

[Demeter]

15. How to Pay Off the National Debt By Nikki Alexander (Semi-Satire)

http://www.informationclearinghouse.info/article23532.htm

September 18, 2009 "Information Clearing House" -- It’s all the rage these days to sell public assets to pay off government debt. We mustn’t default, after all. We just hate to see our national parks, public roads, energy grids, water, hospitals and schools being sold to robber barons. Do we have anything to sell that the majority of Americans wouldn’t mind parting with?

What about all that Pentagon real estate owned by US taxpayers? Over 1,000 military bases worldwide. That real estate must be worth a fortune. Given the worldwide inflation of real estate values, created by the central banks, it must be worth trillions. We could close our worldwide military bases and sell that real estate to the locals who would probably jump at the chance to get rid of a foreign occupying army. We could ask the buyers to pay for the land with worthless Federal Reserve notes. That would solve their problem of how to get rid of their worthless US dollars and simultaneously give Americans a sufficient amount of worthless dollars to pay back the Federal Reserve for the national debt they created with worthless Federal Reserve notes. Without those military bases we couldn’t have wars and we should be able to drastically reduce the Pentagon budget, saving even more money ~ and lives! Just think of it … close to one trillion dollars every year being sucked up by the Pentagon would be liberated for health care, education, infrastructure and a peacetime economy. We could even get rid of the Pentagon all together. After all, we lived quite comfortably without it for 170 years.

While we’re at it, we could sell off those secret CIA torture prisons; close all those military labs that make chemical and biological weapons and the pharmaceutical labs that create deadly vaccines. This would free up enough cash to save our hospitals, schools and national parks with money left over to clean up all the depleted uranium sites contaminating 39 of our states.

We could get rid of the domestic surveillance apparatus and stop outsourcing intelligence gathering to private “security” firms, cancel the contracts with mercenaries and assassins, stop funding military recruiters in our schools and stop paying for coups in countries where people would rather elect their own leaders. That would save a fortune. Selling off the whole covert operations apparatus would have the double advantage of fetching a good price and freeing other people to live their lives in peace.

If we wanted to permanently flourish we could get rid of the Federal Reserve and restore the function of money creation to the public ~ constitutional money backed by the full faith and credit of US citizens. A new monetary system owned and controlled by the public would ensure that credit is always available to cities and states, schools, hospitals, small businesses and homeowners. We wouldn’t have to sell off the public assets we value because we wouldn’t have any government debt. Problem solved.

The public has plenty of toxic assets to sell. Wall Street hasn’t cornered that market. I wonder why Obama hasn’t thought of this himself. Perhaps the $900,000 in “campaign contributions” from Goldman Sachs is clouding his vision or perhaps the advice he gets from the privately-owned Federal Reserve is self-serving; perhaps the corporate CEOs that rake in billions from public despair have his ear or perhaps the beneficiaries of Pentagon wars have convinced him that killing people in Afghanistan and Iraq will bring greater returns than selling off the toxic assets Americans really don’t want.

Paying off the national debt is a no brainer when you have a conscience.

his article is an excerpt from a more detailed work on the history of organized crime syndicates masquerading as the US government: http://nikkialexander.wordpress.com

[Festivito]

27. Fun. Sell bases for excess overseas dollars and return those dollars to the Fed.

Of course the dollars would return to the owners of the treasury notes, who would return it to the banks, who would not be able to return it to the Fed without leaving themselves open to a run on the bank.

Ah, but what fun that we can dream in affirmismal ways.

EDIT ADDING: The real way to drop the debt is to pull our rich folks together and let them know the huge fun is over, it's only going to be big fun from here and then onward. And, it's not that far-fetched for our democracy to do so.

[Demeter]

40. Yup. We Have the Finest Collection of Strategically Located Toxic Waste Sites

in the world!

[Demeter]

17. Good Monday, Ozy and Friends!

I don't think we found a hammer this weekend, but we identified a lot of nails!


http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x482098

Is there any such thing as a good Monday, I wonder?

[Po_d Mainiac]

28. Monday is the deadline for

Lewis to squeal.......It could be a fine one!!!
:donut:

[Demeter]

38. The Kid Is Coming Home!

They pulled out all her tubes, which was my biggest concern, so I'm packing up something for her to wear.

It is of course, all of a sudden, 91% humidity and feels subtropical. Two days ago, I turned on the heat. Today, I'm seriously considering air conditioning. I can't function in humidity! And the manic depressive cycling of the weather is doing nothing for the people's sanity, either....

At least it isn't snowing, or even frost.

[Po_d Mainiac]

45. Wish u the best!

[amandabeech]

62. Good news!

I hope that all goes well.

As to the snow or frost, surely you know that they will be back in a few days. That's Michigan weather for you!

[ozymandius]

64. Marvelous news!

I am very happy for you Demeter and, of course, your child. I raise a toast for continued improvement. :toast:

[Festivito]

24. 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.)

= 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

[Ghost Dog]

31. Bankruptcy ahead (Noland: Credit Bubble Bulletin)

Commentary and weekly watch by Doug Noland

Q2 2009 Flow of Funds

Peter Eavis, writing in the Wall Street Journal on Friday, noted: "More than half of US residential mortgages are being made by just three large banks. It is a stunning change, but is it good for the housing market, and to what extent will it boost profits over the long term for this elite trio: Wells Fargo, Bank of America, and JP Morgan Chase? Right now, housing remains on government life support. Treasury-backed entities are guaranteeing about 85% of new mortgages, while the Fed buys 80% of the securities into which these taxpayer-backed mortgages are packaged."

The Federal Reserve’s Z1 "flow of funds" report remains a "must read" when it comes to grasping the happenings of the US credit system. Granted, the reams of data may not be quite as captivating now as compared with the Wall Street bubble years. But the report never disappoints.

For the quarter, non-financial credit growth accelerated to 4.9% annualized, up from Q1's 4.1% and compared with Q2 2008's 3.3%. In nominal seasonally-adjusted and annualized rate (SAAR) terms, non-financial debt expanded $1.646 trillion. This was up strongly from Q1's $1.371 trillion SAAR, but still below the $2.0 trillion or so I deem necessary to (at least temporarily) stabilize the system. Keep in mind that the economy remained quite weak for much of Q2. I would expect Q3 credit growth in the neighborhood of $2.0 trillion annualized. For perspective, non-financial credit expanded $865 billion in 2000, $1.152 trillion in 2001, $1.413 trillion in 2002, $1.671 trillion in 2003, $1.997 trillion in 2004, $2.329 trillion in 2005, $2.400 trillion in 2006, $2.539 trillion in 2007 and $1.888 trillion in 2008.

And while the recovery in credit is on the surface encouraging, the composition of this growth is disconcerting. For the quarter, household debt contracted at a 1.7% rate, with home mortgage and consumer debt down 1.4% and 6.5% annualized - both worse than Q1 (declines of 0.1% and 3.7%). Corporate borrowings expanded at only 1.0% annualized, down from Q1's 2.1% and compared to 6.7% back in Q2 2008. Private sector credit remains stuck in the muck.

Meanwhile, state and local debt growth accelerated to 8.3% annualized, up from Q1's 4.9% and Q2 2008's 0.9%. State and local governments expanded borrowings $187 billion SAAR - a resurgence back to the peak borrowing level from 2007 ($186 billion). Federal borrowings expanded at a blistering 28.2% pace, up from Q1's 22.6% and compared to Q2 2008's 5.9%. Federal borrowing increased to $1.895 trillion SAAR during the quarter. State and local and federal combined debt growth reached $2.082 trillion SAAR, significantly larger than the total system non-financial debt growth of $1.646 trillion SAAR (with household credit and mortgage debt contracting).

Over the past four quarters, non-financial credit expanded $1.959 trillion, or 6.1%, to $34.320 trillion. This was no small amount of debt growth. Treasury borrowings increased $1.893 trillion over the past year to $7.143 trillion. And during this period Federal Reserve assets ballooned $1.111 trillion, or 117%, to $2.063 trillion. It is incredible to watch the emerging government finance bubble take such command of US credit.

On an SAAR basis, the Federal Reserve increased agency and government-sponsored enterprise-backed (GSE) securities $1.088 trillion during Q2 (nominal $272 billion). In nominal dollars, Fed holdings of agency (mostly mortgage-backed securities, or MBS) increased from $20 billion at year-end to $559 billion by the end of Q2. And keep in mind that home mortgage debt actually contracted $53 billion during this period (to $10.951 trillion).

There is a perception that the Fed's agency MBS purchase program is specifically targeting stabilization of the conventional mortgage market. Yet, examining the data, one can see that the private-label MBS marketplace is perhaps the greater beneficiary of Federal Reserve largess. For the quarter, issuers of asset-backed securities (chiefly pools of private-label/non-GSE mortgages) contracted $499 billion SAAR, this after a $614 billion SAAR contraction in Q1. But this was offset by an increase in GSE MBS of $556 billion SAAR in Q2 and $304 billion SAAR in Q1.

So, the Fed is amassing quite a stockpile of "conventional" GSE MBS, but often these are "private-label" mortgages recently "refinanced" into GSE securities. As the Fed buys the new GSE MBS, newly created funds become available to flow back to reliquefy the formerly illiquid ABS marketplace (along with agencies, Treasuries, corporates, and equities). To be sure, placing essentially federal government backing upon previously "private-label" mortgages dramatically changes the market's perception of these securities' worth ("moneyness") - especially with fed funds pegged for an extended period at near zero and the Fed in the midst of a $25 billion weekly purchase program in order to fulfill it commitment to purchase $1.25 trillion of mortgage securities.

During the quarter, outstanding GSE MBS expanded at a 10.4% rate to $5.173 trillion. GSE MBS increased $414 billion, or 8.7%, over the past year and $1.098 trillion, or 26.9%, over two years. During Q2, the ABS market contracted at a 12.2% rate to $3.817 trillion. ABS declined $525 billion over the past year, or 12.1%, and $673 billion, or 15%, over two years. Here we see confirmation that nationalization of mortgage credit runs unabated. Not only is the vast majority of new mortgage credit this year government-backed, Washington guarantees are being slapped on hundreds of billions of existing "nonconventional" mortgages. This intrusion and transfer of (credit and interest rate) risk has terrible long-term ramifications, although in the near-term this mechanism provides a powerful stabilizing force for both the credit system and real economy.

...

To summarize, there were no surprises in the Q2 2009 Flow of Funds. What I saw was confirmation of the government finance bubble thesis. "Uncle Sam Bets the House on Mortgages" was the headline for an insightful article in the Wall Street Journal on Friday (Peter Eavis). It would as well make a good title for recent Z1 Flow of Funds reports.

/More... http://www.atimes.com/atimes/Global_Economy/KI22Dj01.html

[Festivito]

41. Debt: 09/18/2009 11,807,667,118,297.67 (DOWN 1,571,920,140.73) (Down a bit.)

(Debt down nearly one-third billion, FICA drops about one-and-a-quarter billion.)

= Held by the Public + Intragovernmental(FICA)
= 7,504,720,341,482.68 + 4,302,946,776,814.99
DOWN 312,998,363.37 + DOWN 1,258,921,777.36

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 307,478,901 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 $38,401.55.
A family of three owes $115,204.66. (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 3,685,107,452.26.
The average for the last 30 days would be 2,702,412,131.66.
The average for the last 31 days would be 2,615,237,546.76.
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$/day.
There were 166 reports in 241 days of Obama's part of FY2009 averaging 7.07B$ per report, 4.90B$/day so far.
There were 241 reports in 353 days of FY2009 averaging 7.40B$ per report, 5.05B$/day.

PROJECTION:
There are 1,220 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)
09/18/2009 11,807,667,118,297.67 BHO (UP 1,180,790,069,384.59 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: 1,782,942,221,385.20 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: 1,180,790,069,384.59 in part since Obama takes over.


LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 -
09/18/2009 -000,312,998,363.37 ---

118,966,144,412.43 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=4069876&mesg_id=4069931

[tclambert]

56. There you go, using that "down" word again.

Debt going down. Debt going . . . down. Sorry, I just can't comprehend what you are saying.

[Demeter]

59. Down is the New Up

get with the program, man!

[Festivito]

63. Up with down! (When talking about debt that is.)

What makes this worse it that the public debt going down is good, whereas the intragovernmental(FICA side) going down means our owed-to-us-working-folk debt is going down, which means we're owed less money, and that is not good, er, bad for us. But, that also is good for US, that is the U.S.A., because all our FICA/SS stuff is kind of invested in our government inasmuch as government will be paying us back in the future, hopefully paying us back in the future.

Could be worse. It could have been invested in ... say... GM and put into GM stock and we'd have watched it go bye-bye. BTW, that is what Bush/CONs wanted when they wished to privatize SS. So, right now it's invested in democracy's future.

Of course democracy in the future can decide not to pay us back at all! Then again, democracy can decide to take every cent from rich folks, pay back all our debts, and then pay ourselves a healthy retirement. Democracy can be a scary thing. Most strongest-things-we-know in this world -- are scary.

Have fun. See ya tomorrow after being down in bed, I'll get up and be up a bit with a down debt.

[tclambert]

55. Did you say "Down a lot?"

It can go that direction? Huh! Now there's a surprise.

[UpInArms]

29. dollar watch

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

Last trade 76.875 Change +0.380 (+0.49%)

US Dollar Overdue for a Technical Bounce, But Fundamental Reversal...

http://www.dailyfx.com/story/currency/eur_fundamentals/US_Dollar_Overdue_for_a_1253314255861.html

The dollar was able to relieve the pressure of suffering its worst trend on recent record by clawing out the first bullish close in eleven consecutive trading days; but that does not mean the burdened currency is necessarily primed for a true reversal. While this currency is arguably oversold on a fundamental basis; the same drivers that ushered it to its yearly low last week are still in play. The pace of the economic recovery, growing financial concerns and a Fed struggling to keep pace are all prominent concerns when gauging the long-term health of the dollar; but all of that is overshadowed by the immediate and market-wide preoccupation of risk appetite.

Last week, a Bloomberg survey of investors found the market was the most bearish on the dollar in 18 months. Where does this speculative grade come from? The economy is still dealing with an economic recovery and government deficits are a genuine concern; but most of the world’s largest economies are suffering with the same dilemma. The real weight on the dollar is the steady revival of risk appetite over the past six months. Following the necessary period of consolidation after the worst of the financial crisis, capital started to slowly work its way back into the speculative arena. Initially, interest was from early adopters; but the draw of capital gains was strong enough to start the flow from deeper pools of wealth in “risk free” areas. Where do these funds go? It certainly finds its way to US equities and other relatively-risky assets; but when it comes to the yield bearing instruments, the American products can’t compete. The benchmark, 3-month Libor rate dropped to a new record low (0.28948 percent) this past week and subsequently was depreciated to a discount against its Japanese (0.34875 percent) and Swiss (0.29667 percent) counterparts. Does the dollar realistically make the ideal funding currency? No. The Fed will certainly turn to a hawkish policy stance well before the other two, it has the potential to take a more consistent hawkish path, deficits are a problem amongst all three and the foundation for a true recovery is most stable in the US. As soon as US rates recover, risk-seeking capital will once again flow into the world’s financial center.

In the meantime, we may see a shift in sentiment that could benefit the dollar’s safe haven status. The broader markets have rallied consistently for months – despite a fundamental picture that has changed pace little since the initial reversal. Naturally, a wave of profit taking is highly probable. And, considering the advance to this point has been heavily dependent on steady capital gains, a correction could be sharp and aggressive. There are many different potential catalysts for such a turn; but in the end, the shift in optimism will likely develop naturally. Nonetheless, we should keep an eye on a few specific developments. Reports suggest that lending to consumers has dropped at its fastest pace since the Great Depression; yet leverage has returned to levels last seen since before the 2007 meltdown. This is an imbalance that will lead to problems later down the line if not corrected. Also, the Federal Reserve and White House have both voiced concern over the commercial real estate debt market. The former is looking into major banks’ exposure to this asset class; but the term ‘stress test’ is not being used.

Though it is vital to keep abreast of the health of risk appetite; we shouldn’t ignore the influences of data and growth forecasts. The economic docket is light next week; but durable goods orders and housing data (existing sales, new home sales) can supply short-term volatility. It is the FOMC that tops the list – not with a possible change in the benchmark, but commentary that can move up the time table for a hike. Data aside, the US/China trade spat hints at a growing concern with protectionism which may come under scrutiny at the September 24/25 G20 Meeting. Exit strategies, financial regulation, banking compensation are all on the topic list; but not currencies.



...more...

Euro, British Pound Falter as Investors Speculate the FOMC to Propose an Exit Strategy

http://www.dailyfx.com/story/bio1/Euro__British_Pound_Falter_as_1253530469976.html

The EUR/USD declined for the second day and reached a low of 1.4636 following the rise in risk aversion, and the single-currency may continue to trend lower against the greenback as investors speculate the Federal Reserve to signal an end to its emergency programs later this week. At the same time, Germany’s Finance Ministry argued unemployment has been “unusually moderate” during the worst economic downturn in the post-war period, and sees a risk of job losses intensifying going into the following year as the effects of the government stimulus starts to taper off.

The Finance Ministry went onto say that “in the view of the low level of production and the related under-utilization of the economy’s production capabilities…stronger adjustment reactions on the labor market are yet to come,” but anticipates household spending to bolster economic activity in the third-quarter as consumer sentiment improves. Moreover, the Bundesbank reinforced an enhanced outlook for the region as the central bank expects the rebound in exports to shore up the economy as the stimulus fades, and projects a “noticeable” recovery in the third quarter as trade conditions improve. Meanwhile, ECB board member Gertrude Tumpel-Gugerell said that the “the worst financial storm since the 1930s is only gradually calming down,” and supporting the banking system is the key to ending the crisis as global finances remain far from normal.

The British pound weakened against the greenback for the third day and slipped below the 100-Day moving average (1.6254) to reach a low of 1.6134 during the overnight trade, and the slump in risk appetite may lead the pair to test the monthly low for near-term support as the reserve currency continues to benefit from safe-haven flows. However, as the GBP/USD holds the broad range from mid-August, we may see the pair attempt to retrace the overnight decline and continue to trend sideways over the week as investors weigh the outlook for future policy. Meanwhile, the Rightmove house price index rose 0.6% in September after falling 2.2% in the previous month, with the annualized rate slipping1.5% from the previous year after sliding 3.1% in August. The data encourages an enhanced outlook for the region as policy makers take unprecedented steps to soften the landing of the economy, and demands for housing should continue to pick up over the coming months as policy makers anticipate economic activity to improve throughout the second half of the year.

The greenback advanced across the board following the rise in risk aversion and may continue to strengthen going into the North American trade as equity futures foreshadow a lower open for the U.S. markets. Meanwhile, the leading indicator for the U.S. is anticipated to improve for the fifth consecutive month in August, with economists forecasting the index to rise 0.7% from the previous, and the data is likely to support the dollar rally as investors speculate the Federal Reserve to hold the benchmark interest rate at 0.25% and concluded its easing cycle over the coming months. As a result, the reserve currency may continue to appreciate against its major counterparts as market participants anticipate the central bank to hold a hawkish tone going into 2010, and the rise in the interest rate outlook is likely to drive the exchange rate higher throughout the second half of the year as investors speculate the Fed to tighten policy over the next 12 months.

...more...

[Ghost Dog]

44. Bank sends pound skidding

Even the Bank of England is worried about the value of sterling.

After a week in which the pound managed to perform even worse than the beleaguered dollar, the Bank added fresh impetus to sterling’s woes on Monday by raising concerns that the currency’s long-run value may have been fundamentally undermined by the financial crisis.

It warned overseas investors might have reassessed their willingness or ability to purchase sterling assets and thereby finance the UK trade deficit, pushing the long-run sustainable real sterling exchange rate lower.

Those comments, which sent the pound skidding to a five-month low against the euro, could hardly have come at a worse time for sterling.

/... http://www.ft.com/cms/s/0/7b54723a-a6d9-11de-bd14-00144feabdc0.html

[Hugin]

32. Nobel Winner Krugman Says ‘End of World Postponed’ (Update3) (Bloomberg)

By Kati Pohjanpalo

Sept. 21 (Bloomberg) -- The global economic downturn has probably hit bottom though the recovery will be “slow and painful,” said Paul Krugman, the Nobel Prize winning economist.

“The end of the world appears to have been postponed,” Krugman, a professor at Princeton University, said at a seminar in Helsinki today. The world economy “does not appear to be falling into an abyss but is still” in trouble. The outlook is “very fuzzy’ and a W-shaped recovery may become U-shaped.

Germany, France and Japan emerged from recession last quarter, adding to evidence some of the world’s biggest economies are over the worst. The U.S. recession probably ended in late July or August, Krugman said, after gross domestic product fell 1 percent in the second quarter from the prior three months.

The Nobel Laureate said ‘‘the truly extraordinary thing” has been “the collapse of world trade,” the subject for which he was awarded the prize last year, and he cast doubt on the potential for exports to lead the global recovery. He also said China’s economy isn’t big enough to serve as a growth engine.

More over here (not Reuters) ... http://www.bloomberg.com/apps/news?pid=20601087&sid=ap6aPBj59zLc

_________________________________________________________________________________________________________

I wonder how this is going to sit with the "End of the World on September 21st, 2009 Crowd" mentioned over in E&O?

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=103&topic_id=482512&mesg_id=482539

(Note: Inflatable Dolls and Helium Gas on backorder... So, the mass ascent is on hold for now. But, for how long? ;) )

[tclambert]

58. September 21st isn't over yet.

When it is, they will check their arithmetic and announce that they forgot to carry a 2, and that will make the real EOTW date . . . sometime in the future. And when that fails, they go with "Oh, never mind." Isn't that the pattern established by William Miller? He predicted Jesus Christ would return before March 21, 1844, then amended it to April 18, 1844, then to October 22, 1844, which became known to the Millerites as the "Great Disappointment." Lucky no one had invented poisoned Kool-Aid yet.

[DoBotherMe]

33. K&R n/t

[DoBotherMe]

34. K&R n/t

[FBaggins]

46. Who/what is K&R? n/t

[zogofzorkon]

47. Kruger & Rand

Its the gold standard of approval

[FBaggins]

48. Lol

Not a "gold bug" here. Sorry.

[Hugin]

49. They're messing with ya.

K&R

Is "Kick and Recommend".

[tclambert]

61. What are you still doin' here? I thought Reuters bought you.

[tclambert]

60. Some people use this symbol

:kick: to represent kick.