STOCK MARKET WATCH, Monday December 28

[ozymandius]

Source: du

STOCK MARKET WATCH, Monday December 28, 2009

Bush Administration Officials Convicted = 1
Name(s): David Safavian

Bush Administration Officials Charged = 1
Name(s): Richard Lopez Razo

Financial Sector Officials Convicted since 1/20/09 = 11

AT THE CLOSING BELL ON December 24, 2009

Dow... 10,520.10 +53.66 (+0.51%)
Nasdaq... 2,285.69 +16.05 (+0.71%)
S&P 500... 1,126.48 +5.89 (+0.53%)
Gold future... 1,104 +10.00 (+0.91%)
10-Yr Bond... 3.79 +0.04 (+1.15%)
30-Year Bond 4.67 +0.07 (+1.41%)

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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

To Our (Dis)Credit
Part 2
BY RICHARD A. ECKERT

So, what’s so wrong with a little credit?

Once more, as long as it is used to finance the manufacture or acquisition of capital goods, nothing. However, I also observed, later on “changes in real wages—which have trended flat to down over the period displayed in Exhibit III despite reported increases in productivity—provided no support to increases in real consumption and, most probably, exerted a drag.” This begs the question, “If personal consumption accounts for the largest portion of GDP and real wages are not providing any support to increases in personal consumption—and, in fact may be exerting a drag—is it not appropriate to infuse the economy with enough credit to augment languishing real incomes and lift personal spending to the point that positive changes in GDP are once again recorded?”

The issue with credit, even in a “normal recession”—i.e., one that merely represents the cyclical trough in the business cycle and, not the product of structural changes to the economy—is that while it can temporarily stimulate demand for consumer goods, allowing incremental purchases to be financed at low rates by even those unemployed or just marginally attached to the workforce, those purchases, just like the money used to make them, are borrowed. Assuming that individual consumers are only going to generate a certain amount of income and that those individuals can only spend what they earn in a lifetime, using credit to fund current consumption only borrows it from the future. This assumption requires the use of a couple of other supporting—and simplifying—premises. The first is that monetary stimulus does not alter the sum of money earned in a lifetime. I am confident this particular assumption holds and will stand the test of time. Call it a naïve faith in fate, but I believe that most individuals are destined to earn a fixed amount of income over their lifetimes and that very few intervening events are going to change that. The second simplifying assumption is that most individuals do not want to bequeath to their heirs a legacy of debt, even if this is, most assuredly, what we will do collectively, as a nation.

If one can buy into those assumptions, then it is easy to conclude that credit does not increase total lifetime consumption; indeed, it can only accelerate the buying decision, pulling forward a particular purchase in time. But a dollar of borrowed money spent today = a dollar of debt service in the future. So credit merely displaces that spending in time, reducing future consumption by the amount spent on borrowed money today. And, to the extent there is an interest component to that credit—and almost all debt requires the payment of interest (it is, after all, the “rent” for living in debt)—it can crowd out future spending, replacing it with interest payments, and reduce total lifetime consumption.

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

[Tansy_Gold]

9. Wow! What a concept! Credit = Debt! Who'da thunk it????

:sarcasm: just in case.


Tansy Gold

[ozymandius]

18. That's why I refer to one of those plastic things as a "debt card".

Back in the days of my callow youth, a college girlfriend and I would walk past the tables near the student center where people would sign up marks for the Shitibank Visa/Mastercard. We would mock their sales pitches by asking our fellow students if they were interested in "acquiring crushing debt?"

We enjoyed the cognitive dissonance evident on the faces of the sales people when they tried to maintain their people pleasing persona while wishing that we two would get the hell outta there.

[Roland99]

20. you rabble-rouser!

:)

[ozymandius]

23. Oh, I roused some rabble alright.

Those experiences contributed mightily to the cynical jerk person I am today.

[ozymandius]

2. no goobermental reports today n/t

[ozymandius]

3. Oil holds near $78 a barrel in Asia

KUALA LUMPUR, Malaysia – Oil prices held near $78 a barrel Monday in Asia ahead of inventory figures later in the week that could send it through the $80 mark.

Benchmark crude for February delivery was flat at $78.05 at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. Trading was thin due to the holiday season.
.....

The government last week reported a crude stocks drawdown of five million barrels and if inventories continue to decline — suggesting improved demand — it will be a boost to crude prices.
.....

In other Nymex trading in January contracts, heating oil rose 1.1 cents to $2.05 while gasoline rose 1.1 cents to $2. Natural gas added 13.9 cents to $5.78 per 1,000 cubic feet.

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

[Demeter]

37. Venezuela, China Sign Oil Deals

http://online.wsj.com/article/SB126152693744102097.html?mod=WSJ_hpp_sections_world

Venezuela and China gave a new boost to their thriving economic ties Tuesday, signing a package of agreements that advances China strategy of locking in access to the South American country's vast oil reserves.

After two days of talks in Caracas, the China National Offshore Oil Corporation will help the government of President Hugo Chavez develop the Boyaca 3 oil block in the Orinoco-belt, a large heavy-crude basin in Eastern Venezuela.

The move is part of Venezuela's efforts to increase oil sales to China to 1 million barrels per day from the 400,000 barrels per day it says it currently supplies. Under Chavez, Venezuela has tried to curb oil exports to the U.S. and searched for new markets. Despite his efforts, the U.S. remains the main destination for Venezuela oil, with sales averaging around 1 million barrels per day.

The China National Petroleum Corporation also moved forward by securing access to another oil block in the Orinoco region that could eventually produce 400,000 barrels of oil per day.

The Chinese oil titan also agreed to build a refinery with Venezuela that will process crude from a joint oil venture between the two countries that operates the Junin 8 block.

CNPC also plans to bid alongside French firm Total in early 2010 in an upcoming oil auction known as Carabobo, which is considered the most important drilling project in Venezuela in more than a decade.

China and Venezuela have cemented a close economic bond during the last few years. Venezuela is eager to receive Chinese investment to develop its heavy-oil reserves, which require massive financing. Venezuela is a key objective for China as it pushes to secure oil and other natural resources for its economic expansion.

The two countries have developed a $12 billion development fund, with China depositing $8 billion in the fund in exchange for Venezuelan oil. The fund focuses on bankrolling infrastructure projects in Venezuela.

The economic ties between the two countries has spilled to other areas. Chinese companies launched a telecommunications satellite for Venezuela and are working on projects ranging from building a car factory to building a railway system.

Trade between China and Venezuela reached $10 billion in 2008, nearly three times the trade figure posted in 2003. China is now Venezuela's second largest trading partner, surpassed only by the U.S.

[ozymandius]

4. Failed attack likely won't crash airline stocks

Two weekend security incidents aren't expected to have much effect on airline stocks. Investors instead are likely to focus on an improving economy when trading resumes Monday.

A failed attack on a Northwest flight Christmas Day and another incident on the same flight Sunday may set travelers on edge, but investors Monday are expected to pay more attention to the big picture of airlines' improving demand and prices.

Shares of airline stocks have climbed out of a recession-dug trough in the second half of 2009 as people began flying again and ticket prices edged up. By November, the volume of people flying was up 2 percent compared with a year ago, said Roger King, an analyst for CreditSights in New York.
.....

Heightened security measures can prompt louder grumbling but aren't likely to deter passengers en masse or send shares tumbling, analysts said. Demand from the airlines' high-margin business travelers could be dampened, however, if the new security measures prove to make air travel significantly more onerous, said Kevin Mitchell, president of the Business Travel Coalition.

http://news.yahoo.com/s/ap/20091227/ap_on_bi_ge/us_airlines_stocks

[ozymandius]

5. New security restrictions could hurt airlines

NEW YORK (Reuters) – Tighter security measures at U.S. airports following an attempt to blow up a Detroit-bound jet could dampen enthusiasm for air travel, hurting the airline industry just as it seemed poised to recover from a period of bruising losses, some industry experts say.
.....

Robert Mann, an airline consultant at R.W. Mann & Company, said airlines must watch for the impact on business travelers, who pay higher fares and travel more frequently than leisure passengers.

"If it becomes something like a four-hour wait, business travelers aren't going to do that," Mann said. "They're either not going to travel or they're going to hire their own private lift, and just avoid scheduled transportation altogether."
.....

The U.S. airline industry, which lost $23.6 billion in 2008, has slashed capacity and increased fares to cope with weaker demand and higher fuel prices.

http://news.yahoo.com/s/nm/20091228/bs_nm/us_airlines_security

[Demeter]

31. If I Were an Evil, Rapacious Business Type like Dick Cheney

or if I worked for GS (but I repeat myself, ala Mark Twain), I might see such incidents of "terrorism" and the ridiculous security responses that they engender which drive self-important businessmen off commercial flights and into small private planes as an opportunity to eliminate the competition--literally.

I'm just saying. If I were a Rich Man...

http://www.youtube.com/watch?v=RBHZFYpQ6nc

[ozymandius]

6. The past and future decade in business at a glance

BANKING
THE PAST DECADE: The nation's big banks swaggered into the decade as owners of the world. They leave it humbled and, in some cases, wards of the state.

THE NEXT DECADE: The question now is whether banks will return to their high-flying ways after they fully regain their health. The Obama administration wants sweeping financial reforms to curb excessive risk-taking. But the banking industry is fighting to scale back the overhaul out of fear that it will cut into profits.

---

REAL ESTATE
THE PAST DECADE: The real estate boom and bust were the biggest since the Great Depression.
...
Then, the crash.

THE NEXT DECADE: It could be another five or 10 years before homes in the hardest-hit markets regain the value they had at the height of the housing boom.

http://news.yahoo.com/s/ap/20091226/ap_on_bi_ge/us_economy_decade_ahead_glance

---

There's retail, health, manufacturing and autos, among others, in the lineup.

[AlphaCentauri]

44. That is that real state inflation will continue

and the wedges and saving will lost it value?

or it is just a bate for people to rush to get a home and make prices go up.

[ozymandius]

7. Hot Money’ Adds to China Asset Volatility, Fan Says (Update1)

Dec. 28 (Bloomberg) -- Inflows of speculative capital, or “hot money,” are contributing to volatility in China’s stock and property markets, said Fan Gang, the academic member of the central bank’s monetary policy committee.

While the inflows help make it cheaper to borrow, “it will also cause asset bubbles,” Fan said at a financial forum in Beijing today. He also said that capital will keep heading into emerging markets for “a considerable period” because of limited or zero growth prospects in the industrialized economies.
.....

China has held the yuan at about 6.83 per dollar since July last year, shielding its exporters from the slump in global demand. Premier Wen reiterated yesterday his government will “absolutely not yield” to calls for currency gains. The International Monetary Fund has said the yuan is “undervalued.”

http://www.businessweek.com/news/2009-12-28/-hot-money-adds-to-china-asset-volatility-fan-says-update1-.html

[Festivito]

8. Debt: 12/23/2009 12,102,603,428,507.74 (UP 7,530,831,298.58) (Wed) (Question?)

(Debt seems to jump up then drop slowly maybe up a little and down a little for days--repeat. I have a question in front of the color chart below.)

= Held by the Public + Intragovernmental(FICA)
= 7,736,506,773,971.40 + 4,366,096,654,536.34
UP 459,596,007.01 + UP 7,071,235,291.57

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 308-Million person America.
If every American, man, woman and child puts in $3.24 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.73, ABOUT TEN BUCKS for a 1B$ 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 another American, so at the end of the workday of the report, there should be 308,279,838 people in America.
http://www.census.gov/population/www/popclockus.html ON 11/07/2009 08:19 -> 307,879,272
Currently, each of these Americans owe $39,258.5.
A family of three owes $117,775.49. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 days.
The average for the last 22 reports is 4,125,661,229.28.
The average for the last 30 days would be 3,025,484,901.47.

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$/day.
There were 174 reports in 253 days of Obama's part of FY2009 averaging 7.33B$ per report, 5.07B$/day so far.
There were 249 reports in 365 days of FY2009 averaging 7.57B$ per report, 5.16B$/day.
There were 58 reports in 84 days of FY2010 averaging 3.32B$ per report, 2.29B$/day.
Above line should be okay

PROJECTION:
There are 1,124 days remaining in this Obama 1st term.
By that time the debt could be between 13.6 and 17.9T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
12/23/2009 12,102,603,428,507.74 BHO (UP 1,475,726,379,594.66 so far since Obama took office.)

FISCAL YEAR DEBT CHANGE, Sep 30 prior year to Sep 30 named year:
(One "* " for each 40B$ reached)
FY1994 +0,281,261,026,873.94 ------------* * * * * * * WJC
FY1995 +0,281,232,990,696.07 ------------* * * * * * * WJC
FY1996 +0,250,828,038,426.34 ------------* * * * * * WJC
FY1997 +0,188,335,072,261.61 ------------* * * * WJC
FY1998 +0,113,046,997,500.28 ------------* * WJC
FY1999 +0,130,077,892,735.81 ------------* * * WJC
FY2000 +0,017,907,308,253.43 ------------WJC
FY2001 +0,133,285,202,313.20 ------------* * * C&B
01-WJC +0,053,598,528,417.78 ------------* WJC 31% of FY, 40% of FY-Debt
01-GWB +0,079,686,673,895.42 ------------* GWB 69% of FY, 60% of FY-Debt
FY2002 +0,420,772,553,397.10 ------------* * * * * * * * * * GWB
FY2003 +0,554,995,097,146.46 ------------* * * * * * * * * * * * * GWB
FY2004 +0,595,821,633,586.70 ------------* * * * * * * * * * * * * * GWB
FY2005 +0,553,656,965,393.18 ------------* * * * * * * * * * * * * GWB
FY2006 +0,574,264,237,491.73 ------------* * * * * * * * * * * * * * GWB
FY2007 +0,500,679,473,047.25 ------------* * * * * * * * * * * * GWB
FY2008 +1,017,071,524,649.92 ------------* * * * * * * * * * * * * * * * * * * * * * * * * GWB
FY2009 +1,885,104,106,599.30 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * B&O
09GWB +0,602,152,152,000.60 ------------* * * * * * * * * * * * * * * GWB 31% of FY, 32% of FY-Debt
09-BHO +1,282,951,954,598.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO 69% of FY, 68% of FY-Debt
FY2010 +0,192,774,424,996.00 ------------* * * * BHO
Endof10 +0,837,650,775,280.24 ------------* * * * * * * * * * * * * * * * * * * * Linear Projection

Below should be a chart showing actuals. Those are actual whats? My guess: those are actual never corrected Bush budget numbers. They don't include the war. They might not include anything that happened after the year began. That Clinton had two surplus budgets means it has to be something being pulled on us. Any ideas? This exaggeration to outrightly lying needs to stop!

** ACTUAL SIDE IS A LIE ** ** PROJECTED SIDE IS OK **
http://www.washingtonpost.com/wp-dyn/content/graphic/2009/03/21/GR2009032100104.html

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
12/03/2009 +002,787,837,042.67 ------------*********
12/04/2009 +000,210,551,232.36 ------------********
12/07/2009 -000,125,073,651.86 --- Mon
12/08/2009 +000,060,968,077.60 ------------*******
12/09/2009 +000,189,524,372.49 ------------********
12/10/2009 +012,264,233,958.36 ------------**********
12/11/2009 +000,041,027,768.14 ------------*******
12/14/2009 -012,123,818,214.95 - Mon
12/15/2009 +058,799,676,220.27 ------------**********
12/16/2009 +000,348,253,057.33 ------------********
12/17/2009 -036,492,539,788.22 -
12/18/2009 +000,710,260,980.35 ------------********
12/21/2009 -000,155,813,757.66 --- Mon
12/22/2009 +002,618,578,973.78 ------------*********
12/23/2009 +000,459,596,007.01 ------------********

29,593,262,277.67 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
http://www.usdebtclock.org/

(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=4197406&mesg_id=4197510

[Festivito]

57. Debt: 12/24/2009 12,101,272,618,959.09 (DOWN 1,330,809,548.65) (Thu)

(Debt seems to jump up then drop slowly maybe up a little and down a little for days--repeat. Good day all.)

= Held by the Public + Intragovernmental(FICA)
= 7,734,527,533,727.08 + 4,366,745,085,232.01
DOWN 1,979,240,244.32 + UP 648,430,695.67

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 308-Million person America.
If every American, man, woman and child puts in $3.24 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.73, ABOUT TEN BUCKS for a 1B$ 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 another American, so at the end of the workday of the report, there should be 308,288,478 people in America.
http://www.census.gov/population/www/popclockus.html ON 11/07/2009 08:19 -> 307,879,272
Currently, each of these Americans owe $39,253.08.
A family of three owes $117,759.24. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 days.
The average for the last 22 reports is 3,861,440,204.20.
The average for the last 30 days would be 2,831,722,816.41.

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$/day.
There were 174 reports in 253 days of Obama's part of FY2009 averaging 7.33B$ per report, 5.07B$/day so far.
There were 249 reports in 365 days of FY2009 averaging 7.57B$ per report, 5.16B$/day.
There were 59 reports in 85 days of FY2010 averaging 3.24B$ per report, 2.25B$/day.
Above line should be okay

PROJECTION:
There are 1,123 days remaining in this Obama 1st term.
By that time the debt could be between 13.6 and 17.9T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
12/24/2009 12,101,272,618,959.09 BHO (UP 1,474,395,570,046.01 so far since Obama took office.)

FISCAL YEAR DEBT CHANGE, Sep 30 prior year to Sep 30 named year:
(One "* " for each 40B$ reached)
FY1994 +0,281,261,026,873.94 ------------* * * * * * * WJC
FY1995 +0,281,232,990,696.07 ------------* * * * * * * WJC
FY1996 +0,250,828,038,426.34 ------------* * * * * * WJC
FY1997 +0,188,335,072,261.61 ------------* * * * WJC
FY1998 +0,113,046,997,500.28 ------------* * WJC
FY1999 +0,130,077,892,735.81 ------------* * * WJC
FY2000 +0,017,907,308,253.43 ------------WJC
FY2001 +0,133,285,202,313.20 ------------* * * C&B
01-WJC +0,053,598,528,417.78 ------------* WJC 31% of FY, 40% of FY-Debt
01-GWB +0,079,686,673,895.42 ------------* GWB 69% of FY, 60% of FY-Debt
FY2002 +0,420,772,553,397.10 ------------* * * * * * * * * * GWB
FY2003 +0,554,995,097,146.46 ------------* * * * * * * * * * * * * GWB
FY2004 +0,595,821,633,586.70 ------------* * * * * * * * * * * * * * GWB
FY2005 +0,553,656,965,393.18 ------------* * * * * * * * * * * * * GWB
FY2006 +0,574,264,237,491.73 ------------* * * * * * * * * * * * * * GWB
FY2007 +0,500,679,473,047.25 ------------* * * * * * * * * * * * GWB
FY2008 +1,017,071,524,649.92 ------------* * * * * * * * * * * * * * * * * * * * * * * * * GWB
FY2009 +1,885,104,106,599.30 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * B&O
09GWB +0,602,152,152,000.60 ------------* * * * * * * * * * * * * * * GWB 31% of FY, 32% of FY-Debt
09-BHO +1,282,951,954,598.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO 69% of FY, 68% of FY-Debt
FY2010 +0,191,443,615,447.30 ------------* * * * BHO
Endof10 +0,822,081,407,509.00 ------------* * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
12/04/2009 +000,210,551,232.36 ------------********
12/07/2009 -000,125,073,651.86 --- Mon
12/08/2009 +000,060,968,077.60 ------------*******
12/09/2009 +000,189,524,372.49 ------------********
12/10/2009 +012,264,233,958.36 ------------**********
12/11/2009 +000,041,027,768.14 ------------*******
12/14/2009 -012,123,818,214.95 - Mon
12/15/2009 +058,799,676,220.27 ------------**********
12/16/2009 +000,348,253,057.33 ------------********
12/17/2009 -036,492,539,788.22 -
12/18/2009 +000,710,260,980.35 ------------********
12/21/2009 -000,155,813,757.66 --- Mon
12/22/2009 +002,618,578,973.78 ------------*********
12/23/2009 +000,459,596,007.01 ------------********
12/24/2009 -001,979,240,244.32 --

24,826,184,990.68 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
http://www.usdebtclock.org/

(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=4201034&mesg_id=4201061

[UpInArms]

10. dollar watch

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

Last trade 77.584 Change -0.184 (-0.24%)

Oil May Trade Above $79, Metals Fail at Resistance on US Data

http://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2009-12-28-0751-Oil_May_Trade_Above__79_.html

Crude oil prices may test above $79/barrel while gold and silver may fail at key technical resistance as if the Dallas Federal Reserve’s manufacturing activity gauge adds 2% as expected in December.

Commodities – Energy
Oil Prices May Test Above $79 as US Data Boosts Demand Outlook

Crude Oil (WTI)       $78.28       +$0.23       +0.29%

Prices broke out of a rising channel that had guided prices higher from the swing bottom below $70 set earlier this month and the path looks clear for a rise to test above $79 at this point. The nudge toward resistance may come if the Dallas Federal Reserve’s manufacturing activity gauge adds 2% as expected in December, yielding the largest increase in two and a half years boosting recovery prospects for the world’s largest crude consumer.



Commodities – Metals
Gold, Silver May Fail at Resistance on US Manufacturing Data

Gold       $1110.53       +$5.08       +0.46%

Gold prices look to be testing resistance at the top of a falling channel that has guided spot rates lower for most of the current month, with a break higher exposing horizontal support-turned-resistance at $1141.78. Fundamentally, the metal retains a strong inverse correlation with the outlook Federal Reserve monetary policy (as expressed by the spread between Dec’2010 and Mar’2010 fed funds futures). This means that an uptick in December’s edition of the Dallas Fed’s manufacturing activity gauge (set to rise 2%, the most since June 2007) may prove to weigh on prices.

Silver       $17.55       +$0.54       +0.31%

Positioning is strikingly similar to gold, with prices testing resistance at the top of a falling channel established from early December. Also in line with its more expensive counterpart, a significant inverse correlation with the 2010 fed funds futures spread hints that resistance may hold as the Dallas Fed’s manufacturing activity metric crosses the wires.



...more...

Currencies May Turn Volatile as Markets Search for Drivers in Thin Holiday Trade

http://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/euro_open/2009-12-28-0623-Currencies_May_Turn_Volatile_as.html

Currency markets are exposed to knee-jerk volatility in thin holiday-week liquidity conditions with a close to empty European and US economic calendar leaving traders without a tangible near-term catalyst for price action.

Key Overnight Developments

• Japan’s Industrial Production Rises on Car Exports, Domestic Demand Weak
• UK House Prices Rose For Fifth Month on Falling Supply, Says Hometrack

Critical Levels



The Euro consolidated in a narrow 40-pip range below 1.44 while the British Pound yielded an effectively flat result after recovering from an initial -0.2% drop at the start of Asian trading just ahead of the opening bell in Europe. We remain short EURUSD at 1.4881 and short GBPUSD at 1.6648.

Asia Session Highlights



Preliminary estimates showed that Japan’s Industrial Production grew 2.6% from the previous month in November, a reading slightly higher than economists expected and the largest increase since May. Output declined -3.9% from a year before, the smallest drop in 14 months. Transport equipment led the metric higher, up 1.1% from the previous month with a 0.78% gain in passenger car, bus and truck production at the forefront. Autos are Japan’s primary export and today’s outcome likely owes to a rebound in overseas demand driven by ample global fiscal and monetary stimulus efforts. Indeed, exports gained 4.9% from the previous month in November, the most in over 13 years, with metrics tracking vehicle shipments to Asia and the US turning positive for the first time in at least six months.

Meanwhile, Japanese domestic demand remained lackluster as Labor Cash Earnings fell -2.8% from the previous year in November, the third consecutive month of deteriorating wages and the biggest drop since June, weighing on spending. Retail Trade shrank at an annual pace of -1.0%, marking the first time that the metric has not improved since February, while a gauge of large retailers’ sales dropped -9.6% to register the largest decline in nearly 12 years. It remains to be seen whether a sustainable rebound in overseas sales will encourage firms to re-hire workers and boost incomes, but for the time being Japanese companies seem content to do more with less. Indeed, labor market data released last week showed that the number of employed people declined at the fastest annual rate in four months in November.

...more...

[UpInArms]

11. Feds investigating Stanford ties to lawmakers-report

http://www.reuters.com/article/idUSN2714221420091227

* Says he hosted Republicans, Democrats on Caribbean trips

* Department of Justice declines to comment (Adds Justice Department declining comment)

MIAMI, Dec 27 (Reuters) - U.S. federal authorities are investigating millions of dollars contributed by fraud suspect Allen Stanford and his staff to U.S. lawmakers in the past decade, the Miami Herald reported on Sunday.

The newspaper said the Justice Department investigation aimed to determine whether the banker received special favors from politicians while he was operating his alleged $7 billion Ponzi scheme centered on fraudulent certificates of deposit issued by his offshore bank in Antigua and Barbuda.

The U.S. Department of Justice said it had no comment on the Herald report.

The newspaper said an e-mail sent to Stanford by Texas Republican Representative Pete Sessions on the day authorities announced fraud charges against the billionaire financier, as well as $2.3 million in contributions he made to Sessions and other U.S. lawmakers, were "part of the government's inquiry."

It said Stanford, who has pleaded not guilty and is awaiting a trial set for January 2011, also spent $5 million on lobbying since 2001. It said he successfully lobbied in 2001 to kill a bill that would have exposed the flow of millions into his secretive offshore bank on the Caribbean island of Antigua.

The following year he helped block legislation that would have led to more government scrutiny of his now disgraced Antigua bank, the Miami Herald said.

Stanford, 59, has been in custody since June 19, when he was indicted on 21 criminal charges related to his alleged fraud. His global banking and securities business was shut down in February when the U.S. Securities and Exchange Commission filed civil charges that he and others had committed fraud.

The Miami Herald said that on the day federal agents raided Stanford's offices in the United States, Feb. 17, the financier received an e-mail message from Sessions, the chairman of the National Republican Congressional Committee.

The newspaper said the message was found on Stanford's computer servers and reads: "I love you and believe in you.

"If you want my ear/voice -- e-mail," the Miami Herald quoted the message as saying, adding it was signed "Pete."

...more...

[UpInArms]

12. "I love you and believe in you" -it was signed "Pete"

how sweet!

:sarcasm:

[ozymandius]

17. Long distance relationships rarely work out.

Besides the phone sex thing getting stale after awhile - it was clearly a one dimensional relationship.

[ozymandius]

14. You beat me to it.

Good morning! :donut: :donut: :donut:

Dontcha just love the love Pete had for Stanford?

[UpInArms]

16. love to love ya - ba-bee!

[DemReadingDU]

29. More from Karl Denninger

12/28/09 Gee, Who WASN'T Bribed? Karl Denninger

Let's talk about what's going on here, because this is not limited to a handful of interests - it is in fact widespread and part and parcel of the corruption that has swept our nation.

The "revolving door" game - and the so-called "perks" of being a lawmaker, including the ability to travel to exotic (and expensive) places on the dole of others - has always been an issue.

In the last 20 years it has become completely out of control.
.
.
Now tell me how different this is from Henry Paulson showing up at the SEC's office to press for, and receive, a removal of leverage limits from the Investment Banks - an act that then allowed big Wall Street firms to package up trash loans into securities, shop ratings to get that coveted "AAA" and then sell them off to unsuspecting rubes - who in turn took huge losses in 2007 and 2008?

I argue there is no difference.

lots more...
http://market-ticker.denninger.net/archives/1795-Gee,-Who-WASNT-Bribed.html

[Roland99]

21. Was he robbing Paul to pay Peter?

[Demeter]

32. Please have mercy--It's only Monday

and that blueberry wine packed quite a punch.

[Roland99]

45. That's why I stick with eggnog and rum!

:)

[ozymandius]

13. Feds probe banker Allen Stanford's ties to Congress

...
Records show Stanford also doled out $5 million on lobbying since 2001, setting up his own Washington firm last year with expensive furnishings and artwork -- the money plundered from his customers' accounts.
.....

In 2001, he pressed successfully to kill a bill that would have exposed the flow of millions into his secretive offshore bank in Antigua.

While he was fighting reforms to financial secrecy and offshore banking laws, Stanford was hobnobbing with dozens of lawmakers.

Stanford hosted New York Congressman John Sweeney's wedding dinner at his five-star restaurant in Antigua in 2004 -- toasting the couple for photographers -- and staged a cocktail fundraiser for now-disgraced Ohio congressman Bob Ney at his bayfront Miami office.
.....

But when a bill was created to compel offshore bankers to reveal the sources of money flowing into their banks, Stanford jumped into the fight to kill it.

http://www.miamiherald.com/news/southflorida/story/1399470-p2.html

---

The story really heats up on page 2.

[UpInArms]

15. Bad bets: The condo meltdown in Las Vegas mirrors Miami's

http://www.miamiherald.com/457/story/1400245.html

LAS VEGAS -- With foreclosures soaring and home prices in the tank, Miami and Las Vegas often compete for the dubious distinction of being the nation's hardest hit condo market.

Just a few years ago the two cities shared a reputation as invincible boom towns. Now both real estate markets are climbing out of an abyss of stalled condo developments, spiraling foreclosures and stymied sales.

Trying to figure out which is the biggest real estate loser isn't so easy. But comparing the two markets puts into perspective just how unprecedented Miami's condo explosion was.

``They built less in Las Vegas than in Miami,'' but there are fewer potential buyers, said Marty Burger, president and chief executive of Artisan Real Estate Ventures in Las Vegas.

Vegas condo owners like Kathy Riggle, a retiree from Tucson, who bought a condo conversion sight unseen for $180,000 during the boom, have watched in disbelief as values have dropped by more than half.

``Will Rogers once said, `Buy land because they ain't making any more of it.' We got caught up in it like a lot of people,'' Riggle said.

Her unit, now valued at $49,000, is in foreclosure because she can no longer rent it for enough to cover the mortgage.

Las Vegas analysts and builders blame South Florida developers, as well as other out-of-market players, for helping whip up the condo mania in the nation's gambling mecca.

During the the boom, Miami development companies launched full-scale assaults on the Vegas market -- complete with cocktail parties (hosted by gorgeous models) and million-dollar sales centers.

...more...

[ozymandius]

26. One would logically think that that this dynamic would factor into CPI.

Her unit, now valued at $49,000, is in foreclosure because she can no longer rent it for enough to cover the mortgage.

OER, or Owners Equivalent Rent, is the largest factor in the Consumer Price Index. As housing prices fall, so does CPI. But so far I am not seeing it.

[UpInArms]

19. Who got money from Stanford?

http://www.mcclatchydc.com/homepage/v-print/story/81314.html

Rep. John Sweeney of New York -- Stanford hosted, toasted Rep. Sweeney and the lawmaker's new bride, Gaia.

Ex-Rep. Bob Ney of Ohio -- Stanford staged Miami fundraiser for Ohio lawmaker the year before his conviction for taking bribes from clients of lobbyist Jack Abramoff.

George W. Bush -- Stanford gave $100,000 to his inauguration committee

Democratic Senatorial Campaign Committee -- Stanford gave $500,000 to Dems Senatorial campaign committee in 2002 -- his largest ever contribution.

"Caribbean Caucus" -- Reps. Donald Payne (New Jersey), Max Sandlin (Texas), Phil Crane (Illinois) enjoyed luxury trips to Antigua and other islands, paid for by a nonprofit heavily funded by Stanford

Pete Sessions (Texas) -- On day of Stanford's arrest in $7 billion Ponzi scheme, Sessions messaged him: "I love you and believe in you. If you want my ear/voice -- email.''

[ozymandius]

24. That's just how the sheeple's bidness is done in Washington.

[ozymandius]

22. John Dugan (mentioned here before): Architect of “Too Big to Fail” Banks

“There were two pieces of legislation that facilitated our migration toward too big to fail… Interstate Banking and Branching Efficiency Act of 1994, which permitted banks to grow across state lines, and the Gramm-Leach-Bliley Act, which eliminated the separation of commercial and investment banking. Since 1990, the largest twenty institutions grew from controlling about 35% of industry assets to controlling 70% of assets today.”

-Kansas City Federal Reserve president Thomas Hoenig. in an August 6 speech before the Kansas Bankers Association.

There is a fascinating discussion of John Dugan, one of the earliest architects of the “too big to fail” concept, in the January 2010 issue of The Nation. Nothing in the article will surprise regular readers of this blog; however, the extent of the wrongheaded belief system and policy initiatives still has the power to shock.

Dugan’s main work came about in 1989, when Congress ordered the Treasury to conduct a study on FDIC deposit insurance. Dugan ballooned the project into a 750-page manifesto, titled Modernizing the Financial System: Recommendations for Safer, More Competitive Banks (1991).

The title is misleading: There were many policy ideas pushed in the tome, but in terms of the current economic collapse, there were three of significance:

• Allowing banks to expand into multiple states without incurring additional regulatory oversight;

• Allowing relatively safe commercial banks to merge with riskier investment banks and insurance companies (Repeal of Glass Steagall);

• Allowing commercial firms (General Electric, Sears) to purchase banks.

There is no small irony in that a hard core GOP ideologue wrote the blueprint for Democrat Bill Clinton’s deregulation. “It was the first real recipe for too big to fail” said banking scholar Arthur Wilmarth Jr., professor at George Washington University Law School.

more here...

http://www.ritholtz.com/blog/2009/12/john-dugan-architect-of-too-big-to-fail-banks/

---

Question is: why is this person still in the position of influencing policy?

[Tansy_Gold]

25. Answer is:

Because he's not hurting the people who have the power to MAKE policy.


FRSPs all around.



Tansy Gold, freezing this morning because she forgot to turn the heat on last night.

[Demeter]

33. Tansy, Get yourself a Snuggly Blanket Bag

get the one lined in silky fake fur. It's the answer to just about everything. I don't even ache in the morning!

[Tansy_Gold]

35. I move around too much.

If I were the type to sit in one place for hours at a time, I probably would. I hate being cold, and I love snuggling up in a comfy chair or corner of the couch with a good book or a "project."

Unfortunately, the coldest time of the day in the house is early morning, and that's when I'm up and about, taking the dogs out, finishing up overnight "work," etc. So no snugglies for me, sad to say.

Tansy Gold, busy rearranging cords, plugs, and outlets to install her new 1TB external hard drive. . .. :woohoo:

[Demeter]

36. The Type I Have Is More Like a Cloak With a Zipper Closing

It's quite ingenious. I can move around, change how closed up I am, etc. It's more like an indoor coat, but much less confining and very light. I'll have to go find the box and post the brand name.

[ozymandius]

27. Again from Ritholtz: Dumb Headline of the Day: “War on Wall Street”

I had to do a double-take when I saw this headline on the Bloomberg news service this morning:

War on Wall Street as Congress Sees Returning to Glass-Steagall

“A one-page proposal gaining traction in Congress could turn back the clock on Wall Street 10 years, forcing the breakup of banks, including Citigroup Inc. Lawmakers in both parties, seeking to prevent future financial crises while soothing public anger over bailouts and bonuses, are turning to an approach that’s both simple and transformative: re-imposing sections of the 1933 Glass-Steagall Act that separated commercial and investment banking.”

How exactly is this a “War on Wall Street?”

The 1933 Glass-Steagall Act was designed to prevent a Wall Street catastrophe from spilling over into the real economy. For 65 years, it did just that. And thanks to Gram & Co., it was repealed just in time for the crisis to erupt.

Nice work.

http://www.ritholtz.com/blog/2009/12/dumb-headline-of-the-day-war-on-wall-street/

more plus source link when you click through above...

and to add...how is this war in any way, shape or rhetorical fashion?

[DemReadingDU]

28. Ritholtz: Putting this law back on the books is prudent, and long overdue.

Hope the Congress follows thru

[Demeter]

34. When You Have the Unchecked Id of a Two-Year-Old

any opposition to your immediate wants is a war.

[tclambert]

51. Yes! Declare war on 'em! Let slip the Glass Seagulls of war!

Make those damn Too Big To Fail banks break themselves up. Split off the investment house from the insurance companies and the regular banks. Split em, bash 'em, crash 'em, smash 'em.

[Demeter]

30. Today's Cartoon--Isn't THAT the Truth!

I doubt you could find anyone who could use health care that would adopt that freak.

[tclambert]

52. Cap'n, the transporter malfunctioned!

Does anybody's medical insurance cover transporter accidents?

[Demeter]

38. Plan to Move Guantánamo Detainees Faces New Delay$$$$

http://www.nytimes.com/2009/12/23/us/politics/23gitmo.html?_r=2&ref=global-home

ebuffed this month by skeptical lawmakers when it sought finances to buy a prison in rural Illinois, the Obama administration is struggling to come up with the money to replace the Guantánamo Bay prison.

As a result, officials now believe that they are unlikely to close the prison at Guantánamo Bay, Cuba, and transfer its population of terrorism suspects until 2011 at the earliest — a far slower timeline for achieving one of President Obama’s signature national security policies than they had previously hinted.

While Mr. Obama has acknowledged that he would miss the Jan. 22 deadline for closing the prison that he set shortly after taking office, the administration appeared to take a major step forward last week when he directed subordinates to move “as expeditiously as possible” to acquire the Thomson Correctional Center, a nearly vacant maximum-security Illinois prison, and to retrofit it to receive Guantánamo detainees.

But in interviews this week, officials estimated that it could take 8 to 10 months to install new fencing, towers, cameras and other security upgrades before any transfers take place. Such construction cannot begin until the federal government buys the prison from the State of Illinois.

The federal Bureau of Prisons does not have enough money to pay Illinois for the center, which would cost about $150 million. Several weeks ago, the White House approached the House Appropriations Committee and floated the idea of adding about $200 million for the project to the military spending bill for the 2010 fiscal year, according to administration and Congressional officials.

But Democratic leaders refused to include the politically charged measure in the legislation. When lawmakers approved the bill on Dec. 19, it contained no financing for Thomson.

The administration will probably not have another opportunity until Congress takes up a supplemental appropriations bill for the Afghanistan war. Lawmakers are not likely to finish that bill until late March or April.

Moreover, the administration now says that the current focus for Thomson financing is the appropriations legislation for the 2011 fiscal year. Congress will not take that measure up until late 2010.

Frustrated by the difficulties in obtaining financing from Congress, administration officials had discussed invoking a little-known statute that would allow the president to declare a national emergency and then use military funds allocated for other construction projects to buy and retrofit the Illinois prison.

That statute, however, has never been used for a project quite like this one. Fearing that lawmakers would be angered by such a move and could respond by erasing the statute, the administration decided not to invoke it.

Matthew Waxman, who was assistant secretary of defense for detainee affairs in the Bush administration, said the Obama administration would need lawmakers’ support for its long-term post-Guantánamo plans. Invoking emergency powers to unilaterally buy Thomson, he said, would be “poking Congress in the eye in a way that would be very counterproductive.”

Still, it is not clear that Congress will be willing to approve money enabling the transfer of Guantánamo detainees to domestic soil — especially as the 2010 midterm election campaign heats up, with the likelihood that Republicans will pick up seats.

This year, Congress restricted the ability of the executive branch to transfer detainees into domestic prisons, a ban reiterated in the 2010 military appropriations bill...

[Demeter]

39. US home foreclosures top one million mark

http://www.wsws.org/articles/2009/dec2009/fore-d23.shtml

The number of US homes in foreclosure topped the one million mark for the first time ever, according to figures released this week by federal agencies. The continued deepening of the housing crisis is being driven by the relentless economic squeeze on working people, confronted with declining wages and persistent and growing mass unemployment.

http://www.wsws.org/images/2009dec/d23-hous-480

While millions are facing the loss of their jobs and their homes, corporate profits have reached their highest levels in five years.

The number of prime-rate mortgage borrowers in default doubled from a year earlier, according to figures released Monday by the Office of Thrift Supervision (OTS) and the Comptroller of the Currency (OCC). The portion of such “prime” mortgages in serious delinquency reached 3.6 percent in the third quarter, up 19 percent from three months before.

The report surveyed the 34 million home loans made by banks under the purview of the OTS and OCC, which amount to about 65 percent of all mortgages issued in the US. Given that the figures only covered this share of US mortgages, the real number of foreclosures is undoubtedly well over 1 million.

The total percentage of “nonperforming” mortgage loans climbed for the sixth straight quarter, reaching 13 percent of all mortgages in the survey. The percentage of mortgages that are “seriously delinquent” reached 6.2 percent, while 3.2 percent of all mortgages were in foreclosure.

Extrapolating from the survey of all US mortgages, 6.8 million of US households were behind on their mortgage payments in the third quarter. These figures do not count those families who have already lost their homes. A loss rate of 3.2 percent on the $6 trillion in loans measured by the report would represent write-downs of some $192 billion.

Meanwhile, the study found that despite mortgage modification programs promoted by the US government, homeowners whose banks modified their mortgage terms continued to default at extremely high rates. Nearly half of all participants in such programs still went on to default on their mortgages.

This is partly due to the fact that the overwhelming majority of such modifications have been temporary. The Obama administration reported this month that while 700,000 three-month trial modifications were issued as part of its “Home Affordable Modification Program,” only 31,382 had been made permanent as of November.

The report followed findings by First American CoreLogic, a real estate information firm, that the number of foreclosed homes about to go on the market has reached 1.7 million. The backlog of such homes has grown by 55 percent in the year to September, according to a report issued last week by the California-based company.

The flood of foreclosed homes has pushed down home prices, with the average selling price of a previously occupied home falling to $172,600 last month, a 4.3 percent decrease from a year ago, according to the CoreLogic report. In separate figures, the Federal Housing Finance Agency said its index of housing prices was down 10.8 percent from its peak in April 2007.

Plummeting home prices, together with extensive government tax incentives, helped push up the number of existing home sales by 7.4 percent last month, to a three-year high, according to a survey released Tuesday by the National Association of Realtors. Lawrence Yun, the vessociation’s chief economist, said that the jump was due to “a rush of first-time buyers” who wanted to take advantage of the Obama administration’s tax credit before it was set to expire last month.

On November 7, the White House extended the program that provides new homebuyers with up to $8,000 in tax credits, to April of next year. Economists warn that home sales will likely plunge following the program's expiration.

Meanwhile, the employment situation, which has become the principal cause of the housing crisis, remains dire. The Washington Post reported Tuesday that in 25 states unemployment benefit programs have already run out of money due to record numbers of people losing their jobs. The state’s unemployment insurance programs have had to borrow $24 billion from the federal government to continue functioning.

By 2011, according to government figures, 40 states will have exhausted their benefit pools and will need to borrow an additional $90 billion from the federal government to keep afloat.

The Obama administration has explicitly denied states’ requests for further aid, forcing them to consider cuts to benefit payments that are already too low to cover essential needs. The shortfall has brought calls for cuts to unemployment benefits, with a state panel in Kentucky recommending last week that the state reduce its benefits for the jobless by about 9 percent.

Virginia has borrowed $89 million from the US government to cover benefit payments, and Maryland owes the government $85 million. South Carolina, which has a 12 percent unemployment rate, owes the federal government $649 million for unemployment payments.

Meanwhile, the rate of US economic growth in the third quarter was once again revised downward this week, to 2.2 percent. The figure was originally reported as 3.5 percent by the US Commerce Department, but was lowered to 2.8 percent last month. The US economy shrank at a rate of 0.7 percent in the second quarter.

Corporations, however, are reaping the benefits of the so-called recovery. In its latest report, the Commerce Department revised third-quarter corporate profits upward, from 10.6 percent to 10.8 percent, representing the largest gain in over five years.

Far from signaling any amelioration of the economic conditions confronting the broad mass of working people, the rise in profits has been driven by reduced labor costs stemming from layoffs and increased productivity. During the last quarter, labor costs fell at a rate of 2.5 percent, the steepest 12-month decline in seven years.

This decline is a function of stagnant and declining wages, along with the threat of unemployment being used to intensify the exploitation of those still on the job. Productivity has risen by 8.1 percent, the highest rate in six years.

[Demeter]

40. Brace Yourself For a Hard Landing By Mike Whitney

http://www.informationclearinghouse.info/article24247.htm

Ben Bernanke has been a bigger disaster than Hurricane Katrina. But the senate is about to re-up him for another four-year term. What are they thinking? Bernanke helped Greenspan inflate the biggest speculative bubble of all time, and still maintains that he never saw it growing. Right. How can retail housing leap from $12 trillion to $21 trillion in 7 years (1999 to 2006) without popping up on the Fed's radar? It's not possible. Bernanke is just fudging the facts to save his skin.

Bernanke was also staunch supporter of the low interest rate policy which led to the crash. Greenspan never believed that it was the Fed's job to deal with credit bubbles. "The free market is self-correcting", he thought. He was the nation's chief regulator, but he was opposed to the idea of government regulation. Go figure? Here' a quote from Greenspan in 2002:

“I do have an ideology. My judgment is that free, competitive markets are by far the unrivaled way to organize economies. We have tried regulation, none meaningfully worked.”

What rubbish. Listen to Greenspan try to dignify class warfare as a matter of principle.

Bernanke is no different than Greenspan; they're two peas in a pod. Everyone could see what the Fed-duo was up to from the get-go. They were working hand-in-hand with their crooked friends on Wall Street to milk the bubble for all it was worth before the whole thing blew sky-high. It was one ginormous skimming operation orchestrated by the Federal Reserve.

Now Bernanke is carrying on where his former boss left off, using all the tools at his disposal to offset the atrophy that's endemic to mature capitalist economies. "Stagnation", that the real enemy, which is why Bernanke supports this new galaxy of oddball debt-instruments and bizarre-sounding derivatives; because it creates a world where surplus capital can generate windfall profits despite chronic overcapacity. It's Financial Nirvana for the parasite class; the relentless transfer of wealth from workers to speculators via paper assets. Marx figured it out. And, now, so has Bernanke.

Bernanke is just following Greenspan's basic blueprint. It's nothing new. Unregulated derivatives trading is just one of the many scams he's thrown his weight behind. The list goes on and on; one swindle after another.

Just look what happened when Lehman Bros blew up. Just weeks earlier, Bernanke and Co. had worked out a deal with JP Morgan to buy Bear Stearns with the proviso that the government would guarantee $40 billion in Bear's toxic assets. Fair enough. The whole transaction went by without a hitch. Then Lehman starts teetering, and Bernanke and Treasury Secretary Henry Paulson decide to do a complete policy-flip and let Lehman default. Their reversal stunned the markets and triggered a frenzied run on the money markets that nearly collapsed the global financial system. Why?

It was because Bernanke knew that the big banks were buried under a mountain of bad assets and needed emergency help from Congress. The faux-Lehman crisis was cooked up to extort the $700 billion from taxpayers via the TARP fund. Bernanke and Paulson pulled off the biggest heist in history and there's never even been an investigation. It was blackmail, pure and simple.

Bernanke was in the wheelhouse when the subprime bubble blew and carved $13 trillion from aggregate household wealth. Consumers are now so deeply underwater that personal credit is shrinking for the first time in 50 years while unemployment is hovering at 10 percent. If Bernanke isn't responsible, than who is?

Take a look at Bernanke's so-called lending facilities. They are all designed with one object in mind, to support financial markets at the expense of workers. It's just more corporate welfare. The media praises the Troubled asset-backed security lending facility (TALF) as a way to restart the wholesale credit system (securitzation). But is it? Under the TALF, the government provides up to 92 percent of the funding for investors willing to buy assets backed by auto, credit card, or student loans. In other words, the Fed is putting the taxpayer on the hook for another trillion dollars (without congressional authorization or oversight) to produce more of the same high-risk junk which investors still refuse to purchase two years after the two Bear Stearns hedge funds defaulted in July 2007. Fortunately, the TALF turned out to be another Fed boondoggle that fizzled on the launchpad.

Bernanke's latest stealth-ripoff is called quantitative easing (QE) which is being touted as a way to increase consumer lending by building up banks reserves. In fact, it doesn't do that at all and Bernanke knows it. As an "expert" on the Great Depression, he knows that stuffing the banks with reserves was tried in the 1930s, but it accomplished nothing. Nor will it today. Here's how economist James Galbraith explains it:

"The New Deal rebuilt America physically, providing a foundation from which the mobilization of World War II could be launched. But it also saved the country politically and morally, providing jobs, hope, and confidence that in the end democracy was worth preserving....

“What did not recover, under Roosevelt, was the private banking system. Borrowing and lending—mortgages and home construction—contributed far less to the growth of output in the 1930s and ’40s than they had in the 1920s or would come to do after the war. If they had savings at all, people stayed in Treasuries, and despite huge deficits interest rates for federal debt remained near zero. The liquidity trap wasn’t overcome until the war ended..... the relaunching of private finance took twenty years, and the war besides.

“A brief reflection on this history and present circumstances drives a plain conclusion: the full restoration of private credit will take a long time. It will follow, not precede, the restoration of sound private household finances. There is no way the project of resurrecting the economy by stuffing the banks with cash will work. Effective policy can only work the other way around." ("No Return to Normal:Why the economic crisis, and its solution, are bigger than you think" James K. Galbraith, Washington Monthly)

And, there's more proof that Bernanke knows that quantitative easing is a hoax, too. Here's a quote from the late Paul Samuelson's magnum opus "Foundations of Economic Analysis":


"Today few economists regard Federal Reserve monetary policy as a panacea for controlling the business cycle. Purely monetary factors are considered to be as much symptoms as causes, albeit symptoms with aggravating effects that should not be completely neglected.

By increasing the volume of their government securities and loans and by lowering Member Bank legal reserve requirements, the Reserve Banks can encourage an increase in the supply of money and bank deposits. They can encourage but, without taking drastic action, they cannot compel. For in the middle of a deep depression just when we want Reserve policy to be most effective, the Member Banks are likely to be timid about buying new investments or making loans. If the Reserve authorities buy government bonds in the open market and thereby swell bank reserves, the banks will not put these funds to work but will simply hold reserves....

In terms of the quantity theory of money, we may say that the velocity of circulation of money does not remain constant. “You can lead a horse to water, but you can’t make him drink.” You can force money on the system in exchange for government bonds, its close money substitute; but you can’t make the money circulate against new goods and new jobs. You can get some interest rates down, but not all to the same degree. You can tempt businessmen with cheap rates of borrowing, but you can’t make them borrow and spend on new investment goods." (Paul Samuelson, "Foundations of Economic Analysis" Harvard University Press, 1947)

Bernanke was bread-and-buttered on Samuelson. He knows QE is a joke. He's just creating a diversion so he can shovel more money into insolvent banks, pump-up the stock markets, and recycle Treasurys. Otherwise why would Obama's Chief Economic Advisor, Lawrence Summers say this:

"In the current circumstances the case for fiscal stimulus... is stronger than ever before in my professional lifetime. Unemployment is almost certain to increase -- probably to the highest levels in a generation. Monetary policy has little scope to stimulate the economy given how low interest rates already are and the problems in the financial system. Global experience with economic downturns caused by financial distress suggests that while they are of uncertain depth, they are almost always of long duration." ("A Bailout Is Just a Start", Lawrence Summers, Washington Post)

QE is monetary policy writ large and--by Summers own admission--it won't work. It won't reduce unemployment or spark a credit expansion. That's why total consumer spending is falling, retail sales are flat, and wages are beginning to tank. Everywhere businesses are trimming hours and cutting salaries. Bernanke's $1 trillion in excess bank reserves has had no material effect on lending, credit expansion or jobs. It's been a dead loss. Here's Damian Paletta of the Wall Street Journal:

"U.S. lenders saw loans fall by the largest amount since the government began tracking such data, suggesting that nervousness among banks continues to hamper economic recovery.

Total loan balances fell by $210.4 billion, or 3%, in the third quarter, the biggest decline since data collection began in 1984, according to a report released Tuesday by the Federal Deposit Insurance Corp. The FDIC also said its fund to backstop deposits fell into negative territory for just the second time in its history, pushed down by a wave of bank failures.

The decline in total loans showed how banks remain reluctant to lend, despite the hundreds of billions of dollars the government has spent to prop up ailing banks and jump-start lending. The issue has taken on greater urgency with the U.S. unemployment rate hitting 10.2% in October, even as the economy appears to be stabilizing.

The total of commercial and industrial loans, a category that includes business loans, fell to $1.28 trillion at the end of September, from $1.36 trillion at the end of June. The outstanding total of construction loans, credit cards and mortgages also fell. ("Lending Declines as Bank Jitters Persist" Damian Paletta, Wall Street Journal)

Bernanke, Summers, Geithner and Obama have all misrepresented quantitative easing (QE) so they can improve the liquidity position of the banks without the public knowing what's going on. The fact is, the banks are not "capital constrained" by lack of reserves. Therefore, extra reserves won't lead to increased lending. Here is an excerpt from Billy Blog which clarifies how the banking system really works and how that relates to QE:

"Does quantitative easing work? The mainstream belief is that quantitative easing will stimulate the economy sufficiently to put a brake on the downward spiral of lost production and the increasing unemployment.

It is based on the erroneous belief that the banks need reserves before they can lend and that quantitative easing provides those reserves. That is a major misrepresentation of the way the banking system actually operates. But the mainstream position asserts (wrongly) that banks only lend if they have prior reserves. The illusion is that a bank is an institution that accepts deposits to build up reserves and then on-lends them at a margin to make money. The conceptualization suggests that if it doesn’t have adequate reserves then it cannot lend. So the presupposition is that by adding to bank reserves, quantitative easing will help lending.

But this is a completely incorrect depiction of how banks operate. Bank lending is not “reserve constrained”. Banks lend to any credit worthy customer they can find and then worry about their reserve positions afterwards. If they are short of reserves (their reserve accounts have to be in positive balance each day and in some countries central banks require certain ratios to be maintained) then they borrow from each other in the interbank market or, ultimately, they will borrow from the central bank through the so-called discount window. They are reluctant to use the latter facility because it carries a penalty (higher interest cost).

The point is that building bank reserves will not increase the bank’s capacity to lend. Loans create deposits which generate reserves." (Billy Blog, Bill Mitchell)


So, if bank lending is not constrained by lack of reserves, then what does QE actually do?

Not much, apparently. All quantitative easing does is exchange one type of financial asset (long-term bonds) with another (reserve balances). "The net financial assets in the private sector are in fact unchanged although the portfolio composition of those assets is altered (maturity substitution) which changes yields and returns." (Bill Mitchell)

The net result of Bernanke's meddling is just this: Quantitative easing and the lending facilities have kept the price of financial assets artificially high, which has minimized financial sector deleveraging. (Financial sector debt is currently $16.4 trillion, nearly the same as it was a year ago. $16.3 trillion) In contrast, households have lost $13 trillion which has thrust the middle class into a severe downturn. Bernanke's policies have made a bad situation even worse.

TIGHTENING THE NOOSE

The Fed is engaged in various strategies to recapitalize the banking system. At the same time, Bernanke, Summers, Geithner, and Obama have stated repeatedly, that they're committed to slashing the long-term deficits. This means that they plan to reduce liquidity and push the economy back into recession so they can launch an attack on Medicaid, Medicare, and Social Security. Last Thursday, Bernanke announced that he will begin to tighten the noose as early as March 31 2010, when the Fed ends its $1.65 trillion purchases of agency debt, mortgage-backed securities, and US Treasurys. That's why stock market volatility has picked up since the Fed released its December 16 statement. Here's a clip:

"In light of ongoing improvements in the functioning of financial markets, the Committee and the Board of Governors anticipate that most of the Federal Reserve’s special liquidity facilities will expire on February 1, 2010,... These facilities include the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, the Commercial Paper Funding Facility, the Primary Dealer Credit Facility, and the Term Securities Lending Facility. The Federal Reserve will also be working with its central bank counterparties to close its temporary liquidity swap arrangements by February 1. The Federal Reserve expects that amounts provided under the Term Auction Facility will continue to be scaled back in early 2010. The anticipated expiration dates for the Term Asset-Backed Securities Loan Facility remain set at June 30, 2010, for loans backed by new-issue commercial mortgage-backed securities and March 31, 2010, for loans backed by all other types of collateral."

By April 1, 2010 the mortgage monetization program will be over; long-term interest rates will rise and housing prices will fall. When the Fed withdraws its support, liquidity will drain from the system, stocks will drop, and the economy will slide back into recession. Obama's second blast of fiscal stimulus--which is a mere $200 billion dollars---won't make a lick of difference.

The Obama administration and the Fed are on the same page. There will be no lifeline for the unemployed or the states. Those days are over. Now it's on to "starve the beast" and crush the middle class. Maestro Greenspan summed up the Fed's approach in a recent appearance on Meet the Press when he opined,

"I think the Fed has done an extraordinary job and it's done a huge amount (to bolster employment). There's just so much monetary policy and the central bank can do. And I think they've gone to their limits, at this particular stage."

Brace yourself for a hard landing.

[DemReadingDU]

41. Tanker Glut Signals 25% Drop on 26-Mile Line of Ships

12/28/09 Tanker Glut Signals 25% Drop on 26-Mile Line of Ships

A 26-mile-long line of idled oil tankers, enough to blockade the English Channel, may signal a 25 percent slump in freight rates next year.

The ships will unload 26 percent of the crude and oil products they are storing in six months, adding to vessel supply and pushing rates for supertankers down to an average of $30,000 a day next year, compared with $40,212 now, according to the median estimate in a Bloomberg News survey of 15 analysts, traders and shipbrokers. That’s below what Frontline Ltd., the biggest operator of the ships, says it needs to break even.

Traders booked a record number of ships for storage this year, seeking to profit from longer-dated energy futures trading at a premium to contracts for immediate delivery, according to SSY Consultancy & Research Ltd., a unit of the world’s second- largest shipbroker. Ships taken out of that trade would return to compete for cargoes just as deliveries from shipyards’ largest-ever order book swell the global fleet.

“The tanker market has been defying gravity,” said Martin Stopford, a London-based director at Clarkson Plc, the world’s largest shipbroker. Stopford has covered shipping since 1971.

More than half of the ships are in European waters, with the rest spread out across Asia, the U.S. and West Africa. Lined up end to end, they would stretch for about 26 miles.

more...
http://www.bloomberg.com/apps/news?pid=20601087&sid=abS1HzLIvy_k&pos=7

[Demeter]

46. Makes a Nice, Obvious target for Terrorists

or military adventures.

[Demeter]

42. They're All Against Jobs By Sen. Fritz Hollings

http://www.huffingtonpost.com/sen-ernest-frederick-hollings/theyre-all-against-jobs_b_397405.html

December 21 2009 "Huffington Post" -- Who is against jobs in the United States? The big banks, Wall Street, the Council on Foreign Relations, the Business Roundtable, the United States Chamber of Commerce, the National Retail Federation, Corporate America, the President of the United States, Congress of the United States. Everyone is crying for jobs, but no one seems to understand why there aren't any. And the reason for those opposing jobs is money.

Beginning in 1973, big banks made most of their profit outside of the United States. Industries off-shoring, investing, banks financing the investments, transfer fees, fees and interest on the loans made for bigger profits. Long since, the big banks under the leadership of David Rockefeller have led the way to off-shore and make a bigger profit. Goldman Sachs, AIG, Citicorp and Wall Street, conspiring for a bailout and now using it for bonuses, make more money from the off-shored operations.

The Council on Foreign Relations ought to be renamed the Council on Making Money. A recent PEW poll reported fully 85% of Americans said that protecting United States jobs should be a top foreign policy priority. But only 21% of the Council on Foreign Relations agrees. Financial interests organized the Business Roundtable to continue off-shore investment and profit. The local Chamber is for Main Street America, but Tom Donahue and the United States Chamber have sold out to the financial interests and oppose jobs and producing in the United States. Thirty years ago, hundreds of thousands of Arrow shirts produced in China were a best seller in the United States. But at Christmastime, the Chinese supply ran short and the retail stores had to order the same shirt from New Jersey. They made 20% less profit on the New Jersey shirt. Retailers are all for profit from imports and against domestic production and jobs in America.

Corporate America would fight any initiative by the President, the Congress, or the government to create jobs in the United States. That is, production that faces competition offshore. In globalization, U. S. production can't make a profit, can't survive. Its competition will off-shore the same article for a lesser price, putting you out of business. Moreover, Corporate America doesn't have to bother with labor in China. The China government controls labor and you don't have to worry about a work stoppage or minimum wage. All they have is a maximum wage.

And Corporate America doesn't have to worry with clean air and clean water or the environment in China. Nor does it have to worry with OSHA and all of its safety rules. Many times the factory building is furnished and you don't have to worry with capital costs. If you make a profit, you can just reinvest it in an additional operation and not have to pay any U. S. income tax. If the operation fails, walk away with no legacy costs. Corporate America bitterly opposes its government protecting and strengthening the U. S. economy because producing again in America will put the executives back to work. They can send a Jaycee to China to watch the quality control daily and sit on the 32nd floor on Sixth Avenue with the internet, keeping check, and, leaving early for a massage and drinks. With production in China they don't have to work.

As Commander-in-Chief, the President dithered for months over the number of troops. But he can't equip the troops except for the favor of a foreign country. The War Production Act of 1950 requires the President to make sure that we can produce in- country those articles necessary for our national defense. Enforcing this law would limit the campaign contributions. Under Section 201 of the trade laws, the President is supposed to take action, like impose tariffs or quotas, when a certain production is endangered. Not only endangered, our automobile production has been bankrupted. But all the President does is give Detroit bailout welfare. The President doesn't want to limit the campaign contributions.

The same with Congress. Senator Byron Dorgan of North Dakota long ago tried to allocate the tax incentive for foreign jobs and production to domestic jobs and production. The Business Roundtable and the U. S. Chamber fought it like a tiger and killed it.

As the President said in his West Point talk, there is fierce competition in international trade and globalization. All countries move to protect and build their economies while the United States goes out of business. The one advantage that the U.S. has is its richest market in the world. It is fast becoming the poorest market and the U.S. is losing any clout to maintain a strong economy.

The economy is in the hands of Summers, Bernanke and Geithner. Campaign contributions are in the hands of David Axelrod and Rahm Emanuel. The poor President is smart, diligent and working his head off campaigning. But he is inexperienced and not governing, and the Congress is in a Mexican standoff over an archaic filibuster rule that reveres democracy by the minority.

Of course, the media, which knows this and keeps it top secret, is owned by big business.

If I don't meet you in the breadline, my children will.

Merry Christmas!

Fritz Hollings is a former South Carolina Senator.

[Tansy_Gold]

47. DUH! n/t

[Demeter]

48. Pounds Foolish, Though

They really think they are Masters of the Universe--creating a brainless, preprogrammed population.

I think they will be unpleasantly surprised. Between the ecological disasters they are unleashing and the popular pain they are inflicting, they will be crushed. There is no other option but death, and people really don't want to die, in general. But even before the end of ecological survival, there is the economics of our present day. If their intentionally created economic catastrophe doesn't take all their power in the next 5 years, I will be very surprised and disappointed.

And even with all that brainwashing, there's still a well of historical knowledge in this country--rather like the Book People in Farenheit 451, which is a repository for truth and hard-won experience.

Wouldn't it be nice if we didn't have to go through all that--if a little intellectual honesty and wisdom could be applied to our present situation? That is what I expected of Obama. That is why I am disappointed in him. He is a "miserable failure" to himself, as much as W is.

[Demeter]

43. Moody's Warns U.S. Could Lose Triple-A Rating

http://www.foxbusiness.com/story/markets/economy/moodys-warns-face-downgrade-long-term/

Credit rating agency Moody's (MCO) said Tuesday (Dec. 8) that the United States, along with 16 other countries, could lose their Triple-A credit rating if fiscal deficits and heavy debts are not effectively managed.

While Moody's analysts emphasized that the United States' Aaa rating is not under immediate threat, it did say the rating could be downgraded in 2013 if the fiscal position does not improve.

"Aaa governments with stretched balance sheets will find themselves under pressure to announce credible fiscal plans and -- if markets start losing patience -- to start implementing them," said Pierre Cailleteau, managing director of Moody's Sovereign Risk Group, in a statement.

The Triple-A credit rating of the United States is both a point of pride and financial importance. If the U.S. were to lose its credit rating, even by one notch, it would significantly increase the government's cost of borrowing.

Moody's said that the biggest issues for the U.S. and other Aaa-rated countries will be the ability to have sustained economic growth coming out of this recession while also reducing fiscal deficits. The U.S recorded a record $1.42 trillion annual deficit for 2009, which raised the total amount of debt held as a percentage of the nation's GDP to 53.8%, according to the Congressional Budget Office.

The U.S.'s deficit as a percentage of GDP is expected to rise to 67% by 2018, the CBO said.

According to Moody's, the U.S. and other major Aaa-rated countries are not at risk and retain the "characteristics necessary for a Aaa rating," but have "lost altitude" in the Aaa space.

Austan Goolsbee, a member of the President’s Council of Economic Advisers, disputed Moody's report, saying that "it’s rather obvious that the U.S. government is not in danger of default."

"The deficit in the short run is big because we confront the worst economic crisis since 1929," he said. "In the medium run, the fiscal situation is dramatically better and we need to have fiscal responsibility, but the argument that we’re going to be a higher risk of default I find close to absurd.”

[MilesColtrane]

54. If the deficit continues to balloon they'll have to change Treasury bond ratings from Aaa...

to Ass.

Maybe Congress will even have to consider taxing the uberlords of society to help bring the budget into balance.



...naaaaah

[ozymandius]

55. We have been warned.

The underlying assumption that the current world monetary system is built upon is that America will always over-consume and the world will always accept our debt at face value. It's a warped and unhealthy relationship, but its worked (sort of) for several decades. That's why it was notable when a Chinese central banker spoke up last week.

"The United States cannot force foreign governments to increase their holdings of Treasuries," Zhu said, according to an audio recording of his remarks. "Double the holdings? It is definitely impossible."

.....

It turns out that the problem isn't foreigner's willingness to lend to us.
.
.
.
The problem is that the American middle class is broke and unable to continue to over-consume.

As the world watched America go on a borrowing binge unprecedented in the post WWII era, their first response was to roll their long-term dollar assets into short-term assets as they expired. This reduces risk for the lender, plus reduces rates for the borrower.

However, it causes a potential problem for the borrower - America - because it requires an increasingly large amount of debt that must be rolled over every few months. If, for whatever reason, there is an unexpected, short-term financial crunch, then it can quickly become a crisis.

You have to get the money from somewhere else. For a couple of months we can issue our debt in short-term bills to match our foreign creditor's desire to reduce their risk. This will only mask the problem, and in fact, its already run out.

http://www.dailykos.com/story/2009/12/28/819863/-We-have-been-warned

---

I offer this up for your dissection for this posting has many well-aggregated graphs, reflecting economic data over recent decades. There are also many points of American consumptive habits over the past nine years. In sum: the crisis whirling around America's inability to fund its buying habits has already arrived. We just have not heard the announcement loudly and clearly. The Fed with sycophantic Treasury assistance has allowed our currency to shoulder the burden from its own momentum as fiat trading currency while the sale of T-notes slumps. But we are beginning to see the effect of quantitative easing to soften.

[Dr.Phool]

49. Good Morning, Vietnam!

It sure feels like a war zone around here.

I hope everyone had a happy holiday. I popped into a few groups and threads that I shouldn't have over the week-end.

Did they have a holiday furlough at the funny farm? There seems to be a lot of people seriously off their meds, with too much time on their hands.

I'm glad it's Monday and we have our SMW back.

:grouphug:

[ozymandius]

50. Deleted Message -- Name Removed

I saw quite a bit of that over the long weekend. It made me wonder why some hoary, stanky troll brigade decided to swing this way. I expect we will see a bit more of that stuff until life returns to a normal routine next week.

Good to see you, Dr. Phool. :hi:

[Tansy_Gold]

53. they're not always tombstoned, though

It could be a regular DUer who posted something they weren't supposed to and the post got pulled. It still shows up as a TS, whether it's a long sub-thread that gets deleted or just one post that some mod finds offensive.

Thing is, as our good doctor can attest, it's flame war central out there. The "sneerleaders" on one side and the "obama haters" on the other. ANY criticism of the administration or anyone in it is greeted with horrible epithets and accusations. It's quite ugly.

I too am glad to be back in safe, welcoming confines of SMW.



Tansy Gold, who prefers to deal with reality rather than deny it

[ozymandius]

56. 3 Fraud Probes Target Goldman, AIG: Is It "The" Story of 2010?

It's nice to see so many finance scandal stories making the rec'd list at DailyKos. - ozymandius

by Bob Swern at DailyKos:

It does not take much reading between the lines of recent news stories--although, technically, this is still just speculation--to come to a yet-to-be-confirmed conclusion that many executives from numerous Wall Street firms, including Goldman Sachs' past and present CEOs Hank Paulson and Lloyd Blankfein, respectively, may be in the cross-hairs of multiple fraud investigations by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), and Congress. (See Gretchen Morgenson's NY Times links, further down the page.)
Let me lay it all out for you...day-by-day over the past week...

Then there's this little gem:

Treasury Cover-Up of Goldman's Role in AIG Crisis?
Huffington Post
Janet Tavakoli
President, Tavakoli Structured Finance, Inc.
Posted: December 22, 2009 07:20 AM
In November 2009, I wrote in the Huffington Post that Goldman Sachs Group nearly bankrupted AIG. In December, the Wall Street Journal explained to the general public that Goldman fueled AIG's gambling and played a much bigger role in the mortgage bets that nearly felled American Insurance Group (AIG) than the Treasury, the Fed, or Goldman itself publicly disclosed.

The TARP Inspector General's November 17 report missed the most damaging facts. Intentionally or otherwise, it was evasive action or just plain whitewash. The report failed to clarify Goldman's role in AIG's near collapse, and that of all the settlement deals, the U.S. taxpayers' was by far the worst.

Goldman originated or bought protection from AIG on about $33 billion of the problematic $80 billion of U.S. mortgage assets that AIG "insured" with credit derivatives, about twice as much as the next two largest banks involved.

Goldman acted as middle-man on $14 billion of that amount, after it took the risk of mortgage assets originated by other banks and insured all of it with AIG. Goldman may wish to claim it "was only following orders," but since Goldman also originated many of the mortgage assets ultimately protected by AIG, it should have been well aware of the risk posed to itself and to AIG. The risk was then Goldman's. If AIG failed, Goldman Sachs would have had to make good on those trades...

The piece is really good. However possible - let's keep stirring the pot past the new year to prevent this from getting sucked down the memory hole. - ozy