STOCK MARKET WATCH, Tuesday January 12

[ozymandius]

Source: du

STOCK MARKET WATCH, Tuesday January 12, 2010

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 January 11, 2010

Dow... 10,663.99 +45.80 (+0.43%)
Nasdaq... 2,312.41 -4.76 (-0.21%)
S&P 500... 1,146.98 +2.00 (+0.17%)
Gold future... 1,152 +12.80 (+1.12%)
10-Yr Bond... 3.82 -0.02 (-0.44%)
30-Year Bond 4.73 +0.02 (+0.36%)

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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

[Demeter]

1. Tag! First Rec!

[ozymandius]

3. Good morning, Demeter.

:donut: :donut: :donut:
My, my. You're up early.

[Demeter]

19. No Earlier than the Valiant Ozy!

Insomnia, the gift that keeps on giving....

[ozymandius]

21. I'm sorry.

Insomnia sucks. I've had a couple of rough nights too. Once with a sick cat. Then last night with a sick child.

[UpInArms]

45. oh, I'm sorry -

hope that everyone feels better soon

:grouphug:

[ozymandius]

2. Market Observation

Clear Thought in Confusing Times
BY ROB KIRBY

How often have you heard a talking-head or pundit from the print media try to “explain” how the U.S. led global economy faltered the way it has? We’ve been dazzled and fed explanations regarding root-cause, ranging from sub-prime mortgages to credit-default swaps to lack of regulatory oversight to good-ole-fashioned greed.

While countless pages and untold face-time has been devoted to the aforementioned topics in the main stream financial press, precious little has been articulated in the mainstream that irredeemable fiat money is what lies at the heart of our economic woes.

This past weekend, Dr. Edwin Vieira, Jr. was interviewed by the formidable Swiss publication, The Daily Bell. In this interview, Dr. Vieira was asked what were the two most pressing domestic problems facing America? Vieira replied,

“The foremost problem… now plaguing this country-is the inherent and ineradicable instability of the present monetary and banking systems centered around the Federal Reserve System.”

Ladies and gentlemen, our present monetary and banking system centered around the Federal Reserve System, summed up, “IS” our current system of irredeemable (un-backed) fiat money. Sadly, there are few who realize or could identify this fact.

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

[ozymandius]

4. Today's Report

08:30 Trade Balance Nov
Briefing.com -$31.0B
Consensus -$34.5B
Prior -$32.9B

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

[ozymandius]

5. Oil falls below $82 on warmer weather expectations

SINGAPORE – Oil prices fell below $82 a barrel Tuesday in Asia on expectations a frigid cold spell in parts of the U.S., Europe and Asia will ease in coming weeks, weakening crude demand. ...

Crude prices have jumped from $69 a barrel a month ago as cold winter weather, especially in the U.S. Northeast, boosted demand for oil products such as heating oil. Forecasters now expect those freezing temperatures to rise the rest of this month. ....

In other Nymex trading in February contracts, heating oil fell 1.06 cents to $2.17 a gallon and gasoline slipped 0.41 cent to $2.14 a gallon. Natural gas futures were up 0.8 cents at $5.46.

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

[Demeter]

11. Where? Where Is It Warmer? 17F Here, Warmer than 4F

which it was again this Sunday....

[ozymandius]

14. Here.

We are expecting to be above the freezing mark today for the first time in some weeks. Heck - we might even make 40º.

[Lasher]

56. Heat wave here at 25 degrees. Snowing again.

Seems like it's snowed every single day for a month.

[Tansy_Gold]

49. Currently (6:20 a.m.) 59 degrees; should hit a sunny 74 by afternoon

There is a REASON I'm in central Arizona and not the midwest.

:hi:



Tansy Gold

[Roland99]

51. Heavy frost on my car this morning in Orlando.

70s finally coming back by about Friday, though.

[tclambert]

76. One of my acquaintances went to Florida for a week to escape the Michigan cold.

Ha hahahahaha ha. When she returns, I'm going to ask her if she remembered her snow pants, thermal undies, etc. The goal will be to get her to say, "STFU!" inside of two minutes.

[Mojorabbit]

106. I am in Orlando too

I can't wait till we get back to normal temps.

[Warpy]

68. They'll thumb their noses at you next summer

when you're struggling to pay that AC bill for all those 120 degree days.

I chose the happy medium. After weeks of nasty weather, it broke 55 here yesterday.

There's a reason I moved to the high desert in NM instead of the low desert in Arizona.

[Tansy_Gold]

72. Let 'em laugh! I keep the house around 80 in the summer with no problems

and the difference is that going from the house to the car and the car to destination in summer isn't a hassle. No scraping off windshields, no driving in snow and/or ice. Plus, the snowbirds disappear by April 30.

But I saw my share of midwestern winters and 90% humidity summers; I'll gladly stay where I am and not complain.


Tansy Gold, where we rarely have even "days" of nasty weather, let alone "weeks" :hi:

[wordpix]

52. here in DC, warming into 40's---it's really getting HOT in this city

woohoo :woohoo:

and I'm thinking not just of the weather but of Geithner, the Fed, the Treasury, the banks, the Wall St. 6-8 figure bonuses ----getting hotter and hotter in DC for sure

[Demeter]

53. Now Down to 14F with the Sunrise

Hunkering down in my 3-in-1 Softie Wrap (tm)

[AnneD]

62. We are expected to get above 50 today......

we broke freezing at 40 yesterday...

AnneD, who has not utter a nice word to her hubby every since he admitted not wrapping the pipes in the warm days before the freeze as I asked. I have not had water in 3 days and we will find out today how much this ignoring the little woman will cost him. :grr:

[Demeter]

65. My Condolences to the Couple

Been there, done that. Why don't you install a heating tape? They are fabulous. they draw very little current, only go on when it's cold enough, last forever, and even a guy can install them...it's like an electric blanket for your water pipe!

[AnneD]

82. We have an RV.....

It is so warm here it may not be cost effective. I will ask him about it. I think he will be more inclined to check it out now.

Mom suggested the same thing and she lived in a trailer years ago when she had problems with frozen pipes.

[Demeter]

84. I Think It Cost $12 in 1985

Compared to the cost of replumbing....

[tclambert]

77. Larry the Cable Guy says Snuggies are for people too stupid to work a blanket.

[Demeter]

81. Larry the Cable Guy Is an Ass

and it's a Softie, not a Snuggie. Totally different design.

[Dr.Phool]

60. At 6:30am it was 39 degrees in Havana.

Ice on the water bucket at the dog park this morning.

[Demeter]

66. I had to laugh when the NPR quiz show "Wait, Wait...Don't Tell Me"

last week got a caller from Antarctica, who mentioned that it was 40F at the bottom of the world, and Peter Sagel, the show's host, berated his guest for calling to Chicago to brag about the balmy weather at the ice station.

[Demeter]

6. Federal Reserve earned $45 billion in 2009

http://www.msnbc.msn.com/id/34816272/ns/business-washington_post

Wall Street firms aren't the only banks that had a banner year. The Federal Reserve made record profits in 2009, as its unconventional efforts to prop up the economy created a windfall for the government.

The Fed will return about $45 billion to the U.S. Treasury for 2009, according to calculations by The Washington Post based on public documents. That reflects the highest earnings in the 96-year history of the central bank. The Fed, unlike most government agencies, funds itself from its own operations and returns its profits to the Treasury.

The numbers are good news for the federal budget and a sign that the Fed has been successful, at least so far, in protecting taxpayers as it intervenes in the economy — though there remains a risk of significant losses in the future if the Fed sells some of its investments or loses money on its stakes in bailed-out firms....

As it happens, the Fed's earnings for the year will dwarf those of the large banks, easily topping the expected profits of Bank of America, Goldman Sachs and J.P. Morgan Chase combined.

Much of the higher earnings came about because of the Fed's aggressive program of buying bonds, aiming to push interest rates down across the economy and thus stimulate growth. By the end of 2009, the Fed owned $1.8 trillion in U.S. government debt and mortgage-related securities, up from $497 billion a year earlier. The interest income on those investments was a major source of Fed profits — though that income comes with risks, as the central bank could lose money if it later sells those securities to reduce the money supply.

Emergency loans
The Fed also made money on its emergency loans to banks and other firms and on special programs to prop up lending, such as one that supports credit cards, auto loans, and other consumer and business lending. Those programs impose interest and fees on participants, with the aim of ensuring that the Fed does not lose money.

And while the central bank in its most recent financial report had recorded a $3.8 billion decline in the value of loans it made in bailing out the investment bank Bear Stearns and the insurer American International Group, the Fed also logged $4.7 billion in interest payments from those loans. Further losses — or gains — on the two bailouts are possible as time goes by. The Fed also charges fees for operating the plumbing of the financial system, such as clearing checks and electronic payments between banks.

From its revenue, the Fed deducts operating expenses, such as employee salaries, then returns almost all of the earnings that remain to the Treasury. The largest previous refund to the Treasury was $34.6 billion, in 2007.

NOW, WHY DON'T I BUY THIS STORY?

FIRST OF ALL, DID ANYBODY EVEN KNOW THAT THE FED MADE PROFITS? THAT THE FED TURNED OVER THESE PROFITS TO THE TREASURY?

SECOND OF ALL, ISN'T IT CONVENIENT TO FLAUNT "PROFITS" AT A TIME WHEN SERIOUS EFFORTS TO AUDIT THE FED ARE AFOOT?

[ozymandius]

9. Great points.

And I will add another that comes to mind: When the Fed and the banks that benefitted from the Fed's largesse made money - why is there so little to show for these massive profits in the public sphere?

[Po_d Mainiac]

44. Not to worry, all Fed holdings are hedged with AIG swaps :hmmm:

[Tansy_Gold]

47. +1 Ain't that the, ahem, truth. n/t

[wordpix]

54. suspicious timing: this coincides with banks contemplating 6-8 figure bonuses

Question: Do these Fed profits mean Fed has losses, too, that are passed on to Treasury?

:shrug:

A big problem with all these entities, whether Wall St. or the suddenly profit-making Fed, is they never save for a rainy day and when that day comes, they come to taxpayers with their hands out begging for a bailout.

[Demeter]

67. Good Point

I'd rather liquidate the Fed if their losses render them insolvent. Two birds with one stone.

[ozymandius]

7. AP source: Obama considers levy for rescued firms

WASHINGTON – Targeting an industry whose political deafness has vexed his administration, President Barack Obama is weighing recovering tax dollars from government-rescued financial institutions with a levy. ...

A senior administration official said Monday that Obama would seek modifications to the law that sent billions in bailout money in 2008 and 2009 to a flailing Wall Street that was approaching collapse. The government official spoke on the condition of anonymity to discuss the president's thinking.

The idea received an early boost from Speaker Nancy Pelosi, the top Democrat in the House, where there have been calls for a hefty tax on bank bonuses. ...

Government officials have conceded that they don't expect to recoup billions in TARP money used to rescue insurance conglomerate American International Group Inc. and the auto industry. Banks have been repaying their infusions, in part to get out from under compensation limits imposed on the bailout recipients. Banks have also paid dividends from the government help.

http://news.yahoo.com/s/ap/20100112/ap_on_bi_ge/us_obama_bank_fees

[Demeter]

8. What the Financial Crisis Commission Should Ask

http://www.nytimes.com/2010/01/12/business/12sorkin.html?hp

On Wednesday, the first hearing of the Financial Crisis Inquiry Commission — what many are calling this century’s equivalent of a Pecora-style investigation that scrutinized the market crash of 1929 — will take place in Washington.

Wall Street’s top brass are planning to be there (and yes, they are flying down the night before so they don’t miss it): Lloyd C. Blankfein of Goldman Sachs, Jamie Dimon of JPMorgan Chase, John J. Mack of Morgan Stanley and Brian T. Moynihan of Bank of America.

The hearing, of course, will partly be political theater. There will be finger-pointing. But if the committee uses its inquiry for its stated purpose — “hearing testimony on the causes and current state of the crisis” — it may help direct the national conversation and steer the current reform efforts.

In the spirit of trying to help start some lively discussions, here are some questions they might consider asking:

¶Mr. Blankfein, your firm, and others, created and sold bundles of mortgages known as collateralized debt obligations that it simultaneously sold short, or bet against. These C.D.O.’s turned out to be bad investments for the people who bought them, but your short bets paid off for Goldman Sachs.

In the process of selling them to institutional investors, however, your firm lobbied ratings agencies to assign them high ratings as solid bets — even as your firm planned on shorting them.

Could you explain how Goldman bet against these C.D.O.’s while simultaneously trying to persuade ratings agencies and investors that they were good investments? Were they designed from the outset to be shorted by Goldman and possibly select clients? And were those clients involved in helping design these transactions? What explicit disclosures did you make to Standard & Poor’s and Moody’s about your plans to short these instruments? And should we continue to allow transactions in which you’re betting against what you’re also selling?

¶Mr. Dimon, during the final week before Lehman Brothers collapsed, your firm asked Lehman to post billions of dollars in collateral and threatened to stop clearing Lehman’s trades if it didn’t do so. That demand had the effect of depleting Lehman’s capital base, just when it desperately needed that capital to return funds to investors who were asking for their money back.

JPMorgan clearly was trying to protect itself. But could you explain what impact you believe that “collateral call” had on Lehman’s failure and the ensuing market crisis?

¶This one is for the entire group. All of your firms are involved in some form of proprietary trading, or using your own capital to make financial bets, not unlike hedge funds and other private investors. As the recent crisis has shown, these bets can go catastrophically wrong and endanger the global financial system.

Given that the government sent a clear signal in the crisis that it would not let the biggest firms fail, why should taxpayers guarantee this sort of trading? Why should the government backstop what amounts to giant hedge funds inside the walls of your firms? How is such trading helpful to the broader financial system?

¶A question for all the executives about bonuses: We keep hearing that you plan to pay out billions in bonuses this year. Given that they come out of profits that, to a large degree, seem to be the result of government programs to prop up and stimulate the banking sector, do you think they are deserved, even if they are in stock? And, while we’re on the topic, given the market crisis of 2008, were you all overpaid in 2007?

¶Again, for the group: Over the last year, your firms have actively used the Federal Reserve’s discount window to exchange various investments (including C.D.O.’s) for cash. You probably have a better idea than most about what those assets now sitting on the Fed’s balance sheet are worth.

Given the growing calls for regular audits of the Fed (an idea being resisted by the likes of the chairman, Ben Bernanke), do you think the demands for such audits are warranted?

¶This question is for Mr. Mack. In November, in a surprisingly candid moment, you publicly declared, “Regulators have to be much more involved.” You then added, “We cannot control ourselves.” Can you elaborate on those comments? Is Wall Street inherently incapable of policing itself — a view contrary to what most of your peers have argued?

¶Mr. Blankfein. Your firm, like other banks on this panel, was paid in full by the American International Group on various financial contracts, thanks to the government’s bailout. You can understand how this has whipped up no small amount of fury and questions over why A.I.G. and the government did not try to renegotiate those contracts.

Because your firm was the largest beneficiary of the government’s decision, did you or any of your employees lobby the Fed, Treasury or any other government agency for this “100 cents on a dollar” payout? If so, enlighten us about those conversations.

¶This is for Mr. Moynihan. Please explain — and no jargon, please — why your firm believed it didn’t have to disclose mounting losses at Merrill Lynch ahead of a shareholder vote in December 2008. After all, investigations into the matter suggest company executives knew of the $4.5 billion loss Merrill suffered in October before that vote.

And why, just a week or so after you became general counsel, did Bank of America decide to tell the government about those same losses that it chose not to tell shareholders about?

¶To Mr. Dimon and Mr. Moynihan: Your industry has vigorously opposed creating a consumer protection agency. But it’s clear that your millions of retail customers weren’t adequately protected, leading to hardship and heartbreak across the nation. Because you oppose creating such a regulator, what should be done to ensure these problems don’t happen again?

[Demeter]

10. The Ignoble and Noble Prizes for Economics

The Real-World Economics Review Blog is holding polls to determine the awarding of two prizes:

* The Ignoble Prize for Economics , to be awarded to the three economists who contributed most to enabling the Global Financial Collapse (GFC), and
* The Noble Prize for Economics , to be awarded to the three economists who first and most cogently warned of the coming calamity.

It is accepted fact that the economics profession through its teachings, pronouncements and policy recommendations facilitated the GFC. We also know that danger signs became visible long before the event and that some economists (those with their eyes on the real-world) gave public warnings which if acted upon would have averted the human disaster.

With other learned professions entrusted with public confidence, such as medicine and engineering, it is inconceivable that their professional bodies would not at the very least censure members who had successfully persuaded governments and public opinion to ignore elementary safety measures, so causing epidemics and widespread building collapses.

To date, however, the world’s major economics associations have declined to censure the major facilitators of the GFC or even to publicly identify them. This silence, this indifference to causing human suffering, constitutes grave moral failure. It also gives license to economists to continue to indulge in axiom-happy behaviour. Nor has the economics establishment offered recognition to those economists who were not taken in by fads and fashion and whose competence, if listened to, would have prevented the collapse.

These two silences reveal a continuing moral crisis within the economics profession . The Ignoble and Noble Prizes for Economics are being offered as small first steps towards a cure.

Poll Procedures for the Ignoble Prize for Economics

Stage One: Nominations and Evidence

Nominations for both prizes are open to the international community of economists, rather than limited to a closed and secret shop. For each nominated economist an evidence page will be opened on http://rwer.wordpress.com/ to which people can leave evidential comments. In this way a documented case for (and against) each candidate will be built up.

There are two ways, one direct and the other indirect, by which you can nominate and post evidence.


Direct Method


You can nominate economist X or economists X and Y, or X, Y and Z (maximum of three) by leaving a comment on the Nominations for the Ignoble Prize for Economics page for which there is a link near the top of the blog’s home page’s right hand column. Your comment needs only to say “I nominate X . . . for the Ignoble Prize for Economics.”

You can post evidence regarding a nominated economist by leaving a comment on their evidence page, which in most cases will be opened within 24 hours of their nomination. These pages are sub-pages of the “Nominees and Submission of Evidence” page and will be link-listed in a box near the top of the home page’s right hand column.

Indirect Method


Because of the current nature of the economics profession, some economists will fear that going public with their professional views on these matters could jeopardize their careers or those of people associated with them. Therefore nominations and evidence can be put forward anonymously by emailing them to [e-mail] , preferably with the subject heading “Nominations and Evidence”. The editor will then post the material on the relevant pages. Strict confidentiality will be maintained.

Stage Two: Short List

After an appropriate interval, most likely one month, nominations and the submission of evidence will be closed. Through consultation, authors of the Real-World Economics Review Blog will compile a short list of the strongest nominees, probably 10 or 12. At this time a final dossier, based on the evidential comments posted on the blog, will be compiled and posted for each short-listed candidate. Voting will then open.

Stage Three: Voting

The voting will be conducted using PollDaddy. Its system uses cookies to prevent repeat voting. A voting box showing the short-listed candidates will be displayed prominently on the home page of the Real-World Economics Review Blog. Close by will be links to each candidate’s final dossier. Voting is open to all interested parties. Each voter can vote for up to three of the listed candidates. The ballots are secret. Voting will remain open for several weeks. No results will be announced before closing the poll.

Stage Four: Results

Within 24 hours of the closing of the poll, the results will be announced. The three economists receiving the highest number of votes will be declared the joint winners of the prize.

General Rules

Only economists may be nominated, and they must have been active during part of the last quarter century. Joke nominations (e.g., Baker, Keen or Roubini for the Ignoble Prize) or ones suspected of being motivated by malice or for which no supporting evidence is forthcoming will not be accepted or allowed to stand. Likewise evidence submitted must be substantive, accurate and presented in good taste.

Poll Procedures for the Noble Prize for Economics

These will be approximately the same as for the Ignoble Prize, but may be adjusted in view of lessons learnt. It is expected that nominations and submission of evidence for this prize will commence when voting for the Ignoble Prize begins.

Nominations and submissions of evidence for the Ignoble Prize for Economics are now open at http://rwer.wordpress.com/

[ozymandius]

12. Stock futures fall; eyes on Alcoa, Chevron

(Reuters) - U.S. stock index futures pointed to a lower open on Wall Street on Tuesday, with futures for the S&P 500 down 0.5 percent, Dow Jones futures down 0.5 percent and Nasdaq 100 futures down 0.6 percent.

Alcoa Inc will be the main focus after posting a narrower quarterly loss that fell short of expectations after the bell on Monday.

The company blamed higher power bills, a weak dollar and costs of temporarily shutting smelters in Italy, and said while aluminum prices were climbing, demand from some customers, especially planemakers and the commercial construction sector, was not expected to improve soon.

Frankfurt-listed shares in Alcoa were down 6.1 percent, while shares in rival Aluminum Corp of China Ltd (Chalco) dropped 2.4 percent in Hong Kong and European mining shares such as Rio Tinto and Xstrata were among the biggest losers in Europe where the FTSEurofirst 300 index was down 0.5 percent.

Chevron Corp shares fell 1.3 percent to $79.84 after the bell on Monday after the energy company provided an interim update on its fourth quarter.

http://www.reuters.com/article/idUSTRE6030ZW20100112

[Festivito]

13. Debt: 01/08/2010 12,280,604,597,845.51 (DOWN 240,683,672.08) (Fri)

(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)
= 7,781,415,376,435.24 + 4,499,189,221,410.27
DOWN 177,723,158.27 + DOWN 62,960,513.81

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 308,418,078 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 $39,818.04.
A family of three owes $119,454.13. (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 8,605,078,215.94.
The average for the last 30 days would be 6,310,390,691.69.
The average for the last 31 days would be 6,106,829,701.64.
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$/day.
There were 68 reports in 100 days of FY2010 averaging 5.45B$ per report, 3.71B$/day.
Above line should be okay

PROJECTION:
There are 1,108 days remaining in this Obama 1st term.
By that time the debt could be between 13.8 and 19.0T$.
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)
01/08/2010 12,280,604,597,845.51 BHO (UP 1,653,727,548,932.43 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 +0,370,775,594,333.80 ------------* * * * * * * * * BHO
Endof10 +1,353,330,919,318.37 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 --
12/28/2009 +000,088,095,190.64 ------------******* Mon
12/29/2009 -015,034,724,927.64 -
12/30/2009 +007,596,599,767.56 ------------*********
12/31/2009 +083,831,281,729.66 ------------**********
01/04/2010 -007,102,898,314.32 -- Mon
01/05/2010 +000,354,346,864.84 ------------********
01/06/2010 +000,123,816,367.19 ------------********
01/07/2010 -022,790,950,811.50 -
01/08/2010 -000,177,723,158.27 ---

12,048,684,879.10 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=4219774&mesg_id=4219776

[Festivito]

75. Debt: 01/11/2010 12,285,484,345,787.32 (UP 4,879,747,941.81) (Mon)

(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)
= 7,781,189,167,268.88 + 4,504,295,178,518.44
DOWN 226,209,166.36 + UP 5,105,957,108.17

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 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 308,443,998 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 $39,830.52.
A family of three owes $119,491.56. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 20 reports in the last 30 to 31 days.
The average for the last 20 reports is 10,188,748,162.75.
The average for the last 30 days would be 6,792,498,775.17.
The average for the last 31 days would be 6,573,385,911.45.
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$/day.
There were 69 reports in 103 days of FY2010 averaging 5.44B$ per report, 3.65B$/day.
Above line should be okay

PROJECTION:
There are 1,105 days remaining in this Obama 1st term.
By that time the debt could be between 13.8 and 19.5T$.
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)
01/11/2010 12,285,484,345,787.32 BHO (UP 1,658,607,296,874.24 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 +0,375,655,342,275.60 ------------* * * * * * * * * BHO
Endof10 +1,331,205,824,568.88 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 --
12/28/2009 +000,088,095,190.64 ------------******* Mon
12/29/2009 -015,034,724,927.64 -
12/30/2009 +007,596,599,767.56 ------------*********
12/31/2009 +083,831,281,729.66 ------------**********
01/04/2010 -007,102,898,314.32 -- Mon
01/05/2010 +000,354,346,864.84 ------------********
01/06/2010 +000,123,816,367.19 ------------********
01/07/2010 -022,790,950,811.50 -
01/08/2010 -000,177,723,158.27 ---
01/11/2010 -000,226,209,166.36 --- Mon

48,315,015,500.96 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=4221349&mesg_id=4221364

[ozymandius]

15. SEC expanding case against bank (of America)

:popcorn:

WASHINGTON - Federal regulators aim to expand their charges against Bank of America Corp. over billions in bonuses paid at Merrill Lynch, accusing the bank of failing to disclose mounting losses at Merrill before shareholders voted to approve combining the two firms. ...

The SEC and Bank of America go to trial March 1. The SEC previously accused the bank of failing to disclose the bonuses when Merrill was acquired a year ago. Last fall, the judge threw out a proposed $33 million settlement and rebuked the SEC for not pursuing charges against individual executives.

Yesterday, the SEC said it was seeking to charge the bank with negligently failing to disclose “extraordinary financial losses’’ at Merrill in the two months preceding the shareholders’ Dec. 5, 2008, vote.

http://www.boston.com/business/articles/2010/01/12/sec_expanding_case_against_bank/

[ozymandius]

16. Bonds Rise as Economic Recovery Seen Sputtering; Stocks Decline

Jan. 12 (Bloomberg) -- Government bonds rose, driving 10- year Treasury yields down the most in a week, while European stocks and U.S. index futures fell on concern the pace of the economic recovery will falter.

The benchmark U.S. note yield declined six basis points to 3.76 percent at 10:03 a.m. in London, while the yield on the German bund dropped to the lowest level this year. Europe’s Dow Jones Stoxx 600 Index lost 0.5 percent and futures on the Standard & Poor’s 500 Index slipped 0.4 percent. Platinum rose to a 17-month high.

The U.S. rebound will require low interest rates until it shows “momentum,” Federal Reserve Bank of Atlanta President Dennis Lockhart said yesterday. Futures contracts show traders see an 8 percent chance of the Fed raising its target overnight rate to 0.5 percent in June, down from a 47 percent likelihood a month ago. Alcoa Inc., the largest U.S. aluminum producer, posted earnings that trailed analysts’ estimates. ...

Governments around the world are selling unprecedented amounts of debt to help keep the economic recovery on track. The U.S. will sell a record-tying $40 billion of three-year notes today in the second of four auctions this week totaling $84 billion. The Netherlands is scheduled to issue 4.5 billion euros ($6.5 billion) of three-year notes.

http://www.bloomberg.com/apps/news?pid=20601087&sid=akT6ajfwUtvY&pos=3

[ozymandius]

20. Alcoa Stinks the Joint Up, Pressures Futures

From Ritholtz:

Alcoa reported a Q4 2009 loss of $277 million loss, on lower sales and higher costs. Losses narrowed from a year ago when they were $1.2 billion dollars.

Pro forma operating profits were 1 cent, missing analysts estimates of a 6 cent profit, and begging the question of HTF can you report a per share profit on a quarter billion dollar loss? The analyst and accounting industries should hang their head in shame, and reach for a wakizashi to perform Seppuku, being the only honorable thing to do after the great shame brought upon their houses.

Source: Alcoa Drops After Quarterly Earnings Trail Estimates

HTF, indeed! I can smell the funk from here.

[ozymandius]

17. Federal Reserve Seeks to Block Release of U.S. Bailout Secrets

Jan. 12 (Bloomberg) -- The Federal Reserve asked a U.S. appeals court to block a ruling that for the first time would force the central bank to reveal secret identities of financial firms that might have collapsed without the largest government bailout in U.S. history.

The U.S. Court of Appeals in Manhattan will decide whether the Fed must release records of the unprecedented $2 trillion U.S. loan program launched primarily after the 2008 collapse of Lehman Brothers Holdings Inc. In August, a federal judge ordered that the information be released, responding to a request by Bloomberg LP, the parent of Bloomberg News....

‘Right to Know’

“The question is at what point does the government get so involved in the life of the institution that the public has a right to know?” said Charles Davis, executive director of the National Freedom of Information Coalition at the University of Missouri in Columbia. Davis isn’t involved in the lawsuit.

The ruling by the three-judge appeals panel may not come for months and is unlikely to be the final word. The loser may seek a rehearing or appeal to the full appeals court and eventually petition the U.S. Supreme Court, said Anne Weismann, chief lawyer for Citizens for Responsibility and Ethics, a Washington advocacy group that supports Bloomberg’s lawsuit.

http://www.bloomberg.com/apps/news?pid=20601070&sid=apOGA_joTmYc

[ozymandius]

24. William Black - “Anti-Regulators: The Federal Reserve’s War Against Effective Regulation”

The first decade of this century proved how essential effective regulators are to prevent economic catastrophe and epidemics of fraud. The most severe failure was at the Federal Reserve. The Fed’s failure was the most harmful because it had unique authority to prevent the fraud epidemic and the resulting economic crisis. The Fed refused to exercise that authority despite knowing of the fraud epidemic and potential for crisis.

The Fed’s failures were legion, but five are worthy of particular note.

1. Greenspan believed that the Fed should not regulate v. fraud

2. Bernanke believed that the Fed should rely on self-regulation by “the market”

3. (Former) Federal Reserve Bank of New York President Geithner testified that he had never been a regulator (a true statement, but not one he’s supposed to admit)

4. Bernanke gave the key support to the Chamber of Commerce’s effort to gimmick bank accounting rules to cover up their massive losses — allowing them to report fictional profits and “earn” tens of billions of dollars of bonuses

5. Bernanke recently appointed Dr. Patrick Parkinson as the Fed’s top supervisor. He is an economist that has never examined or supervised. He is known for claiming that credit default swaps (CDS, a.k.a the financial derivatives that destroyed AIG) should be unregulated because fraud was impossible among sophisticated parties.

Each error arises from the intersection of ideology and bad economics.

read more at Naked Capitalism

---

I add William Black's name to my short list of those who should succeed Tim Geithner.

[Demeter]

18. About University of the People

Founded by educational entrepreneur Shai Reshef, University of the People (UoPeople; www.UoPeople.org) is the world's first tuition-free, online academic institution. Based on the principles of e-learning and peer-to-peer teaching, coupled with open-source technology and courseware, UoPeople is designed to provide universal access to college studies, despite geographic and economic constraints. Enrollment is currently open for Term 3 which begins February 4, 2010.

------------------------

http://www.opednews.com/articles/University-of-the-People-A-by-Press-Release-091210-965.html



University of the People Attracts Academics from Columbia, Yale and New York University


—Provost and Chair of Computer Science Department Appointed—

Pasadena, CA (December 10, 2009)—Bolstering its ambitious academic mission, University of the People (UoPeople) today announced leading educators from Columbia and New York University have joined the organization's scholastic leadership. Former Vice President and Dean of Columbia Dr. David Harris Cohen and New York University Professor Dr. Alexander Tuzhilin have been named Provost and Computer Science Department Chair, respectively.

Following a distinguished career as a neurobiologist and university administrator, Dr. David Harris Cohen will serve as the UoPeople Provost, overseeing academics. From 1995 to 2003, Dr. Cohen was the Vice President and Dean of the Faculty for Arts & Sciences at Columbia University, where he was also professor of Biological Sciences and professor of Neuroscience in Psychiatry. Before joining Columbia, Dr. Cohen was at Northwestern University from 1986 to 1995, initially as the Vice President of Research and Dean of the Graduate School, and then as Provost. He also held professorial appointments in the Departments of Neurobiology and Physiology. Throughout his career, Dr. Cohen has worked with a number of organizations, including Association of American Medical Colleges and Society for Neuroscience, in a variety of capacities. Dr. Cohen received his A.B. magna cum laude with highest honors from Harvard in 1960 and his Ph.D. from the University of California at Berkeley in 1963.

Dr. Alexander Tuzhilin joins University of the People as the Chair of the Computer Science Department, with over two decades of experience at New York University (NYU). He is currently Professor of Information Systems at the Stern School of Business and has previously held visiting positions at The Wharton School of the University of Pennsylvania, Columbia University and Ecole Nationale Superieure des Telecommunications in Paris. Dr. Tuzhilin's research has been published in over 90 ACM, IEEE and INFORMS journals and conference proceedings. He has also served on the editorial boards of various journals and on program and organizing committees of numerous conferences, including as a Program Co-Chair of the Third IEEE International Conference on Data Mining (ICDM) and as a Conference Co-Chair of the Third ACM Conference on Recommender Systems (RecSys). Prior to joining Stern in 1989, Dr. Tuzhilin earned a Ph. D. degree in Computer Science from the Courant Institute of Mathematical Sciences, also part of NYU.
Dr. Tuzhilin's NYU colleague, Dr. Russell Winer, currently serves as Chair of the Business Administration Department and a member of the Advisory Committee.

In addition to backing by educators from these storied instructions, UoPeople is also supported by the Information Society Project at Yale Law School (Yale ISP). Bringing more than a decade of leadership in developing the principles of access to knowledge and equitable digital education, Yale ISP is the research partner of UoPeople. Jack Balkin, Yale ISP Director and Knight Professor of Constitutional Law and the First Amendment at Yale Law School, serves on the Advisory Committee of UoPeople.

“The support UoPeople has received in one short year is a confirmation of its mission and potential,” said Shai Reshef, founder & president, UoPeople. “The democratization of higher education is an ambitious job but not out of reach, especially when great minds from Columbia, NYU and Yale are brought together. We are thrilled to have Dr. Cohen and Dr. Tuzhilin as leaders at UoPeople.”

Launched in January 2009, with this first-term beginning this past September, UoPeople is a tuition-free, online academic institution designed to reach the world's disenfranchised communities. To date, hundreds of students from dozens of countries have begun their tertiary studies at UoPeople.

[ozymandius]

22. Great idea.

E-learning higher institutions are mainstream now. They should aggressively expedite their accreditation and affiliate list.

[ozymandius]

23. More Employment Charts

• THE EMPLOYMENT RATE IS NOW AT 58.2% — LOWEST RATE SINCE AUGUST 1983:
This to me is a devastating picture of the workforce in the US — at its lowest level in nearly 3 decades: (see chart)

• Temp Help is Improving:
Its not all glum — Temp help is improving, and tends to be a good early indicator of more hiring to come (see chart)

• Percent Job Losses in Post WWII Recessions:
Here is what the 2007-2010 Recession looks like in terms of recovery of jobs lost (fugly chart)

more here

[Demeter]

35. Snapshots of Devastation

As bad as Katrina, and just as criminal.

[fasttense]

43. Thanks for posting. I love charts and these are very sobering.

[Tansy_Gold]

48. Temp help

Many companies will hire temps when they have increasing work but aren't sure if the increase is going to continue. If it doesn't, they ditch the temp with no risks. If it stays, they often hire the temp as a regular employee because they've already got the experience.

Right now, however, I think you're going to have to watch for:

1. Increasing the hours of those who are already working, many of them less than 40 hours a week.
2. Re-hiring of laid-off workers and boosting hours, of those already working, from 40 to overtime.
3. Engaging of long-term and temp-to-perm temps.


When I did a research paper for a soc class in 2002 on temp office workers, I found that there was very little literature on this "industry," and most of what I found was anecdotal "My Life as a Temp" kind of thing, which of course mine was also. But temps, unlike independent contractors (which is what I am now) are employees of the temp agencies and have certain rights, responsibilities, and benefits accruing as such. It's an area that really warrants more examination.


Tansy Gold, goin' back to her "contractor" job which she should have been working on this past hour. . . . .

[dmallind]

70. In mfg at least average hours is 43.8

That level is a sure sign hiring demand is pending.

[tclambert]

78. Seems like some employers hire "perma-temps" in order to dodge providing benefits,

and dodging the moral responsibility for their employees' livelihoods. They can let go a temp worker with less feelings of guilt. Okay, okay, yes, I am talking about those executives who have not yet had the operation to excise their consciences.

[Tansy_Gold]

79. they do so at a huge premium, however.

I've been a long-term temp several times, and it has its advantages for the temp, too.

However, because the temp's wage is generally (not always but generally) competitive with permanent employees and because the temp agency usually gets pretty close to an equal amount, the effective rate for a temp can be double what the going wage is.

So if I'm making $14/hour, the employer is paying the agency $27 or $28 an hour, out of which the agency has to pay my unemployment tax, SS contribution, etc., plus their own overhead and profit. So it's not like the employer escapes ALL the added expenses of the employee.

Often, a good temp in a temp-to-perm or long-term-temp position actually gets treated better than regular employees. I worked two long-term positions where I walked out after poor treatment and was called at home by the employer -- NOT by my agency -- to come back. They had been unable to get a decent temp replacement and understood that I had done a superior job for them under less than optimal conditions. I NEVER had that happen as a "real person" when I was an actual employee.

Being a temp is not an ideal position, but for those who don't mind going into some awkward situations and having little to no security and/or benefits, it does have its attractions. For one thing, it's rarely boring!


Tansy Gold, who wrote that last comment and then remembered the holiday-vacation stint she did for a leasing company where for six days she did nothing -- NOTHING -- but read magazines while seated in one of the world's most uncomfortable chairs.

[wordpix]

55. "temp help improving" ---how nice employers don't need to pay for health insurance now!

:grr:

[Demeter]

25. U.S. Will Settle (American) Indian Lawsuit for $3.4 Billion

http://www.nytimes.com/2009/12/09/us/09tribes.html?_r=1

The federal government announced (in December) that it intends to pay $3.4 billion to settle claims that it has mismanaged the revenue in American Indian trust funds, potentially ending one of the largest and most complicated class-action lawsuits ever brought against the United States.

The tentative agreement, reached late Monday, would resolve a 13-year-old lawsuit over hundreds of thousands of land trust accounts that date to the 19th century. Specialists in federal tribal law described the lawsuit as one of the most important in the history of legal disputes involving the government’s treatment of American Indians.

President Obama hailed the agreement as an “important step towards a sincere reconciliation” between the federal government and American Indians, many of whom, he said, considered the protracted lawsuit a “stain” on the nation.

As a presidential candidate, Mr. Obama said, “I pledged my commitment to resolving this issue, and I am proud that my administration has taken this step today.”

For the agreement to become final, Congress must enact legislation and the federal courts must then sign off on it. Administration officials said they hoped those two steps would be completed in the next few months.

The dispute arises from a system dating to 1887, when Congress divided many tribal lands into parcels — most from 40 to 160 acres — and assigned them to individual Indians while selling off remaining lands.

The Interior Department now manages about 56 million acres of Indian trust land scattered across the country, with the heaviest concentration in Western states. The government handles leases on the land for mining, livestock grazing, timber harvesting and drilling for oil and gas. It then distributes the revenue raised by those leases to the American Indians. In the 2009 fiscal year, it collected about $298 million for more than 384,000 individual Indian accounts.

The lawsuit accuses the federal government of mismanaging that money. As a result, the value of the trusts has been unclear, and the Indians contend that they are owed far more than what they have been paid.

Under the settlement, the government would pay $1.4 billion to compensate the Indians for their claims of historical accounting irregularities and any accusation that federal officials mismanaged the administration of the land itself over the years.

Each member of the class would receive a check for $1,000, and the rest of the money would be distributed according to the land owned. In addition, legal fees, to be determined by a judge, would be paid from that fund.

Philip Frickey, a law professor at the University of California, Berkeley, who specializes in federal Indian law, said that of all the Indian land claims and other lawsuits over the past generation, the trust case had been a “blockbuster” because it is national in scope, involves a large amount of money, and has been long-running.

The lawsuit spanned three presidencies and engendered seven trials covering 192 trial days, generated 22 published judicial opinions, and went before a federal appeals court 10 times.

Over its course, the federal judge originally assigned to the case, Royce C. Lamberth, put contempt orders on two secretaries of the interior over their handling of the lawsuit. In 2006, after the Bush administration complained of bias, a federal appeals court removed Judge Lamberth from the case.

Judge James Robertson has handled it since, and he pushed both parties to negotiate — including brokering a last-minute deal over an undisclosed problem that nearly derailed the settlement late Monday, said David J. Hayes, the Interior Department deputy secretary.

Attorney General Eric H. Holder Jr. on Tuesday characterized the case as “intense, and sometimes difficult.”

“The United States could have continued to litigate this case, at great expense to the taxpayers,” Mr. Holder said. “It could have let all of these claims linger, and could even have let the problem of fractionated land continue to grow with each generation. But with this settlement, we are erasing these past liabilities and getting on track to eliminate them going forward.”

The settlement also seeks to resolve an ever-growing headache of the trust system that contributed to the government’s problems — especially in the pre-computer era — in keeping track of the allotments: the original owners, most of whom died without leaving wills, have many heirs, which has “fractionalized” the ownership interests.

For example, one 40-acre parcel today has 439 owners, most of whom receive less than $1 a year in income from it, Mr. Haynes said. The parcel is valued at about $20,000, but it costs the government more than $40,000 a year to administer those trusts.

In an effort to resolve such problems — and prevent them from worsening in subsequent generations — the settlement would establish a $2 billion fund to buy fractional interests in land from anyone willing to sell. The program would seek to consolidate ownership in parcels of land for the tribes, while reducing the Interior Department’s work in keeping track of the trusts.

“This is an historic, positive development for Indian country,” said Ken Salazar, the Interior Department secretary, “and a major step on the road to reconciliation following years of acrimonious litigation between trust beneficiaries and the United States.”

Over the years, the plaintiffs have contended that they were owed tens of billions of dollars, while the government has at times taken the position that it owed them little or nothing.

Elouise Cobell, the lead plaintiff who filed the class-action lawsuit in 1996, said she believed that the Indians were owed more, but that it was better to reach an agreement that could help impoverished trust holders than to spend more years in court. She said she had originally expected the litigation to last only two or three years.

“We are compelled to settle by the sobering realization that our class grows smaller each day as our elders die and are forever prevented from receiving just compensation,“ Ms. Cobell said.

Robert Clinton, an Arizona State University law professor who specializes in federal Indian law, said the settlement alone would not resolve the trust problem because many of the heirs who own tiny interests in parcels may not be willing to sell them.

Still, the settlement will provide an incentive for such owners to sell: the Interior Department will set aside up to 5 percent of the value of the land interests for a scholarship fund to help Indians attend college or vocational school.

[Demeter]

26. American Jobs Plan: 5 Pt. Plan to Stem US Jobs Crisis

http://www.epi.org/index.php/american_jobs/american_jobs_plan

"The United States is experiencing its worst jobs crisis since the Great Depression. Nearly 16 million Americans—our family, friends, and neighbors—are out of work. This national crisis demands a bold plan to put people back to work. The Economic Policy Institute proposes the American Jobs Plan, a plan that would create at least 4.6 million jobs in one year.

Here you will find EPI's comprehensive research and analysis of the jobs crisis—how severe it has grown and why—and the details of EPI's American Jobs Plan.

We can—and must—put America back to work."

THIS IS AN ELABORATE WEBSITE WHICH I HAVEN'T TIME TO EXPLORE. PERHAPS SOMEONE CAN REPORT BACK ON IT?

[ozymandius]

27. Ratigan Makes The Case Against Geithner

This video presents a point-by-point argument for removing Geithner as Treasury Secretary. From HuffPo:

Ratigan laid out evidence of Geithner's failures as Treasury secretary and detailed efforts to downplay the former New York Fed chief's role in the apparent debacle. Ratigan wondered how one man has the legal authority to deny the congress, the attorney general, and the states attorneys general access to emails about public money.

I encourage you to see it.

Video link here

[Demeter]

31. Why haven't any Wall Street tycoons been sent to the slammer?

http://www.mcclatchydc.com/336/story/75720.html

More than a year into the gravest financial crisis since the Great Depression, millions of Americans have seen their home values and retirement savings plunge and their jobs evaporate.

What they haven't seen are any Wall Street tycoons forced to swap their multi-million dollar jobs and custom-made suits for dishwashing and prison stripes.

There are plenty of civil and class-action lawsuits from aggrieved investors angered by the losses in their mortgage bonds, hedge funds or pensions. Regulators have stepped up their vigilance after the fact. But to date, no captain of finance tied to the crisis has walked the plank.

There have been some high-profile arrests and federal convictions of financial giants — such as Ponzi scheme king Bernard Madoff and Stanford Financial Group chairman Robert Allen Stanford. They weren't among the causes of the financial meltdown, however, just poster boys for an era of lax enforcement, weak regulation and devout faith in free markets.

"A lot of people who are responsible (for the crisis) seem to have gotten awfully rich in the process," said Barbara Roper, the director of investor protection for the Consumer Federation of America.

The absence of what many would call justice stands out all the more because past financial crises always had their villains. The depression-era had electricity and railroad magnate Samuel Insull, who partly inspired the movie "Citizen Kane." The savings and loan crisis of the 1980's had banker Charles Keating. Energy giant Enron Corp.'s spectacular collapse offered the late CEO Kenneth Lay, a Texas crony of President George W. Bush.

Yet there's no such poster child for the Great Recession, as today's crisis is now called.

One may yet emerge. The FBI has more than 580 large-scale corporate fraud investigations under way. At least 40 of them are scrutinizing players in sub-prime mortgage lending, which was the first domino to fall and triggered a global financial crisis.

"The investigations are very complex; it's not something that's going to turn overnight," said Bill Carter, a spokesman at FBI headquarters. "They are labor intensive. They involve a review of records."

To date, the closest thing to a prosecution of a major actor in the financial meltdown is a civil fraud case that the Securities and Exchange Commission brought on June 4 against Angelo Mozilo, the perma-tanned CEO of mortgage-lending giant Countrywide.

The SEC, in documents filed in a federal courtroom in central California, accuses Mozilo of "deliberately misleading investors" by misrepresenting the risk that Countrywide posed. The SEC also accused him of insider trading because he sold large shares of company stock and options ahead of what he allegedly knew was a coming collapse of mortgage lending.

Unless the Justice Department brings corresponding criminal charges, however, Mozilo could be hit with penalties and a ruined reputation if convicted — but he wouldn't see the inside of a jail cell.

Another big trial is imminent, however. On Oct. 13, a Brooklyn jury will begin hearing the federal prosecution of former Bear Stearns investment fund founder Ralph Cioffi and his fund manager Matthew Tannin.

Two of their hedge funds, offered to mega-wealthy investors and heavily weighted with investments in mortgage bonds backed by sub-prime loans to the weakest borrowers, collapsed in June and August of 2007. Their collapse signaled a gathering storm in mortgage finance that culminated in March 2008 with the government-brokered fire sale of their bank to JP Morgan Chase.

Both men were charged on June 19, 2008, with defrauding investors, passing off as safe the investment in mortgage bonds even though they described the market for sub-prime mortgages as "toast" in their own e-mails. Cioffi also faces charges of insider trading.

Lawyers for both men declined comment to McClatchy, but when their clients were arrested they called the pair scapegoats for the broader financial crisis.

Court documents filed in August show attorneys for the two are trying to suppress evidence that the executives' special trading notebooks have disappeared. The government suspects that Cioffi and Tannin, or someone helping them, made them disappear to cover their tracks.

Cioffi's attorneys also asked in August that the presiding judge quash the use of evidence that points to their clients' lavish lifestyle, including mansions and Ferraris. The documents accused federal prosecutors of "improper appeal to class prejudice." Tannin's attorneys joined the motion on Sept.15.

Class prejudice against bankers is what many Americans feel, evident in the death threats made against some former or current executives at insurer American International Group and other financial firms earlier this year. Wall Street switchboard operators at some institutions no longer provide addresses to phone callers.

Americans are angry because the suffering on Main Street is a spillover from the excessive risk taking and lavish compensation of executives who invested on behalf of the ultra-wealthy. Investors seeking outsized "alpha" returns turned to Wall Street, both seeking to make a short-term killing even if doing so eventually brought the near collapse of the financial system.

President Barack Obama alluded to this on Sept. 14 in a New York speech to commemorate the anniversary of the collapse of investment bank Lehman Brothers, which sent off a global financial panic.

"We will not go back to the days of reckless behavior and unchecked excess at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses," Obama said, promising new rules. "Those on Wall Street cannot resume taking risks without regard for consequences."

There are persistent but unconfirmed reports that the FBI and grand juries are looking at the e-mails of executives of failed institutions such as Bear Stearns, which pioneered the process of pooling sub-prime loans for sale to investors, and Lehman Brothers, which was a leader in these toxic products when it collapsed.

Records from AIG, which the Federal Reserve saved from collapse on Sept. 17, 2008, are also thought to be under review. The FBI reportedly is also looking at rating agencies Fitch, Moody's and Standard & Poor's to determine if they knowingly gave pools of sub-prime mortgages AAA investment-grade ratings, the best possible, despite evidence to the contrary.

Carter, the FBI spokesman, declined comment on ongoing investigations.

The lack of any prosecution to date doesn't mean authorities aren't investigating, added Ian McCaleb, a spokesman for the Department of Justice.

"There are ongoing cases. But from a prosecution standpoint, it takes a significant amount of time to develop these things. Most financial fraud cases are very complex and it could take a while to unravel the specifics of each case," he said. "I would characterize financial fraud as one of our top priorities."

Another possibility is that a new politically appointed Financial Crisis Inquiry Commission could turn up something that leads to prosecution. The 10-member panel, created by Congress this month, began probing the origins of the crisis, has subpoena power and could compel testimony. This could, however, lead to conflicts with ongoing legal investigations.

Another reason that there've been no arrests of the perpetrators of the financial meltdown is that agencies such as the SEC, which regulates trading in stocks and bonds, and the Commodity Futures Trading Commission, which oversees the trading of contracts for future delivery of energy and farm products, lack powers of criminal prosecution.

They can bring civil charges that result in fines or pass information to federal prosecutors or the FBI, which under the Bush administration was reorganized to focus less on white-collar crime and more on national security matters and crimes against children.

Legislation introduced in the House and Senate would make it easier for the CFTC to prosecute, especially allegations of market manipulation. Measures would lower the current high threshold for determining manipulation. In 35 years, the agency has won only a single manipulation case, and it's under appeal. The bills also would give commodities regulators powers to bring criminal cases.

"Folks who do the crime shouldn't just pay a fine, but do the time," said Bart Chilton, a CFTC commissioner who's championed the need for prosecutorial powers.

Because it saves time and money, regulators traditionally have negotiated settlements with bad actors, and fines often amount to a business cost.

That, too, may be changing, however. The SEC on Sept. 14 was hit with a stinging judicial rebuke for its half-hearted efforts to punish Bank of America for alleged disclosure failures in the government-brokered purchase of investment bank Merrill Lynch.

U.S. District Judge Jed Rakoff tossed out a $33 million settlement between the SEC and Bank of America, effectively calling it a fig leaf. The agency, he said, looked as if it was enforcing the law while the bank and its CEO, Kenneth Lewis, got away with a slap on the wrist.

"It is not fair, first and foremost, because it does not comport with the most elementary notions of justice and morality, in that it proposes that the shareholders who were the victims of the bank's alleged misconduct now pay the penalty for that misconduct," Rakoff wrote in a scathing 12-page opinion that ordered the complaint to proceed to trial.

MAY I NOMINATE PHIL GRAMM AND ROBERT RUBIN? ANY OTHER NOMINATIONS FROM THE FLOOR?

[ozymandius]

36. Geithner for dereliction of his job duties, for one.

Others will come to mind - like Dick Fuld. Now I really gotta go. :hi:

[UpInArms]

46. standing nomination for Alan (WUHBPH) Greenscum

(WUHBPH ~ Washed Up Has Been Partisan Hack)

[wordpix]

57. really devastating to Obama Admin---Obama himself needs to respond FAST

[Demeter]

28. The Reason for 15 Million Unemployed: Poor Thinking at the Top By Dean Baker

http://tpmcafe.talkingpointsmemo.com/2009/12/07/the_reason_for_15_million_unemployed_poor_thinking/

The United States has more than 15 million people unemployed. This is not their fault. It is the fault of really bad policy decisions by people who get paid more than almost all of the unemployed ever did or ever will. The failure of economic policymakers to recognize and attack an $8 trillion housing bubble led to the downturn. The continuing failure of economic policymakers to think creatively is why 15 million people remain unemployed.

The basic problem of unemployment is in fact a very simple one; we don't have enough demand in the economy. The collapse of bubbles in both residential and nonresidential construction led to a falloff in annual construction of close to $700 billion. The disappearance of more than $6 trillion in housing bubble wealth has forced consumers to pare consumption by approximately $500 billion a year. This creates a total shortfall in annual demand of $1.2 trillion.

In the face of inadequate demand, people lose their jobs.

There is not enough demand for houses, cars, restaurant meals and thousands of other goods and services to keep everyone employed.

One way to fix the problem is to create more demand. That was the point of the stimulus package passed last February. This helped, but it was nowhere near big enough.

Subtracting out tax accounting measures (the alternative minimum tax fix) and spending to come in 2011 and later, the stimulus was about $300 billion for both 2009 and 2010. The federal stimulus is also being offset by approximately $150 billion in annual budget cuts at the state and local level. This leaves a net stimulus from the government sector of around $150 billion a year. This will not offset a loss in annual demand of $1.2 trillion; it's like trying to fill a swimming pool with five buckets of water.

In principle, the federal government could spend much money on stimulus until it has generated enough demand to get the unemployed back to work. For political reasons, this doesn't seem possible. The deficit fixation in Washington is preventing effective action, just as a balanced budget craze in the '30s forced Roosevelt to cutback the deficit in 1937, throwing the economy into another recession.

If politics makes it impossible to increase the demand for labor, an alternative way to create jobs is through decreasing the supply of labor. Specifically, employers can be given an incentive to cut the hours of their current workforce, while keeping their pay constant. This should then cause them to hire more workers. This is not an untested idea. Germany has used work sharing tax credits to keep its unemployment rate from rising in this downturn, even though its recession has been more severe than ours.

There are proposals for using this sort of work sharing being considered in both houses of Congress at the moment. Sen. Jack Reed (D-Rhode Island) and Rep. Rosa DeLauro have both introduced bills that would build upon work-share programs that already exist in 17 states. These programs allow employers to use unemployment insurance funds to keep workers employed at shorter hours, rather than laying them off and collecting unemployment benefits. These bills would provide additional funding to the existing programs so that they would be more widely used and help the other states establish work-share programs.

Rep. John Conyers has proposed a tax credit that would allow employers to reduce work time, while still maintaining their pay, and thereby creating the demand for more workers. This route has the benefit of allowing employers to try to innovate at their workplace, even if they are not currently planning layoffs, so it could have a much broader impact.

However, it is important to remember that nearly two million workers are still losing their job each month. The jobs' figure that is reported each month is a net figure. It shows how many jobs the economy has gained or loss after adding up all the workers hired or fired. If we reduce the gross monthly job loss figure by 10 percent, or 200,000 workers, it has the same impact on employment as adding 2.4 million jobs. This means that even though the Conyers bill would have a broader impact, even the Reed-DeLauro bills could lead to many more jobs being created.

It is important to realize that work sharing can also have a lasting impact on the structure of work. There have been major efforts by labor unions and women's organizations to make the workplace more family friendly through paid family leave, paid sick days and paid vacation. These work-share programs offer an opportunity to both quickly reduce unemployment and lay a basis for lasting change in this area. Companies can take advantage of these programs to experiment with paid sick days or family leave. If they work, they are likely to leave these policies in place even after the public funding is no longer there.

It is absolutely unacceptable to have 15 million people unemployed just because the people who call the shots are too dumb to figure out how to get them back to work. We got into this mess because the people on top didn't know what they were doing. We shouldn't have to stay here because they still can't figure things out.

In Germany, they are experiencing the recession through short workweeks and longer vacations, rather than mass unemployment. We should be doing the same here.

DEAN BAKER OVERLOOKS THE HOLLOWING OUT OF THE MANUFACTURING BASE OF OUR ECONOMY

[Tansy_Gold]

73. Just to reiterate your close, Demeter -- Baker misses the point completely

The housing bubble really started full-tilt in teh late 90s and into the early 00s. It burst in '06. The reason it was able to inflate was that there were not enough qualified buyers for the homes that were being built (or vacated by the people moving into the new ones). Banks and mortgage brokers were making deals with many unqualified buyers, then passing off the toxic paper to the less well-informed, aka suckers.

Had the manufacturing sector not been gutted, there would have been steady and reasonably sustainable growth in all sectors. But once manufacturing began bleeding good-paying jobs, the money to sustain the elites' profit margins had to come from somewhere, and that somewhere was the less-able to pay.

The elites wanted their higher profits on manufactured goods, so they shipped jobs to Mexico, China, Honduras, Madagascar, wherever the labor was cheap. But when jobs disappeared, so did "demand" in the form of discretionary spending $$$, and those were replaced with credit.

Ultimately, it always always always goes right back to manufacturing jobs. Always and always. And Baker has missed this issue several times. I think he needs a wake-up email from



Tansy Gold

[Demeter]

29. For the feds, some Wall Street firms are too big — to punish

http://www.mcclatchydc.com/227/story/80277.html

Forget too big to fail. In the eyes of federal regulators, many Wall Street firms are too big to punish. During the past three years, some of the nation's largest financial firms have been accused by the government of cheating or misleading clients and ripping off tens of thousands of consumers of their investments.

Despite these findings, these financial giants got, sometimes repeatedly, special exemptions from the Securities and Exchange Commission that have saved them from a regulatory death penalty that could have decimated their lucrative mutual fund businesses.

Among the more than a dozen firms that have gotten these SEC get-out-of-jail cards since January 2007 are some of Wall Street's biggest, including Bank of America, Citigroup and American International Group.

SEC rules permit corporate lawbreakers to apply for what are known as Section 9(c) waivers from one of the agency's harshest penalties — effectively shuttering the violator's mutual fund operations — but regulators never rejected any of these firms' applications. While the firms were punished in other ways, they were spared from what some claimed would be "severe and irreparable hardships."

In fact, the last time the SEC's staff could recall a waiver being turned down was 1978. The SEC declined to comment in detail on its decisions, however.

Despite the massive securities frauds of the past decade, the SEC is coming off a period of stagnant enforcement. The Government Accountability Office, Congress' investigative arm, reported this year that SEC enforcement workers have felt overwhelmed by their caseloads and undermined by SEC leaders hesitant to levy heavy punishment.

The waivers typically are part of the settlements the commission negotiates with companies caught violating federal law. Securities experts think companies wouldn't apply for waivers if they didn't think their applications would be granted. At the same time, the fact that the SEC could someday deny one is a major weapon in its arsenal, experts said.

The infractions that led to the waiver applications raided Americans' pocketbooks and savings accounts. Some cases involved money that thousands of citizens had invested based on the advice of their trusted financial advisers to pay tuition bills, make down payments on houses or cope with routine monthly expenses.

Small business owners had money they were counting on to pay their employees frozen by their bankers, and even bigger companies such as KV Pharmaceutical weren't immune. The St. Louis drug maker was forced to eliminate 700 jobs this year, in part because some of its investments went sour.

McClatchy's review of recent waiver applications also found that the SEC has granted exemptions to the same firms more than once, once after a firm committed the same violation of law, and the agency even approved one for a company that misled the SEC in its application.

Indeed, granting these waivers has become so routine that different firms use identical language, culled from a 1940 congressional hearing, to argue for unrelated exemptions.

Underpinning its decision not to levy the penalties provided by the Investment Company Act of 1940, the SEC essentially has accepted the Wall Street firms' argument that they're too big and too complex to be subject to a law that was written almost 70 years ago.

Earlier this year, for example, the SEC said a division of E-Trade Financial had been slicing tiny amounts of money off "tens of thousands" of stock trades, using tactics such as "trading ahead" of customers. That means that even when a customer had placed an order to buy or sell stocks, E-Trade executed its own trade for the same stock first, denying the customer the best price.

The SEC calculated that E-Trade had cost its customers $28.3 million. While not admitting guilt, E-Trade settled the case in U.S. District Court in New York and agreed to pay $34 million in penalties.

In March, E-Trade applied for a Section 9 waiver. Without it, the company said, its in-house mutual fund operation could have been decimated, potentially causing customers "severe and irreparable hardships." It also said that it needed exemption from punishment that "could disrupt investment strategies," "frustrate efforts to manage effectively the funds' assets," and increase the costs to people who owned them, E-Trade said. More than 1,500 employees could be affected.

Eight days later, the SEC indicated that it would grant the request.

Two weeks after that, E-Trade closed the very mutual funds at issue — harming the very customers it told the SEC it was trying to help.

In fact, at the same time E-Trade was asking the SEC to help it save those funds, the company had already filed notice elsewhere at the SEC that it was planning to close them, SEC records show. At the time E-Trade asked for its waiver, most of the funds couldn't even be purchased any more.

The waiver still helps E-Trade because it could allow the company to restart its mutual funds. E-Trade had no comment on its actions.

Sometimes, "permanent" in SEC enforcement parlance has proved to be a temporary thing.

In 2003, Citigroup settled a case after the SEC accused it of manipulating stock market research. The settlement "permanently restrained and enjoined" Citigroup from violating a specific section of federal securities law.

Then in 2006, the SEC cited Citigroup and other firms for improperly marketing "auction rate securities," bonds issued by municipalities, student loan entities and corporations. The agency censured Citigroup and fined it $1.5 million, and Citigroup promised to clean up its sales practices. The SEC indicated that was good enough: In its attempt to deter more lawbreaking, the SEC declared, "this settlement is appropriate."

Two years later, however, Citigroup was back under SEC scrutiny. This time, the SEC said the firm had improperly marketed auction rate securities, violating the same section of law at issue in 2003.

Citigroup again settled with the SEC, and while not admitting the allegations, it again agreed to not violate that key federal securities law.

It was one of those auction rate investments that went sour on KV Pharmaceutical.

Citigroup first approached the firm in 2005 to invest in the securities, pitching them as safe and dependable — perfect for KV's needs. When the market started souring in 2007, however, Citigroup never passed those concerns on to KV, according to a lawsuit the drugmaker eventually filed in federal court.

KV bought $10.7 million in the securities, then another $16.9 million. And it kept right on buying them, long after Citigroup traders were receiving e-mails like this one intended to boost sales: "Hit all bids . . . Times like these, we need to do whatever is necessary. Just make sure all hands are on deck and paper is sold," according to court records.

KV, in its lawsuit, said Citigroup "put its economic interests before KV's" in an effort to save Citigroup's own faltering finances. All along, KV said, it was assured there was nothing to worry about.

The auction rate securities market failed in February 2008, and KV was left holding more than $70 million it couldn't spend.

While the settlements the SEC negotiated with Citigroup and other banks could make some customers whole, it didn't help KV in time. In February, facing a cash crunch, it said it was cutting 700 jobs, due in part to its auction rate problems.

Its lawsuit is pending; neither KV nor Citigroup would comment.

Meanwhile, Citigroup filed its application for a waiver, and the SEC granted it.

In theory, securities law allows the SEC to levy heavier fines or extract greater punishment from companies that violate their previous "permanent" injunctions.

"The SEC has a miserable record of policing and keeping track of recidivism even of prior violations," said James Cox, a Duke University law professor and an expert on financial regulation. "I think it's not uncommon and I think it's a problem."

[ozymandius]

30. Fools - ALL!

these financial giants got, sometimes repeatedly, special exemptions from the Securities and Exchange Commission that have saved them from a regulatory death penalty that could have decimated their lucrative mutual fund businesses.

Among the more than a dozen firms that have gotten these SEC get-out-of-jail cards since January 2007 are some of Wall Street's biggest, including Bank of America, Citigroup and American International Group.

We might not be where we are right now if the SEC had just done its fucking job.

[ozymandius]

32. G'bye, for a few hours.

I need to leave early for school today. Please take it easy.

:hi:

[Demeter]

34. Stay Safe! See You Later!

[Demeter]

33. More Easy Money for Wall Street, Comment By William Greider

http://www.thenation.com/doc/20091221/greider

The sales pitch for financial-reform legislation pending in the House claims it would put an stop to "too big to fail" bailouts for the leading banks. The reality is the opposite. The federal government would instead be granted unlimited authority to spend whatever it takes to prop up the big boys when they get in trouble. Only in the next crisis, Congress won't have to be asked for the money. The financial rescues will be funded by the secretive Federal Reserve, not the Treasury, with money the Fed itself creates.

And the emergency lending could be pumped into any financial institution in trouble--not just behemoth commercial banks but investment houses like Goldman Sachs, insurance companies, hedge funds or any other pools of private capital whose failure regulators believe would threaten the system.

This sounds nutty and it is. A permanent security blanket for big boys of finance could further inflame public opinion. Only the public isn't likely to know. The crucial terms for Fed financing are set by an innocuous-sounding amendment offered by Representative Brad Miller of North Carolina. Any financial holding company designated as a "systemic risk" and subject to stricter regulatory standards "shall have the same access to the discount window lending of an appropriate Federal Reserve Bank as is available to a member bank of each Federal Reserve bank."

This last-minute amendment, if included on final passage, solves a huge problem for the Obama administration--how to pay for the next bailout if another financial calamity unfolds. In the House banking committee, the administration's legislation originally sought unlimited authority for the Treasury and the president. But committee members choked on the implications after Representative Brad Sherman of California denounced it as "TARP on steroids." TARP was the original $700 billion bailout jammed through Congress last year. Citizens are still angry and some members of Congress who voted for TARP are likely to lose their seats.

Solution? Let the Fed do it behind closed doors. The Federal Reserve's discount lending to commercial banks is normally not disclosed to the public since it might signal the bank is in trouble and undermine investor confidence. That secrecy can hardly be sustained in another crisis, however, since financial markets will swiftly figure out which financial firms are the lucky winners in the Fed's fail-or-flourish lottery.

The so-called reform legislation has many other problems--too many to clean up at this stage in the legislative process--but somebody should start right now to raise a righteous stink about the core provisions. As I have been writing for months, putting the Federal Reserve in charge as super-regulator is the path that leads to the corporate state. A limited circle of privileged players would enjoy a permanent line of credit from Washington, while their competitors in business and finance would struggle at great disadvantage. This top-down economy would combine the worst qualities of both socialism and capitalism. Unfortunately, the hybrid nature of the monstrosity may not become clear, even to members of Congress, until the next crisis, when it will be too late.

[Demeter]

37. Citi replaces Dial in new shake-out

http://www.ft.com/cms/s/0/755713c4-fee0-11de-a677-00144feab49a.html

Citigroup on Monday replaced Terri Dial, the head of its underperforming North American retail bank, as part of yet another shake-up of the company’s upper echelons.

The move comes three months after an independent review criticised her managerial skills.

Citi was also considering taking responsibility for the legal and compliance functions away from Lew Kaden, an influential executive who was also criticised in the external review of Citi’s top managers, people close to the situation said.

Under the changes being looked at, Mr Kaden, a vice-chairman who is well connected in Washington and is close to Robert Rubin, the former Treasury secretary and ex-Citi director, would retain oversight of government affairs and human resources.

Citi, which has ceded a 27 per cent stake to the US government in return for repeated bail-outs, failed to comment on Mr Kaden.

Ms Dial’s responsibilities, which also included oversight of Citi’s global retail operations, will be assumed by Manuel Medina-Mora, who will remain as head of the Latin American business.

Citi insiders said the move could position Mr Medina–Mora as a possible candidate to succeed Vikram Pandit, Citi’s chief executive, in the medium term.

Ms Dial was Mr Pandit’s first senior hiring since taking over the helm at Citi when he recruited her from Lloyds TSB in March 2008. She was widely credited with reviving Lloyds’ sluggish retail bank

Citi said Ms Dial was leaving for “personal reasons” and would become a senior adviser.

People close to the situation said the timing of Ms Dial’s departure had been influenced by the illness of a close family member.

However, Citi insiders said her position had been weakened since October when a report prepared by the consultancy Egon Zehnder at the request of regulators had raised concerns over her managerial skills.

The report – the product of several interviews with Citi’s executives – has not been published, but people who have seen it say it raised questions over the skills of Ms Dial, Mr Kaden and Don Callahan, Citi’s chief administrative officer.

Ms Dial’s supporters credit her with steadying a unit after an ill-fated expansion strategy put in place under Mr Pandit’s predecessor Chuck Prince and bolstering its managerial ranks.

However, results at Citi’s North American retail operations continued to suffer amid the recession and the financial crisis. In the nine months of 2009, net income at the division fell 27 per cent to $345m.

THIS STINKS TO HIGH HEAVEN--ONLY ONE FIRED IS THE WOMAN....AS PART OF THE FIGHT OF SUCCESSION

[Demeter]

38. Lehman warns on ‘unreasonable’ US claims

http://www.ft.com/cms/s/0/c4fc9870-fef1-11de-a677-00144feab49a.html

Big banks seeking to make windfall profits by making “outrageously unreasonable” claims against Lehman Brothers’ US business will be forced to prove their case in public courts, the executive leading the unwinding of the failed bank has warned.

Bryan Marsal, the chief executive of Lehman Brothers Holdings, who is responsible for maximising recoveries to all its creditors, said he was planning to make an example of big banks seeking to claim more than they should on billions of dollars of losses linked to trades in derivatives.

He said: “We are going to go after the outliers. “We plan to bring these claimants in front of the judge to argue why this claim is not warranted and by doing so persuade the other claimants to be more reasonable.”

His comments come as the unwinding of Lehman Brothers moves into its second year.

Mr Marsal and his team are expected to focus this year on resolving the more than $800bn (£496bn) of claims for losses that have been made against the US estate of Lehman.

Those claims linked to derivatives are expected to pose the biggest challenge to unwind and the bankruptcy of the investment bank is being widely watched for precedents in this process.

Mr Marsal said: “There are a lot of innocent people that got hurt big time by the collapse of Lehman and we need to make sure the banks understand that this is not a profit windfall, that damages being claimed ... are in most cases far in excess of losses.

“We will be in court with these claims in the second quarter, if these banks don’t come to their senses before.”

About $60bn in claims linked to derivatives have been made including those from about 40 of the largest US banks.

While Mr Marsal said they were not rejecting legitimate claims, he wanted the large institutions to co-operate in proving their claims.

Banks have been using provisions under standard contracts by the trade body for the derivatives industry to calculate their potential losses.

But Lehman’s representative believes the process provides banks with “theoretical loss in a market that has no bearing on reality” and permits “extremism” in the calculation of the value of the claims.

However, people familiar with some of the claims said the bankruptcy process allowed banks to make claims and that the losses accounted for the increased cost at the time to replace those trades.

[Demeter]

39. Component shortages set to push up computer costs

http://www.ft.com/cms/s/0/f4854e36-fedb-11de-a677-00144feab49a.html

The cost of assembling personal computers will rise this year for the first time in six years because of shortages in some key components, industry analysts have forecast.

The cost of semiconductor components in computers has fallen by an annual average of 7.8 per cent since 2000, but they are set to rise this year by 2.8 per cent, according to data from Gartner research consultancy.

This is almost entirely attributable to a 23 per cent increase in the price of D-Ram memory chips. Those chips, needed in every computer, make up about 10 per cent of a PC’s overall cost.

Ben Lee, principal research analyst, said: “In general, there is a steady drop in the cost of a PC every year. If component prices are flat or even increasing, that means they are outperforming expectations,” .

The cost of flat-screen monitors was expected to increase by about 20 per cent this year because of shortages, Mr Lee said. Other components in short supply include hard drives and optical disc drives.

The shortages are part of the aftermath of the financial crisis, which led many component makers to delay investment plans. While capacity building resumed late last year, it usually takes at least a year before new factories come on line.

This problem is particularly acute in the D-Ram industry, which is in the middle of migrating from second to third-generation chips, called DDR3 chips.

Since mid-December, spot prices for DDR3s have risen 23 per cent to $3.01, according to Drame­Xchange.

Rising component costs present a dilemma for PC makers, which helped stimulate a recovery in the technology sector last year by selling small, cheap notebook computers to price-conscious consumers. Analysts say PC brands will have to adapt this year by promoting more fully equipped, mainstream computers instead.

[Demeter]

40. Carlyle plans renminbi fund with state body

http://www.ft.com/cms/s/0/17cc573e-ff29-11de-a677-00144feab49a.html

Carlyle Group, the US private equity fund, on Tuesday unveiled plans to work with city authorities in Beijing to establish a renminbi fund that will enable it to make local currency investments across China.

Carlyle has signed a memorandum of understanding with the financial arm of the Beijing municipal government and expects the fund to begin operation later this year.

Foreign private equity groups have struggled to make significant inroads in China, partly because of strict regulations governing the use of dollar-based offshore funds to acquire local assets.

Carlyle was an early mover in China and has made close to 50 investments to date with an aggregate equity expenditure of $2.5bn, the biggest by a single foreign private equity group....

[Demeter]

41. Rate rise fears spark rush to issue bonds

http://www.ft.com/cms/s/0/6f46f226-fef2-11de-a677-00144feab49a.html

Businesses and governments have rushed to raise tens of billions of dollars from bond markets in a frenetic round of new year fundraising amid fears that interest rates are set to jump.

A flurry of issuers, including Virgin Media, BMW and Manchester United football club, turned to the capital markets on Monday aiming to raise more than $20bn (£12.4bn).

Poland and Mexico were among a number of governments that also tapped international investors.

So far this month more than $75bn has been raised, more than two-thirds of this by financial institutions trying to repair their balance sheets in the wake of the economic crisis.

Investors are expecting a spurt of issuance this week by junk-rated European companies, a sector of the bond market that was frozen for much of last year. Last week, the US corporate bond market had its second busiest day on record.

Wayne Hiley, of Barclays Capital, said a recent rally in the corporate bond markets had lowered the interest rate premium to government bonds that businesses pay. “There are issuers who are saying ‘let’s take advantage of this’ even if they hadn’t planned to come to the market until later on,” he said.

Companies usually aim to sell bonds early in the year when investors have fresh funds and before many companies enter a “purdah” period ahead of earnings announcements.

However, the current round of capital raising is particularly intense. Some companies believe a recovery in economic growth this year will lead to central banks raising interest rates, pushing up the cost of borrowing.

Other companies, fearing market turbulence as the authorities begin to unwind last year’s emergency monetary and fiscal measures to prop up the economy – which have included buying bonds – are borrowing as much as they can while demand for debt remains strong.

Ivor Dunbar, co-head of global capital markets at Deutsche Bank said: “It’s sensible to assume that rates aren’t going much lower, so issuers are taking advantage of the conditions now”.

There is also unease that Western economies might be heading for a “double dip” recession – or the chance that the economy slumps back again towards the end of this year, as fiscal stimulus fades away.

Some treasurers also fear a logjam later in the year when companies issuing higher-yielding debt try to refinance cheap loans they took out in the credit boom.

[Demeter]

42. Miners shun China in iron ore price talks

http://www.ft.com/cms/s/0/50e41854-fef2-11de-a677-00144feab49a.html

Global miners have sidelined China, their biggest customer, in the annual iron ore price negotiations because of political gridlock over the resource in the industry and government and fears about retribution if the talks were to collapse.

Vale of Brazil, Rio Tinto and BHP Billiton, the big operators that mine iron ore in Australia, are talking instead to Japanese customers to reach a benchmark deal they can present to Beijing on a “take it or leave it” basis.

The decision to sideline Beijing is remarkable as China is the largest iron ore importer, accounting for more than 50 per cent of the seaborne market.

The miners have so far held no substantive negotiations with the Chinese side, led by Baosteel, the big state-owned steel mill, according to people familiar with the talks.

They added that there were no plans to travel to China for talks, meeting instead in Singapore.

One executive said: “As far as I am concerned, they could come over to Australia if they want to talk.”

The Chinese side has been hamstrung by internal disputes between steel companies and the industry association over how to manage any talks and a price they should agree on.

Prospects for a deal this year could be further complicated by the detention of Stern Hu, the Rio Tinto executive held by the Chinese since July on charges that he and three other employees of the Anglo-Australian miner illegally obtained commercial secrets during last year’s iron ore price negotiations.

The Australian government announced on Monday that Mr Hu’s case had been referred to the prosecutor in Shanghai to decide whether or not he and his colleagues will stand trial.

Under Chinese law, the prosecutor has 45 days to decide whether or not to try the men in court, according to Tao Wuping, lawyer for Liu Caikui, one of the Rio employees.

The four were detained initially on suspicion of stealing state secrets. However, the charges were downgraded a month later when they were formally arrested on suspicion they violated commercial secrets and took bribes. The case sent shock waves through the foreign business community in China, and has doubtless contributed to the tense atmosphere in this year’s benchmark negotiations, with mining negotiators understood to be unwilling to travel to China for fear of possible detention.

Legal sources said the men were more likely to be charged and brought to trial, any time from the end of February, than to be released.

The timing of the trial, which could come in the crucial weeks before the April 1 deadline for benchmark price negotiations, would add a further element of political pressure to the highly contentious talks.

INTERACTIVE GRAPH AT LINK

[UpInArms]

50. dollar watch

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

Last trade 76.952 Change -0.053 (-0.07%)


USD Graphic Rewind

http://www.dailyfx.com/forex/fundamental/article/usd_graphic_rewind/2010-01-12-0634-USD_Graphic_Rewind.html



...more...

US Dollar Gains on Safety Demand as Chinese Borrowing Costs to Rise

http://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/euro_open/2010-01-12-0709-US_Dollar_Gains_on_Safety.html

The US Dollar rose and stocks declined in Asian trading after China allowed the yield on its 1-year central bank bill to rise for the first time in 20 weeks, hinting that policymakers are becoming worried about overheating the economy and may start withdraw stimulus.

Key Overnight Developments

• US Dollar Higher as China Allows First Bond Yield Gain in 20 Weeks
• New Zealand Firms Say Labor Market Firming, NZIER Survey Shows
• Japan: Trade Surplus Narrows, Deflation Continues as Lending Drops
• UK House Prices Pressured Higher Despite December Setback, Says RICS
• Australian Lending Falls Most in 18 Months on RBA Rate Hikes

Critical Levels



The Euro traded lower in Asian hours, slipping as much as -0.4% against the US Dollar. The British Pound followed suit, testing as low as 1.6063 against the greenback. We remain short EURUSD at 1.4881 and short GBPUSD at 1.6648.

Asia Session Highlights



The US Dollar traded higher and stocks declined across Asian exchanges with investors seeking safety after China allowed the yield on its 1-year central bank bill to rise for the first time in 20 weeks, hinting that policymakers are becoming worried about overheating the economy and may start to tighten monetary conditions. Yesterday, economists at the Chinese Academy of Social Sciences said GDP may grow as much as 16% this year, threatening to set off rapid inflation and a property bubble. The researchers cautioned that “if the government continues with the same strength of macro-economic stimulus as in 2009, there will be notable economic overheating in 2010.” Comments from China Investment Corp, the Asian giant’s sovereign wealth fund, also boosted the Dollar after it predicted that the greenback is unlikely to weaken further this year.

New Zealand’s NZIER Business Opinion Survey showed that sentiment soured a bit in the fourth quarter after surging to a decade high in the three months through September. The details of the report looked more encouraging than the headline figure, however, as the decline looked to be accounted for by lower readings on sub-indexes tracking ease of finding labor. Tighter hiring conditions now and expectations of more of the same in the second quarter hint that the jobless rate may start to moderate after hitting a 9-year high at 6.5%, helping to bolster New Zealand’s economic recovery by boosting disposable incomes and encouraging consumption growth.

Japan’s Current Account surplus narrowed less than economists expected, printing at 1.1 trillion yen in November versus 1.4 trillion in the previous month. Economists were calling for a 0.9 trillion outcome ahead of the release. The surplus had trended higher since hitting a record low in January 2009 as imports declined at a markedly faster pace than exports. The same pattern held this time around but the gap in negative growth rates narrowed, leading to a smaller surplus. Indeed, overseas sales contracted just 7% from the previous year, the smallest drop since September 2008, while outbound shipments fell -18.2% over the same period, the least in a year. Meanwhile, December’s monetary aggregate figures pointed to continued deflationary pressure: the annual growth rate of the M3 Money Stock (the broadest measure of money supply) fell to 2.2%, marking the first decline since June, and Bank Lending shrank 1% to reveal the biggest drop in over 4 years. Finally, the Eco Watchers survey showed that merchant sentiment improved in December, with respondents in the retail and manufacturing sectors predicting improving conditions over the next three months.

...more...

[KoKo]

58. Administration Bank Tax Plan: An Empty Populist Gesture by Design?

Administration Bank Tax Plan: An Empty Populist Gesture by Design?

http://www.nakedcapitalism.com/2010/01/administration-bank-tax-plan-an-empty-populist-gesture-by-design.html#comments

With its talk of new taxes on banks, is Team Obama reverting to its now well established pattern of crony capitalist giveaways with the occasional phony populist reform as an increasingly ineffective disguise? The extraordinarily unenthusiastic, perhaps inept by design, discussion of its plans to tax banks in some yet undetermined manner certainly says so.

First, let’s consider Exhibit 1: the truly piss poor job the Obama Administration did of selling its health care reform plan. Recall the remarkable disconnect of people saying they did not want “socialized” health care, yet they also did not want Medicare touched. It does not take Madison Avenue credentials to see the sales pitch: “We already have successful, popular, government funded health care in the US. It’s called Medicare. We want to build and improve on that. Here’s how.” Did we see anything like this from the Administration message-meisters? And where were the President’s famed communication skills? Funny how he seems unable to articulate a vision that will actually shift public opinion.

If you believe in neuro-linguistic programming, Obama’s formal presentation often uses what I believe NLP calls hypnotic speech. It sounds wonderfully uplifting while you are listening, but when you get done, you scratch your head, because there was so much abstraction and imagery relative to content that very little of substance is said. Despite its creepy sounding name in the NLP lexicon, it’s common in political speeches. The audience is left with a favorable impression of the speaker but not much in the way of concrete ideas that it can recall, which is perfect for campaigners who studiously want to avoid making promises. Hypnotic speech is good for creating a positive image, not good at all for conveying content of any complexity.

Now before we get to the “how” of any bank taxes, something Team Obama clearly has not figured out, we also need a “why”: why are these taxes warranted and necessary now? Well, the Adminsitration is either punting (as usual) in giving a rationale, or worse, is just ‘fessing up loudly and clearly that it really does not have much appetite for this exercise, but is responding to its sliding poll ratings.

Get a load of these remarks from the usual MSM suspects. In each case, we have chosen the first sentence which says why the Administration is planning to move ahead:

Wall Street Journal: “The White House hopes the fee will soothe the public’s anger at financial firms.”

Financial Times (subhead on first page summary): “Aim to address anger over bonuses.” From the story itself: “The proposal comes as the administration faces increasing pressure from Democrats in Congress to take punitive action against banks. The White House is trying to contain anger in a week in which banks will begin announcing billions of dollars in new bonuses.”

New York Times (which does give two objectives): “The general idea is to devise a levy that would help reduce the budget deficit….But the president also has a political purpose — to respond to the anger building across the country as big banks, having been rescued by the taxpayers, report record profits and begin paying out huge bonuses while millions of Americans remain out of work.”

From Politico.com (which broke the story): “A fee on banks would help solve two political problems for the White House. First, the administration would benefit politically from tapping into the populist anger about enormous 2009 banker bonuses that will be announced in coming days. And second, it would help stem some of that backlash from the GOP about runaway federal deficits.”

[Dr.Phool]

61. Hypnotic speech = Profound nonsense.

I know a woman who can prattle on, non-stop in what appears to be an intelligent conversation. Until it dawns on you, that she has said absolutely nothing of any value.

[DemReadingDU]

59. Simon Johnson: Kill Wall Street Bonuses or Tax 'em to Death

click link for video

1/12/10 Kill Wall Street Bonuses or Tax 'em to Death, MIT's Simon Johnson Says

Bashing big banks is all the rage this week, with White House officials and New York Attorney General Andrew Cuomo scolding Wall Street fat cats ahead of the Financial Crisis Inquiry Commission, which gets underway Wednesday.

At issue is what level of bonuses are appropriate for publicly traded firms that posted record profits in 2009 thanks to the government's largess and after being rescued in 2008.

Simon Johnson, professor at MIT's Sloan School of Management and former chief economist of the IMF, says there's a simple solution to this seemingly complex problem: "People working at our largest banks - say over $100 billion in total assets - should get zero bonus for 2009."

Looking back, all the big firms were saved by the various government programs, including Goldman Sachs and Morgan Stanley were allowed to convert to bank holding company status in 2008, Johnson says. "There were unconditional bailouts for all our big banks - it was a decision made on the fly in the crisis. Let's not second-guess," he says. "But no way that strategy implies, requires, or is consistent with the banks then paying all that money out to their employees."

By contrast, when the government instituted a similar "recapitalization" strategy for banks after the Latin America debt crisis of the early 1980s, the banks retained the money to help rebuild their balance sheets, he recalls. "In this case they're going to pay out 40% - that's not good economic policy."

And if the "too big to fail" banks insist on paying bonuses for "retention" purposes or other reasons he deems fallacious, Johnson says they should be subject to a "steeply progressive windfall income tax" -- paid by the employees and not the firms, as is the case with the U.K.'s recently announced 50% bonus tax.

click link for video

http://finance.yahoo.com/tech-ticker/kill-wall-street-bonuses-or-tax-%27em-to-death-mit%27s-simon-johnson-says-402210.html?tickers=XLF,JPM,GS,BAC,C,MS,WFC&sec=topStories&pos=9&asset=&ccode=

[DemReadingDU]

63. Simon Johnson: Bernanke "Not the Right Man for the Job Right Now"

click link for video

1/11/10 Bernanke "Not the Right Man for the Job Right Now", Johnson Says

Former IMF chief economist Simon Johnson is joining a growing chorus of voices, who are frustrated the same men at the helm prior to the financial meltdown still have their jobs. Among the leaders in question are Fed Chairman Ben Bernanke, Treasury Secretary Tim Geithner and White House chief economic adviser Larry Summers, director of President Obama's National Economic Council.

Oh, Ben. Reappointing Bernanke would be a mistake, argues Johnson, a senior fellow at the Peterson Institute for International Economics, and author of the popular Baseline Scenario blog. Bernanke's reappointment will soon be voted on by the full Senate, following the Senate banking committe's confirmation last December.

As Johnson tells Aaron and Henry, what's most troubling is Bernanke's seeming ineffectiveness at taking on "too big to fail" financial institutions. More than a year after Lehman's collapse, bank balance sheets remain loaded with unsound assets and risks. The giant financial institutions are still giant. Wall Street is bracing for a record '09 bonus season.

Geithner's email woes. Meanwhile, Geithner is facing growing furor over his alleged involvement -- while head of the New York Fed -- in covering up details of the AIG bailout, and the insurer's "backdoor bailout" of some of it's largest counterparties.

Bigger picture, the smoking gun for Bernanke & team ultimately may be their collective decisions they've championed during the past two years. Most notably, lack of regulation and monetary policies as the mortgage and credit crisises grew larger and larger.
"Policies have to change," Johnson says.

click link for video

http://finance.yahoo.com/tech-ticker/bernanke-%22not-the-right-man-for-the-job-right-now%22-johnson-says-402299.html?tickers=dia,spy,^gspc,^dji,tlt,tbt&sec=topStories&pos=8&asset=&ccode=

[Demeter]

69. I Wouldn't Hire Bernanke To Walk a Dog

Is there any right job for this man? After all, the village got its idiot back last year....

[DemReadingDU]

71. Simon Johnson: We Need Bank Reform Now Or Another Crisis Is Inevitable

click link for video

1/12/10 We Need Bank Reform Now Or Another Crisis Is Inevitable, Simon Johnson Says

One of the most remarkable things about the financial crisis is that, despite nearly destroying the economy, it hasn't led to any meaningful banking reforms. One might think that, after a near-death experience, fixing the system would be a top priority. But for a variety of reasons, including the market recovery, nothing has changed.

That's outrageous, says our guest Simon Johnson, MIT professor and former economist at the IMF. And it means that we're just heading for a similar crisis again.

The most important and necessary reform, Professor Johnson says, is the elimination of "Too Big To Fail," an implicit policy in which our government has agreed to bail out any financial institution viewed as large enough to bring the system down.

In Johnson's view, the way to scrap "Too Big To Fail" is to chop the banks up and then limit their future asset size to a specified (and small) percentage of GDP. Tying bank size to GDP would allow them to grow with the economy, eliminating the need for constant updates to the size cap. It would keep them small enough that they wouldn't threaten the system.

Goldman Sachs, for example, could be chopped up into, say, five parts. Goldman's shareholders would still own all five parts, so they wouldn't suffer, and the five mini-Goldmans would then be free to take as much risk as they wanted without having the taxpayer on the hook.

One of the arguments against this plan is that our banks would have trouble competing in a global market in which Asian and European banks have no such size restrictions. Professor Johnson isn't concerned about that.

click link for video

http://finance.yahoo.com/tech-ticker/we-need-bank-reform-now-or-another-crisis-is-inevitable-simon-johnson-says-402563.html?

[Demeter]

83. Evolution of Big Banks

[DemReadingDU]

87. bookmarking that evolution of banks

I can never remember which banks morphed into the mega-banks.

[Tansy_Gold]

74. From 1966 --

Some of us were talking at coffee this morning about the problems with the banks and credit and how people are likely to get just too frustrated and angry and start taking things into their own hands the wrong way. Two of our Chicago-area natives recalled an incident from 1966 that, on reflection, seemed to have an eerie resonance today. Tansy Gold confesses that she, also a Chicago native and certainly old enough in 1966 to have been aware of this incident, knew nothing about it until she looked it up after the discussion.

The following is a link to an article from the April 1966 edition of Ebony Magazine. While ostensibly about the shotgun slayings of two partners and an employee of Fohrman Motors in Chicago by Donald Dean Jackson (shot by a police detective after the shootings) after Jackson had apparently been "gouged" by what he considered excessive financing fees, there is much more in the article about fair lending practices, Truth in Lending legislation, and even the effect of credit on social mobility and the national economy. Could be really really relevant today.

http://books.google.com/books?id=kUBLURuzOxEC&pg=PA67&lpg=PA67&dq=fohrman+motors&source=bl&ots=-HOJMEyOyR&sig=c6greWcDFKwXaoVLgLQ2BkrowMA&hl=en&ei=SctMS8yvNJS0NpHW9OgM&sa=X&oi=book_result&ct=result&resnum=2&ved=0CAoQ6AEwAQ#v=onepage&q=fohrman%20motors&f=false


Interestingly, the article cites the HR policies of Inland Steel in Chicago, which at that time had 22,000 employees in the Chicago/Gary/East Chicago area. I wonder how many are employed by ArcelorMittal, who bought out Inland?


Tansy Gold, off on tangents again

[DemReadingDU]

80. I do wonder why people haven't become angry at the banksters

and gunned them down on Wall Street and other financial institutions. Maybe because the government is keeping people pacified with unemployment compensation and food stamps. Also today, more people just seem to be wimpy, preferring to watch mindless TV.

edit: I'm not advocating violence, but at some point, that is the only thing that wakes up people.
:(

[Tansy_Gold]

90. Well, that opens a whole 'nother line of discussion

Because when it comes to international violence, aka terrorism, no one seems to be doing anything about the root causes. Even Clinton's strategy (?) of treating it as a police matter, a crime, doesn't make sense. That's taking the position that there is nothing that can be done to prevent it, only prosecute it after the damage is done.

I didn't have time to read the entire Ebony article, but it seemed that the kind of abuses that led to the Forhman murders was addressed with new laws that at least gave the consumer a fighting chance. And I think for the most part, up until say 2000 or so, that legislation worked.

But with the abandonment of Glass-Steagall and the unregulated greed of Wall Street, even those 1966 protections fell by the wayside.

Donald Dean Jackson was, I'm sure, only one of many, many, many such victims of consumer abuse. I think of the asshole who ran the mortgage brokerage in the office next to where I worked in 2001, a greasy bastard who bragged about not being able to process the paperwork fast enough and not caring if anything was done correctly because he got paid a commission on every mortgage that went through his office and it was up to the banks to collect their money from the buyers. His job was just to process paper. He lived very, very, very well, bought his Phoenix girlfriend a new Jaguar and sent his SF wife fat bonus checks every month. If there's anyone who deserves to be homeless now, it's him. I can't even remember his name.

And like you, I don't advocate or even condone violence, not even our teasing FRSPs, but I also understand that when people are desperate, they take desperate action. Someone, someone is going to be as desperate as Donald Dean Jackson.

I think we should remember that name.


TG

[DemReadingDU]

99. Donald Dean Jackson

I've filed that name in my brain.

Occasionally, there are situations even where I live, that people can't see any way out, other than shooting. A desperate person will do something desperate. It's remarkable that there hasn't been any such desperation act against a bankster, yet. But that could change with record bonuses being paid out soon.


1/12/10 The most brazen disdain for democracy in modern times.
Bumper banker bonuses are back.
By Simon Jenkins

There will be a tidal wave of rage. Over the next two weeks the executives of the leading British and American banks will announce that some £50bn is to be taken from accumulated profit and handed over, not to shareholders or taxpayers, but to themselves. It will be the most outrageous contempt of ­democratic authority in modern times.

The sums will be breathtaking, starting with Friday's predicted payout of £18bn at the American bank, JP Morgan Chase. This is almost exactly what it cost the US taxpayer to rescue the bank a year ago. A similar sum is predicted at Goldman Sachs. This is happening at the heart of the western economy that has just endured its worst crash for 30 years, almost entirely through the doings of these banks and executives.

more...
http://www.guardian.co.uk/commentisfree/2010/jan/12/disdain-democracy-bankers-bonuses-theft

[DemReadingDU]

64. ZeroHedge: The Minsky Moment Approaches

1/11/10 ZeroHedge: The Minsky Moment Approaches
"When investors are forced to sell even their less-speculative positions to make good on their loans, markets spiral lower and create a severe demand for cash. At that point, the Minsky moment has arrived." The Minsky moment is, once again, knocking on the door.

Today, the yield curve hit a record. At 380 basis points, which incidentally was the widest spread between the 2 Year and the 30 Year ever, it has never been easier for banks to make money on the short-long interest spread.


.
.
.
lots more...
http://www.zerohedge.com/article/minsky-moment-approaches

The Minsky Moment
http://en.wikipedia.org/wiki/Minsky_moment

[CatholicEdHead]

85. CNBC is putting the blame on new regulations (aka Obama)

Yep, it is not the banksters lack of lending, it is Obama's and the Democrats' new regulations. :puke:

http://www.cnbc.com/id/34825943

A potential wave of new regulation and higher taxes may be scaring many businesses from hiring, prolonging any rebound in employment, say business groups and economists.

The prospect of increased federal and state regulation and taxes has been particularly disruptive to the hiring plans of small- and medium-sized businesses, which have historically generated about two-thirds of the nation’s jobs.

“I don’t really see the private sector hiring much in the next few months,” says Brian Bethune, an economist at Global Insight. “For the small-business sector there is just too much uncertainty about what happens beyond 2010."

Not only is the Obama administration seeking to push through major overhauls of energy and health care policy, it is also expected to impose dozens of new workplace rules and raise income taxes.

[Demeter]

88. What New Regulations?

:shrug: :silly: :freak: :banghead:

[CatholicEdHead]

94. Even trival changes are radical "regulations" to the CNBC crowd

:crazy:

[CatholicEdHead]

86. JPMorgan still out to lunch on bonuses

http://www.cnbc.com/id/34818846

JPMorgan Chase Chief Executive Jamie Dimon defended the bank's pay policies on Monday and said he was "tired" of his employees being vilified over bonuses.

Dimon, along with the chief executives of Goldman Sachs, Morgan Stanley and other big banks, will be appearing this week before a commission created by Congress to look into causes of the financial meltdown.

JPMorgan pays its employees for sustained performance over multiple years, Dimon said on Monday.

"We do not have change-of-control agreements, special executive retirement plans, golden parachutes, special severance packages or merger bonuses," he told a JP Morgan healthcare conference, adding that many of company's employees are in client-facing jobs and work hard with small and mid-size businesses.

"I am a little tired of the constant vilification of these people," he said.

[Tansy_Gold]

91. "I am a little tired of the fucking cluelessness of Jamie Dimon"

Tansy Gold

[Demeter]

93. The Man Who Would Be Treasurer

of these here United States....

[Tansy_Gold]

95. I am not a violent person. I do not believe violence solves problems.

I do not advocate violence.

I abhor violence.



































OFF WITH HIS FUCKING HEAD~!

[Demeter]

96. We Should Have a New Form of Punishment

Permanent Unemployment after asset-stripping.

Talk about a grassroots idea!

[Tansy_Gold]

97. Court-mandated poverty.

I like it.


TG

[Demeter]

98. CMP vs. FRSP

Which would the guilty choose?

Obviously, CMP is for states that do not permit Capital Punishment.

[Tansy_Gold]

100. Well, actually

CMP is a form of "capital" punishment that the non-violent Tansy Gold approves of.

I also think corporations that are found to be guilty of murder -- like CIGNA and other "health" insurance companies who let people die rather than pay out what they're supposed to -- should be subject to the same penalties. And in their cases, death of the corporation, which involves no loss of human life, should be automatic.

Can you tell I'm going bonkers over a deluge of paid work today after a three-week-long dearth?


Tansy Gold, playing with "d" words today.

[Demeter]

102. I Think We Have the Seed Idea to Rewrite US Statutory Law Here

Or at least, plug a gaping hole in it.

Now, to get it to go viral...

[DemReadingDU]

101. Where's Demeter's guillotine?

This will do

[Demeter]

103. That's far to gruesomely Realistic!

Something Like This would sell much better.

[Tansy_Gold]

104. SOMEONE NEEDS TO PHOTOSHOP THIS WITH TIMMEH'S

head and Jamie and Larry and Bob and Lloyd and Big Al (who will not be allowed "care" packages from Andrea).

[Demeter]

105. Of Course, I Meant TOO realistic

My fingers are getting much worse at spelling, typing and grammar. Maybe I need gloves...

[Demeter]

89. The Outrage Continues:Health tax on high-earners may be out

http://news.yahoo.com/s/ap/20100112/ap_on_bi_ge/us_health_care_overhaul

Democratic officials say House and Senate negotiators working with the White House on a health care bill appear likely to drop a proposed income tax increase on high-wage earners. They also may jettison a requirement for large corporations to offer coverage to their employees.

These officials also said that key lawmakers and the White House were hoping to include more money to protect state governments from the cost of an expansion of Medicaid.

The officials spoke on condition of anonymity because the talks were private.

The developments came as the pace of negotiations on health care legislation quickened. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid were scheduled to meet with Obama at the White House Wednesday.

[Tansy_Gold]

92. CHANGE!

not