STOCK MARKET WATCH, Wednesday January 13

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday January 13, 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 12, 2010

Dow... 10,627.26 -36.73 (-0.34%)
Nasdaq... 2,282.31 -30.10 (-1.30%)
S&P 500... 1,136.22 -10.76 (-0.94%)
Gold future... 1,129 -22.10 (-1.92%)
10-Yr Bond... 3.71 -0.11 (-2.80%)
30-Year Bond 4.62 -0.11 (-2.31%)

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

Market Conditions During Trading Hours

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

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This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.

Read more: du

[ozymandius]

1. Market Observation

The "Unconflicteds"
BY RICHARD A. ECKERT

No good crisis goes unwasted

Sixteen months have passed since the global financial system nearly melted down that fateful week of September 2008, when Lehman filed for Chapter 11 protection and AIG teetered on the precipice of failure before being seized by then Treasury Secretary Henry Paulson and the Fed, and the exposures giving rise to the crisis remain. There are banks that are still too big to fail—or, to be more precise, “too interconnected to fail”—$10s, if not $100s of trillions of credit default swaps (notional principal) that still trade over the counter with opaque pricing and little/no margin requirements and federally-insured depositories, or their affiliates, that can engage in investment banking and proprietary trading activities.

The only change that has taken place is that the risks posed by the financial institutions to which the above apply have been shifted from the managers, bondholders, employees and, to a much lesser extent, the shareholders of those institutions to the taxpayer. Indeed, firms like Goldman Sachs (NYSE:GS—$167.82) have raked in enormous profits by doubling their value at risk (VAR), knowing the taxpayer stands behind any bets that go sour. Thus, we appear to be living in the worst of all worlds: the risks are as great as ever—if not greater—there is no regime in place to manage those risks, and no incentive for those taking them to stop taking them because it is an innocent third party, the taxpayer, that will ultimately shoulder the costs of any breakdowns in the system. ...

The Wall Street Reform and Consumer Protection Act

Until last month, that is, when the U.S. House of Representatives passed H.R. 4173, The Wall Street Reform and Consumer Protection Act. Might as well have read as “The Wall Street Refrain and Consumer Predation Act”. Jamie Dimon, Chairman and CEO of JP Morgan Chase (NYSE:JPM—$44.48) could have written the blueprint for the bill in an editorial he wrote for the Washington Post on November 13, 2009, “No more ‘too big to fail’”. Despite the opportunity for meaningful reform presented by the crisis, despite the momentum for genuine change a year ago last fall, despite the public outcry over the outrageous policies and practices of financial institutions large and small, all we got was another feckless bureaucracy, the Consumer Financial Protection Agency (CFPA)—I’m sure this provided a nice sound bite for Democratic legislators pandering to core constituencies (and you are hearing this from a person who votes Democratic), but the new agency will neither address “safety and soundness” issues nor protect the consumer from unscrupulous lending practices, just add cost to an already overburdened taxpayer—and another amorphous, pusillanimous council of federal regulators to engage in “extend and pretend” oversight. “We’ll extend oversight over systemically important institutions if they’ll pretend to observe our rules and guidelines”.

Sounds eerily similar to the interagency guidance on commercial real estate (CRE) loans issued on October 30, 2009, encouraging banks to extend existing terms and rates on CRE loans scheduled for a balloon payment in late 2009, 2010 and 2011 in return for borrowers’ promises to make payments on those terms and at those rates, no matter how precipitously in value the underlying property had dropped. It is my understanding that the tacit agreement between lenders, regulators and auditors is that even if the loan is delinquent after extension, the lender merely needs to report it as nonperforming—it does not, does not, I repeat have to charge off estimated losses or even make a provision for them, even if the property collateralizing the loan is worth less (in many cases, far less) the amount of the loan outstanding. .....

Part of the problem, not the solution

Which brings me to the point of this piece. Yes, I am still convinced we need to make sure that none of our financial institutions is “too big to fail”, that none of them can write, willy-nilly, $10s of trillions of swaps without making sure where those obligations lie or that those agreements were adequately collateralized, and that underwriting and market making activities are not funded with insured deposits. But, at the same time, we should not stanch the flow of credit to creditworthy borrowers, particularly business borrowers that depend on C&I loans to fund their day-to-day operations. This, however, is exactly where regulation broke down. Most of the new charters late in the last decade and early in this came in an already crowded commercial banking field wherein most participants were CRE and CRE construction lenders; working capital loans (C&I) were an anathema to them. So, most regional and community banks—when viewed against the conduits they competed with—merely served to inflate real estate values, not stimulate business activity.

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

[ozymandius]

2. Today's Reports

10:30 Crude Inventories 1/08
Briefing.com NA
Consensus NA
Prior 1.33M

14:00 Treasury Budget Dec
Briefing.com -$97.0B
Consensus -$92.0B
Prior -$120.3B

14:00 Fed's Beige Book

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

[Demeter]

3. Not the first rec this time.

But good morning everybody! It's 24 balmy degrees out.

[ozymandius]

6. Please drink plenty of liquids.

And please limit your outdoor activities during the mid to late afternoon. :evilgrin:

Good morning, Demeter. Two jumped in line to rec the thread just as I posted the thing later than usual. :donut: :donut: :donut:

[Demeter]

9. I had to limit outdoor activities yesterday

My back was on the verge of spasming out. I am not in good enough shape to do the kind of things I've been doing, it seems.

Tonight is the Annual Meeting for the Condo Association. Elections of board members, reports, complaints, it should be stressful.

Then next week is election of officers. That will be the culmination of nefarious schemes!

[ozymandius]

4. Oil falls below $80 as US inventories jump

SINGAPORE – Oil prices slid below $80 a barrel Wednesday in Asia after China moved to curb bank lending and a report showed an unexpected jump in U.S. inventories of distillates and gasoline. ....

But data released late Tuesday by the American Petroleum Institute showed distillate inventories increased 3.6 million barrels last week, while analysts had expected a drop of 1.7 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Gasoline supplies jumped 6.8 million barrels and crude stocks rose 1.2 million, the API said. The Energy Department's Energy Information Administration plans to announce its inventory report later Wednesday. ....

In other Nymex trading in February contracts, heating oil fell 2.94 cents to $2.10 a gallon and gasoline dropped 3.58 cents to $2.06 a gallon. Natural gas futures skidded 6.4 cents to $5.53.

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

[Demeter]

5. German economy shrinks in 2009 for first time in six years

http://www.marketwatch.com/story/germanys-economy-shrank-5-in-2009-2010-01-13-41800?siteid=YAHOOB

Germany's economy shrank 5% in 2009, posting its biggest contraction since the Second World War, as demand for its exports -- historically a major driving force of growth - plummeted, official preliminary data showed on Wednesday.

Last year's contraction in gross domestic product, the first in six years, was slightly higher than the 4.8% decline expected by most economists.

The decline contrasted sharply with the growth recorded in recent years. The German economy expanded by 1.3% in 2008 and by 2.5% in 2007.

"Over the year, there were signs that the economic development would slightly stabilize on the new, lower level," the Federal Statistical Office, Destatis, reported in a statement on Wednesday.

"What was striking in 2009 is that both exports and capital formation in machinery and equipment slumped heavily," Destatis also said.

Foreign trade, previously a major driving force for growth in the German economy, curbed economic growth last year. Exports dropped a price-adjusted 14.7%, while imports declined 8.9%, according to official data.

Consumption expenditure made the only positive contribution to GDP in 2009, with household consumption up a price-adjusted 0.4% and government consumption expenditure up 2.7% on the previous year.

General government net borrowing totaled 77.2 billion euros ($112 billion) last year, raising the budget deficit to 3.2% of GDP, according to provisional calculations by Destatis.

[Demeter]

7. SocGen profit almost wiped out by $2 billion charge

http://www.marketwatch.com/story/socgen-profit-almost-wiped-out-by-2-bln-charge-2010-01-13?siteid=YAHOOB

Shares in Societe Generale sank as much as 6% Wednesday after the French bank warned that it would take another 1.4 billion euros ($2.02 billion) of charges on risky mortgage assets, virtually wiping out its profit for the fourth quarter.

In a brief trading update, the bank said it had again marked down the value of its mortgage holdings to reflect rising loss rates on both prime and subprime loans...

I SUPPOSE DYING BY INCHES, MATCHING WRITE DOWNS TO PROFITS FOR THE QUARTER, IS BETTER THAN TOTAL DENIAL....

[ozymandius]

8. STIMULUS WATCH: White House changes job-count rule

WASHINGTON – The White House has abandoned its controversial method of counting jobs under President Barack Obama's economic stimulus, making it impossible to track the number of jobs saved or created with the $787 billion in recovery money.

Despite mounting a vigorous defense of its earlier count of more than 640,000 jobs credited to the stimulus, even after numerous errors were identified, the Obama administration now is making it easier to give the stimulus credit for hiring. It's no longer about counting a job as saved or created; now it's a matter of counting jobs funded by the stimulus.

That means that any stimulus money used to cover payroll will be included in the jobs credited to the program, including pay raises for existing employees and pay for people who never were in jeopardy of losing their positions. ....

Numbers published later identified more than 640,000 jobs linked to stimulus projects around the country. The White House said the public could have confidence in those new numbers, which officials argued proved the administration was on track to keep Obama's promise that the stimulus would save or create 3.5 million jobs by the end of this year.

But more errors were found, with tens of thousands of problems documented in corrected counts, from the substantive to the clerical. Republicans have used those flaws to attack what so far is the signature domestic policy approved during Obama's presidency.

http://news.yahoo.com/s/ap/20100113/ap_on_bi_ge/us_stimulus_counting_jobs

[Demeter]

10. It's Baloney No Matter How Thin You Slice It

[ozymandius]

12. Can you believe the hooha when the initial figure of 2 million was announced?

That sounded like Bush era smoke-and-mirrors figures.

[wordpix]

45. there'd be a lot more jobs created if there were affordable health insurance

A small entrepeneur like me can't afford to buy a good policy for myself, much less for others as the business grows. This health insurance mess is stifling new business and job growth.

[Demeter]

52. Hear, Hear!

My agent just offered me a policy with $2500. deductible major medical for $220/month.

I go to a doctor less than a blue moon. No chronic anything, no regular prescriptions, nothing.

She doesn't think anything will come of "health insurance reform" either.

[ozymandius]

11. AP source: Obama to announce bank fees Thursday

WASHINGTON – President Barack Obama plans to announce a new fee Thursday on the country's biggest financial firms to recover up to $120 billion in taxpayers' money used to prop up corporations during the economic crisis, a senior administration official said. ....

In proposing a multiyear levy on big banks, Obama is targeting an industry whose political deafness has vexed his administration. Banks once threatened by the undertow of a Wall Street collapse are now posting profits and proposing robust bonuses for their executives. ....

The $120 billion recovery goal is the most that administration officials expect to lose from the government's $700 billion Troubled Asset Relief Program that bailed out banks, automakers and other financial firms. ....

Details of the fee are expected to be spelled out when the president releases his 2011 budget next month. Congress would have to approve any fee plan.

http://news.yahoo.com/s/ap/20100113/ap_on_bi_ge/us_obama_bank_fees

[ozymandius]

13. Subpoena would probe Geithner's AIG decisions

WASHINGTON – Treasury Secretary Timothy Geithner came under increased scrutiny Tuesday when a key congressman said he would subpoena the Federal Reserve Bank of New York about bailout decisions made on Geithner's watch.

Rep. Edolphus Towns, D-N.Y., said Tuesday he will subpoena the New York Fed for documents related to the bailout of failed insurer American International Group Inc. ....

The committee has been investigating e-mails from New York Fed lawyers telling AIG not to disclose details about the deal. The e-mails were released last week by California Rep. Darrell Issa., the committee's top Republican. ....

Administration officials have defended Geithner in the AIG matter by saying he wasn't involved in the e-mails released last week. But the planned subpoena makes clear that the committee probe involves separate decisions Geithner made.

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

[wordpix]

46. the admin. needs to stop defending this guy & let the chips fall

[Demeter]

14. US commercial property attracts new wave of money

http://www.ft.com/cms/s/0/ffc88450-fe1a-11de-9340-00144feab49a.html

The beleaguered US commercial real estate sector has been attracting a new wave of money from sources including foreign banks, US private equity firms, and a leading Chinese sovereign wealth fund.

Market participants warn that the activity represents “bottom-feeding” by opportunistic investors whose strategies could be derailed by rising interest rates. Also, sums are tiny compared with the debts that need refinancing. Nevertheless, the growing interest from investors is a sign of stabilisation, making it less likely that worsening commercial real estate conditions will sink banks and choke off a US recovery.

“We believe the real story is that capital is ready to buy, even though it may not be so visible today,” said Bob Steers, co-chairman of Cohen & Steers, a real estate investment firm.

Recently, state-owned China Investment Corporation has enlisted Cohen & Steers, Angelo Gordon and Morgan Stanley to identify commercial real estate opportunities, people familiar with the matter say.

A public sign of such activity came on Friday when Colony Capital won a Federal Deposit Insurance Corporation auction for $1bn (€693m) of commercial property loans formerly held by failed banks in states hit hard by the real estate downturn.

The deal valued the loans at 44 cents on the dollar and was structured so the FDIC contributes $136m and holds 60 per cent of the equity, while Colony, a Los Angeles investment firm, puts in $90m for the remaining 40 per cent.

Tom Barrack, Colony founder, called the investment “an implicit bet that rates stay low” and warned: “If rates go up, everyone will be crushed.”

Last week, SL Green, a real estate investment trust, said it had refinanced a Times Square tower it owns with Canada’s Caisse de Dépôt et Placement du Québec in a $475m deal led by Bank of China.

In December, JPMorgan Chase raised $625m for Inland Western, a real estate investment trust, of which $500m was in the form of securities backed by commercial real estate assets.

The deal was notable because it was done without help from the term asset-backed securities loan facility, or Talf, which was set up to provide financing for investors in such deals.

In all, an estimated $1,500bn to $1,800bn in commercial property debt needs to be restructured, and $800bn in commercial mortgage-backed securities.

[ozymandius]

15. Goldman Tries to Put a Halo on Bonuses

Goldman Sachs is doing its best to prove that what's good for them is good for the rest of us. But image consultants and corporate-compensation experts say the Wall Street firm's recent moves won't quell the growing anger against the world's most profitable bank.

In its latest move to rebuild its reputation, Goldman will reportedly require its executives and top managers to donate a portion of their bonuses to charity. Goldman already has a program to promote voluntary giving by the firm's partners, which was started two years ago. The new program would expand the program to more of the firm's employees, and set a mandatory floor for charitable giving. While it's rare for a company to force its employees to donate, lawyers say it is perfectly legal. Bear Stearns, which was swallowed by JPMorgan Chase at the beginning of the financial crisis, used to have a similar plan. ...

But others say the charity plan is likely to fall short of its assumed goal: reversing a slide in Goldman's public image. That's because the amount the program is likely to generate in donations will be dwarfed by bank bonus payouts. In the next week or so, Goldman and other large financial firms will hand out an estimated $140 billion in 2009 bonuses. Goldman alone is expected to enrich its employees by $18 billion. The large bonuses have drawn scrutiny because they are being paid at a time when the unemployment rate is 10% and many Americans are suffering financially. What's more, many Americas believe Goldman and others only survived because of taxpayer support, and now are unfairly profiting from the government bailouts.

Read more: http://www.time.com/time/business/article/0,8599,1953136,00.html?xid=rss-biztech-yahoo#ixzz0cUSdOQPJ

[justabob]

31. that they have to force donations is telling

It sort of underlines what we are all so angry about in the first place.

[Hugin]

33. I tried to read one of those spiels earlier this week on MarketWatch.

Saying something about how the bonuses would save the housing market... or some such.

I threw up a little about half way through and blacked out. Thankfully, some thoughtful soul rebooted my computer while I was out and I awoke to a blank screen. I doubt I would've survived a second dose of that pablum.

As a precaution, I've gone on a totally Corporate Media Free information diet.

It's odd, after only a couple of days, when I even try to watch any Boob-tube news... I CAN'T. It simply doesn't make any sense. It's a whirl of colors and babbling noises. I find myself distracted from it by the smallest things... Like hearing dust settling into the carpet. :shrug:

Just stopped by to say... :hi:

[DoBotherMe]

61. LOL!

The best laugh I've had all day. I can relate! Dana ; )

[TalkingDog]

40. umm... you mean like this?

[Demeter]

42. Cute!

lol :rofl:

How have you been, TD?

[TalkingDog]

44. Running in place. But at least I'm excercising.....

I peek in almost daily. SMW = part heroin, part catnip

If it could be bottled, somebody would be rich.

[wordpix]

48. I can see it now---Heritage Foundation and AEI are the recipients

[wordpix]

49. they should require their wunderkids to work in the NY City public schools

and do other social work.

[Demeter]

50. Were the Riots in the 60's That Good for You?

I'd rather not go back there, if it's all the same with you.

[Demeter]

16. China banks eclipse US rivals (ooh, that's gotta sting!)

http://www.ft.com/cms/s/0/1c13f7f2-fe16-11de-9340-00144feab49a.html

Chinese banks have cemented their position as the most highly valued financial institutions, taking four of the top five slots in a ranking of banks’ share prices as a multiple of their book values.

China Merchants Bank, China Citic, ICBC and China Construction Bank lead the table, followed by Itaú Unibanco of Brazil, all with a price-to-book multiple of more than three.

Over the past six years, the average price-to-book value of the biggest 50 banks has halved from two to one.

This means that investors believe the average bank is worth no more than the value of its balance sheet. Most western banks are trading at well below their book value.

But investors are attaching a growing premium to emerging markets banks, led by China Merchants, the most highly rated of the biggest 50 banks by market capitalisation, on a multiple of 4.3, according to Bloomberg data.

At the start of the last decade, the US dominated the rankings. The top five were Bank of New York Mellon , Lloyds of the UK, Morgan Stanley, Citigroup and Wells Fargo.

Only last year US Bancorp topped the table and Wells Fargo was in the top 10...

[Demeter]

18. China raises bank reserve requirements

http://www.ft.com/cms/s/0/c49c6b12-ff82-11de-8f53-00144feabdc0.html

China has increased the amount banks must set aside as reserves in the clearest sign yet that the central bank is trying to tighten monetary conditions amid mounting concerns of overheating and inflation as a result of the credit boom.

The People’s Bank of China also raised interest rates modestly in the inter-bank market on Tuesday for the second time in less than a week, as it engages with commercial banks in a tug-of-war over rapid lending.

Stock markets and commodities fell in Asia on Wednesday after the surprise decision, sparking concerns that the move could slow China’s purchases of natural resources and other imported goods from around the region...

[Demeter]

21. Google to defy China over censorship

http://www.ft.com/cms/s/0/f65a4ba6-ffd7-11de-ad8c-00144feabdc0.html

Google has said it will end the controversial censorship of its search service in China and risk being thrown out of the world’s most populous internet market, following what it claimed were Chinese-based attempts to hack into its systems and those of other international companies.

The group also said it had found evidence of attempts to break into its Gmail system, with partial success in two cases, and many other attempts to trick “dozens” of human rights activists around the world in order to access to their email.

The dramatic gesture, which Google discussed with the US government beforehand, marks a new low in the deteriorating cyber-relations between China and the rest of the world, following a spate of online attacks and efforts to tighten web censorship.

US intelligence officials believe hackers supported by the Chinese government have been behind major breaches at US defence contractors, who have in some cases been targeted using the same previous unknown software vulnerabilities as trick emails sent to Chinese dissidents.

Google said that in mid-December it had identified a “highly sophisticated and targeted attack” on its corporate systems “originating in China”. The group added that it had found evidence of similar attacks on “at least” 20 other companies in finance, the media and other sectors.

Chinese surfers react to Google decision

In China, internet users cheered Google’s announcement. Young people bowed their thanks and left flowers outside the company’s office in Beijing. But not all internet users were as gushing in their praise for the world’s largest search engine. Here is a selection:

“Google is an admirable company. What’s the difference between internet censorship and cutting off our country from the outside world? In the new world, falling behind the times deserves a slap in the face. How long do our leaders need to be slapped for them to wake up? They can talk about a harmonious society every day but they are just burying their heads in the sand. It’s deception.” You Cao You Ni Haiyou Ma on xcar.com.cn

“It’s a huge pity for a great company like Google to leave! The distance between Chinese netizens and the world will be further away. What Google is doing has deep meanings. It’s beyond satisfying what consumers want.”Unknown user on baidu.com

”It’s better to die in glory than live in dishonour.”Byyi on xcar.com.cn

“If Google really was to leave, it would lose the Chinese market. Would it really be willing to part with it? I don’t believe a large multinational company would give up a market with unlimited growth opportunities. Will Coca-Cola give up China? No. Will Pepsi give up China? No. Will Microsoft give up China? Absolutely not. So Google is the only one who is willing to give up? I don’t believe it.Google’s retreat is an unreasonable act. It is acting like a spoiled child.”Jiang Bojing on it.people.com.cn

“The tone of Google’s chief legal officer makes me sick. If you are pulling out because of economic reasons, just say it. Covering up yourself with whitewash, and then mentioning that Google was attacked by the Chinese, that the Gmail accounts of Chinese human rights activists were attacked, and then using these as your excuse to withdraw from China is an insult to the Chinese people. It can only satisfy those supercilious westerners who have not been to China, know nothing about China and yet like to make irresponsible remarks. Solaryf on baidu.com

One person close to Google said that the company had no evidence that the cyber-attacks were sanctioned by the Chinese government. However, another person familiar with its thinking said that it would not have taken such a drastic measure had it not believed the attacks had official backing.

A Google statement on its blog said: “These attacks and the surveillance they have uncovered – combined with the attempts over the past year to further limit free speech on the web – have led us to conclude that we should review the feasibility of our business operations in China. We have decided we are no longer willing to continue censoring our results on Google.cn, and so over the next few weeks we will be discussing with the Chinese government the basis on which we could operate an unfiltered search engine within the law, if at all. We recognize that this may well mean having to shut down Google.cn, and potentially our offices in China.“

“Tiananmen”, the Beijing square that was the site of the 1989 crackdown on student protesters as well as other historical events, was at the top on Wednesday of Google.cn’s “fastest rising search keywords”. Three searches related to Google’s China announcement were also in the top 10. Searches on the site continued to carry a message that search results were screened to comply with local law.

Hillary Clinton, US secretary of state, said: “We have been briefed by Google on these allegations, which raise very serious concerns and questions. We look to the Chinese government for an explanation. The ability to operate with confidence in cyberspace is critical in a modern society and economy. I will be giving an address next week on the centrality of internet freedom in the 21st century, and we will have further comment on this matter as the facts become clear.”

Ending the self-imposed censorship of its Chinese search service marks a reversal of one of Google’s most controversial decisions, its 2006 agreement to block certain websites in return for being able to run a local Chinese service.

That decision brought global criticism and led to considerable hand-wringing inside Google, with some senior executives led by co-founder Sergey Brin deeply uncomfortable about the move. The question of whether Google should pull out of China was given more serious consideration midway through last year, according to one person close to the company, though another said that the cyber-attacks had been the clear trigger.

”I think this is a significant step to underscore how the company feels about freedom of expression and privacy online,” said Arvind Ganesan, business and human rights programme director at Human Rights Watch. “More important, it underscores the lengths governments will go to to really close the internet, whether it’s censoring information or trying to get information on users, and in this case there was a transnational attack to try to obtain information.”

Rafal Rohozinski, a cyber-security expert who helped uncover Chinese eavesdropping on Skype, said that Google and the Chinese government were headed for a showdown that could fundamentally alter the web’s development. It would fragment the global internet if the country decides to block Google from indexing websites within China, he said.

Google is the second-largest search engine in China behind leader Baidu with just under a third of the market share. Baidu shares trading on Nasdaq rose 6.8 per cent in after-hours trading on Tuesday, as a potential withdrawal by Google would consolidate its dominance. Ironically, the Chinese website itself was attacked by Iranian hackers on Tuesday. People accessing Baidu.com in the morning found it was covered with a picture of the Iranian flag and other symbols and the words “Iranian Cyber Army”.

[wordpix]

47. yeah, but China has a big housing bubble, so let's see what happens

[Demeter]

17. NY judge freezes Argentine assets held by Fed

http://www.ft.com/cms/s/0/84e5bace-ffd6-11de-ad8c-00144feabdc0.html

With Argentina mired in an unprecedented crisis sparked by government plans to use central bank reserves to pay off debt, a New York judge has frozen $1.75m of the bank’s assets held in the US Federal Reserve at the request of two so-called vulture funds.

Federal Judge Thomas Griesa’s embargo order is part of long-running legal action by the holders of bonds still unpaid since Argentina’s $100bn default in 2001 in their bid to recover their assets.

The surprise move comes as Argentina puts the finishing touches to plans to make a fresh offer to the so-called holdouts – a small group of investors now owed some $29bn including interest – who earned the nickname after spurning a similar debt restructuring in 2005 and “holding out” for a better one.

The government had been hoping to make the offer at the end of the month in a bid to reopen access to capital markets from which it has been shut out for the past eight years but it was not clear whether market conditions would now be favourable enough.

NML Capital, an investment fund and the largest holdout fund, owed more than $2bn, confirmed that Judge Griesa had “granted an order for the attachment of all the assets of the central bank in New York”. The fund had won a similar freeze in 2005 on $105m of Argentine central bank funds.

Martín Redrado, the embattled central bank president, appealed against the judge’s ruling. He has been at the centre of a storm in a turbulent week that saw him ousted by a decree by Cristina Fernández, president, reinstated by a judge, and then attacked as a “squatter” by the president who is still pursuing legal action to remove him.

The row erupted when Mr Redrado, fearing the reserves could be seized in similar legal action by holdouts, refused to comply with a decree issued by Ms Fernández in December ordering the transfer of the funds.

Last week Ms Fernández fired him by decree for dereliction of duty, but a judge granted an injunction after an appeal by the opposition, blocking both the decree to transfer the funds and the ousting of Mr Redrado, prompting a legal battle that experts say could go right to the Supreme Court.

Ms Fernández has blasted what she called an opposition anti-government conspiracy. Presaging Tuesday’s legal move she said she sensed vultures circling, preparing to swoop. It was “imperative” for Argentina to exit its default to have access to funding at lower rates.

“Just as the government and Wall Street have agreed for our country to exit the default . . . along comes the right in Argentina and the vulture funds are slamming the brakes on,” Héctor Timmerman, Argentina’s ambassador in Washington, told Télam, the state news agency,

[Demeter]

19. Banks braced for Basel battle

http://www.ft.com/cms/s/0/eae5e12a-ff89-11de-8f53-00144feabdc0.html

Banks are gearing up to fight a proposal by global regulators to sharply increase capital requirements for institutions that bring in outside investors to fund subsidiaries, saying it will cripple their ability to expand in emerging markets.

Bank executives fear the provision would create huge holes in the capital stocks of a wide range of UK, European and Japanese financial institutions, at a time when they are already under pressure to increase their regulatory capital.

Analysts described the proposal as one of the most “draconian” and “potentially devastating” parts of a package of measures put forward in December by the Basel committee, which sets global standards that are implemented by local regulators.

Credit Suisse analysts calculate the rule would substantially reduce the estimated equity buffers that banks hold against potential losses.

They estimate the so-called equity tier one capital ratio, a key measure of balance sheet strength which excludes hybrid capital such as preference shares, would be cut by 0.7 percentage points from the current 9.6 per cent.

In essence, the Basel committee wants to force banks to stop counting minority-owned stakes as part of their equity capital but insists they continue to recognise the entire potential losses of any subsidiary.

Regulators are essentially saying that banks are on the hook for all the losses of their subsidiaries, but that equity owned by minority investors in a particular subsidiary would not be available to absorb group losses elsewhere in the world....

[ozymandius]

20. Asian Shares End Lower; Fears Of Further China Tightening

SINGAPORE (Dow Jones)--Asian stock markets ended lower Wednesday as The People's Bank of China's move Tuesday to rein in excessive credit creation raised concerns that further monetary tightening measures may be in the works.

The Shanghai Composite index slumped 3.1% to 3172.66 after China's central bank said late Tuesday it will raise the reserve requirement ratio for banks by a half-percentage point from Monday, the first such rise since November 2008. ...

Japan's Nikkei 225 Average declined 1.3%, Australia's S&P/ASX 200 dropped 0.6%, South Korea's Kospi declined 1.6%, Taiwan's Taiex gave up 1.4% and India's Sensex shrank 0.6% in afternoon trading. ...

Chinese banks were sharply lower on the PBOC's decision, with property developers also dropping on fears the central bank's move would put the brakes on bank lending, making it harder for developers to obtain loans. ...

http://online.wsj.com/article/BT-CO-20100113-702816.html?mod=rss_Global_Stocks

[ozymandius]

22. Investors Sell as Japan Airlines Nears a Bankruptcy Filing

TOKYO — Investors rushed to sell their shares in Japan Airlines on Tuesday and Wednesday ahead of a bankruptcy filing that could come as early as next week. At the same time, two rival airlines, American and Delta, battled for a stake in JAL, which could still be a strong regional player once restructuring takes place.

American Airlines said Tuesday that it had raised its joint offer of an investment in JAL, together with the private equity firm TPG, by $300 million, to $1.4 billion. The United States carrier also pledged a $100 million annual sales increase for JAL if it stayed with the American-led Oneworld airline alliance. ...

Still, shares in JAL, which has $16 billion in liabilities, fell 45 percent on Tuesday and then 80 percent more on Wednesday, to 7 yen, as a bankruptcy filing appeared inevitable.

Prime Minister Yukio Hatoyama has suggested that shareholders of JAL — the recipient of a string of government bailouts — would not be protected in a restructuring, which would be orchestrated by a state-backed corporate turnaround agency.

http://www.nytimes.com/2010/01/13/business/global/13air.html

---

JAL is now a penny stock at just over 7¢ per share.

[Demeter]

23. Reckoning With a Delusional Stock Market By Bill Bonner

http://dailyreckoning.com/reckoning-with-a-delusional-stock-market/

Poor Obama. The man is in way over his head. And what can he do? Few people understand what is going on in the economy...and none of them work for the Obama administration, as near as we can tell. The only one who seemed to be on the ball was his advisor, Paul Volcker. But Volcker got edged out by Larry Summers, a man with a long history of bad ideas on economic matters.

Summers is a stalwart member of that very special club - modern economists. Never has an unarmed professional group done more damage to a society than Summers and his colleagues.

"We cannot and will not accept any speed limit on American growth," said Summers in a 1995 speech, rejecting the idea of higher interest rates to cool speculation. By 2000, the economy with no speed limit had smashed into an abutment. But Summers never figured out what the problem was. He was too busy wrecking a great university. He went on to apply the same 'no speed limit' philosophy to Harvard, where his building program was so costly the university years will probably never recover from it.

Ben Bernanke gives no hint that he has any idea of what is going on either. He maintains that modern central banking can't see when economies are getting into trouble. But when they do...he knows just what to do to fix it.

What kind of strange GPS system is this, dear reader? It failed to tell us where we were before we ran off the cliff... But now, we're going to use it to find our way home. Good luck!

But who worries now? We're rolling along...convinced that trouble is behind us. Recovery is on the way; that's what the signs say.

But wait...

Joblessness at a 26-year high, and rising....

Consumer credit just took the biggest monthly drop ever...it's fallen 10 months in a row.

Nearly half of Florida's mortgages are underwater...

Hey...what a recovery!

But the stock market doesn't seem to care. Or notice.

The Dow rose 45 points yesterday. Investors seem to think that businesses are going to make a lot of money in the years ahead. How? How much stuff can you sell to unemployed people? But why else would investors pay 100 times earnings for a share?

The current price/earnings ratio is a subject of much discussion. Earnings collapsed in the depression. Prices did not. So if you look just at current earnings you come to a P/E ratio in the 100+ range. That means investors pay $100 for every dollar's worth of earnings. If they intend to earn their money back - and nothing changes - they'll wait a century to break even.

But earnings are expected to go up. So Robert Shiller used a 10-year moving average to compute earnings...smoothing them out to a "normal" level. Still, he says, the S&P 500 is overvalued by about 27%.

The point is, stocks are expensive. So, you have to wonder: what is going on? Are stock market investors really such optimists?

Or, is the federal government manipulating stock prices? It is spending trillions of dollars to give people the impression that things are getting back to normal. Why not spend a few billion more to manipulate stock prices?

We don't know. The feds have shown themselves willing to do any fool thing...but rigging the stock market? Who knows?

We've got to reckon with what we've got. And what we've got is a stock market that is either manipulated...or delusional.

Stocks could only be worth current prices if this were a normal recession. But if this were a normal recession, it would be over by now. Stocks would be moving up in anticipation of the next boom phase. But this is not a normal recession. And it hasn't come to an end. New jobs aren't being created. Consumer credit is not expanding. And the only prices that are going up are the prices subject to speculation.

The real reason stocks are so expensive (assuming the market isn't rigged) is that this is the beginning of a depression, not the end of one. At the beginning, people don't quite believe it.

"We're climbing out of a nasty recession," said a financial expert interviewed on the radio this morning. "And we're all happy to put this thing behind us as soon as possible."

Stocks are high because people think they can 'put this thing behind them.' They can't imagine that the depression will last for 5...10...maybe 15 more years. Nor do they realize that the US economy is permanently impaired...that the companies traded on Wall Street will have a very hard time earning profits in the years ahead...nor that the average American family may have reached the height of its wealth in 1973!

The disappointment will come...then the disillusionment...then the disgust...then the despair. It will be like walking down a staircase...each step heavier...deeper...and more depressing the last. And with each step, stocks will fall. Investors will begin to see things in a new way. And at the bottom, a whole new outlook will be common:

"America is finished as an economic power," people will say. "Incomes are going down - forever; we can't compete with the Chinese. Stocks were dreadfully overpriced; now they are cheap...but who would want to buy them?"

It may not happen like that. But somehow, some day...stocks will once again trade at low P/E ratios... Below 10...maybe down to 5. Then, they will be bargains.

How will you know when it is time to buy again? When you no longer want to.

[hamerfan]

39. Thanks for posting this, Demeter!

A very good article. And the last line is dead-on:
"How will you know when it is time to buy again? When you no longer want to."
S'right!

[Demeter]

41. You're Welcome

The internet is my library, telephone, newpaper, marketplace, social network, rec room, and more. And this thread is like "Cheers"

[ozymandius]

24. FDIC Moves to Tie Fees to Bank Pay (and John Dugan gets spanked)

The Federal Deposit Insurance Corp.'s board narrowly agreed to start the process to impose higher fees on U.S. banks whose compensation plans encourage risky behavior that could threaten the bank's solvency.

The 3-2 vote to seek public comment on the proposal exposed a divide between federal officials over how best to police pay. The FDIC is wading into the compensation-regulation issue after the Federal Reserve proposed restrictions on employee compensation and as congressional Democrats are advancing legislation to bring more scrutiny to bankers' pay. ....

The goal of the FDIC proposal, an initial step in a multistage rule-making process, is to "provide incentives for institutions to adopt compensation programs that align employees' interests with those of the firm's stakeholders, including the FDIC," the agency said.

The proposal suggests a compensation model that would favor banks that pay employees in high-risk business lines a significant portion of their compensation in restricted, nondiscounted company stock that vests over a number of years and can be withdrawn under certain circumstances. The system would also favor pay structures administered by independent members of boards of directors. ....

Comptroller of the Currency John Dugan, an FDIC board member and noted wanker, said he had "substantial concerns" about the proposal, in part because the Fed and Congress are moving forward with separate plans. ...

Ms. Bair responded with an unusual public rebuke. "I must say to take a position that we should not even be asking these questions is not one that I can understand," she said.

http://online.wsj.com/article/SB126330898465226207.html

---

Ouch! Something of Dugan's just puckered.

[Demeter]

25. Not a Positive Economic Picture (GRAPHIC PORN!)

http://www.financialarmageddon.com/2010/01/not-a-positive-economic-picture.html

[Demeter]

26. Another Great Graphic from Mother Jones

Yesterday's picture of the consolidation of banks was also from Mother Jones. More graphs at following link:

http://motherjones.com/politics/2010/01/unjust-wall-street-bonus

[DemReadingDU]

27. Breathtaking bonuses are back

That red line will be shooting upwards again
:(


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

[Festivito]

28. 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

[Festivito]

58. Debt: 01/12/2010 12,291,168,534,193.72 (UP 5,684,188,406.40) (Tue)

(Debt seems to jump up then drop slowly maybe up a little and down a little for days--repeat. To me, this is a little up. Back to NASA by morning. Good day all.)

= Held by the Public + Intragovernmental(FICA)
= 7,781,352,915,790.80 + 4,509,815,618,402.92
UP 163,748,521.92 + UP 5,520,439,884.48

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

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 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 308,452,638 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 $39,847.83.
A family of three owes $119,543.49. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 32 days.
The average for the last 21 reports is 9,974,245,317.21.
The average for the last 30 days would be 6,981,971,722.05.
The average for the last 32 days would be 6,545,598,489.42.
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$/day.
There were 70 reports in 104 days of FY2010 averaging 5.45B$ per report, 3.67B$/day.
Above line should be okay

PROJECTION:
There are 1,104 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)
01/12/2010 12,291,168,534,193.72 BHO (UP 1,664,291,485,280.64 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 +0,381,339,530,682.00 ------------* * * * * * * * * BHO
Endof10 +1,338,355,083,643.56 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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
01/12/2010 +000,163,748,521.92 ------------********

47,768,503,042.53 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=4222890&mesg_id=4222963

[UpInArms]

29. dollar watch

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

Last trade 76.646 Change -0.308 (-0.40%)

S Dollar: A Breakout is in the Forecast but what will be the Spark?

http://www.dailyfx.com/forex/fundamental/forecast/weekly/usd/2010-01-09-0424-US_Dollar__A_Breakout_is.html

Fundamental Outlook for US Dollar: Bullish

- Dollar falters as risk trends hold and interest rate speculation cools
- December NFPs disappoint but November’s revision raises heads
- The Dollar’s technical bearings could change quickly

How bearish is an 85,000-count drop in net payrolls? This is the question many were asking themselves when the US dollar tumbled following the release of the December NFPs figure this past Friday. In reality, though the indicator was well below the unchanged forecast that was projected; the market was likely little concerned about the headline figure. Instead, a revision to the November reading that officially bumped the month up to a 4,000-job increase hit a milestone that many speculators were waiting for. The first positive increase in US labor trends in two solid years offers a tangible objective that is akin to a business finding itself breaking even. Had the increase been larger, the resultant rally in risk appetite (and subsequent tumble from the market’s favorite funding currency of the momentum: the US dollar) would have been greater. However, now that this hurdle has been crossed; the market can move on. The dollar needs a true catalyst to force a breakout from the tight range that has set in over the past three weeks. And, there are few factors strong enough to truly spark a trend.

In the week ahead, the likelihood of a breakout is very high. Yet, there is a difference between a technical breakout and the development of a new trend. A technical break can develop out of necessity with speculation generating too much volatility to maintain such a constrictive trading band. In contrast, a drive that develops into a meaningful and lasting trend is a different outcome all together. The follow through on the latter scenario would call the official beginning of 2010’s trend for the US dollar. And, having already field-tested many potential catalysts already; it seems the only driver with the necessary influence is risk appetite itself. Through 2009, the currency was pushed into a steady descent as investors diversified away from dollar-based safe havens and in turn started to fund trades through cheap dollar-based leverage. Risk appetite waned into the final months of the year, however; and speculators have essentially waited for a sign to either add to positions or take profit for two months now. Someone could point out that the dollar and other risk-sensitive currencies have seen momentum since the onset of this lassitude; but that is merely the other fundamental interests coming back to the forefront – and ultimately the reason the dollar has been unable to establish a clear and consistent trend. To establish a true bearing and momentum, the dollar (and all currencies) needs a market-wide (stocks, Fixed Income, commodities, FX, etc) shift in risk appetite. And, the best fuel for such a fire is momentum behind sentiment itself. When such an effort is made, it will be more than obvious. All the asset classes will be moving on the same course and at the same pace; but it is probably a break from the Dow that will carry the most weight.

The influence of risk appetite – once triggered – cannot be denied. We have already seen its effects on the dollar; and they produce incredible opportunities. However, making that first critical push is clearly difficult (otherwise it would have been made already). Looking across the economic docket, there are many indicators (retail sales, durable goods, consumer confidence, CPI, etc) that can perhaps tap dollar volatility. But to reach underlying risk appetite, it may take the confluence of all the releases working together or perhaps something all-together more intense. At this point, we need to be less concerned about ‘how’ the move will happen and more focused on the ‘when.’



...more...

Daily Sound Bites

http://www.dailyfx.com/forex/fundamental/article/daily_sound_bites/2010-01-13-1258-Daily_Sound_Bites.html



...more...

[DemReadingDU]

30. William Black: 'Put Up or Shut Up'

click link for video

1/13/10 'Put Up or Shut Up': The Message the Financial Crisis Panel Should Send, Bill Black Says

What caused the financial crisis? Who's to blame? These are great questions that remain unanswered more than a year after Lehman's collapse and the near implosion of the global financial system. (Remember when we panicked about our FDIC-insured bank deposits?) Fast forward to the present day.

Today top bank CEOs -- including Goldman's Lloyd Blankfein and JPMorgan Chase's Jamie Dimon -- are among a long list of finance experts who are being called as witnesses before the Financial Crisis Inquiry Commission in Washington.

What Is the Financial Crisis Inquiry Commission?

Congress created the bipartisan, 10-member group that's charged with examining the causes of the financial meltdown. The two-day public hearing ends Thursday, with a formal report to Congress and President Obama due by Dec. 15. The commission resembles the Pecora Commission that investigated the Wall Street crash of 1929, and prompted more regulation including the creation of the Securities and Exchange Commission.

It's easy to dismiss the hearings as another dog-and-pony show of banking executives with no meaningful outcome. That's why our guest Bill Black, a former federal bank regulator, says the hearings need to be treated like a deposition of expert witnesses -- not just a reading of self-serving statements.

Look for the Financial 'Black Box'

The commission "is the equivalent of the National Transportation Safety Board after an airplane crashes," Black tells Henry Blodget in the accompanying clip. "You go and find the black boxes because they have the critical information," adds Black, now an associate professor of economics and law at the University of Missouri, Kansas City. Black was a former senior bank regulator and prosecutor during the savings and loan crisis of the late 1980s.

"The financial equivalent to the black box is getting the email trail, the losses trail, the compensation trail" from the financial institutions, Black says. "All of this is readily available in institutions we the taxpayers own -- AIG, Fannie, Freddie and other institutions."

Power Struggle to Come

Whether the commission will have the political muscle to access and subpoena such documentation is a matter of political will, Black says.

Bigger picture, the hearings this week and the commission's work will be an opportunity to shed light on what happened a year ago. As Black has said previously on Tech Ticker, the FBI blew the whistle as early as September 2004 on "an epidemic of mortgage fraud." More than five years later, no major figures have gone to jail for fraud related to the crisis.

Perfect Timing?

The timing for the commission's hearings was prescient. The outcry over Wall Street bonuses for '09 is swelling this week -- a year after the bailout of major financial institutions at taxpayers' expense.

So what should the commission's message to the financial industry be? "The message is real simple. "Put up or shut up," Black says. "Give us all the information. Give us the analyses, the emails ... no self-serving releases."


click link for video

http://finance.yahoo.com/tech-ticker/%27put-up-or-shut-up%27-the-message-the-financial-crisis-panel-should-send-bill-black-says-403157.html?tickers=^gspc,^dji,gs,bac,wfc,AIG,jpm&sec=topStories&pos=9&asset=&ccode=

[DemReadingDU]

59. Stop Complaining and Start Acting; We Need to Solve the Problem With Wall St. Bonuses, Black Says

click link for video

Stop Complaining and Start Acting; We Need to Solve the Problem With Wall St. Bonuses, Black Says

There's no absence of backlash and outrage over the billions Wall Street bankers will take home this year in bonuses. What's missing is a solution.

The FDIC in a proposal made Tuesday, said it wants employee compensation to be another factor in how it determines bank payments to the insurance fund.

In other words, the riskier the bank's compensation structure the more they should pay into the total insurance pot. William Black, economics and law professor at the University of Missouri - Kansas City, tells Henry the proposal doesn't go far enough to align the interest of the bank employees with the long-term interest of shareholders.

To solve that he's proposing:

* Clawback provisions.
* Paying bonuses in stock. Black says employees should be restricted from selling stock for years.

The former regulator during the Savings & Loan Crisis also recommends reinstating mark-to-market accounting. Until that's done, he says, there's no way to tell whether 2009 paper gains won't be wiped out in the near future if the market sours again. Black argues "people are being paid bonuses when the company, the bank has actually lost tens of billions of dollars. That's an obscenity."

click link for video

http://finance.yahoo.com/tech-ticker/stop-complaining-and-start-acting-we-need-to-solve-the-problem-with-wall-st.-bonuses-black-says-403607.html?tickers=gs,xlf,skf,spy,dia,jpm,17605088&sec=topStories&pos=9&asset=&ccode=

[DemReadingDU]

32. Goldman exec: The rumors are true (in some cases)

1/13/10 Goldman E-Mail Lays Bare Trading Conflicts

For years, Wall Street whispered that Goldman Sachs profited handsomely by trading ahead of — or even against — its own clients. On Tuesday, a Goldman executive made an unusual admission that, in some cases, the rumors were true, Andrew Ross Sorkin writes in The New York Times.

In an e-mail message to select clients, Thomas C. Mazarakis, the head of Goldman’s fundamental strategies group, acknowledged that his unit often provided investment ideas that the firm had already traded on. Sometimes Goldman has even taken the opposite approach, betting against particular instruments that the group has recommended.

“We may trade, and may have existing positions, based on trading ideas before we have discussed those trading ideas with you,” he wrote.

The statement comes as the firm faces growing criticism over its role in the financial crisis, and is a rare acknowledgment of Goldman’s conflicts with certain of its clients.

more...
http://dealbook.blogs.nytimes.com/2010/01/13/goldman-e-mail-message-lays-bare-trading-conflicts/


edit to add
1/13/10 Goldman E-Mail Message Lays Bare Trading Conflicts
by Andrew Ross Sorkin
http://www.nytimes.com/2010/01/13/business/13goldman.html

[Demeter]

34. Members of the Jury, What Say You?

[Tansy_Gold]

35. OFF WITH THEIR HEADS!

[Demeter]

36. I knew it was you without looking

the all caps gave it away. Good morning, TG!

[Tansy_Gold]

37. G'morning, Demeter. Of course, I mean only to guillotine the corporations,

not the individuals.


The individuals, if found guilty, will receive sentences of lifetime CMP, no chance for parole, no care packages from family and friends. All assets acquired with income from corporate employment, including assets hidden in the names of spouses, children, parents, dogs/cats/cockatiels/African greys/etc., shell companies, etc., will be surrendered. If their spouses have to go out and find jobs, well, so do all the people who were left unemployed by the machinations of these greed-mongers.

I am normally a compassionate person. I disliked even killing off the bad guys in my novels. I wanted everyone to be redeemed.

But there is no redemption for those who show absolutely no remorse for what they've done. I have no mercy for them. None at all.


Tansy Gold, hard ass today because it's overcast and gloomy

[Demeter]

38. That's a Winning Platform for Your Presidential Run, You Know

the only question is hiding you from BlackWater and the BFEE/CIA

[tclambert]

60. How about we have BANKER tattooed on their foreheads? Scarlet letter time!

or WORKED FOR GOLDMAN SACHS, or WORKED FOR AIG, or for the Federal Reserve, or the SEC?

I don't know if the public humiliation would do any good, or if it would just bring bangs back into fashion.

[Demeter]

62. That's Too Much Like Torture

Enforced poverty is retribution enough.

[wordpix]

43. good, it's about time some light was shed on GS's practices

The criminals should get theirs :puke:

[Tansy_Gold]

51. Well, let's see how this works.

You've got a small, local, independent stock broker, Bill Ruby. He's got half a dozen local clients, friends and friends of friends.

Bill buys a block of stock in XYQ. he gets it at a good price, thinks it might go up a little but not much, and probably won't amount to a lot in the long run. But if he can unload it on his clients for a tidy profit, why not? So, if he conceals his own misgivings about the stock when he talks his clients into buying it, whether he conceals material information or not, is he being ethical? Is he breaking the law?


At the same time, one of his clients comes along and says, "Hey, Bill, I been watchin' QBT the past couple of weeks. They've been goin' up slow but I think they're poised for a big jump. Can you get me 1000 shares?"

If Bill manages to get 1000 shares of QBT at $5 and then the price goes up to $5.50 the next day, allowing him to sell the shares to his client for an extra $500 profit on top of his commission, is that legal and/or ethical?

I'm asking, 'cause I know NOTHING about dealing with brokers. ABSOLUTELY NOTHING.


TG

[Dr.Phool]

53. They call them a "Broker" for a reason.

You'll be broker when they're done with you.

I knew a guy who had a horrible track record of advice. He'd tout an IPO, and go broke on it.

He was really trying to push some Templeton Funds on me. I looked over their past performance and said, "These guys are losing money every year". Still trying, he said, "Yeah, but they're not losing it as fast as everyone else". :crazy: :wtf:

He thought I was the crazy one when I asked him why I wouldn't be better off leaving my money in the bank.

True story, and he did manage to lose all of his clients.

[DemReadingDU]

55. Hey!

Is that the link to your new blog?

[Dr.Phool]

56. Yeah

Nothing posted yet, except a preliminary biography. I think I'll do some tonight.

[DemReadingDU]

54. Marc Faber: The Next Thing You Need To Worry About Is The PIIGS

click link for video

1/13/10 Marc Faber: The Next Thing You Need To Worry About Is The PIIGS

After every financial crisis there's a sovereign debt crisis, Marc Faber says. Countries that borrowed too much during the boom times start struggling to pay their competitors back, and eventually some of them default.

The countries most likely to blow up this time around are the "PIIGS": Portugal, Ireland, Italy, Greece, and Spain. One ore more of them, Faber says, will likely default in the next couple of years. And, that could result in the death of the Euro currency.

Longer-term, Faber says, Japan and the US are in line for the same fate.

The US crisis won't hit us this year or next year. But within 5-10 years, the United States will be forced to quietly default on its debt, most likely by printing money and destroying the value of the currency.

The main problem comes down to two things: 1) ballooning debts and 2) future interest costs.

As these charts from Faber's Gloom, Boom, And Doom Report show, in the past decade, the U.S. government's total debt and liabilities have gone through the roof, especially when Fannie, Freddie, Medicare, and Social Security are taken into account. This trend is unsustainable, and it will correct itself only through a rapid acceleration of economic growth and tax revenues, a new-found financial discipline, or a crisis--or a combination of all three.

The second problem is interest costs. Right now, the government's debt and deficits aren't creating an undue burden because the government can borrow so cheaply. Eventually, however, as the country's financial situation gets weaker, interest rates will likely rise, and our interest costs will go through the roof.

According to Faber, our annual interest costs currently amount to 12% of the government's tax revenue. Within five years, Faber estimates, these costs will soar to 35% of tax revenue. This will force the government to cut spending (unlikely) and/or frantically print money.

click link for video

http://finance.yahoo.com/tech-ticker/marc-faber-the-next-thing-you-need-to-worry-about-is-the-piigs-403497.html?tickers=tbt,tlt,^n225,^ftse,USDJPY=X,^gspc&sec=topStories&pos=9&asset=&ccode=


1/13/10 Marc Faber: "We Are Doomed"

8 charts...
http://www.businessinsider.com/henry-blodget-marc-faber-we-are-doomed-2010-1#the-budget-deficit-is-soaringso-we-have-to-borrow-ever-more-money-to-pay-our-bills-1

[Demeter]

63. The Death of the Euro Has Been Predicted Since Before It Was Started

rather like the end of the women's movement. Ain't gonna happen. Too many people worked too hard for too long to get it going, and it does have benefits.

[fan of the arts]

57. College Football Champions Alabama to Display Trophy at Wal-Marts

I hear they're also going to be consuming mass quantities of cadmium while there:

http://www.huffingtonpost.com/2010/01/08/walmarts-alabama-bcs-trop_n_416974.html

[mbperrin]

64. kick