STOCK MARKET WATCH, Monday April 5

[ozymandius]

Source: du

STOCK MARKET WATCH, Monday April 5, 2010

AT THE CLOSING BELL ON April 2, 2010

Dow... 10,927.07 +70.44 (+0.64%)
Nasdaq... 2,402.58 +4.62 (+0.19%)
S&P 500... 1,178.10 +8.67 (+0.74%)
Gold future... 1,128 +1.70 (+0.15%)
10-Yr Bond... 3.93 +0.07 (+1.73%)
30-Year Bond 4.80 +0.07 (+1.44%)

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Market Conditions During Trading Hours

Euro, Yen, Loonie, Silver and Gold

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

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

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

Handy Links - Videos:
The Coming Collapse of the Middle Class    Charlie Rose talks with Roubini    Charlie Rose talks with Krugman
    William Black: This Economic Disaster    Bill Moyers with Kevin Drum and David Corn

Bush Administration Officials Convicted = 2
Names: David Safavian, James Fondren

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

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

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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. The SMW will be getting a later start than usual this week.

It's Spring Break. So I am taking the liberty of not getting up at 5am. I apologize for any inconvenience this may cause your schedule.

ozymandius

[MattSh]

3. Hey, that's cool...

It allowed me to get the first rec today. That's a first for me on this thread !

.

[ozymandius]

5. Thanks!

What time is it in Kiev?

[MattSh]

8. Afternoon, 2:15 PM

Plus, today's a holiday here.

Hoorah!

.

[Demeter]

10. Enjoy your well earned vacation, Ozy!

I will try to reduce my backlog this week, now that the Easter-birthday frenzy is over. At least, it better be.

[ozymandius]

13. Thank you. And good morning.

:donut: :donut: :donut:

The SMW needs friends - especially in the mid afternoon.

[Name removed]

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[Name removed]

56. Deleted message

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[ozymandius]

2. Today's Reports

10:00 ISM Services Mar
Briefing.com 52.1
Consensus 53.6
Prior 50.0

10:00 Pending Home Sales Feb
Briefing.com -2.5%
Consensus -1.0%
Prior -7.6%

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

[ozymandius]

4. Oil rises above $85 as US jobs market improves

SINGAPORE – Oil prices rose above $85 a barrel Monday in Asia, extending gains from last week as investors bet an improving U.S. job market will herald growing crude demand. ....

On Friday, the U.S. Labor Department said employers added 162,000 jobs in March, the largest job gain in three years. The unemployment rate stayed at 9.7 percent for the third straight month. ....

In other Nymex trading in May contracts, heating oil rose 0.86 cent to $2.225 a gallon, and gasoline gained 1.03 cents to $2.334 a gallon. Natural gas fell 1.5 cents to $4.061 per 1,000 cubic feet.

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

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So now that everyone who does not have a job will soon have one and be fabulously flush with cash - we can look forward to giving more of our money to oil speculators. :sarcasm:

[ozymandius]

15. Oil Nears 17-Month Highs

LONDON—Crude-oil futures were higher in London Monday trading near 17-month highs after data showed that U.S. employers created jobs last month at the fastest pace in three years, igniting hopes of a pickup in energy demand. ...

A rise in manufacturing activity in the euro zone, China, India and much of Asia has also strengthened the view that momentum in the global recovery is gaining pace.

Energy prices are strong, reflecting the understanding the global economy is indeed doing better than expected and "perhaps doing better than even the optimists had thought likely only a short while ago," said Dennis Gartman, editor of The Gartman Letter. ....

Looking more broadly at supply of physical crude to the market, Saudi Arabia released official selling prices for its crude oil over the weekend, widening the spread between its lighter and heavier grades for a second consecutive month in line with expectations. The widening of the differential between May-loading Arab Light and Arab Heavy is pan-regional and mirrors the trend seen in the March product markets.

http://online.wsj.com/article/SB10001424052702304017404575165481068992738.html?mod=WSJ_economy_LeftTopHighlights

[UpInArms]

17. Oil prices being driven up by speculators not real demand

http://www.zawya.com/Story.cfm/sidZAWYA20100330045150/Oil%20prices%20being%20driven%20up%20by%20speculators%20not%20real%20demand

After a short lull, the allegations of speculators driving the oil markets have surfaced again.


Brahim Aklil, a senior oil price analyst at Opec, noted at the Offshore Arabia Conference yesterday that it is speculators and not real demand that is driving up the buoyant looking oil prices.

"The price is driven heavily by speculators. When they take a future position they also determine the price now ," Aklil said. "Hedge funds are really doing a lot in the market. They are really driving the prices."

Nymex crude for delivery in May was priced at $81.36 a barrel in the afternoon session yesterday, having risen 2.32 per cent from the previous day's close.

The comments came after a period of time during which countries across the world, particularly the US, have shown an inclination to oppose high levels of speculation on their mercantile exchanges. The Commodity Futures Trading Commission, the US-based regulator of commodities exchanges, recently laid clamps on the maximum positions that a trader can take on any of the country's commodity exchanges.

...more...

[ozymandius]

19. new NYMEX oil chart

[Name removed]

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[ozymandius]

6. White House braces unemployed for slow job rebound

WASHINGTON – Buoyed by good news on the jobs front, the White House claimed credit Sunday for reversing the downward economic spiral while bracing out-of-work Americans for a slow recovery. ...

Given the depth and length of the recession, the White House wants to cool expectations of a rapid economic recovery before the November elections that will determine whether Democrats retain control of the House and Senate.

The administration's line is that there's steady, if slow, progress in repairing the economic ruin President Barack Obama repeatedly blames on his predecessor, Republican George W. Bush.

The economy added about 162,000 jobs in March, the most in nearly three years. A large percentage of the gains were temporary census workers hired by the federal government, and the unemployment rate held firm at 9.7 percent. The additional 123,000 private-sector jobs were the most since May 2007.

The economy is growing again, but at a pace unlikely to quickly replace the 8.4 million jobs erased in the recession that began in late 2007. More than 11 million people are drawing unemployment insurance benefits.

http://news.yahoo.com/s/ap/20100405/ap_on_bi_go_ec_fi/us_economy

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Oil speculators need to read the damn memo.

[Demeter]

9. It Isn't About Us as People With Budgets

It's about us as victims.

[UpInArms]

16. "repeatedly blames"???? WTF kind of shit statement is that

"which occurred" during the tenure of the failed POS should have been the correct structure.

:fuming:

[Tansy_Gold]

26. Or. . . . .

"Which was engineered by and directly benefited the 'have-mores' as they were described by his predecessor, and thus created the severe and undeserved economic stress currently suffered by the working people of this country."



Tansy Gold

[Name removed]

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[ozymandius]

7. Ahead of the Bell: ISM service sector index

NEW YORK – A private trade group's measure of the U.S. service sector is expected to show accelerating growth in March as the economy added jobs and consumer spending slowly increased.

The Institute for Supply Management's service index likely rose to 54 last month from 53 in February, according to economists polled by Thomson Reuters. February's reading was the strongest since January 2008.

The report is expected at 10 a.m. EDT Monday.

Any reading above 50 signals growth. That threshold was broken in September for the first time in 13 months. The service sector's recovery has been bumpy since, lagging a resurgence in manufacturing as hesitant consumers remain wary of big purchases amid high unemployment.

http://news.yahoo.com/s/ap/20100405/ap_on_bi_ge/us_economy_service_ahead_of_the_bell

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Like the article says - this number reflects 80% of the job market. Now the question remains: how reliable is the trend data?

[Demeter]

11. Manipulating Gold and Silver: A Criminal Naked Short Position that Could Wreck the Economy

http://www.deepcapture.com/manipulating-gold-and-silver-a-criminal-naked-short-position-that-could-wreck-the-economy/

It's the Wild West all over again...

[mbperrin]

24. Until we make naked trading illegal, I'll stay out of the markets.

Why aren't these people in jail? And why is this different than "I've got a bridge I'll sell you?"

[Name removed]

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[tclambert]

53. You can trade via the Internet from home now, so naked trading is OK.

Just make sure the webcam is OFF!

[Demeter]

12. Strawberry prices drop as late harvest hits market

http://news.yahoo.com/s/ap/20100405/ap_on_bi_ge/us_food_and_farm_cheap_strawberries

It's a good spring for strawberry lovers: Prices are unusually low in many places because cold weather delayed Florida's harvest to coincide with California's, and the two states are flooding the market with cheap berries.

A record number of strawberries for this time of the year were picked in the U.S. last week — 80 million pounds, said Gloria Chillon, director of marketing for Driscoll's, a major berry producer and distributor based in Watsonville, Calif.

At Publix supermarkets on Florida's Gulf Coast, shoppers can buy a pound of locally grown strawberries for $1.25. Prices elsewhere were a bit higher: Sam's Club in Fort Worth, Texas, had a pound for $1.49, while Meijer in Ann Arbor, Mich., offered a pound for $1.66.

Shoppers can thank the freezing weather and rain at the beginning of the year.

Florida is the nation's biggest strawberry producer in January and February, while California is the largest in the spring. This year, Florida's coldest temperatures in recent memory damaged strawberry fields and delayed harvests.

At nearly the same time, heavy rains swept across Southern California's berry growing regions, raising fears their crops also could be damaged.

Prices paid to U.S. strawberry growers reached record highs, averaging $2.18 per pound in January and $1.55 per pound in February compared with 2009's averages of $1.16 and $1.28 in those two months. But then Florida's harvest got going in earnest....

[ozymandius]

14. Alpine Strawberries grow well in shade.

There is a syndicated program on the local public radio station called The Splendid Table. This past weekend's program featured tips on growing your own fruits and herbs - including those that do well without full sun. Alpine strawberries do not travel well like the commercial variety we all know. So they are ideal for growing indoors and in shady areas outdoors. The Alpine variety is also much more flavorful. I will ask about buying these when I pick up the last of my tomato plants later this week.

Also to note: I have noticed that some garden stores are now selling "grow your own" blueberries, blackberries and raspberries, among other varieties of staple items. Since you know me to keep tabs on the changing attitudes in this economic depression - this is something quite new which I feel is a response to the ever increasing price of food. Do-it-yourself just took a new angle, IMO.

[Demeter]

18. That's Been Available for Decades

in NH and Michigan, at least

[ozymandius]

21. They still seem to be a rarity in this region. n/t

[boomerbust]

28. Waiting for Georgia peaches up here

Crop report?

[CatholicEdHead]

31. That show is produced up here in Minnesota

and it has been around a long time. It started on Minnesota Public Radio and not is syndicated worldwide by American Public Media (different wing of same non-profit).

[UpInArms]

20. dollar watch

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

81.200 +0.019 (+0.02%)

US Dollar Still has NFP Volatility to Exercise, Will the Fed Hike?

http://www.dailyfx.com/forex/fundamental/forecast/weekly/usd/2010-04-03-0224-US_Dollar_Still_has_NFP.html

A tentative bullish breakout for the US dollar has been summarily reversed. It is still too early to deem the currency’s pullback a true bear trend as there is a precedence of congestion built up over the past few months for the currency to push through; but the lost potential has certainly undermined the favorable trend that began back in early December. However, the benchmark currency may not be immediately resigned to another extended period of sideways price action. The top event risk of this past week (the non-farm payrolls report) has yet to fully play itself out with the speculative ranks cleared by the market holiday. What’s more, the there was a renewed bearing on investor sentiment this past week that has produced meaningful developments for various benchmarks. What’s more, there is enough scheduled event risk to cause significant problem – especially at the beginning of the week.

When the market’s open back up Monday morning, the first thing that traders will respond to is this past Friday’s employment report. While speculative FX interest was present for the release and the bond market was online, US equities were closed for the Good Friday holiday. What’s more, most of the European markets were also closed, meaning there was virtually no liquidity in the normally active crossover between the New York and London sessions. That being the case, the 162,000-person increase in payrolls (only the second positive number in 27 months and the biggest in three years) would be interpreted as a boost to the relative growth and interest outlook for the United States and thereby assist the dollar. However, this is a warped response to this data. Absent was the presence of the market’s more ‘simple’ asset classes. Had the equities, commodities and futures markets been open for this report, it could have encouraged a surge in risk appetite that relegated the greenback to its status as a safe haven (a weight when sentiment is on the rise). This may still be a viable scenario come Monday given Treasury Secretary Timothy Geithner’s remarks that this data pointed to a “self-sustaining” recovery and the NBER’s (the group responsible for defining the end of the recession) head Robert Hall stating it was a “pretty clear” sign that the recession was over.

If indeed, the risk appetite regains its footing next week, it would extend the progress of a few very notable developments this past week. With a general recovery in investor optimism, the Dow has marched on to 18-month highs, crude oil just recently broke to a 17-month high and the ever-sensitive carry trade has started to revive its bullish bearing. Yet, this employment report and the round of manufacturing data that bolstered expectations this past week do not exist in a vacuum. There are still credible threats to the market’s tranquility including Greece’s steady descent towards default, the UK’s upcoming election, sovereign credit ratings and stimulus withdrawal. Another concern brought up by the Chinese central bank is the threat of asset bubbles all over the world.

Should a swell in risk appetite be averted (or merely hold off for Monday), the dollar could actually make considerable headway on Monday. Just this past Friday, the Federal Reserve surprised the diluted market when it was announced an emergency meeting to review the discount lending rate was scheduled for April 6th. This heads up is likely an effort to take some of the shock out of a hike to this essential lending rate. And, though it would not represent the same thing as a tightening of the Fed Funds rate, a 25 basis point hike at the discount window would be a strong and definable step for the policy authority to towards the inevitable.



...more...

U.S. Dollar Mixed as Fed Holds Unscheduled Meeting on Discount Rate Policy

http://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/us_open/2010-04-05-1037-U_S__Dollar_Mixed_as_Fed.html

Nevertheless, the Bank of England is widely expected to hold the benchmark interest rate at 0.50% and maintain its asset purchase target at GBP 200B later this week as policy makers continue to see a risk for a protracted recovery, and dovish comments following the rate decision could lead the pound-dollar to test the March low at 1.4782 as the pair continues to trade within the broad range carried over from the previous month.

A Bloomberg News survey shows all of the 36 economists polled anticipate the BoE to maintain its current policy in April, and the central bank may continue to support the real economy going into the second-half of the year as the MPC aims to balance the risks for growth and inflation. Governor Mervyn King held a dovish outlook throughout the first three-months of 2010 and sees price pressures falling back below the 2% target for inflation later this year, and the pull back in price growth would certainly allow the central bank to maintain a loose policy stance over the coming months as the government aims to encourage a sustainable recovery. However, Credit Suisse overnight index swaps shows investors speculate the MPC to hike borrowing costs by nearly 160bp over the next 12-months after pricing expectations for a 100bp rate hike during the beginning of March, and the rise in the interest rate outlook is likely to push the British Pound higher over the near-term as investors weigh the prospects for future policy.

The Euro extended the decline from the previous week and slipped to a low of 1.3463 during the overnight trade, and the single-currency appears to have carved a short-term top below the 50-Day SMA (1.3643) as the recent rally fails to retrace the decline from the third-week in March. Meanwhile, the European Central Bank is anticipated to hold borrowing costs at the record low of 1.00% later this week as the Governing Council looks to support all of the economies operating under the fixed-exchange rate system, and President Jean-Claude Trichet is likely to hold a dovish outlook for future policy as policy makers expect price pressures to remain subdued this year.

U.S. dollar price action was mixed following the holiday weekend, and the greenback is likely to face increased volatility going into the North American trade as the Federal Reserve holds an unscheduled meeting at 15:30 GMT to review its policy on the discount rate. The FOMC unexpectedly hiked the discount rate by 25bp to 0.75% in February as “these changes are intended as a further normalization of the Federal Reserve’s lending facilities,” and the central bank may see scope to raise borrowing costs going into the second-half of the year as the economic recovery gathers momentum. Service-based activity in the world’s largest economy is expected to expand at a faster pace in March as market participants forecast the ISM non-manufacturing index to advance to 54.0 from 53.0 in the previous month, while pending home sales is projected to weaken 1.0% in February after contracting 7.6% during the first month of 2010.

...more...

[ozymandius]

22. NYT Op-Ed: I Saw the Crisis Coming. Why Didn’t the Fed?

By MICHAEL J. BURRY

“ALAN GREENSPAN, the former chairman of the Federal Reserve, proclaimed last month that no one could have predicted the housing bubble. “Everybody missed it,” he said, “academia, the Federal Reserve, all regulators.”

But that is not how I remember it. Back in 2005 and 2006, I argued as forcefully as I could, in letters to clients of my investment firm, Scion Capital, that the mortgage market would melt down in the second half of 2007, causing substantial damage to the economy. My prediction was based on my research into the residential mortgage market and mortgage-backed securities. After studying the regulatory filings related to those securities, I waited for the lenders to offer the most risky mortgages conceivable to the least qualified buyers. I knew that would mark the beginning of the end of the housing bubble; it would mean that prices had risen — with the expansion of easy mortgage lending — as high as they could go.

I had begun to worry about the housing market back in 2003, when lenders first resurrected interest-only mortgages, loosening their credit standards to generate a greater volume of loans. Throughout 2004, I had watched as these mortgages were offered to more and more subprime borrowers — those with the weakest credit. The lenders generally then sold these risky loans to Wall Street to be packaged into mortgage-backed securities, thus passing along most of the risk. Increasingly, lenders concerned themselves more with the quantity of mortgages they sold than with their quality. ....

Suspecting that my Wall Street counterparties might not be able or willing to pay up when the time came, I used six counterparties to minimize my exposure to any one of them. I also specifically avoided using Lehman Brothers and Bear Stearns as counterparties, as I viewed both to be mortally exposed to the crisis I foresaw.

http://www.nytimes.com/2010/04/04/opinion/04burry.html

[TalkingDog]

30. I can name a dozen people I know (not in the financial industry)

who were saying the same things at the same time. Most were in or around the building trades and at least one was in the energy sector. He had dealings with Enron as a subcontractor for the DOE. He saw the parallels between Enron and the Housing market and he and the Spousal Unit had many befuddled discussions over same.

I'm not anti-intellectual. All these same folks who saw the cracks in the fundamentals have college degrees. But the phrase Ivory Tower springs to mind when looking at people like Greenspan. The problem with surrounding yourself with sycophants and fans is there is nobody to call bullshit on you.

The common joe with or without college degree works in a system where opinions run rampant.

Come live with us motherf*cker, we'll show you how an economy really works.

[DemReadingDU]

55. Around 2006, spouse & I saw major disconnect about housing

Who could buy the McMansions when so many people were getting laid off? At about this same time, a new town-concept upscale shopping mall was built. We wondered who could shop there if there were huge mortgage payments to be made, or were laid off. Restaurants did well, still are, people must be using credit cards to eat.

But it wasn't until spring 2008, when I connected the dots, and sold stocks, and put proceeds into CDs and Treasury Bills. Warned my family. But I'm not a 'professional financial planner', I just read blogs. No one listened. I'm warning them again, but they refuse to get out, because they might miss the gains.

[ozymandius]

23. Kraft: Management Incompetence Visited On Cadbury Employees

The Kraft acquisition of Cadbury provides a vivid illustration of why the US model of screwing workers to preserve executive bonuses does not go over well abroad.

Brief synopsis: Kraft acquires the 200 year old British confection-maker Cadbury after a heated battle. The chairwoman and CEO Irene Rosenfeld (already not a good sign, best practice is to separate the two roles) was awarded a 41% pay increase, bringing the total to $26 million for 2009 for her “exceptional role” in the Cadbury transaction, as well as her “commitment to fiscal discipline. ....

The press is blandly reporting Kraft party line on a monumental stuff up. From the Financial Times:

More than 3,000 Cadbury employees face a three-year pay freeze unless they opt out of the confectioner’s final salary pension scheme.

New owners Kraft Foods, the US food group, has told 3,600 staff that they must accept a pay cap after it discovered an obscure clause in Cadbury’s pension trust deed that makes it almost impossible to close the scheme.

Kraft did not know about the clause, which is at least 30 years old, until after it acquired Cadbury for £11.6bn ($17.6bn).

A person with knowledge of the Cadbury pension fund said he did not know why such an unusual clause existed, but it could be linked to Cadbury’s Quaker heritage and its doctrine of giving a fair deal to staff and suppliers. Kraft is forcing employees to accept a pay freeze because it believes this is the only way it can get its future retirement costs under control. “The scheme is unaffordable going forward,” said one person involved.

Yves here. Can you parse the bullshit? That “obscure clause” nonsense is a “the dog ate my homework” level excuse. Due diligence includes a review of material contracts. A pension is a major contract and would get a lot of attention. Someone on the Kraft team made a colossal error, and is trying to shift blame in a ham-handed fashion.

http://www.nakedcapitalism.com/2010/04/kraft-management-incompetence-visited-on-cadbury-employees.html

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More at link - including some wonderful reader comments.

[ozymandius]

25. Cognitive Dissonance: "The Cabal," Wall St Crimes & Mid-Terms

by bobswern
Mon Apr 05, 2010

MISSION ACCOMPLISHED?
There are some folks in the MSM and the blogosphere, of late, that talk of our current Treasury Secretary's "stunning" work. A few others in the ever-surreal MSM and the metaverse are lavishing praise upon the recent efforts of the Chairman of our Federal Reserve Board for a job well done. Yet others tell us--as they conflate the TARP bailout program with the 20+ other, lesser-known, taxpayer-funded Wall Street bailout programs, now totalling roughly $2.5 trillion in "welfare for the rich" -- that the banks are "paying the taxpayers back," to the point where somehow, we're going to make a profit on the deal.

Additionally, as 18-month-old calls for Federal Reserve and Wall Street bailout history tranparency gain traction and some semblance of response from the financial sector (albeit in many instances only by court order, whistleblowers and/or anonymous informants), we're quickly realizing that virtually everything stated above is little more than hype obfuscating much darker truths, such as: roughly five banking instutions--give or take one or two--are regularly colluding on a variety of strategies regarding the regulatory capture of our government and our society, not the least of which being ownership and management of our nation's legislative branch. ....

As you'll see from the links, below, numerous investigations and outcries--from Democrats on the floors of the U.S. Senate and House of Representatives to the Department of Justice to the historically spineless Securities and Exchange Commission (SEC)--are fully underway or being considered for further review regarding the now-questionable actions of both Bernanke and Geithner, and those that reported to them, concerning their job performance over the past few years. And, all of this is now moving forward with the understanding that, at best, the current Wall Street bailout efforts by our government have already cost taxpayers roughly $2.5 trillion.

http://www.dailykos.com/storyonly/2010/4/5/854259/-Cognitive-Dissonance:-The-Cabal,-Wall-St-CrimesMid-Terms

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This is a long diary. You may take more than one sitting to read in full, given the numerous links embedded throughout the piece.

[Name removed]

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[DemReadingDU]

27. John Mauldin: Is This A Recovery?

4/3/10 John Mauldin: Is This A Recovery?

First, we are in a nascent recovery from the depths of the Great Recession, but the question is "what kind of recovery?" Many suggest that we will see a typical recovery, like we have seen with every recession since World War II. As regular readers know, I don't think we've gone through a typical, garden-variety recession, and to expect a typical recovery is more faith-based than factual. We had a deleveraging recession and we are still deleveraging. The process, as shown in studies I have written about, takes years to conclude.

When I started talking in 2002 about a Muddle Through Economy for the rest of the decade, I had a lot of people giving me a hard time by 2005-6. But as we closed out the decade, average growth of US GDP for the entire decade was less than 2% annualized, which by my definition is Muddle Through. For the US economic machine, that was pretty anemic growth. It resulted in a lost decade for stocks, except for the NASDAQ, for which it was merely a dismal decade. Traditional 60-40 (stocks to bonds) portfolios did not fare well, coming nowhere close to the projections of standard-issue money managers.

I think we are in for yet another Muddle Through period, at least for 5-7 years and maybe for the decade, depending on a few scenarios I will come to in a minute. As my friend Prieur du Plessis outlined for us in last Monday's Outside the Box, if we measure the stock market by either earnings or dividend yields, valuations are in the top 10% historically. Average (!) returns, going out for ten years, are 2.6% real, with some historical 10-year periods being negative. Below is the range of returns, based on dividend yields. It does not look much different from the chart based on earnings. We are currently at the far right-hand bar.
This does not suggest a happy outcome for those who espouse buy-and-hope portfolios, at least not if you have expectations or needs of 7-8% or more.


This Time is Different

If you are a new reader, I suggest going to the archives at http://www.2000wave.com/archive.asp and searching on the name "Rogoff," to read the letters I have written on his and Carmen Reinhart's must-read book, This Time is Different, which shows us that it is never different this time. They looked at 266 financial crises in over 60 countries across a span of 200 years.

Debt crises have sadly similar conclusions: they always end in pain and tears. And although we have stopped, as private citizens, from accumulating debt (or in some cases, such as mortgages, have just walked away from the debt), our national government has stepped into the breach and is borrowing at mind-boggling levels.

more more, and charts too
http://www.businessinsider.com/is-this-a-recovery-2010-4

[Demeter]

29. At this Point, Even Muddling Through Seems Optimistically Unattainable

Until there's some serious response out of DC, there isn't much the grassroots can do except eschew the "aboveground" economy, which is anything but.

[Name removed]

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[Name removed]

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[Tansy_Gold]

39. OMG -- it's the kool-aid brigade

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=433x260456


:sigh:

[Dr.Phool]

40. Drink up!

It goes good with sacred cow.

[ozymandius]

45. Oh my.

That is disturbing. What is the fundamental basis of such hoo-hawing?

[Tansy_Gold]

49. They, like some of my friends, still believe with all sincerity

that the DJIA is the sole and sufficient measure of American economic health. In part, it's because they desperately WANT to believe this. They are psychologically unable to confront economic reality.

With regard to the people I know personally, some of them don't have to face reality. They are comfortably retired and a rising Dow increases the value of their stock portfolio.

In other cases, facing reality is simply too painful, and they are happier basking in the illusion. It helps them deal with their own avoidance of making the difficult and unpleasant decisions -- walking away from the drowning mortgage being the biggest -- that must be made if they are to survive.

I don't know about the people here on DU. Virtually all of us SMW regulars have done our level best to put facts out there, but many just don't want to hear it.

There was conversation amongst my friends at coffee this morning about the Chinese drywall fiasco. They couldn't understand how "we" -- the American government, I presume -- could allow this to happen. Yet these are also the first people who want government to stop or at least ease up on environmental and "frivolous" safety regulations. They are also the people who most benefit from investments in corporations that do extensive business with/in China.

I figure they're pretty typical of the DUers who, well, are cheering that 11,000 Dow.


Tansy Gold, who is not cheering because she knows what it means

[Demeter]

48. These People Are Frightening

They think they are at a roulette wheel?

Well, they got that part right....

[tclambert]

52. Well, yeah, sorta like roulette.

C'mon 23 red! C'mon 11,000 black! C'mon TEG, CQP, CPLP, and AONE! Drat, AONE is down while everything else is up.

Unlike the normal casinos, though, the NYSE casino, because of the Ponzi-ness of its nature, is supposed to pay out more than the players put in, on average. I'm still not rich, but in the past year, my returns were better than Warren Buffett's. So there, Warren!

[Festivito]

41. Debt: 04/01/2010 12,764,878,911,618.18 (DOWN 8,244,184,521.25) (Thu)

Debt: 04/01/2010 12,764,878,911,618.18 (DOWN 8,244,184,521.25) (Thu)
(Up a bit after being up big the day before. My internet is back up after days of being goofy. Good day all.)

(Debt under Obama seems to jump up big then drop slowly maybe up a little and down a little for days--repeat.)
= Held by the Public + Intragovernmental(FICA)
= 8,294,870,658,096.94 + 4,470,008,253,521.24
UP 4,832,827,050.45 + DOWN 13,077,011,571.70

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 309-Million person America.
If every American, man, woman and child puts in $3.23 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.7, ABOUT TEN BUCKS for a 1B$ 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 309,135,198 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 $41,292.22.
A family of three owes $123,876.66. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 24 reports in the last 30 to 31 days.
The average for the last 24 reports is 10,722,602,031.55.
The average for the last 30 days would be 8,578,081,625.24.
The average for the last 31 days would be 8,301,369,314.75.
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$/day.
There were 125 reports in 183 days of FY2010 averaging 6.84B$ per report, 4.67B$/day.
Above line should be okay

PROJECTION:
There are 1,025 days remaining in this Obama 1st term.
By that time the debt could be between 14.2 and 21.3T$.
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)
04/01/2010 12,764,878,911,618.18 BHO (UP 2,138,001,862,705.10 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 +0,855,049,908,106.40 ------------* * * * * * * * * * * * * * * * * * * * * BHO
Endof10 +1,705,427,412,343.37 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
03/12/2010 +000,363,901,611.09 ------------********
03/15/2010 +060,487,338,970.60 ------------********** Mon
03/16/2010 +000,241,513,784.66 ------------********
03/17/2010 +000,318,864,879.69 ------------********
03/18/2010 +020,986,560,998.86 ------------**********
03/19/2010 +000,244,805,712.35 ------------********
03/22/2010 +000,662,784,714.13 ------------******** Mon
03/23/2010 +000,796,033,080.11 ------------********
03/24/2010 +000,495,755,553.04 ------------********
03/25/2010 +024,094,622,106.32 ------------**********
03/26/2010 -000,521,947,711.23 ---
03/29/2010 -000,032,502,739.57 ---- Mon
03/30/2010 +000,146,146,107.03 ------------********
03/31/2010 +089,964,337,654.53 ------------**********
04/01/2010 +004,832,827,050.45 ------------*********

203,081,041,772.06 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/
DUer primer on National debt

(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=4329594&mesg_id=4332848

[Festivito]

51. Debt: 04/02/2010 12,762,747,199,516.75 (DOWN 2,131,712,101.43) (Fri)

(Down a drop. Good day all.)

(Debt under Obama seems to jump up big then drop slowly maybe up a little and down a little for days--repeat.)
= Held by the Public + Intragovernmental(FICA)
= 8,294,087,559,961.41 + 4,468,659,639,555.34
DOWN 783,098,135.53 + DOWN 1,348,613,965.90

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 309-Million person America.
If every American, man, woman and child puts in $3.23 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.7, ABOUT TEN BUCKS for a 1B$ 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 309,143,838 people in America.
http://www.census.gov/population/www/popclockus.html ON 11/07/2009 08:19 -> 307,879,272
Currently, each of these Americans owe $41,284.17.
A family of three owes $123,852.51. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 24 reports in the last 30 to 31 days.
The average for the last 24 reports is 10,138,478,084.64.
The average for the last 30 days would be 8,110,782,467.71.
The average for the last 31 days would be 7,849,144,323.59.
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$/day.
There were 126 reports in 184 days of FY2010 averaging 6.77B$ per report, 4.64B$/day.
Above line should be okay

PROJECTION:
There are 1,024 days remaining in this Obama 1st term.
By that time the debt could be between 14.2 and 20.8T$.
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)
04/02/2010 12,762,747,199,516.75 BHO (UP 2,135,870,150,603.67 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 +0,852,918,196,005.00 ------------* * * * * * * * * * * * * * * * * * * * * BHO
Endof10 +1,691,930,117,075.14 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
03/15/2010 +060,487,338,970.60 ------------********** Mon
03/16/2010 +000,241,513,784.66 ------------********
03/17/2010 +000,318,864,879.69 ------------********
03/18/2010 +020,986,560,998.86 ------------**********
03/19/2010 +000,244,805,712.35 ------------********
03/22/2010 +000,662,784,714.13 ------------******** Mon
03/23/2010 +000,796,033,080.11 ------------********
03/24/2010 +000,495,755,553.04 ------------********
03/25/2010 +024,094,622,106.32 ------------**********
03/26/2010 -000,521,947,711.23 ---
03/29/2010 -000,032,502,739.57 ---- Mon
03/30/2010 +000,146,146,107.03 ------------********
03/31/2010 +089,964,337,654.53 ------------**********
04/01/2010 +004,832,827,050.45 ------------*********
04/02/2010 -000,783,098,135.53 ---

201,934,042,025.44 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/
DUer primer on National debt

(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=4332635&mesg_id=4332866

[cal04]

42. Wall Street Returns and Starts Push to 11,000

http://www.nytimes.com/2010/04/06/business/06markets.html


Shares rose Monday after an increase in hiring and improved demand at services businesses raised expectations for the economy.

The Dow Jones industrial average rose 52 points in morning trading and neared the psychological benchmark of 11,000 for the first time in 18 months. The growing confidence about the economy hurt demand for Treasuries and drove up interest rates. The yield on the 10-year Treasury note rose to its highest level since 2008.

The Labor Department said Friday that employers added 162,000 jobs in March. It was the biggest gain since the recession began in December 2007. However, the number was fewer than the 190,000 jobs economists forecast. The stock market was closed Friday so investors did not have a chance to trade on the report before the weekend.

Stocks are also rising following an increase in activity in American services industries and a gain in pending home sales.




U.S. stocks lifted by signs economy is recovering
http://www.marketwatch.com/story/us-stocks-lifted-by-jobs-report-2010-04-05

[ozymandius]

43. Alright! Who was bad?

I worked in the garden awhile then returned to find 'message deleted' --- 'name removed' all over the place. Did we have another spam troll? Or did someone say something stupid?

[Dr.Phool]

44. Another spambot.

Ads for stock picks.

[ozymandius]

46. figures

Barry Ritholtz has had the same problems in the comments section at his site. There seems to be a connection between these spambot comments and people who have rating subscriptions like digg, buzz, reddit, etc.

[cbdo2007]

47. There seems to be a small Tech rally today

I've got a handful of small tech stocks all up 4% each today.

Happy Easter to me!

[fan of the arts]

50. Trading dead by 11am, off to the golf courses for the elite manipulators

A typical Monday, 100% corrupted, abused, "deregulated" and controlled. Anyone actually remember when the USA was a free country with free markets that were sincerely regulated? It's been years. How about this predominate fallacy of failed capitalism: everything costs more because prices just always go up, never mind that stocks, real estate and incomes don't.

The entire U.S. system is a falsehood perpetuated by propaganda and those dumb enough to believe it and ruled by corrupt politicos who are criminal enough to not want to change it.

[Demeter]

54. Welcome, Hope You Find Refuge Here