STOCK MARKET WATCH, Thursday May 13

[ozymandius]

Source: du

STOCK MARKET WATCH, Thursday May 13, 2010

AT THE CLOSING BELL ON May 12, 2010

Dow... 10,896.91 +148.65 (+1.36%)
Nasdaq... 2,425.02 UNCH (UNCH)
S&P 500... 1,171.67 +15.88 (+1.36%)
Gold future... 1,236 -7.20 (-0.58%)
10-Yr Bond... 3.57 +0.04 (+1.16%)
30-Year Bond 4.48 +0.06 (+1.38%)

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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    
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Handy Links - Videos:
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    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

[Festivito]

1. Debt: 05/11/2010 12,931,157,737,293.42 (UP 2,216,512,663.87) (Tue)

(Up a small amount. I'm first. Good morning. Gotta run.)

(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)
= 8,416,456,370,414.73 + 4,514,701,366,878.69
UP 656,599,651.55 + UP 1,559,913,012.32

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 13 seconds we net gain another American, so at the end of the workday of the report, there should be 309,247,747 people in America.
http://www.census.gov/population/www/popclockus.html ON 04/09/2010 15:49 -> 309,034,742
Currently, each of these Americans owe $41,814.88.
A family of three owes $125,444.64. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 to 32 days.
The average for the last 22 reports is 4,794,106,640.35.
The average for the last 30 days would be 3,515,678,202.92.
The average for the last 32 days would be 3,295,948,315.24.
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$/day.
There were 152 reports in 223 days of FY2010 averaging 6.72B$ per report, 4.58B$/day.
Above line should be okay

PROJECTION:
There are 985 days remaining in this Obama 1st term.
By that time the debt could be between 14.3 and 18.0T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
05/11/2010 12,931,157,737,293.42 BHO (UP 2,304,280,688,380.34 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 +1,021,328,733,781.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * BHO
Endof10 +1,671,681,559,777.22 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
04/20/2010 +000,349,194,756.21 ------------********
04/21/2010 +000,180,306,016.37 ------------********
04/22/2010 -015,686,359,446.12 -
04/23/2010 -000,156,047,055.50 ---
04/26/2010 +000,019,005,411.26 ------------******* Mon
04/27/2010 +000,734,843,937.10 ------------********
04/28/2010 -000,020,446,125.69 ----
04/29/2010 -019,519,315,418.04 -
04/30/2010 +098,427,087,705.17 ------------**********
05/03/2010 -004,329,381,263.93 -- Mon
05/04/2010 +000,043,170,775.25 ------------*******
05/05/2010 +000,598,834,211.91 ------------********
05/06/2010 -014,947,673,650.95 -
05/07/2010 +000,000,195,077.74 ------------*****
05/11/2010 +000,656,599,651.55 ------------******** Tue

46,350,014,582.33 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=4378010&mesg_id=4378021

[Festivito]

69. Oh, oh. Corrections coming. Skipped 5/10 so above post is errant.

[Festivito]

70. Debt: 05/10/2010 12,926,785,477,772.98 (DOWN 2,155,746,856.57) (Mon)

(Up a small amount. Correction one of errant 5/11 post goof.)

(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)
= 8,416,604,417,925.40 + 4,510,181,059,847.58
UP 804,647,162.22 + DOWN 2,960,394,018.79

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 13 seconds we net gain another American, so at the end of the workday of the report, there should be 309,241,100 people in America.
http://www.census.gov/population/www/popclockus.html ON 04/09/2010 15:49 -> 309,034,742
Currently, each of these Americans owe $41,801.64.
A family of three owes $125,404.92. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 to 31 days.
The average for the last 22 reports is 4,595,367,571.24.
The average for the last 30 days would be 3,369,936,218.91.
The average for the last 31 days would be 3,261,228,598.94.
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$/day.
There were 152 reports in 222 days of FY2010 averaging 6.69B$ per report, 4.58B$/day.
Above line should be okay

PROJECTION:
There are 986 days remaining in this Obama 1st term.
By that time the debt could be between 14.3 and 18.0T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
05/10/2010 12,926,785,477,772.98 BHO (UP 2,299,908,428,859.90 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 +1,016,956,474,261.20 ------------* * * * * * * * * * * * * * * * * * * * * * * * * BHO
Endof10 +1,672,023,032,006.03 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
04/20/2010 +000,349,194,756.21 ------------********
04/21/2010 +000,180,306,016.37 ------------********
04/22/2010 -015,686,359,446.12 -
04/23/2010 -000,156,047,055.50 ---
04/26/2010 +000,019,005,411.26 ------------******* Mon
04/27/2010 +000,734,843,937.10 ------------********
04/28/2010 -000,020,446,125.69 ----
04/29/2010 -019,519,315,418.04 -
04/30/2010 +098,427,087,705.17 ------------**********
05/03/2010 -004,329,381,263.93 -- Mon
05/04/2010 +000,043,170,775.25 ------------*******
05/05/2010 +000,598,834,211.91 ------------********
05/06/2010 -014,947,673,650.95 -
05/07/2010 +000,000,195,077.74 ------------*****
05/10/2010 +000,804,647,162.22 ------------******** Mon

46,498,062,093.00 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=4378010&mesg_id=4378021

[Festivito]

71. Debt: 05/11/2010 12,931,157,737,293.42 (UP 4,372,259,520.44) (Tue)

(Down a small amount. Correction two of errant 5/11 post goof, the real 5/11.)

(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)
= 8,416,456,370,414.73 + 4,514,701,366,878.69
DOWN 148,047,510.67 + UP 4,520,307,031.11

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 13 seconds we net gain another American, so at the end of the workday of the report, there should be 309,247,747 people in America.
http://www.census.gov/population/www/popclockus.html ON 04/09/2010 15:49 -> 309,034,742
Currently, each of these Americans owe $41,814.88.
A family of three owes $125,444.64. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 32 days.
The average for the last 23 reports is 4,585,667,221.20.
The average for the last 30 days would be 3,515,678,202.92.
The average for the last 32 days would be 3,295,948,315.24.
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$/day.
There were 153 reports in 223 days of FY2010 averaging 6.68B$ per report, 4.58B$/day.
Above line should be okay

PROJECTION:
There are 985 days remaining in this Obama 1st term.
By that time the debt could be between 14.3 and 18.0T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
05/11/2010 12,931,157,737,293.42 BHO (UP 2,304,280,688,380.34 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 +1,021,328,733,781.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * BHO
Endof10 +1,671,681,559,777.22 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
04/21/2010 +000,180,306,016.37 ------------********
04/22/2010 -015,686,359,446.12 -
04/23/2010 -000,156,047,055.50 ---
04/26/2010 +000,019,005,411.26 ------------******* Mon
04/27/2010 +000,734,843,937.10 ------------********
04/28/2010 -000,020,446,125.69 ----
04/29/2010 -019,519,315,418.04 -
04/30/2010 +098,427,087,705.17 ------------**********
05/03/2010 -004,329,381,263.93 -- Mon
05/04/2010 +000,043,170,775.25 ------------*******
05/05/2010 +000,598,834,211.91 ------------********
05/06/2010 -014,947,673,650.95 -
05/07/2010 +000,000,195,077.74 ------------*****
05/10/2010 +000,804,647,162.22 ------------******** Mon
05/11/2010 -000,148,047,510.67 ---

46,000,819,826.12 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=4379553&mesg_id=4379554

[Festivito]

72. Debt: 05/12/2010 12,923,161,977,864.28 (DOWN 7,995,759,429.14) (Wed)

(Up a small amount. Correction three of errant 5/11 post goof.)

(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)
= 8,417,239,340,657.65 + 4,505,922,637,206.63
UP 782,970,242.92 + DOWN 8,778,729,672.06

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 13 seconds we net gain another American, so at the end of the workday of the report, there should be 309,254,393 people in America.
http://www.census.gov/population/www/popclockus.html ON 04/09/2010 15:49 -> 309,034,742
Currently, each of these Americans owe $41,788.13.
A family of three owes $125,364.38. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 days.
The average for the last 23 reports is 4,207,935,720.76.
The average for the last 30 days would be 3,226,084,052.58.

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$/day.
There were 154 reports in 224 days of FY2010 averaging 6.58B$ per report, 4.52B$/day.
Above line should be okay

PROJECTION:
There are 984 days remaining in this Obama 1st term.
By that time the debt could be between 14.3 and 18.0T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
05/12/2010 12,923,161,977,864.28 BHO (UP 2,296,284,928,951.20 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 +1,013,332,974,352.50 ------------* * * * * * * * * * * * * * * * * * * * * * * * * BHO
Endof10 +1,651,189,891,244.03 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
04/22/2010 -015,686,359,446.12 -
04/23/2010 -000,156,047,055.50 ---
04/26/2010 +000,019,005,411.26 ------------******* Mon
04/27/2010 +000,734,843,937.10 ------------********
04/28/2010 -000,020,446,125.69 ----
04/29/2010 -019,519,315,418.04 -
04/30/2010 +098,427,087,705.17 ------------**********
05/03/2010 -004,329,381,263.93 -- Mon
05/04/2010 +000,043,170,775.25 ------------*******
05/05/2010 +000,598,834,211.91 ------------********
05/06/2010 -014,947,673,650.95 -
05/07/2010 +000,000,195,077.74 ------------*****
05/10/2010 +000,804,647,162.22 ------------******** Mon
05/11/2010 -000,148,047,510.67 ---
05/12/2010 +000,782,970,242.92 ------------********

46,603,484,052.67 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power JUST BEFORE fiscal year end.
Bush admin borrowed $962,245,245,654.01 in those last 124 days in office crossing two fiscal years.
$360,093,093,653.42 in last 12 days of FY2008, and $602,152,152,000.59 in subsequent 112 days before leaving office.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock
http://www.usdebtclock.org/
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=4379553&mesg_id=4382851

[Festivito]

73. Debt: 05/13/2010 12,927,411,267,929.24 (UP 4,249,290,064.96) (Thu)

(Up. Last correction, four of four of errant 5/11 post goof. Actually this post had not been posted yet, so it's not a correction -- really.)

(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)
= 8,420,541,100,207.82 + 4,506,870,167,721.42
UP 3,301,759,550.17 + UP 947,530,514.79

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 13 seconds we net gain another American, so at the end of the workday of the report, there should be 309,261,039 people in America.
http://www.census.gov/population/www/popclockus.html ON 04/09/2010 15:49 -> 309,034,742
Currently, each of these Americans owe $41,800.97.
A family of three owes $125,402.91. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 days.
The average for the last 23 reports is 4,183,386,271.24.
The average for the last 30 days would be 3,207,262,807.95.

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$/day.
There were 155 reports in 225 days of FY2010 averaging 6.57B$ per report, 4.52B$/day.
Above line should be okay

PROJECTION:
There are 983 days remaining in this Obama 1st term.
By that time the debt could be between 14.3 and 18.0T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
05/13/2010 12,927,411,267,929.24 BHO (UP 2,300,534,219,016.16 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 +1,017,582,264,417.50 ------------* * * * * * * * * * * * * * * * * * * * * * * * * BHO
Endof10 +1,650,744,562,277.28 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
04/23/2010 -000,156,047,055.50 ---
04/26/2010 +000,019,005,411.26 ------------******* Mon
04/27/2010 +000,734,843,937.10 ------------********
04/28/2010 -000,020,446,125.69 ----
04/29/2010 -019,519,315,418.04 -
04/30/2010 +098,427,087,705.17 ------------**********
05/03/2010 -004,329,381,263.93 -- Mon
05/04/2010 +000,043,170,775.25 ------------*******
05/05/2010 +000,598,834,211.91 ------------********
05/06/2010 -014,947,673,650.95 -
05/07/2010 +000,000,195,077.74 ------------*****
05/10/2010 +000,804,647,162.22 ------------******** Mon
05/11/2010 -000,148,047,510.67 ---
05/12/2010 +000,782,970,242.92 ------------********
05/13/2010 +003,301,759,550.17 ------------*********

65,591,603,048.96 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/
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=4379553&mesg_id=4382855

[ozymandius]

2. Today's Reports

08:30 Continuing Claims 05/01
Briefing.com 4600K
Consensus 4570K
Prior 4594K

08:30 Initial Claims 05/08
Briefing.com 440K
Consensus 440K
Prior 444K

08:30 Export Prices ex-ag. Apr
Briefing.com NA
Consensus NA
Prior 0.6%

08:30 Import Prices ex-oil Apr
Briefing.com NA
Consensus NA
Prior 0.2%

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

[ozymandius]

3. Oil falls to near $75 on weak US crude demand

SINGAPORE – Oil prices fell to near $75 a barrel Thursday in Asia as traders mulled signs of tepid U.S. crude demand against growing consumption in developing economies.

Crude inventories keep rising, defying analyst predictions that a recovering U.S. economy would boost demand. The Energy Information Administration said Wednesday that oil supplies increased more than expected last week as stockpiles grow for 14 of the last 15 weeks.

Supplies at the key Cushing, Oklahoma terminal jumped to a record high.

In other Nymex trading in June contracts, heating oil rose 1.45 cents to $2.1736 a gallon, and gasoline 0.76 cent to $2.2180 a gallon. Natural gas was steady at $4.280 per 1,000 cubic feet.

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

[Loge23]

26. Even pigs need to digest once in awhile.

They'll be back at the trough as soon as they "digest" the latest speculative binge.
For my business, fuel prices were up 34% for April over last April.
You're welcome, porkies!

[ozymandius]

4. Senate tackles mortgage finance in bank bill

WASHINGTON (Reuters) – The Federal Reserve scored a victory and mortgage bankers suffered a defeat on Wednesday as the Senate took aim at bank supervision and housing finance in its sprawling Wall Street reform effort.

Reversing an earlier plan drawn up by Senator Christopher Dodd, the Senate approved an amendment by a 90-9 vote to preserve Fed supervision of hundreds of smaller banks, instead of transferring them to other regulators.

The vote was a setback for Dodd, the Democratic chairman of the Senate Banking Committee, in his bold effort to rationalize the patchwork U.S. bank supervision system, widely faulted for missing the 2008-2009 financial crisis.

The Senate voted 63 to 36 to end mortgage kickbacks and "liar loans," two practices that led to a proliferation of shaky mortgages in the years before the crisis.

Incentives known as "yield spread premiums" encouraged brokers to steer consumers into risky, high-interest loans even if they qualified for cheaper loans.

http://news.yahoo.com/s/nm/20100512/bs_nm/us_financial_regulation

[ozymandius]

5. Senate votes to rein in mortgage lenders

WASHINGTON – Taking aim at deceptive lending, the Senate on Wednesday voted to ban mortgage brokers and loan officers from getting greater pay for offering higher interest rates on loans, and to require that borrowers prove they can repay their loans.

The Senate, however, rejected a measure that would have required homebuyers to make a minimum downpayment of 5 percent on their loans. The votes were part of the Senate's deliberations on a broad overhaul of financial regulations designed to avoid a repeat of the crisis that struck Wall Street in 2008.

Borrowers would have to provide evidence of their income, either though tax returns, payroll receipts or bank documents. That provision seeks to eliminate so-called stated-income loans where borrowers offered no proof of their ability to pay.

But the Senate voted 57-42 against a Republican amendment offered by Sen. Bob Corker, R-Tenn., that set tougher underwriting standards, including the downpayment requirement. That measure also would have eliminated a condition that mortgage lenders retain 5 percent of any mortgages they resell in the securities market.

The Senate rejected 59-39 a Republican proposal to regulate the complex securities known as derivatives, which would have diluted provisions contained in the pending legislation. The amendment, offered by Sen. Saxby Chambliss, R-Ga., would still have increased government oversight of the previously unregulated instruments, but it would have provided greater exceptions for participants in derivatives contracts who use them primarily to hedge against market fluctuations.

http://news.yahoo.com/s/ap/20100512/ap_on_bi_ge/us_financial_overhaul

[Po_d Mainiac]

21. So neither homeowners or banks need to have any skin in the game..n/t

Let the games continue

[ozymandius]

6. Trade deficit increases to $40.4 billion in March

WASHINGTON – The U.S. trade deficit rose to a 15-month high as rising oil prices pushed crude oil imports to the highest level since the fall of 2008, offsetting another strong gain in exports. The larger deficit is evidence of a rebounding U.S. economy.

Analysts expect this year's deficit to be up significantly from 2009, when it hit an eight-year low. But U.S. exports should keep growing, providing a major source of strength from American manufacturers, and will only be marginally affected by the European debt crisis.

The Commerce Department reported Wednesday that the trade deficit rose 2.5 percent to $40.4 billion in March compared to the February imbalance. It was the largest monthly trade deficit since December 2008.

Exports of goods and services were up 3.2 percent to $147.87 billion, the highest level since October 2008. Imports were up 3.1 percent to $188.3 billion.

U.S. manufacturers, the standout performers so far in this recovery, will continue to get a boost from rising demand for their products, economists predicted. Their sales are being helped by a rebound in the global economy and declines in the value of the dollar against other major currencies.

http://news.yahoo.com/s/ap/20100512/ap_on_bi_go_ec_fi/us_economy

[Po_d Mainiac]

22. Someone has to purchase the hubris the world creates

This is a noble task that must be undertaken by the US consumer.

Case in point: The US consumer goes AWOL for a couple years and the great economy's of Europe simply disintegrate before our very eyes. As a nation we can not allow the contagion to spread to the Sub-continent and Asia.

:sarcasm:

[ozymandius]

7. U.S. Home Foreclosures Reach Record

U.S. home repossessions set a record in April while foreclosure filings dropped for the first time in four years, a sign lenders may be delaying new default actions as they seize properties, RealtyTrac Inc. said.

A record 92,432 bank repossessions were reported in April, up 45 percent from a year earlier and 1 percent from March, Irvine, California-based RealtyTrac said today in a statement. Foreclosure filings, including default and auction notices, were 333,837. One out of every 387 U.S. households got a filing.

Unemployment of 9.9 percent and a rising percentage of U.S. homes worth less than the mortgages on them are combining to thwart a housing recovery, according to RealtyTrac. About 5 million delinquent loans will probably end up in the foreclosure process in addition to the 1.2 million homes already taken back by lenders, Sharga said.

Monthly foreclosure filings will remain “at a very high level that will not drop off in the near future,” James J. Saccacio, RealtyTrac’s chief executive officer, said in the statement. April marked the 14th straight month that foreclosure filings exceeded 300,000.

More than a fifth of U.S. mortgage holders owed more than their homes were worth in the first quarter, according to Zillow.com. The proportion rose to 23 percent from 21 percent in the previous quarter, the Seattle-based property service said this month.

http://preview.bloomberg.com/news/2010-05-13/foreclosures-in-u-s-rise-to-record-in-signal-seizures-won-t-drop-off-soon.html

[ozymandius]

8. Big banks slashed small business credit lines

NEW YORK (CNNMoney.com) -- The biggest Wall Street banks slashed their small business loan portfolios by 9% between 2008 and 2009, more than double the rate at which they cut their overall lending, according to a government report released Thursday.

The Congressional Oversight Panel report spotlights the role banks, especially the largest ones, played in the credit crunch that has plagued small companies throughout the recession.

"Big banks pulled back on everyone, but they pulled back harder on small businesses," Elizabeth Warren, the panel's chairwoman, said on a conference call with reporters ahead of the report's release.

Warren's oversight committee was established to keep tabs on the federal government's financial stabilization effort, the Troubled Asset Relief Program (TARP). The committee's May report focuses on the role TARP played in improving credit access for small companies.

The grim conclusion: It failed.

http://money.cnn.com/2010/05/13/smallbusiness/small_business_lending/index.htm

[ozymandius]

9. Are big banks dead in the water?

Still, even if it turns out that no charges are ever filed against Morgan, it's clear that the SEC, DOJ and other federal agencies have found religion in going after the big banks.

Many politicians have also been intensely critical of the large financial firms as taxpayers continue to bristle about the bailout of the sector in 2008 and the quick return to profitability enjoyed by many of the banks that were propped up with government support.

Are all the big banks going to come under increased scrutiny from regulators?

It appears this might be the case. Interestingly though, shares of other large banks didn't get hit on the Morgan news Wednesday. Goldman's stock was up about 2% -- small consolation for investors considering that it's still down 22% since the SEC charged it with fraud in late April.

Short sellers, investors that bet a security will go down in value, also seem to think that some of the big banks could fall further. According to the most recent figures released by the New York Stock Exchange, the number of Citigroup shares being held short surged 16% between mid-April and the end of the month.

http://money.cnn.com/2010/05/12/markets/thebuzz/index.htm

[ozymandius]

10. Is This a “Typical” Economic Recovery ?

From Ritholtz:

I keep hearing from people that this is not the typical economic recovery. But I don’t see that at all — at least in terms of Consumer behavior.

We had 25 months of economic contraction with horrific headlines the whole time. Spending decreased, savings increased, unemployment spiked. This led the government and central bankers to throw lots of money at the problem — not so much fixing it, as papering it over.

But have a look a the charts below — when I look at year over year changes in areas such as spending, income, jobs — this looks like a typical recovery in hiring, etc.

Isn’t that is typical recession/recovery behavior?

-People hunkered down, and slowed spending.
-Market discounted the recession partially.
-Unemployment increases.
-Consumers get nervous, spend less, save more during the contraction.
-Economy bottoms
-Markets discounted the recovery.
-Employment picks up
-As signs of improvement become visible, consumers started spending again.

The consumer response to economic stress was — pardon the word — typical. 1973, 1982, and 1991 saw similar hunkering down, then a return towards normalcy.

[ozymandius]

11. Yves Smith: Were the Ratings Agencies Duped Rather than Dumb?

The line of thinking that underlies an investigation by New York attorney general Andrew Cuomo is a challenge to conventional wisdom about the financial crisis. The prevailing view is that since credit ratings were one of the single biggest points of failure in the crisis, the ratings agencies were one of the biggest, if not the biggest, perp.

But the Cuomo investigation is honing in on a crucial issue: did the banks misrepresent the assets in the deals rated? That has the potential to be a Big Deal, since it could result in bad ratings and the resulting losses being attributed to bad information from banks, who could be sued, and conveniently also are deep pockets.

A New York Times story on Cuomo’s probe covers a lot of ground that will be familiar to readers of the blog: that low and behold, the banks tried to game the ratings! Since banksters try to game everything, this is hardly news:

At Goldman, there was even a phrase for the way bankers put together mortgage securities. The practice was known as “ratings arbitrage,” according to former workers. The idea was to find ways to put the very worst bonds into a deal for a given rating. The cheaper the bonds, the greater the profit to the bank.

On the one hand, correlation was a crucial input into structuring these deals, and one big reason so many supposedly AAA bonds failed was the underlying assets were highly correlated.

Moreover, banks themselves often did these deals off their correlation desks. That further raises the possibility that the banks were arbing the correlation risk against their investors (in other words, they could be narrowly truthful in insisting, as Goldman and Magnetar do, that they weren’t designing the deals to fail; they were designing the deals to have highly correlated exposures. But that would mean if they got in trouble, they WOULD fail, as oppose to merely be somewhat impaired).

http://www.nakedcapitalism.com/2010/05/were-the-ratings-agencies-duped-rather-than-dumb.html

[Demeter]

12. Chase's Foreclosure Disgrace

http://www.thenation.com/article/chases-foreclosure-disgrace

Here’s the problem with the Obama Administration’s approach to foreclosure prevention: it depends entirely on the banks voluntarily doing the right thing, even when homeowners have held up their end of the bargain to prevent a foreclosure.

Take the case of three homeowners in Queens, New York. Each one met the requirements for a “permanent” modification of their mortgages--which means a reduction of payments for five years--as laid out under the Administration’s Home Affordable Modification Program (HAMP). They did so by making three months of trial modification payments to JP Morgan Chase and verifying their incomes. They had contracts with Chase and fulfilled their obligations under those contracts.

So how did Chase reward them?

Permanent modifications denied. Delinquency reports to credit rating agencies issued. And the cherry on top--foreclosure.

These three homeowners—each working full-time, with at least one job, working up to six days a week--are fighting back. With the help of the Urban Justice Center, a non-profit legal services provider in New York, they filed suit last Tuesday against the bank in federal court in Brooklyn.

“We want Chase to live up to the contracts that they entered into and give permanent modifications to these homeowners,” said Ted De Barbieri, an attorney at the Urban Justice Center. “If you’re going to sign onto HAMP, you have to follow the rules. These homeowners followed the rules, and now it’s time for Chase to.”

[Demeter]

13. U.S. home prices drop by $25 billion

http://www.bizjournals.com/sanfrancisco/stories/2010/05/10/daily38.html?jst=b_ln_hl

A report by San Francisco’s Trulia Inc. says home prices around the United States were cut by 10 percent in April. In total, some $25 billion has been slashed from the list prices of for-sale homes.

Luxury homes costing $2 million or more are unaffected by the expiration of a U.S. tax credit that has created turbulence in markets around the country, according to the report. But luxury homes on the market already have had an average price cut of 14 percent.

Trulia has been tracking house price cuts for a year. The hardest hit markets, where the most homes had their prices cut, were Minneapolis (40 percent of listed homes had price cuts), Milwaukee (37 percent), Baltimore (35 percent), Phoenix (33 percent) and Dallas (32 percent).

San Francisco came in at No. 41 on Trulia’s list in May, with 17 percent of its listed homes having their prices cut. The total amount cut from San Francisco homes was $44.9 million.

Across the bay, Oakland ranked No. 47, with 14 percent of listed homes having prices cut and a total reduction of $10.2 million from those cuts.

No. 50 San Jose had 12 percent of its homes reduced in price and a total reduction of $17.9 million.

[Demeter]

17. Taking Back Homes from the Banks: Exercising the Human Right to Housing By Bill Quigley

http://www.informationclearinghouse.info/article25428.htm

May has seen an upsurge in local organizations exercising their human rights to housing. Most people recognize that international human rights guarantee all humans a right to housing. With the millions of homeless living in our communities and the millions of empty foreclosed houses all across our communities, groups have decided to put them together.

Organizations across the US are engaging in "housing liberation" and "housing defense" to exercise their human rights to housing. Here are a few examples.

Madison
In Madison Wisconsin, the grass-roots organization Operation Welcome Home helped Desiree Wilson, 24, a mother with small children to move into a vacant house, hook up utilities and change the locks, according to nbc15.com in Madison. The home was vacant due to foreclosure. Bank of America owns the home now. "It's not against the law, "said Ms. Wilson. "This is above the law. It's just so much bigger than me. Housing is a human right."

Operation Welcome Home held a press conference criticizing the billions of dollars in bailouts to mortgage lenders. "We're asking them to turn over the property to the community whose tax dollars are funding what they are doing." One of the spokespersons for the group, Z!Haukness, reminded people that "housing is a human right, no matter what income, no matter what rental history." The group plans more "liberations" of other vacant property.

A local land trust, Madison Area Community Land Trust, says if the activists convince the bank to donate the home the trust can find the resources to turn it into affordable housing. Taking over the vacant foreclosed property is "a brave move" says Michael Carlson of the Madison trust. Carlson told the Madison Cap Times "They're compelling the citizens of Dane County to confront the very real contradictions in the way we provide housing - massive surpluses in the market that led to a collapse in credit and simultaneously people without shelter and permanent affordable housing."

Toledo

A Toledo, Ohio, factory worker, Keith Sadler lost his home of 20 years at a foreclosure sale for $33,000. When it came time to be evicted, Keith had had enough. According to the toledoblade.com, he and 6 friends barricaded the house up to resist the foreclosure eviction. All were all members of the Toledo Foreclosure Defense League. After 5 days the house was raided by the local SWAT team and all were arrested on misdemeanor charges and released.

Portland

In Portland, Oregon, a local group, Right 2 Survive, seized control of vacant land in front of an abandoned school. They set up tents for the un-housed. "This is a celebration because we are taking our rights back, " Julie McCurdy told Take Back the Land. "What we're doing is coming up with the solutions tailored for our community. We are tired of waiting for city hall to come up with revised plans and rehashed ordinances that do not meet the needs of un-housed Portlanders."

Sacramento, Philadelphia, Chicago, Atlanta

A faith-based group has been moving families into vacant homes in Sacramento. The Poor People's Economic Human Rights Campaign moved a family into a vacant home in Philadelphia. The Chicago Anti-eviction Campaign marched to protect a family from eviction and the Malcolm X Grassroots Movement protested auctions of family homes on the county courthouse steps of Atlanta. Other community actions across the country are expected during the rest of May.

Housing as a Human Right

Housing is a human right recognized by a number of international human rights laws. For example, the Universal Declaration of Human Rights, adopted after the Second World War, promised "Everyone has the right to a standard of living adequate for the health and well-being of himself and his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood."

Still, the National Coalition for the Homeless estimates of the number of homeless people in the US range from 1.6 to 3.5 million.

Foreclosures are soaring. Some housing experts say 4 million foreclosures are possible in 2010. There were 3.4 million homes which got foreclosure notices, auction sale notices or bank repossessions in 2009. In the first quarter of 2010, RealtyTrac reported there were 932,000 foreclosures. Auctions were scheduled on 369,000 homes in the same time. Banks repossessed 257,000 homes during that time

Organizations working to exercise peoples' human rights to housing include Take Back the Land and the US Human Rights Network. Both are working with local community organizations to support their campaigns.

Bill is Legal Director at the Center for Constitutional Rights and a law professor at Loyola University New Orleans. He is a Katrina survivor and has been active in human rights in Haiti for years with the Institute for Justice and Democracy in Haiti. [e-mail]

[Loge23]

30. Housing prices are down to everyone but the banks.

By now most of us either know someone close, or have been personally involved with, a foreclosure or abandonment action.
As pointed out on 60 Minutes last Sunday, walking away from the wreckage of an upside down valuation has become basically a socially acceptable practice. It's easy to see how this remarkable transformation in fiscal responsibility has evolved - or devolved.
It's arguable that many of these upside-down valuations were over-leveraged to begin with, but the reality is - one of the owners of these properties, the lenders, are essentially immune to the market deterioration.
The lenders agreed that the property was worth the inflated value and jumped in on the basis of that decision. The mortgagee loses the home, get their almighty credit rating downgraded by an arbitrary cabal of agencies (while another rating cabal overvalues the banks position), and loses whatever equity they thought they were building. The banks get the property and whatever interest they already collected, the broker keeps the commission, and nobody (humanly) on that side of things gets hurt.
If banks were forced to accept the market valuation, refi the loans on that basis, and hedge their losses by having a stake in any increased valuations in the future, no one would get hurt (expect the machine).
Upside down, indeed.

[Demeter]

32. Foreclosures down 2 percent from last year (WOW! CAN YOU BELIEVE IT?)

http://news.yahoo.com/s/ap/20100513/ap_on_bi_ge/us_foreclosure_rates

Millions of Americans are still likely to lose their homes in the coming years, but the foreclosure crisis is finally showing signs of subsiding.

The number of households facing foreclosure in April fell 2 percent from a year ago, the first annual decline in five years, RealtyTrac Inc. said Thursday.

But the data aren't all sunny. While the number of new delinquencies is dropping, the number of borrowers losing their homes is still rising. Banks seized a record 92,000 homes last month.

And there are millions more potential foreclosures ahead. Nearly 7.4 million borrowers, or 12 percent of all households with a mortgage, had missed at least one month of payments or were in foreclosure as of March, according to Lender Processing Services Inc., a mortgage data research firm.

RealtyTrac, a foreclosure listing firm in Irvine, Calif., reported that nearly 334,000 households, or one in every 387 homes, received a foreclosure-related notice in April. That was down more than 9 percent from March.

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

Among states, Nevada posted the highest foreclosure rate in April, with one in every 69 households receiving a foreclosure notice. Foreclosures there were up 10 percent from March, but unchanged from a year earlier. Next on the list were Arizona, Florida, California and Michigan.

Las Vegas continued to be the city with the nation's highest foreclosure rate, but activity there was down 3 percent from a year earlier. And in another sign the problem is receding, nine out of the top 10 cities with the highest foreclosure rates posted annual declines. The exception was Reno, Nev., where foreclosures were up 16 percent from a year ago.

[AnneD]

34. I am so glad to see this movement.....

To regular readers here on SWT-I apologize for repeating this story.

Hubby and I have been working ourselves out of a big debt hole. Some was our doing but some was beyond our control. I was hoping to be out of debt this year but we may have to push it back another year (I am buying back my years of service in order to get full retirement benefits). We have done some calculations about the house we can buy-10% down, house value not exceeding 1/4th of our take home pay on a 15 yr fixed. This came out to a staggering $255K which I have few intentions of paying for a house. I am 56 and plan to pay off sooner, but houses in the area where hubby and I could work run over our price. We have been watching bank foreclosure sales very closely and banks are not discounting at all.

I have attended cattle, horse and other livestock auctions all my life and I can tell when an auction is rigged. I have seen ringers at an auction driving up bidding prices trying to sucker the public and investors.

This fact was confirmed to me when my cater/horse trainer brother told me he recently saw this with his own eyes. A group of these types talking at his tables at a recent house auction. The bank paid for these guys meals. He slipped out to see the bidding and sure enough these guys were jacking up bids.

So here hubby and I sit, building a war chest with about as secure of jobs one can have. We have dings to our credit but we are accumulating cash in hand. We have a 3 month emergency fund now and as soon as we pay off our last debt, we will save for a house down payment. We are looking at buying a foreclosure to shave some repayment time off. Do you think we can get decent prices on a house or get a loan. The answer so far has been a big fat no. The banks do not seem to have any incentive what so ever. I am at the point of telling them f#@$ y*#. We may just buy land and slowly build-totally cutting them out of the process. I am currently getting names and taking numbers of sub contractors. One thing I have learned in my world travels-they is always more than one answer to a problem. We may start out building a garage apartment on the property first before we build a house. I have lived in garage apartments before and it is bigger than the travel trailer I live in today.

I hope the these banks choke on their assets. There will be another crash and God help them because this time the taxpayers won't.

[Demeter]

40. There Are Many Advantages to Building Your Own

but it's a lot more work and pain up front. I think you are on the right track. I'm in your age group, and the thought of building at this point in life is daunting. Just trying to rip out carpet and lay prefinished flooring is scaring me! If I had a husband instead of a severely disabled daughter, I might be more game.

That's why I like my coop-turned-condo. As a board member, I can protect the entire neighborhood, not just a house. It satisfies that building urge.

[Demeter]

14. Record-High Gold Tells of "Inflation & Sovereign Debt" Threat, Gold Buying Now "Exceptionally Strong

http://goldnews.bullionvault.com/gold_buying_051220101

The price of Gold jumped to new all-time highs against all-but-three of the world's major currencies on Wednesday morning, breaking US$1245 an ounce in London trade.

German and US government bonds slipped as world stock markets rallied together with crude oil and base metals.

British gilts rose further however – and the Pound jumped towards a 17-month high in terms of the Euro – as further details of the UK's new Conservative-led coalition government were announced.

Gold priced against the European Euro broke above €980 an ounce (€31,500 per kilo), extended its 2010 gains to 28%.

"Spot Gold in Euros is getting ever closer to the €1000 mark," says Axel Rudolph at Commerzbank in Luxembourg.

"We remain long-term bullish as long as the Gold Price in Euros trades above the March low at €800.42 an ounce."

"The <€750bn> super-financing plan launched by the European Union to save countries in distress has not produced the hoped-for results," says Filippo Finocchi from the trading desk at bullion dealer Italpreziosi in Arezzo, Italy...

[Po_d Mainiac]

23. Not only the yellow metal, but the white one too

http://www.zerohedge.com/article/first-gold-now-europe-running-out-silver

The flee to safety is not necessarily to the U$D, but to the hard currency's that have been around for thousands of years..

IMHO, it may be the only sound investment left...Beware of the ETF's (SLV/GLD). Many have written these have gone Berniesque (As in Madoff)

[DemReadingDU]

25. You can't eat gold or silver

I've been investing in extra cans of food, and hand-crank can openers.

[tclambert]

28. You can so eat them!

They aren't very nutritious, but kids swallow coins all the time. Sometimes they pass right through the system. Which means . . . you, too, could poop gold!

[Po_d Mainiac]

31. Ayuh, but I only shat nickels as a kid

But since they were were rendered unfit for pocket change after the gut wrenching journey, they got saved in a little jar. As I entered the twilight years, I donned a hazmat suit and gave them a second chance and life.

Much to my amazement there were 1937D three legged Buffalo's and a couple 1913 mound nickels in AU condition along with several pounds of war issue Jefferson's. Life has been called retirement ever since!

[DemReadingDU]

33. That's some serious coinage

and you had swallowed all these coins? I can't ever remember swallowing anything but food.

After my mom died years ago, we found hundreds of coins throughout her house...old silver dimes and quarters, Kennedy half-dollars, wheat pennies. Probably some coins could have had historic value, but we eight kids split up the stash.

[Po_d Mainiac]

37. And the sound it made was similar to that of brass

Even at a young age, people gave me a wide berth
:hide:

[Demeter]

56. One of the French King's Mistresses Ate Liquid Gold

in the belief that it kept one young and beautiful--and she died of gold poisoning....

http://en.wikipedia.org/wiki/Diane_de_Poitiers

http://www.bmj.com/cgi/content/extract/339/dec16_2/b5311

[Po_d Mainiac]

29. Agree

But there has almost always been (and will continue to be) some form of currency exchange.

IMHO, Precious metals will retain their value as currency, whereas the mattress stuffed with U$D's will only be useful as a sleeping cushion or kindling a fire.

Ps...never had anything but a hand-crank opener, and have gone so far as to be able to lift water 280ft from the well with a hand pump. Being very rural, one gets used to life off the grid every time a hard blow passes through the area. Literally being the last hook-up on the line often means the last to get plugged back in.

[Dr.Phool]

46. I do that every year at this time.

It's called hurricane preparation. Time for the big trip to Costco.

Does anyone know the half-life of a can of Spam?

[hamerfan]

54. Not sure,

but I think it's measured in millennia.... :rofl:

[Po_d Mainiac]

63. If the can hasn't blown up...u'r good to go

If the can has gone past your expiration date....you'll be going a lot.

[Demeter]

15. Bernanke Said to Tell Senators Euro Aid No Panacea (Update2)

http://www.bloomberg.com/apps/news?pid=20601068&sid=aHKewxscnhg4

Federal Reserve Chairman Ben S. Bernanke told U.S. senators today that the euro region’s almost $1 trillion aid package to stem its debt crisis isn’t a cure- all, according to a participant.

“He said, ‘This is basically not a panacea,’” and that the measures are “temporary,” Alabama Senator Richard Shelby, the senior Republican on the Banking Committee, told reporters in Washington after a closed-door briefing Bernanke held with the panel. “There’s got to be fundamental underlying changes in their economies, not just Greece, but a lot of other countries,” Shelby cited Bernanke as saying...

[Demeter]

16. Finance 101: Blame the Poor (While Taking Their Money) By Gordon Arnaut

http://www.informationclearinghouse.info/article25430.htm

Did you know that the poor (and mostly black) people in the US caused the global financial crisis that threw the world economy into its worst slump since the Great Depression of the 1930’s?

I didn’t know that either, until I heard this news from the US media and popular broadcasters like Glenn Beck, Sean Hannity and Rush Limbaugh.

This is how it all happened: Special interest groups representing poor people, minorities, and “socialist” elements in the US government “pressured banks to make loans to people who could not afford them, and then the whole thing melted down…” explains Beck, who has a radio and TV audience of several million viewers and listeners.

Thomas Sowell, a right-wing economist for the Hoover Institution and a writer for the Wall Street Journal and Forbes magazine, says that anti-poverty activists “blocked drive-up lanes and made business impossible for banks until they surrendered to demands that they make billions in loans that they wouldn’t otherwise have made.”

God Bless America. The land where truth and freedom prevails.

The only thing I don’t understand is how these poor, black and Hispanic Americans, whose combined share of the national wealth is less than the personal fortune of a few wealthy individuals at the top of the Forbes list, could possibly have exerted such a disproportionate influence on the nation’s economy.

Statistics from the United Nations tell us that the bottom 40 percent of the population of the United States own less than 1 percent of the nation’s wealth. That is about 120 million people. If each and every one of these individuals “forced” the banks to give them mortgages and loans, and then failed to pay them back, the worst that could happen would be a total national loss of 1 percent of wealth.

Is this what happened? That 120 million poor Americans all simultaneously defaulted on their mortgage and loan payments and the economy collapsed because of a 1 percent decline?

Or perhaps the collapse had more to do with the top 1 percent of Americans who own 38 percent of the national wealth? If we do a bit of simple math we see that a member of that top 1 percent—about 3 million wealthy Americans—owns, on average, about 1,500 times as much as a member of the bottom 120 million Americans. Put another way, about 1,500 poor people share a single piece of pie that one wealthy American has all to himself.

Also curious are numbers on who actually lost the most in this Great Recession. According to a study by a professor at the University of California, the average American household lost an astounding 36 percent of their total wealth. But the top 1 percent households lost only 11 percent. So the net result is that the wealth distribution is even more unequal than it was it was before the financial crisis. Maybe the top 1 percent should be thanking the poor black folks for “causing” the financial meltdown...

[florida08]

39. gads

Yes I heard it was all Fannie and Freddie's fault..about 5000 times. Not Wamu, Countrywide...

[Zenlitened]

47. Let's call it what it is: The idea that poor folks brought down the economy is a flat-out lie.

Barry Ritholz, author of Bailout Nation, writes at www.ritholz.com:

...You will note that the CRA (Community Reinvestment Act) is not part of this sequence. I could find no evidence that they were a cause or even a minor factor. If they were, the housing bubbles would not have been in California or S. Florida or Ls Vegas or Arizona — Harlem and South Philly and parts of Chicago and Washington DC would have been the focus.

Nor do I blame Fannie and Freddie...

...

Over the past 2 years, I have repeatedly asked the people who push this narrative to provide some evidence for their positions. I have offered a $100,000 if they could prove their case.

Specifically, I have requested some data or evidence that DISPROVED the following facts:

-The origination of subprime loans came primarily from non bank lenders not covered by the CRA;

-The majority of the underwriting, at least for the first few years of the boom, were by these same non-bank lenders

-When the big banks began chasing subprime, it as due to the profit motive, not any mandate from the President (a Republican) or the the Congress (Republican controlled) or the GSEs they oversaw.

-Prior to 2005, nearly all of these sub-prime loans were bought by Wall Street — NOT Fannie & Freddie

-In fact, prior to 2005, the GSEs were not permitted to purchase non-conforming mortgages.

-After 2005, Fannie & Freddie changed their own rules to start buying these non-conforming mortgages — in order to maintain market share and compete with Wall Street for profits.

-The change in FNM/FRE conforming mortgage purchases in 2005 was not due to any legislation or marching orders from the President (a Republican) or the the Congress (Republican controlled). It was the profit motive that led them to this action.

These are data supported facts I pounded on in BN.

Link:
http://www.ritholtz.com/blog/2010/05/rewriting-the-causes-of-the-credit-crisis/

[Demeter]

18. Capitalism Without Capital By Mike Whitney

http://www.informationclearinghouse.info/article25431.htm

Volatility is back and stocks have started zigzagging wildly again. This time it's Greece in the hotseat, but tomorrow it could be someone else. The real problem is there's too much leverage in the system, so crises keep popping up one after another. For a long time, leverage wasn't an issue, because there was enough liquidity to keep things bobbing-along smoothly. But that changed when Lehman Bros. collapsed and non-bank funding began to shut down. When the so-called "shadow banking" system crashed, liquidity dried up and the markets went into a nosedive. That's why Fed Chair Ben Bernanke stepped in and provided short-term loans to under-capitalized financial institutions. Bernanke's rescue operation revived the system, but it also transferred $1.7 trillion of illiquid assets and non-performing loans onto the Fed's balance sheet. So the problem really wasn't fixed at all; the debts were just moved from one balance sheet to another.

Last Thursday, troubles in Greece triggered a major selloff on all the main indexes. At one point, shares on the Dow plunged 998 points before clawing back 600 points by the end of the day. Some of losses were due to High-Frequency Trading (HFT), which is computer-driven program-trading that executes millions of buy and sell orders in the blink of an eye. HFT now accounts for more than 60 percent of all trading activity on the NYSE. Paul Kedrosky explains what happened in greater detail in his article, "The Run on the Shadow Liquidity System". Here's an excerpt:

"As most will know, liquidity is, like so many things in financial life, something you can choke on as long as you don't want any....Liquidity is a function of various things working fairly smoothly together, including other investors, market-makers, and, yes, technical algorithms scraping fractions of pennies as things change hands. Together, all these actors create that liquidity that everyone wants, and, for the most part, that everyone takes for granted.....

Largely unnoticed, however, at least among non-professional investors, the provision of liquidity has changed immensely in recent years. It is more fickle, less predictable, and more prone to disappearing suddenly, like snow sublimating straight to vapor during a spring heat wave. Why? Because traditional providers of liquidity, market-makers and other participants, are not standing so ready to make the other side of the market. There are fewer traders prepared to make a market for the sake of market health.....

For the first time we have large providers of this shadow liquidity, algorithms and high-frequency sorts, that individually account for large percentages of daily trading activity, and, at the same time, that can be turned off with a switch, or at an algorithmic w him. As a result, in market crises, when liquidity was always hardest to find, it now doesn't just become hard to find, it disappears altogether, like water rushing out sight via a trapdoor to hell. Old-style market-makers are standing aside as panicky orders pour in, and they look straight at shadow liquidity providers and say, "No thanks." (Paul Kedrosky, "The Run on the Shadow Liquidity System" Infectious Greed)

The fact that the SEC can't figure out what happened, has been a bigger blow to investor confidence than the erratic behavior of the markets themselves. It shows that regulators really don't have a handle on the technology that's driving the markets. That just reinforces the perception that trading is a crap-shoot and the market is a casino.

Deregulation has also eroded confidence in the markets. Since Glass Steagall was repealed in 1999, the financial markets have been completely overhauled. Unfortunately, the new architecture is riddled with flaws. The main levers of credit creation are now in the hands of privately-owned shadow banks instead of highly-regulated "depository" institutions. That's a problem, because the hedge funds, insurers, brokerage houses, SIVs and off-balance sheet operations are mostly unsupervised, so they can ignore capitalization requirements and traditional lending standards. Even worse, they can crank out as much credit as they want via the repo market or by using financial instruments (like MBS, CDS, CDO) Here's how economist James Hamilton explains it in a recent post titled "Follow The Money". Here's an excerpt:

"If you buy a mortgage-backed security (or collateralized debt obligation constructed from assorted MBS), you could then issue commercial paper against it to get most of your money back, essentially making the purchase self-financing. This was the idea behind the notorious off-balance sheet structured investment vehicles or conduits, which basically used money borrowed on the commercial paper market to buy various pieces of the mortgage securities created by the loan aggregators. The dollar value of outstanding asset-backed commercial paper nearly doubled between 2004 and 2007.

Yale Professor Gary Gorton has also emphasized the importance of repo operations involving mortgage-related securities. If I buy a security, I can then pledge it as collateral to obtain a repo loan, again getting most of my money back and allowing the purchase to be mostly self-financing as long as I keep rolling over repos. Although I have not been able to find numbers on the volume of such transactions, it appears to have been quite substantial.

The question of how the house price run-up was funded thus has a pretty clear answer: Other People's Money. Because of so much money pouring into house purchases, the price was driven up." ("Follow The Money", James Hamilton, Econbrowser)

This is how Wall Street pumped up leverage to ungodly levels and steered the financial system off the cliff. The debt-instruments and repo market were used to create a ginormous debt pyramid balanced precariously atop a few crumbs of capital. The system was bound to crash.


Naturally, the people who benefit from credit default swaps (CDS) and other derivatives, continue to sing their praises, but their numbers grow smaller and smaller all the time. Many people now understand the role that derivatives played in crashing the system and are demanding change. But Wall Street doesn't care about public opinion. The big banks have already deployed their army of lobbyists to Capital Hill to make sure that the new reform legislation doesn't restrict their use of hybrid derivatives which have become their biggest profit-makers. Considering the amount of money they've spread around, it would be a miracle if they didn't get their way.


LOW INTEREST RATES DIDN'T CAUSE THE CRISIS

Last week, economists Edward L. Glaeser, Joshua Gottlieb and Joseph Gyourko published a research paper and presented their findings to the Federal Reserve Bank of Boston. Here's what they said:

"It isn't that low interest rates don't boost housing prices. They do. It isn't that higher mortgage approval rates aren't associated with rising home values. They are. But the impact of these variables, as predicted by economic theory and as estimated empirically over many years, is too small to explain much of the housing market event that we have just experienced."

Glaeser, Gottlieb and Gyourko say those factors can explain only about a 10 percent increase in home prices between 2000 and 2006. That's only one-third of the 30 percent increase in prices (adjusted for inflation) during that period, as measured by the Federal Housing Finance Agency, or the 74 percent increase measured by the Case-Shiller/Standard and Poor's index of prices in 20 large metro areas.


So what is to blame for the bubble? Well, they're not sure. "Using the standard toolkit of the empirical economist, we are unable to offer much of an explanation for what happened," they write." ("Low interest rates didn't cause the bubble economists say", Elizabeth Razzi, Washington Post)

The crisis was not sparked by interest rates or lax lending standards, but by leverage. In fact, the repo market, securitization and the vast array of debt-instruments are all designed with one purpose in mind; to conceal the amount of leverage in the system. It's capitalism without capital.

The $1.5 trillion in subprime mortgages wasn't nearly enough to bring down the entire financial system. But the losses on trillions of dollars of derivatives that were balanced on top of these mortgages, certainly was. So, what really happened? Here's a summary of the meltdown by economist Henry Liu:

"...the current financial crisis that began in mid-2007 was caused not by bank runs from depositors, but by a melt down of the wholesale credit market when risk-averse sophisticated institutional investors of short-term debt instruments shied away en mass.

The wholesale credit market failure left banks in a precarious state of being unable to roll over their short-term debt to support their long-term loans. Even though the market meltdown had a liquidity dimension, the real cause of system-wide counterparty default was imminent insolvency resulting from banks holding collateral whose values fell below liability levels in a matter of days. For many large, public-listed banks, proprietary trading losses also reduced their capital to insolvency levels, causing sharp falls in their share prices." ("Two Different Banking Crisis--1929 and 2007" Henry Liu)

The banks don't fund themselves by taking deposits and then using them to lend out money at higher rates. What they do is buy long-term illiquid assets (mortgage-backed securities, asset-backed securities) and exchange them in the repo market for short-term loans. It's like going to a pawn shop and borrowing money by posting collateral, except --in this case--a financial institution (counterparty) takes the other side of the deal.

When the subprimes started blowing up, the institutions that had been taking the other side of the deals, (the counterparties) got nervous, because they thought the subprime-backed collateral might be worth less than the money they were providing in loans. So they demanded more collateral from the banks which forced the banks to sell more assets to raise money to cover their losses. This pushed prices down, sparked a flurry of firesales, and drove the weaker institutions into bankruptcy.

The amount of leverage built up in these derivatives was mind-boggling. Take a look at this article from the Wall Street Journal:
"Documents released by Senate investigators last week provide clues as to why the losses were so severe. The documents show how Wall Street banks packaged and repackaged the same risky bonds into securities that ultimately helped magnify the impact of defaulting subprime mortgages on the financial system.

In one case, a $38 million subprime-mortgage bond created in June 2006 ended up in more than 30 debt pools and ultimately caused roughly $280 million in losses to investors by the time the bond's principal was wiped out in 2008, according to data reviewed by The Wall Street Journal.....("Senate's Goldman Probe Shows Toxic Magnification", Carrick Mollenkamp and Serena Ng, Wall Street Journal)

So it wasn't the subprime mortgages that caused most of the damage, but the amount of leverage bundled into the derivatives and the repo market. Congress needs to focus their attention on the particular instruments and processes (derivatives, repo and securitization) that are used to maximize leverage and inflate bubbles. That's where the problem lies.

Nomi Prins explains it a bit differently in this month's The American Prospect. Here's an excerpt from her article "Shadow Banking":

"Between 2002 and early 2008, roughly $1.4 trillion worth of sub-prime loans were originated by now-fallen lenders like New Century Financial. If such loans were our only problem, the theoretical solution would have involved the government subsidizing these mortgages for the maximum cost of $1.4 trillion. However, according to Thomson Reuters, nearly $14 trillion worth of complex-securitized products were created, predominantly on top of them, precisely because leveraged funds abetted every step of their production and dispersion. Thus, at the height of federal payouts in July 2009, the government had put up $17.5 trillion to support Wall Street's pyramid Ponzi system, not $1.4 trillion. The destruction in the commercial lending market could spur the next implosion." ("Shadow Banking", Nomi Prins, The American Prospect)

This is a point that bears repeating: "...nearly $14 trillion worth of complex-securitized products were created" on top of just "$1.4 trillion" of subprime loans." No doubt, the investment bankers and hedge fund managers who inflated these monster balloons, knew that they were doomed from the get-go, but then, they must have also known that "I.B.G.-Y.B.G.", which in Wall Street parlance means, "I'll Be Gone and You'll Be Gone."

For a long time, Wall Street concealed its bubblemaking and racketeering behind theories that glorified the wisdom and flexibility of unregulated markets. Government intervention was disparaged as an unnecessary intrusion into a divinely-harmonized system. Now the curtain has been drawn and the sham exposed. The state has a clear interest in making sure that credit-generating institutions are adequately capitalized, that lending standards are strictly upheld, and that reasonable limits are put on the amount of leverage that financial institutions are allowed to use. That's the only way the public can be protected.


COMMENT FROM SITE:

Whitney's rhetorical use of "Capitalism without Capital" creates a false impression. What is commonplace in Capitalism recognized by Karl Marx is that "fictitious" capital (leverage and speculative activity) causes crisis. This is nothing new. Yet you would not understand that from Whitney's hyperbolic framing. Yes, it makes for interesting commentary but it is also maliciously creates the inference that today's behavior is uncommon from previous crises and that "Capitalism" can be restored.

We don't need over the top rhetoric. What is needed is rational presentations explains HOW CAPITALISM (read: EXPLOITATION) OPERATES and that we need to scrap the entire system otherwise we'll all be witnessing declines in our living standards and further stratification of power and wealth.

[Ghost Dog]

19. Asian stocks climb on Spain deficit plans

Asian stocks have risen after Spain announced plans to cut its budget deficit, easing worries that Europe's debt crisis could spread. Investors were also buoyed by gains on Wall Street, where the main Dow Jones index climbed 1.5% on Wednesday.

In Tokyo, the main Nikkei 225 index rose by 231 points, or 2.2%, to 10,625. Shares in China, Singapore, South Korea and Australia also gained ground.

...

The Spanish measures have given some indication that countries with high deficits are prepared to tackle the root of Europe's debt problems - over spending. This is what investors want to see, analysts say, rather than countries simply relying on loan-guarantees from the European Union (EU) and the International Monetary Fund (IMF).

/... http://news.bbc.co.uk/2/hi/business/10113122.stm

[Ghost Dog]

20. Portugal's turn for fiscal shock

AFP - After Spain cut public salaries, Portuguese ministers on Thursday took their turn to enforce a fiscal "shock" to stop the country becoming the next battleground in Europe's debt crisis.

While Australia's central bank warned that Europe's turmoil could hit Asian growth, international share prices roses as markets decided that the measures could just work.

Portugual's Socialist government was to announce tax hikes, wage cuts and a freeze in major public works as it battles to reduce Portugal's public deficit from a record 9.4 percent to target of a 5.1 percent of gross domestic product by next year.

The Jornal de Negocios business daily described the measures as a "fiscal shock," ahead of the cabinet meeting to put the final seal on the cuts. "All taxes are going up," reported Diario de Noticias.

/... http://www.france24.com/en/20100513-portugals-turn-fiscal-shock

[DemReadingDU]

27. Schwarzenegger Warns of "Terrible Cuts, Absolutely Terrible Cuts" Coming in California

5/12/10 Schwarzenegger Warns of "Terrible Cuts, Absolutely Terrible Cuts" Coming in California

More evidence that California is the new Greece.

As the state grapples with a horrible budget situation, Arnold Schwarzenegger is warning of pain ahead.

Specifically, according to the SacBee, Schwarzenegger press secretary Aaron McLear said:

"What you can expect generally is no taxes and terrible cuts, absolutely terrible cuts... We're not going to get through the deficit we have without some really tough decisions and some really terrible cuts."

This is going to get really ugly, and though California may stave off default, there's no way they'll be able to stave off the horrible demand destruction that will result from these "absolutely terrible cuts."

http://finance.yahoo.com/tech-ticker/schwarzenegger-warns-of-%22terrible-cuts-absolutely-terrible-cuts%22-coming-in-california-483776.html?tickers=tlt,tbt,xlf,ncu,nvx,nkl,cev


16 Reasons Why California Is The Next Greece

http://www.businessinsider.com/why-california-is-the-next-greece-2010-05#california-has-a-20-billion-budget-gap-despite-last-years-ravaging-cutbacks-1

[Demeter]

57. I Have no Sympathy For California

[Ghost Dog]

44. Eurozone reports muted economic growth

The eurozone managed only modest economic growth in the first quarter of this year, with Germany’s performance, held back by the bitter winter, failing to kick-start a broader recovery in the 16-country region.

Eurozone gross domestic product expanded by just 0.2 per cent compared with the previous three months, Eurostat, the European Union’s statistical office said.

Germany surprised by also reporting a 0.2 per cent increase, in spite of fears that the exceptionally cold weather had stalled its economic recovery. Italy’s economy also fared better than expected, expanding by 0.5 per cent. But France and Spain reported increases of only 0.1 per cent – although that at least marked the end of Spain’s recession.

Greece’s economy contracted by 0.8 per cent – the same pace as at the end of 2009, suggesting its recession remained intense.

The data highlight how continental Europe’s largest economies continue to struggle in the aftermath of their worst downturn since the second world war, with prospects clouded by the crisis over public finances and dependent on robust growth elsewhere in the global economy. In contrast, the US reported a 0.8 per cent increase in first-quarter GDP.

“The eurozone is being left behind by the US, which is experiencing a strong V-shaped recovery,” said Nick Kounis, economist at Fortis Bank in Amsterdam. The US fiscal stimulus would be bigger this year than in 2009 but aggressive controls on public finances as a result of the crisis that started in Greece would hit eurozone growth, he said.

...

The weaker euro already appears to be benefiting eurozone exporters and the European Central Bank last week noted that “some strengthening appears to be taking place during the spring”. Since early December, the euro has fallen by 10 per cent on a trade-weighted basis.

/... http://www.ft.com/cms/s/0/bba5354e-5d96-11df-b4fc-00144feab49a,dwp_uuid=79cadde4-5c1b-11df-95f9-00144feab49a.html

[Lochloosa]

24. Ya'll confuse the shit out of me.

But thanks for the info.:toast: :party:

[Demeter]

41. We Are All Seeking Enlightenment Here--You Aren't The Only Confused One

That's why we share the information we find--to compare notes and analyze.

And if you think YOU are confused, watch what Congress says and does, individually and collectively!

Whether you are looking for a safe place to hide, to invest, or just to find out what's going on, this is a good place to come. We don't play games.

[AnneD]

35. A SWT Poll......

One of our vehicles is soon to pass to that great recycling center in the sky so we are looking to buy a used vehicle and would like some ideas.

We need a vehicle with some capacity to haul sitars and tablas along with speakers and lighting equipment. We want it to be easy on the gas and dependable as it will be my primary vehicle. Now, we may just buy a small trailer to hitch to the vehicle for these occasional gigs. I want an SUV but may be willing to suffer the indignity of a van or mini van-so pride is not a factor. Also this is Texas so that is a possibility.

What are your recommendations?

[mbperrin]

36. AnneD, we bought a 2007 Chrysler Town and Country 3 years ago, and

we have loved it! The Stow and Go option allows the seats to fold completely flat UNDER the floor, leaving huge amounts of storage in the rear.

The 3.8 V6 is rated for 17/24, but in reality, we get 20 or so in town, and I got a consistent 34 last summer on the road as we camped Louisiana with 2 adults, our granddaughter, two Boston Terriers, tent, clothing, and all the other bric-a-brac needed for a 6 week trip.

More comfortable than Lincoln Town Car, Olds Regency, Mercury Marquis, Caddy Eldorado, or Ford LTD. First Chrysler I ever bought, but it won't be the last.

Maybe this can help you get started.

[Dappleganger]

42. We have a 2001 T&C minivan and use it like a truck, pretty much.

It gets about the 19 in the city (this is used for very short local driving the most). What we do is take out the seats or bench as needed (although stow-n-go is certainly more helpful!). We have fit a washer and dryer IN boxes at once, a full-length sofa, other furniture, drywall sheets, lumber--no problem. Sometimes we have dogs in there along w/kids and suitcases, somehow it all just fits.

All the seats are leather, the a/c works great. There was transmission trouble at one time but it was replaced under warranty and no trouble since then.

[Po_d Mainiac]

38. Do they make rifle racks for SUV's? n/t

[tclambert]

45. Pretty sure in Texas they make rifle racks for motorcycles.

[Dr.Phool]

49. That's called a sissy bar!

[AnneD]

66. No need........

we have concealed weapons in Texas.

[Robbien]

43. Greek hoteliers say riots emptying rooms

Basically they are blaming the media saying "Images of flaming buildings, protests take toll on vital tourism business"


The interesting part of the article is this:

He also urged the government to pay its advertising debts to foreign media, which he said influenced their coverage of events.

http://www.msnbc.msn.com/id/37131329/ns/travel-news/




They are so open about the fact that advertising isn't all about selling goods. They flat out say advertising dollars are payments to the media to influence opinion about the company/country/policy. Which is why JG Wentworth and Payday Loan companies advertise on CNBC. As if the CNBC audience is the target customer of either business line.

[Name removed]

48. Deleted message

Sub-thread removed by moderator. Click here to review the message board rules.

[bread_and_roses]

50. So what happened today? I thought all was coming up roses in the la la casino?

But unless Yahoo quick-view is off, Market went down 100+ points - someone needed to make some money between yesterday-today-tomorrow? I admit I've been too busy to do anything but scan headlines - all of which are awful, outright war on working people everywhere and gasps from the dying eco-sphere, but since when does any of that matter to TPTB?

[Demeter]

60. The Bubble Cannot Be Sustained

More banksters saving for fines and legal costs, I'll wager.

[burf]

51. Looks as though we are starting FDIC Friday

a day earlier this week.

From MarketWatch:

Midwest Banc Holdings likely to fail Friday

SAN FRANCISCO (MarketWatch) -- Midwest Banc Holdings Inc. /quotes/comstock/15*!mbhi/quotes/nls/mbhi (MBHI 0.18, -0.04, -16.28%) will likely fail and be placed into Federal Deposit Insurance Corp. receivership late Friday because of undercapitalization, according to a Securities and Exchange Commission filing Thursday from the bank holding company. The bank, which has $3.18 billion in assets and $2.42 billion in deposits, said that the Federal Reserve Bank rejected its capital plan March 25 and that it does not expect to reach capital requirements by the May 13 Prompt Corrective Action Directive deadline. Shares of Midwest Bank fell 2.3% to 21 cents a share in after-hours activity following a 17.3% decline on the day

Might as well start the festivities early as there is much more to come.

Link: http://www.marketwatch.com/story/midwest-banc-holdings-likely-to-fail-friday-2010-05-13

edited to add link.

[DemReadingDU]

52. It appears to be Illinois banks

Bank runs today and tomorrow?

Info...
We are a half century old community bank with $3.5 billion in assets at December 31, 2009. We have one principal operating subsidiary: Midwest Bank and Trust Company. Midwest Bank has 26 locations serving the diverse needs of both urban and suburban Chicagoland businesses and consumers through its Commercial Banking, Wealth Management, Corporate Trust and Retail Banking areas. For further information: John B. Pelling, III Vice President - Investor Relations [phone]
http://www.snl.com/IRWebLinkX/GenPage.aspx?IID=1021556&gkp=1073743151&

Branch locations...
http://www.midwestbank.com/branchandatmlocator.html

[Demeter]

59. It hasn't hit the official list yet, though

Somebody leaked the rumor!

[Dr.Phool]

53. WTF?

They deleted a sub-thread because I mentioned my birthday, vodka, and eating a grouper?

:wtf: :wtf: :wtf:

[DemReadingDU]

55. Don't let it stop you from partying!

:party: :toast: :party: :toast: :party: :toast: :party: :toast: :party: :toast: :party: :toast:

and Happy Birthday!

[Demeter]

58. Maybe they thought you said groper?

[hamerfan]

61. HBD, Dr!

Consider it a badge of honor, to be deleted. :toast:
I hope to someday be deleted, myself. :nuke:

[TheWatcher]

62. No, it was deleted it because of what I said.

I guess "they" really do lurk here after all. ;)

Pity they never have the courage to shower us with any "enlightenment."

Oh, but then they don't want to draw any attention to the "fascists" now, do they? :)


Happy Birthday, Dear Doctor! :hi:

[Dr.Phool]

64. Thanks all.

I do get deleted pretty often, but never in here. But, I think it was because they shut down the whole sub-thread by The Watcher. Some morans must have infested the thread.

A couple of days ago, I had so many posts deleted "out there", I thought I'd been tombstoned!

I'll czech in tomorrow morning,before the dog park, then work on punishing my evil liver.

[Tansy_Gold]

65. And many more to ya, Doc, you young whippersnapper, you!

:yourock:

[AnneD]

67. Happy Birthday.....

To my fav groper. So I want to know....what do you want on your tombstone?

[Hugin]

68. TW... How many times must I remind you to wipe your feet before entering this thread?

:eyes:

and... Happy Belated B-day to Dr.Phool! :party: