STOCK MARKET WATCH, Thursday December 23

[ozymandius]

Source: du

STOCK MARKET WATCH, Thursday December 23, 2010

AT THE CLOSING BELL ON December 22, 2010

Dow 11,559.49 +26.33 (+0.23%)
Nasdaq 2,671.48 +3.87 (+0.14%)
S&P 500 1,258.84 +4.24 (+0.34%)
10-Yr Bond... 3.35 +0.00 (+0.06%)
30-Year Bond 4.45 +0.01 (+0.16%)

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Market Conditions During Trading Hours

Euro, Yen, Loonie, Silver and Gold

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

Handy Links - Economic Blogs:
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Brad DeLong      Bonddad    Atrios    goldmansachs666    The Stand-Up Economist

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

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

Bush Administration Officials Convicted = 2
Names: David Safavian, James Fondren
Dishonorable Mention: former House majority leader, Tom DeLay

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

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

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

Read more: du

[ozymandius]

1. Today's Reports

http://2.bp.blogspot.com/_dfbI8SIJWek/TRM3S7EUZBI/AAAAAAAAANU/ltn1xkFD-KU/s1600/1223+reports.gif

[DemReadingDU]

39. Your thread in GD has 252 recs!

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x56587

[Tansy_Gold]

42. #1 on front page

:woohoo:

[ozymandius]

44. Dang! That must've struck several nerves.

I got a credit card offer in the mail yesterday. I immediately thought of that quote from Alan Greenspan and became hotly pissed-off. I expect that others may feel similarly about the circumstances related through that simmering gjohnsit diary entry.

[Tansy_Gold]

50. And those nerves belong to people who rarely if ever

show up here in SMW.

Kinda gives the lie to our sentiments being at odds with "the rest of the population."


My car is fixed, so I am going out for coffee. Will be my first interaction with real human beings (other than the mechanic) since Sunday afternoon. I hope I don't blow it! :evilgrin:


TG, TT

[tclambert]

67. Are you saying we're not real?

Is this the Matrix? Neo, where's my frakkin' spoon?

[Demeter]

73. Tansy Was Mostly AWOL This Week

something about volcanic temper...

[Tansy_Gold]

76. Moi? Temper? n/t

[ozymandius]

2. Oil rises to 2-year high near $91 as equities jump

SINGAPORE – Oil prices rose to fresh two-year highs near $91 a barrel Thursday in Asia as a U.S. stock market rally boosted optimism that demand will improve.

The Dow Jones industrial average and the S&P 500 index both rose Wednesday to their highest levels since July 2008 after the Commerce Department said the U.S. economy rose in the third quarter at an annual rate of 2.6 percent, a slight increase from its earlier estimate.

Crude was also buoyed by falling U.S. crude supplies, which suggest demand may be improving. The Energy Department's Energy Information Administration said Wednesday that crude supplies dropped by 5.3 million barrels last week from the week before. The EIA said last week that supplies dropped 9.9 million barrels the previous week, the biggest drop in eight years.

more

Gasoline futures added 0.01¢ to reach $2.43/gal.

[Demeter]

12. More Change I Can't Believe In

Good morning, everyone. Please keep me in your thoughts as I take the Kid to the dentist for the first filling...since the time the dentist INSISTED she had to have a baby tooth filled, and she chewed on the numb lip until it was so infected it needed antibiotics and looked like orange cauliflower....

I am a nervous wreck. She's a lot bigger and stronger, but we will see if there's been any other personal growth...like not doing something when told not to...(laughs hysterically)

[ozymandius]

21. My most fervent wishes for a successful outcome.

That is so emotionally and physically difficult. I hope it goes so smoothly to defy expectations.

[Demeter]

25. Me, too, Because the NEXT Challenge is a Crown

She ground two teeth through the enamel, and one has a cavity now...

[Tansy_Gold]

22. .

:hug:

[ozymandius]

3. Senate inaction kills Diamond nomination to Fed board

This is sad news.

WASHINGTON (Reuters) – The nomination of Nobel prize-winning economist Peter Diamond to the Federal Reserve's Board was scuttled on Wednesday when the Senate failed to vote on it before adjourning for the year.

A professor at the Massachusetts Institute of Technology, Diamond had a strong expertise on budget and tax issues. This research focus prompted criticism from some Republicans who argued he lacked the proper experience on monetary policy.

more

Diamond is imminently qualified to serve on the Fed board. A list of his achievements shows he has weightier qualifications than Bernanke.

[Demeter]

13. But Ozy! We Can't Have Any QUALIFIED People in Public Service!

It would make the rest of them look so....amateur, if not totally incompetent.

[ozymandius]

18. Obviously, Professor Diamond is not in "the club".

He could barely get an introduction on The Hill. Consider how much partisan muscle it took just to get his nomination out of committee.

I am not so discriminating. There are a few people in the Senate I would love to introduce to my club.

[Po_d Mainiac]

32. Vocal bank critic gets key U.S. consumer bureau post..Go Liz!!

(Reuters) - The Obama administration has selected Ohio Attorney General Richard Cordray, a vocal critic of the banking industry, to head the enforcement division of the new Consumer Financial Protection Bureau, according to a Treasury official.

Cordray, a Democrat, has been a leader among state attorneys general in the probe into mortgage foreclosure practices. The probe is examining whether banks submitted faulty legal documents in foreclosure proceedings.

The Obama administration will announce the selection of Cordray later today, the Treasury official said. Cordray lost his re-election bid in November to Republican Mike DeWine.

http://www.reuters.com/article/idUSTRE6BE3YE20101215

:popcorn:

[DemReadingDU]

33. Cordray has been on the offensive against banks, for years

12/21/10 One More "New" Sheriff In Town

Elizabeth Warren has spent some time "reaching out" to bankers, trying to assure them that she's not some wild-eyed Bolshevik out to burn down the banking house. That was all well and good while it lasted. Anyone really interested in reading the early warning signs as to which way the CFPB winds will be blowing once that body is formally launched next summer, however, can get a better idea by paying attention to what Ms. Warren does, not what she says. This past week's appointment of Ohio Attorney General Richard Cordray, who lost his re-election bid last month, as the CFPB's head of "enforcement" tells me that the CFPB is going to be very bank-unfriendly.

Described by Peter Schroeder in The Hill blog as a "vocal bank critic who led the effort on the state level to explore mortgage foreclosure practices," it appears that, like Ms. Warren, Cordray intends to "zero in" on credit cards, and will also be doing his darnedest to stop the crime of residential loan foreclosures, especially in cases where borrowers don't make their loan payments to lenders.

“Those are the areas that affect Americans most,” he said. “You have to go back to the 1930s to find a parallel, in which government set up such an agency.”

Ah, the good old 1930s, when men were men, women were women, and people not only didn't tell, they were afraid to ask. I wonder if we'll reach the point where the president presents his own version of a FDR-like Supreme Court-packing plan to Congress after the current crop refuses to overturn the CFPB-emasculating laws that will be spewing out of Congress over the next few years?

But back to Cordray.

He has a reputation as a guy who likes to sue lenders, and he's done it often. That plays well with a large chunk of the populace. Bank-hating rarely goes out of style. In that respect, Cordray reminds us of Eliot Mess, only sans hookers, which is a point in Cordray's favor. Also, like Spitzer, he apparently views his stint as an "enforcer" as only a stepping stone to higher political office. He told his hometown newspaper that he intends to run for governor of Ohio in 2014. That means that in order to keep his name in front of the folks back home, he's going to have to put the hammer down on some pretty high-profile defendants over the next few years, and to make certain that he holds plenty of well-attended press conferences to tout his populist street cred.

Our preliminary read: "There will be blood."

http://www.banklawyersblog.com/3_bank_lawyers/2010/12/one-more-new-sheriff-in-town.html


Eliot Mess???

[Po_d Mainiac]

36. Eliot Mess = Client #9 n/t

[DemReadingDU]

37. or Eliot Ness?

It was an oddly worded sentence.

Eliot Ness
http://en.wikipedia.org/wiki/Eliot_Ness


edit - maybe I'm a little slow this morning
:evilgrin:

[Po_d Mainiac]

41. Yup, U b a tad sluggish this AM.....

Cordray reminds us of Eliot Mess, only sans hookers, which is a point in Cordray's favor. Also, like Spitzer

Eliot Ness to Eliot Mess: Spitzer asked to step down
http://blog.seattlepi.com/thebigblog/archives/134002.asp

[Demeter]

59. Love Client #9

http://www.capsteps.com/sounds/spitzer-loveclient9.mp3

[Ghost Dog]

64. All you need is love.

(Try to get your daughter on that kind of wavelength, Demeter?)

http://www.youtube.com/watch?v=r4p8qxGbpOk (Beatles HQ).

[Demeter]

72. I don't get what you mean.

The Kid has love, lots of love. She's got the best support system for a person of her disability that I can arrange.

[Ghost Dog]

79. Sorry, Demeter; Of course.

¿The love inside herself?

You're the boss. You know.

Sorry, but hey, :evilgrin: :hey: :hugs:

[Ghost Dog]

4. GLOBAL MARKETS - Growth view fuels gains in commodity stocks, oil

HONG KONG (Reuters) - Asian shares edged higher on Thursday with gains led by resource-linked stocks, and oil traded just below the two-year high it hit yesterday on cautious but growing optimism of the health of the world economy.

...

The Asia-ex Japan index for commodity shares as measured by MSCI climbed within sight of a recent 2-1/2 year peak as investors bet that a healing U.S. economy along with the ongoing rise of China and India would continue to fuel demand for commodities amid tight supplies. The S&P/Goldman commodities index, which has a higher weighting of oil and is therefore more relevant to Asia due to its huge demand, also approached a fresh 26-month peak.

...

That brightening growth view has encouraged analysts to revise upwards their projections for the U.S. and pushed Treasury yields up nearly 100 basis points since the start of November, when the Fed launched its second round of quantitative easing.

...

That growing optimism was reflected in latest Reuters polls which showed investment houses raising their equity holdings, increasing exposure to high-yield credit and cutting back on government debt.

...

According to Thomson Reuters IBES data, 12-month forward price/earnings multiples for Asia-ex Japan shares was hovering close to its 10-year average of 12.83 -- indicating that stocks are fairly priced at current levels. But in a grim reminder that the euro zone's debt crisis is far from over, the euro plumbed to a record low versus the Swiss franc overnight, with traders citing some buying interest emerging from players in the region including central banks.

/... http://in.reuters.com/article/idINIndia-53747020101223?rpc=401&feedType=RSS&feedName=businessNews&rpc=401

[Ghost Dog]

5. OTOH: No End In Sight To Equity Outflows As Stock Boycott Persists...

No End In Sight To Equity Outflows As Stock Boycott Persists Despite Largest Bond Outflow Since Lehman Failure

For the second week in a row, those claiming that flows will any.minute.now. shift away from bonds and go to equities are proven dead wrong. ICI has just reported that in the week ended December 15, not only was there another massive outflow, the 33rd in a row, from domestic equity mutual funds to the tune of $2.4 billion, but taxable and municipal bonds saw a stunning $8.6 billion in outflows, including another record $4.9 billion in muni outflows. At this point absent another major pull back in bond prices, we anticipate that bond inflows will once again resume, even as stock outflows persist indefinitely. Year to date investors have pulled just under $100 billion in money from US-focused equity mutual funds, offset by just $16 billion in comparable inflows into equity strategies via ETFs as we described yesterday. The reason for this seemingly endless boycott of stocks via the bulk of the population was given best by Geoff Bobroff, who told Bloomberg: "I would guess most retail investors are staying put because you aren’t seeing the money go anywhere else." Another explanation, and just as spot on: nobody, save for a few hedge funds, gives a rats ass about manipulated stocks prices anymore.

/... http://www.zerohedge.com/article/no-end-sight-equity-outflows-stock-boycott-persists-despite-largest-bond-outflow-lehman-fail

[Demeter]

17. Sing It For Them, Connie!

http://www.youtube.com/watch?v=TjHJ_snG3RI

[Tansy_Gold]

23. Perfecto!

Of course, now that will be today's earworm. . . . .

[Demeter]

26. Consider It My Xmas Present to You All

What do you think of a 007 Christmas?

I'm out of ideas, here....my creativity is all tied up in staying at least superficially sane on the outside...and I have NO holiday spirit to speak of.

[Tansy_Gold]

35. Works for me.

Holidays? We're having holidays?

Coulda fooled me.. . . . .

:evilgrin:


TG, TT

[AnneD]

83. Nothing says Peace on Earth

like a Walther PPK. That is of course if you want to go original, like a Beretta Modelo 418.

Those were the good old days, when the bad guys just wanted to take over the world, not take every last nickel from every peasant.

[ozymandius]

9. I probably wouldn't give a rat's ass if I were in a short position.

Long term positions are immaterial If the only concern were turning a quick buck. Fair value does not weigh heavily in the trading process of HFT and some hedge funds.

[Ghost Dog]

11. Plenty of 'quick bucks' still being turned, of course,

even by a few hands-on individuals with that much free and/or professional time, inclination, strong nerves and patience.

Otherwise, I just see plenty of 'ordinary folks' getting screwed, as usual. Et ça, c'est pas la vie, mes enfants.

[ozymandius]

19. La plus ça change, la plus c'est la même chose.

Updated relevant adages:

"The markets can remain irrational longer than you can remain solvent." - Keynes

"If farming were to be organised like the stock market, a farmer would sell his farm in the morning when it was raining, only to buy it back in the afternoon when the sun came out." - Will Hutton

[Demeter]

27. But the Skilled Operator Would Buy the Farm When the Weather Was Bad

and sell (or just rent) to a real farmer when the growing season commenced....

[Ghost Dog]

51. Ok. I see you guys are way ahead of me

on this track...

[Ghost Dog]

6. Trades in Accuride canceled on Nasdaq

NEW YORK, Dec 22 (Reuters) - Nasdaq has canceled trades in Accuride Corp that occurred at or above $16.84 during late afternoon trade on Wednesday, the exchange said.

The trades took place between 3:49 p.m. and 3:52 p.m EST. Thomson Reuters data showed some trades rose as high as $1,211.41 a share during the time.

Accuride shares closed on Wednesday at $15.40, up 1 percent.

/... http://www.finanznachrichten.de/nachrichten-2010-12/18913683-trades-in-accuride-canceled-on-nasdaq-020.htm

Edit: Gotta give the robots (and their masters) a break/benefit of doubt, every time, of course.

[Ghost Dog]

7. Despite Economic Woes, Spain Continues Investment in Trains

MADRID — Spain overtook France this month as the country operating Europe’s biggest high-speed rail network, underlining the extent to which infrastructure spending has been at the heart of the country’s boom-and-bust economy.

...

On Monday, a new rail passage across the Pyrenees mountains was inaugurated between Figueres, in Spain, and Perpignan, on the French side — a significant step toward completing a cross-border, high-speed rail link connecting Paris, Barcelona and Madrid.

The 242-mile link between Madrid and Valencia extended Spain’s high-speed rail lines to slightly more than 1,240 miles. France has 1,178 miles and Germany has about 800 miles.

...

Valencia has one of the Mediterranean’s biggest ports and is home to manufacturing activities that include a Ford car factory. Together, the regions of Madrid and Valencia account for 31 percent of Spain’s gross domestic product and 19 percent of its population.

...

Another Spanish ambition is to leverage its rail expertise worldwide. A consortium of Spanish companies is hoping to secure soon a 6 billion euro contract to connect the Saudi Arabian cities of Medina and Mecca. This month, a delegation from the Ministry of Public Works in Spain traveled to Beijing to present Spain’s latest rail advances to a Chinese government that has been investing billions to extend what is already the world’s biggest high-speed rail network.

/... http://www.nytimes.com/2010/12/23/business/global/23rail.html?_r=1&ref=global-home

[Ghost Dog]

8. Bank of England member warns of 5% interest rates

LONDON (AFP) – Bank of England policymakers would like interest rates to reach a "normalised" level of about 5.0 percent, a member of its monetary policy committee has told the Daily Telegraph newspaper.

The central bank has left its key lending rate at a record low 0.50 percent since March 2009 as it seeks to aid economy recovery from a record-length recession that ended late last year.

However, MPC member Paul Fisher told the newspaper on Thursday that officials wanted borrowing costs to rise tenfold as soon as possible, given the threat of higher inflation.

...

"What we need to do is to trigger the mindset in people that that's where rates will eventually go back to," said Fisher, who is the BoE's executive director of markets.

/... http://news.yahoo.com/s/afp/20101223/wl_uk_afp/britaineconomybankrateforexmoney

Telegraph piece: http://www.telegraph.co.uk/finance/economics/8220862/Homeowners-should-prepare-for-interest-rates-of-5pc-warns-Bank-of-England-markets-chief-Paul-Fisher.html

[xchrom]

10. Recommend

[Tansy_Gold]

14. Good morning all!

A chilly but clear morning here in central Arizona, after heavy rain last night.

Fresh hot :donut: :donut: :donut: for everyone, especially those dealing with the effects of mother nature. Drive carefully out there.



TG, TT

[ozymandius]

16. G'morning Tansy.

:donut: :donut: :donut: Clear and cold here in my southern urban hellhole. A weather system is moving this way that may dump ice and snow on us by Saturday.

[Po_d Mainiac]

20. Cold, breezy and white up heyuh

just as it should be.

Not a big weathermaker. More like the way Snow White got knocked-up (One inch ata time)
:hide:

[ozymandius]

24. You've been saving that line. Confess!

[Ghost Dog]

66. That is no joke, actually. You should have seen the look on the face

of a neighbor of mine, an establishment, or close enough, figure, when I mentioned the issues surrounding what happened to

The Maine.

[Demeter]

30. It's not doing Much of Anything Here

Just cold, windy, gray, damp, and it nearly got up to freezing, which somehow seems worse....

[ozymandius]

15. Rust Belt states losing people, political clout

TRAVERSE CITY, Mich. – After years of losing residents to more prosperous states, the nation's Rust Belt now confronts another blow to its economic prospects: losing some of its votes in Congress.

The latest census figures show that states in much of the Midwest and Northeast have been overtaken in population growth by the South and West. So starting in 2013, they will have to make do with smaller delegations in Washington, which means less political clout to attract government money and jobs.

Michigan was the only state where the population declined over the past decade, but growth across the region was anemic — 3 percent in the Northeast and 4 percent in the Midwest. Population in the South and West shot up nearly four times more. The trend largely reflects young people going elsewhere in search of work, causing the northern population to become older.

more

Ten states will lose house seats. All but one are in major traditional manufacturing centers.

[Demeter]

28. More for the Rest of Us

Just wish it was the religious rednecks that were leaving...some of them are.

[Po_d Mainiac]

29. Hey BAC...buy up as many domain names as u want..You still Suck!

As Bank of American awaits a possible release of information from WikiLeaks, it wants to ensure that you don’t think its executives suck. Or blow for that matter.

The company has been aggressively registering domain names including its Board of Directors’ and senior executives’ names followed by “sucks” and “blows”.

For example, the company registered a number of domains for CEO Brian Moynihan: BrianMoynihanBlows.com, BrianMoynihanSucks.com, BrianTMoynihanBlows.com, and BrianTMoynihanSucks.com. Just to be sure, it also picked up the .net version of these names and some .orgs as well

http://domainnamewire.com/2010/12/20/bank-of-america-wants-you-to-know-its-executives-dont-suck/

[Demeter]

31. Sticks and Stones May Break Their Bones

but a grand jury indictment would put an end to their criminality...

[ozymandius]

46. That "sticks and stones" quip has a nice ring to it. n/t

[Roland99]

43. Oh, I think we could get rather creative if we were so inclined...

:evilgrin:

[ozymandius]

45. I'll bet some domain extensions have been overlooked.

I can think of domains like bankofamericastealsfrom.us, brianmoynihandrinksblood.com... These banking types - they have not creativity outside of their attempts to to steal everything.

[Tansy_Gold]

49. Or to utilize Tansy Gold's favorite epithet

brianmoynihanisawanker.com

[rfranklin]

34. Christmas miracle! Boom in big box churches...

Hustling the faithful never fails...CNBC just featured the good news that church building is the new bubble!

Mostly featuring this outfit http://www.bigskyllc.com/Churches.html

I wonder how much they had to pay the PR agency to get that placement?

[TalkingDog]

38. A good Guardian article expanding on the Meredith Whitney predictions

http://www.guardian.co.uk/business/2010/dec/20/debt-crisis-threatens-us-cities

"Next to housing this is the single most important issue in the US and certainly the biggest threat to the US economy," Whitney told the CBS 60 Minutes programme on Sunday night.

"There's not a doubt on my mind that you will see a spate of municipal bond defaults. You can see fifty to a hundred sizeable defaults – more. This will amount to hundreds of billions of dollars' worth of defaults."

New Jersey governor Chris Christie summarised the problem succinctly: "We spent too much on everything. We spent money we didn't have. We borrowed money just crazily. The credit card's maxed out, and it's over. We now have to get to the business of climbing out of the hole. We've been digging it for a decade or more. We've got to climb now, and a climb is harder."

American cities and states have debts in total of as much as $2tn. In Europe, local and regional government borrowing is expected to reach a historical peak of nearly €1.3tn (£1.1tn) this year.



But we know, as long as the stock market is up, that means everything is a-okay.

[ozymandius]

54. Alabama Town’s Failed Pension Is a Warning

This town sounds like it may be one of Meredith Whitney's case studies.

PRICHARD, Ala. — This struggling small city on the outskirts of Mobile was warned for years that if it did nothing, its pension fund would run out of money by 2009. Right on schedule, its fund ran dry.

Then Prichard did something that pension experts say they have never seen before: it stopped sending monthly pension checks to its 150 retired workers, breaking a state law requiring it to pay its promised retirement benefits in full.

The situation in Prichard is extremely unusual — the city has sought bankruptcy protection twice — but it proves that the unthinkable can, in fact, sometimes happen. And it stands as a warning to cities like Philadelphia and states like Illinois, whose pension funds are under great strain: if nothing changes, the money eventually does run out, and when that happens, misery and turmoil follow.

More at the NY Times

Prichard, Alabama has attracted the attention of many interested parties across the country that want to know what will happen when a city ignores its pension obligations. If the city of Prichard is successful in cutting its pensions, other cities will mimic their strategy. San Diego, CA is one of them. Clearly, when more money goes out than is coming into the fund, something has to give. With Prichard's fortunes sinking in the courts and mediation between local government and retirees nearly complete, it appears that the pensioners will bear the cost of decades of bad planning.

[Hugin]

40. SMW Lesson of the Day: Iron Law of Wages

In a follow-up to Ozy's post "The rats are jumping ship" yesterday.

Today we will review Lassalle's "Iron Law of Wages".

From the text...

"The Iron Law of Wages, is a proposed law of economics that asserts that real wages always tend, in the long run, toward the minimum wage necessary to sustain the life of the worker. The theory was first named by Ferdinand Lassalle in the mid-nineteenth century. Karl Marx and Friedrich Engels attribute the doctrine to Lassalle (notably in Critique of the Gotha Programme (1875), Marx), crediting the idea to Thomas Malthus in his work, An Essay on the Principle of Population, and the terminology to Goethe's "great, eternal iron laws" in Das Göttliche.

According to Lassalle, wages cannot fall below subsistence level because without subsistence, laborers will be unable to work. However, competition among laborers for employment will drive wages down to this minimal level. This follows from Malthus' demographic theory, according to which population increases when wages are above the "subsistence wage" and falls when wages are below subsistence. Assuming the demand for labor to be a given monotonically decreasing function of the real wage rate, the theory then predicted that, in the long-run equilibrium of the system, labor supply (i.e. population) will be equated to the numbers demanded at the subsistence wage. The justification for this was that when wages are higher, the supply of labor will increase relative to demand, creating an excess supply and thus depressing market real wages; when wages are lower, labor supply will fall, increasing market real wages. This would create a dynamic convergence toward a subsistence-wage equilibrium with constant population."

Does this mean that eventually (except for a select few, perhaps) that the vast majority of the global workforce will be working for slave wages? Given the current unipolar offshoring of American jobs and the current global environment... Probably.

That's not to say Lassalle didn't have critics... (Marx was one.) But, none of them question the premise that starving the workforce isn't a good business model.

In spite of the evidence in support of the "Iron Law of Wages" TPTB seem blind to the consequences of their short-sighted quest to own everything.

Discussion?

[DoBotherMe]

52. Isn't paid work disappearing?

I would think that as inflation eats up capital, TPTB will need to replace their hoard ... and just maybe want to invest in production of some sort. But it would be better for civilization if the proles would provide equilibrium, but most of our strata are stupidly ignorant of how to subsist. In my simple opinion. Dana ; )

[Demeter]

56. Ford Had a Better Idea

The Five Dollar Day

http://web.bryant.edu/~ehu/h364proj/summ_99/armoush/page3.html

On January 5, 1914, Henry Ford announced a minimum five dollar salary for all elegible employees working eight-hour days. It was conceived as a profit-sharing plan which would motivate Ford employees to adopt efficient and productive habits at both the factory and the home.

The Ford Sociological Department was created to administer the plan by sending field agents into the community to visit workers at home to determine the quality of their home lives. It was believed that influencing the behavior of employees at home would turn them into better workers. All employees over 22 were eligible for the plan, which included a shortened work day from nine to eight hours in addition to the opportunity to earn five dollars per day. In order for a worker to be eligible to receive his share of the company's profits he "must show himself to be sober, saving, steady, industrious and must satisfy the...staff that his money will not be wasted in riotous living." Workers who didn't comply risked being payed half as much for performing the same work as their co-workers, and could eventually lose their jobs.

Ford's plan invoked a variety of responses. Workers viewed him as a friend, while many businessmen viewed Ford's idea as reckless. The Wall Street Journal called it blatant immorality-a misapplication of "Biblical principle" in a field "where they do not belong." Ford disregarded his criticisms because he knew the importance of acknowledging the human element in mass production. He believed that retaining more employees would both lower costs and lead to greater productivity. His beliefs proved his critics false, as the company's profits doubled from $30 million to $60 million between 1914 and 1916. "The payment of five dollars a day for an eight-hour day was one of the finest cost-cutting moves we ever made," Ford said.

Other benefits also resulted in the implementation of the Five Dollar Day. It dissolved the effort to unionize the Ford factory and also turned auto workers into autocustomers. Their purchases brought some of Ford's own money back to him which increased production and lowered per-car costs...

The Assembly Line and the $5 Day - Background Reading

http://www.michigan.gov/dnr/0,1607,7-153-54463_18670_18793-53441--,00.html

On Henry Ford and his $5 a day

http://www.adamsmith.org/blog/tax-and-economy/on-henry-ford-and-his-$5-a-day/

It's a fairly common trope in US lefty land that Henry Ford and his $5 a day wages back in 1913 marked a huge change in labour relations. He was moved to raise wages so high (approximately double the prevailing wage) so as to help create a market for his own products.

This is an interesting thought, certainly, but not one that stands much examination. That year his establishment of workers was some 14,000 head: his sales some 170,000 and that's just the year that he started ramping up production through the moving assembly line (reaching 500,000 in a couple of years and near a million within a decade). The spending power of his workforce was entirely marginal.

No, the real value to Ford of his high wages was, as with the living wage we looked at yesterday, that he was paying higher wages than his competitors. Twice what his competitors were paying in fact. In 1913 he had a turnover of over 50,000 workers to keep that establishment of 14,000. Paying hugely higher wages than everyone else in the nascent manufacturing industry of the time meant that he lowered turnover, thus recruitment and training costs.

We might also note that he wasn't in fact paying higher wages: he was offering a bonus, a highly conditional bonus:

The $5 a day rate was about half pay and half bonus. The bonus came with character requirements and was enforced by the Socialization Organization. This was a committee that would visit the employees' homes to ensure that they were doing things the American way. They were supposed to avoid social ills such as gambling and drinking. They were to learn English, and many (primarily the recent immigrants) had to attend classes to become "Americanized." Women were not eligible for the bonus unless they were single and supporting the family. Also, men were not eligible if their wives worked outside the home.

The stories we're told about matters historical often don't stand up to all that much detailed scrutiny which is why they are more properly referred to not as history but as legends: highly partisan legends.

[Demeter]

57. The Iron Law of Wages Is DEATH on the Consumer Market

The only way they could somehow subvert it was to send the labor offshore, and drain local pocketbooks, retirement accounts, savings accounts, home equity, etc.....

[tclambert]

71. Who supports the senior citizens?

And if all the workers make subsistence wages, then all the customers only have money for basic necessities. Who's left to buy cute stuff from the merchant class? There's something wrong with the basic idea.

[Hugin]

82. I meant to imply it's the End-Game.

Where this race to the bottom ends. It's not an advocacy. It's a fact that unless TPTB stop wringing every last dollar out of the middle-class we'll be in subsistence land.

No, it's not the only solution. But, it's the one headed for unless the course changes away from the Rand Chicago School Reaganomics Greenspan Plan.

[Pale Blue Dot]

47. Good morning everyone!

It's the last day of school before break! Woo hoo!!!

There's some fascinating analysis on Zero Hedge this morning, but for some reason I can't access it at school...

On edit: I see that Ghost Dog posted some of it above. :thumbsup:

[ozymandius]

48. Good morning, PBD!

You guys are getting out late. Congratulations on the pending break! How much time do you have off?

[DoBotherMe]

53. Good Morning Teachers

Here's an apple for you! Dana ; )

[ozymandius]

55. Why, thank you.

Beatles' flavored, too. Delicious!

[Ghost Dog]

63. Ah: Abbey Road zebra crossing preserved in asphalt as well as vinyl

Grade II listing for London site of Beatles cover shot for 1969 LP, a pilgrimage site for music fans from all over the world.



/... http://www.guardian.co.uk/uk/2010/dec/22/beatles-abbey-road-listing?INTCMP=SRCH

So that's a popular vote, then.

[Pale Blue Dot]

69. I have off until the 3rd.

I'll be starting back the same day I take over the SMW. Bad timing, perhaps? I don't care - I'm on vacation NOW!!! :D

[ozymandius]

74. Good on ya!

Tomorrow is a holiday. I'll be back on Monday to start my final week here. Give me a yell if you need anything.

Have a wonderful holiday, PBD. :hi:

[Ghost Dog]

58. Hmm. ZH gives me almost as many headaches as trying to work out where Wikileaks

is coming from... and going to...

One point: Word I've been hearing for several months now, for example, in Switzerland: Worry that maybe the SNB has very little ammunition left in the magazine. Very few CHF left to sell for yet more dodgy USD nor obviously still not soundly-established EUR? Mood last time I visited Geneva a few weeks ago was, um, quite glum.

As regards Wikileaks: Here in Spain, one learns that nothing El País publishes from that supposed cache gets published without the Ok from not only Spanish Authorities, but also from the US Embassy in Madrid. International Indymedia collectives, by way of contrast and only by way of a very soft grassroots alternative example, are on record as having rejected offers of Soros money; and as for seeking the approval of the likes of Freedom House and the National Endowment for Democracy - fuck straight off give me a break.

... http://www.youtube.com/watch?v=x9Z_svHVLjQ

... http://www.youtube.com/watch?v=xD9ICDMb7yQ

... http://www.youtube.com/watch?v=M5xbttkyxGI

[Demeter]

60. Sounds Like a Good Way to Feed Counterfeit Leaks Into the WWW

If the US touches it, it's suspect.

[Ghost Dog]

62. Counterfeit, I don't know. In general, I'd doubt it.

What's published is probably authentic. But certainly thoroughly filtered, 'sanitised', sorry, 'sanitized' (from a 'Western' PTB point of view)...

[Ghost Dog]

65. Incedentally, some music always in my head, recently:

(Leonard Cohen: Secret Life): http://www.youtube.com/watch?v=v1GsWEFlvhs

[hamerfan]

80. Thank you for the link, Ghost Dog!

Loves me some Leonard Cohen!

http://www.youtube.com/watch?v=wYJf4J7VBaY

[Ghost Dog]

81. Ah. Nice cool version.

Payin' the rent. Yeah. What else?

A litle Revolution, maybe?

[hamerfan]

84. Gotta add one more by LC

Dance Me To The End Of Love:

http://www.youtube.com/watch?v=0Yc4QrvNJ1Q

[Festivito]

61. Debt: 12/21/2010 13,867,477,082,973.71 (DOWN 984,205,872.10) (Tue)

(Up little. Good day.)
Gordon! Here!.
(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)
= 9,323,889,939,205.17 + 4,543,587,143,768.54
UP 210,432,562.88 + DOWN 1,194,638,434.98

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 311-Million person America.
If every American, man, woman and child puts in $3.22 THAT'S 1B$, and $3,215.75 makes 1T$.
A family of three: Mom, Dad, Child: $9.65, ABOUT TEN BUCKS for a 1B$ 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 12 seconds we net gain another American, so at the end of the workday of the report, there should be 310,968,992 people in America.
http://www.census.gov/population/www/popclockus.html ON 10/04/2010 04:37 -> 310,403,677
Currently, each of these Americans owe $44,594.4.
A family of three owes $133,783.21. (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 3,535,358,565.65.
The average for the last 30 days would be 2,592,596,281.48.
The average for the last 32 days would be 2,430,559,013.89.
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$/day.
There were 251 reports in 365 days of FY2010 averaging 6.58B$ per report, 4.53B$/day.
There were 56 reports in 82 days of FY2011 averaging 5.46B$ per report, 3.73B$/day.
Above line should be okay

PROJECTION:
There are 761 days remaining in this Obama 1st term.
By that time the debt could be between 14.9 and 17.8T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
12/21/2010 13,867,477,082,973.71 BHO (UP 3,240,600,034,060.63 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 +1,651,794,027,380.00 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO
FY2011 +0,305,854,052,082.00 ------------* * * * * * * BHO
Endof11 +1,361,423,524,511.34 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
12/01/2010 -005,680,380,232.98 --
12/02/2010 +000,827,003,518.64 ------------********
12/03/2010 -000,051,568,825.48 ----
12/06/2010 +000,077,038,802.53 ------------******* Mon
12/07/2010 +000,178,077,201.68 ------------********
12/08/2010 +018,541,141,818.10 ------------**********
12/09/2010 +000,426,018,289.04 ------------********
12/10/2010 +000,085,971,333.21 ------------*******
12/13/2010 -000,140,409,571.73 --- Mon
12/14/2010 +000,270,507,131.41 ------------********
12/15/2010 +035,075,952,728.32 ------------**********
12/16/2010 -002,942,603,716.29 --
12/17/2010 +002,071,215,295.43 ------------*********
12/20/2010 -000,083,147,973.47 ---- Mon
12/21/2010 +000,210,432,562.88 ------------********

48,865,248,361.29 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=4669534&mesg_id=4670258

[Festivito]

70. Debt: 12/22/2010 13,858,529,371,601.09 (DOWN 8,947,711,372.62) (Wed)

(Up little. Good day.)
Well, paint me Tarred and feathered.
(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)
= 9,324,459,559,239.73 + 4,534,069,812,361.36
UP 569,620,034.56 + DOWN 9,517,331,407.18

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 311-Million person America.
If every American, man, woman and child puts in $3.22 THAT'S 1B$, and $3,215.68 makes 1T$.
A family of three: Mom, Dad, Child: $9.65, ABOUT TEN BUCKS for a 1B$ 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 12 seconds we net gain another American, so at the end of the workday of the report, there should be 310,976,192 people in America.
http://www.census.gov/population/www/popclockus.html ON 10/04/2010 04:37 -> 310,403,677
Currently, each of these Americans owe $44,564.6.
A family of three owes $133,693.8. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 days.
The average for the last 22 reports is 2,903,801,273.02.
The average for the last 30 days would be 2,129,454,266.88.

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$/day.
There were 251 reports in 365 days of FY2010 averaging 6.58B$ per report, 4.53B$/day.
There were 57 reports in 83 days of FY2011 averaging 5.21B$ per report, 3.58B$/day.
Above line should be okay

PROJECTION:
There are 760 days remaining in this Obama 1st term.
By that time the debt could be between 14.9 and 17.8T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
12/22/2010 13,858,529,371,601.09 BHO (UP 3,231,652,322,688.01 so far since Obama took office.)

FISCAL YEAR DEBT CHANGE, Sep 30 prior year to Sep 30 named year:
(One "* " for each 40B$ reached)
FY1994 +0,281,261,026,873.94 ------------* * * * * * * WJC
FY1995 +0,281,232,990,696.07 ------------* * * * * * * WJC
FY1996 +0,250,828,038,426.34 ------------* * * * * * WJC
FY1997 +0,188,335,072,261.61 ------------* * * * WJC
FY1998 +0,113,046,997,500.28 ------------* * WJC
FY1999 +0,130,077,892,735.81 ------------* * * WJC
FY2000 +0,017,907,308,253.43 ------------WJC
FY2001 +0,133,285,202,313.20 ------------* * * C&B
01-WJC +0,053,598,528,417.78 ------------* WJC 31% of FY, 40% of FY-Debt
01-GWB +0,079,686,673,895.42 ------------* GWB 69% of FY, 60% of FY-Debt
FY2002 +0,420,772,553,397.10 ------------* * * * * * * * * * GWB
FY2003 +0,554,995,097,146.46 ------------* * * * * * * * * * * * * GWB
FY2004 +0,595,821,633,586.70 ------------* * * * * * * * * * * * * * GWB
FY2005 +0,553,656,965,393.18 ------------* * * * * * * * * * * * * GWB
FY2006 +0,574,264,237,491.73 ------------* * * * * * * * * * * * * * GWB
FY2007 +0,500,679,473,047.25 ------------* * * * * * * * * * * * GWB
FY2008 +1,017,071,524,649.92 ------------* * * * * * * * * * * * * * * * * * * * * * * * * GWB
FY2009 +1,885,104,106,599.30 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * B&O
09GWB +0,602,152,152,000.60 ------------* * * * * * * * * * * * * * * GWB 31% of FY, 32% of FY-Debt
09-BHO +1,282,951,954,598.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO 69% of FY, 68% of FY-Debt
FY2010 +1,651,794,027,380.00 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO
FY2011 +0,296,906,340,709.30 ------------* * * * * * * BHO
Endof11 +1,305,672,462,155.36 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
12/02/2010 +000,827,003,518.64 ------------********
12/03/2010 -000,051,568,825.48 ----
12/06/2010 +000,077,038,802.53 ------------******* Mon
12/07/2010 +000,178,077,201.68 ------------********
12/08/2010 +018,541,141,818.10 ------------**********
12/09/2010 +000,426,018,289.04 ------------********
12/10/2010 +000,085,971,333.21 ------------*******
12/13/2010 -000,140,409,571.73 --- Mon
12/14/2010 +000,270,507,131.41 ------------********
12/15/2010 +035,075,952,728.32 ------------**********
12/16/2010 -002,942,603,716.29 --
12/17/2010 +002,071,215,295.43 ------------*********
12/20/2010 -000,083,147,973.47 ---- Mon
12/21/2010 +000,210,432,562.88 ------------********
12/22/2010 +000,569,620,034.56 ------------********

55,115,248,628.83 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=4670986&mesg_id=4671322

[RUMMYisFROSTED]

68. Marginally rascist cartoon!

:woohoo:

[ozymandius]

77. I'm glad you liked it.

Really, if I were a Republican, the last group of people I would want to piss off is the Latin population. Yet, they cannot seem to help themselves. The U.S. Census report essentially placed a stale date on the Grand Old Party.

[ozymandius]

75. Markets are taking a breather tomorrow for the holiday weekend.

See you folks back here on Monday. Have a safe, healthy holiday weekend. :hi:

[Ghost Dog]

78. Enjoy, friends,

Enjoy :hi:

[Roland99]

85. The Merriest of Christmases to all the SMW denizens!

Ho ho ho!

:)