STOCK MARKET WATCH, Wednesday, January 19, 2011

[Pale Blue Dot]

Source: du

STOCK MARKET WATCH, Wednesday, January 19, 2011

AT THE CLOSING BELL ON January 18, 2011

Dow 11,837.93 +50.55 (+0.43%)
Nasdaq 2,765.85 +10.55 (+0.38%)
S&P 500 1,295.02 +1.78 (+0.14%)
10-Yr Bond... 3.38 +0.01
30-Year Bond 4.56 +0.00

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Market Conditions During Trading Hours

Euro, Yen, Loonie, Silver and Gold

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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

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Edited by Admin at OP's request.

[Pale Blue Dot]

1. Today's Reports (it's all about housing)

Jan 19 07:00 MBA Mortgage Purchase Index 01/14 NA NA +2.2%
Jan 19 08:30 Housing Starts Dec 565K 550K 555K
Jan 19 08:30 Building Permits Dec 540K 560K 544K 530K

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

[Pale Blue Dot]

17. Mortgage Purchase index up 5% - all refinancing.

WASHINGTON, D.C. (January 19, 2011) --The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 14, 2011. The Market Composite Index, a measure of mortgage loan application volume, increased 5.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 6.4 percent compared with the previous week.

The Refinance Index increased 7.7 percent from the previous week. This is the third consecutive weekly increase in refinance applications and is the highest Refinance Index observed since the beginning of December. The seasonally adjusted Purchase Index decreased 1.9 percent from one week earlier. The unadjusted Purchase Index increased 3.1 percent compared with the previous week and was 16.0 percent lower than the same week one year ago.

"Mortgage rates have moved somewhat lower since the beginning of the year, as mixed data on the job market continue to cloud the outlook for the economy," said Michael Fratantoni, MBA's Vice President of Research and Economics. "Refinance applications have picked up, as borrowers take advantage of lower rates, but purchase applications remain quite low, indicating that home sales are unlikely to pick up any time soon."

The four week moving average for the seasonally adjusted Market Index is up 1.4 percent. The four week moving average is down 0.8 percent for the seasonally adjusted Purchase Index, while this average is up 2.3 percent for the Refinance Index.

http://www.mbaa.org/NewsandMedia/PressCenter/75389.htm

[Pale Blue Dot]

18. Housing starts drop to 529K, Building Permits up to 635K.

It will be interesting to see how the media spins these numbers. My guess: The housing start numbers, lower than they've been for almost 18 months, will be downplayed in favor of the permit number (which is normally deemed far less important).

[Pale Blue Dot]

22. Bingo!: December U.S. housing starts fall; permits surge

WASHINGTON (MarketWatch) - Construction of new U.S. homes fell 4.3% to an annualized rate of 529,000 in December, but permits jumped 16.7%, the Commerce Department reported Wednesday. Economists surveyed by MarketWatch had expected housing starts in December to drop to 545,000 on a seasonally adjusted basis. Yet permits for new construction, viewed as a more accurate gauge of home building, jumped to an annualized rate of 635,000 in December - the highest level since last March - from a revised 544,000 in November. Housing starts in November were little changed.

http://www.marketwatch.com/story/december-us-housing-starts-fall-permits-surge-2011-01-19?reflink=MW_news_stmp

[Roland99]

35. Surely it's Mother's Nature's fault. What with all that snow and all....

[jtuck004]

47. Building permits may be an indicator of concern over coming code changes...

...as the note from GS below explains the only reason for the surge in permits is due to a jump in applications ahead of the implementation of new building codes in 2011. As Hatzius notes: "If building code changes are the main explanation for the rise in permits, we should see a substantial drop back in multifamily permits next month."

link:www.zerohedge.com/article/housing-starts-miss-permits-jump-ahead-building-code-changes|Here...]

So we will see...next month.

[Demeter]

60. Another number that doesn't mean what they are going to spin it to mean

Just lovely. Don't call us, we'll call you, Gov't Statisticians!

And don't let the door hit you on your way out.

[jtuck004]

65. Yup. And when you look at it further, it's mostly apartments. 'Cause

all those foreclosed folks have to live somewhere while all this sorts out.

[Pale Blue Dot]

2. Oil rises to near $92 a barrel in Asia

BANGKOK – Oil prices rose to near $92 a barrel Wednesday in Asia, underpinned by a rise in regional stock markets and increases to demand forecasts for this year.

Benchmark crude for February delivery was up 34 cents at $91.72 a barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract, which expires this week, fell 16 cents to settle at $91.38 on Tuesday.

Regional stock markets, which often provide a cue for the oil market, were higher after Apple Inc. and IBM Corp. reported strong quarterly earnings.

The euro and yen, meanwhile, gained against the dollar, making crude less expensive for buyers holding those currencies.

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

[Demeter]

19. Stock Markets and Oil Prices SHOULD NOT Correlate!

The only thing that links those two is SPECULATORS!

[Festivito]

3. Debt: 01/14/2011 14,007,943,536,871.15 (UP 726,561,493.56) (Fri, UP a little.)

(Good day.)
The ticket that keeps ticketing.
(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)
= 9,377,350,492,041.16 + 4,630,593,044,829.99
UP 146,255,477.48 + UP 580,306,016.08

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 $3.21 THAT'S 1B$, and $3,213.97 makes 1T$.
A family of three: Mom, Dad, Child: $9.64, ABOUT TEN BUCKS for a 1B$ 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 311,141,792 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 $45,021.09.
A family of three owes $135,063.28. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 24 reports in the last 30 to 31 days.
The average for the last 24 reports is 6,473,091,914.97.
The average for the last 30 days would be 5,178,473,531.98.
The average for the last 31 days would be 5,011,425,998.69.
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$/day.
There were 74 reports in 106 days of FY2011 averaging 6.03B$ per report, 4.21B$/day.
Above line should be okay

PROJECTION:
There are 737 days remaining in this Obama 1st term.
By that time the debt could be between 15.0 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)
01/14/2011 14,007,943,536,871.15 BHO (UP 3,381,066,487,958.07 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 +0,446,320,505,979.40 ------------* * * * * * * * * * * BHO
Endof11 +1,536,858,346,061.14 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
12/27/2010 -000,059,144,170.26 ---- Mon
12/28/2010 +001,124,227,282.97 ------------*********
12/29/2010 +000,165,778,043.38 ------------********
12/30/2010 +000,091,969,590.77 ------------*******
12/31/2010 +062,732,309,679.32 ------------**********
01/03/2011 -005,396,108,430.64 -- Mon
01/04/2011 -000,085,302,113.98 ----
01/05/2011 -000,029,576,179.10 ----
01/06/2011 -001,749,774,139.62 --
01/07/2011 +000,022,074,863.06 ------------*******
01/10/2011 -000,254,217,892.29 --- Mon
01/11/2011 +000,490,152,520.38 ------------********
01/12/2011 -000,273,054,954.79 ---
01/13/2011 -005,996,045,152.69 --
01/14/2011 +000,146,255,477.48 ------------********

50,929,544,423.99 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=4700543&mesg_id=4700621

[Festivito]

53. Debt: 01/18/2011 14,052,380,830,542.80 (UP 44,437,293,671.65) (Tue, UP a lot.)

(Good day.)
More on a ticket.
(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)
= 9,415,963,819,710.17 + 4,636,417,010,832.63
UP 38,613,327,669.01 + UP 5,823,966,002.64

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 $3.21 THAT'S 1B$, and $3,213.67 makes 1T$.
A family of three: Mom, Dad, Child: $9.64, ABOUT TEN BUCKS for a 1B$ 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 311,170,592 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 $45,159.73.
A family of three owes $135,479.2. (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 7,680,943,653.77.
The average for the last 30 days would be 5,632,692,012.77.
The average for the last 32 days would be 5,280,648,761.97.
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$/day.
There were 75 reports in 110 days of FY2011 averaging 6.54B$ per report, 4.46B$/day.
Above line should be okay

PROJECTION:
There are 733 days remaining in this Obama 1st term.
By that time the debt could be between 15.1 and 17.9T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
01/18/2011 14,052,380,830,542.80 BHO (UP 3,425,503,781,629.72 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 +0,490,757,799,651.10 ------------* * * * * * * * * * * * BHO
Endof11 +1,628,423,607,933.20 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
12/28/2010 +001,124,227,282.97 ------------*********
12/29/2010 +000,165,778,043.38 ------------********
12/30/2010 +000,091,969,590.77 ------------*******
12/31/2010 +062,732,309,679.32 ------------**********
01/03/2011 -005,396,108,430.64 -- Mon
01/04/2011 -000,085,302,113.98 ----
01/05/2011 -000,029,576,179.10 ----
01/06/2011 -001,749,774,139.62 --
01/07/2011 +000,022,074,863.06 ------------*******
01/10/2011 -000,254,217,892.29 --- Mon
01/11/2011 +000,490,152,520.38 ------------********
01/12/2011 -000,273,054,954.79 ---
01/13/2011 -005,996,045,152.69 --
01/14/2011 +000,146,255,477.48 ------------********
01/18/2011 +038,613,327,669.01 ------------********** Tue

89,602,016,263.26 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=4702118&mesg_id=4702121

[tclambert]

4. The cartoon today is ambiguous.

It probably means to say Sarah Palin sees the world as targets. But someone could construe it as a suggestion to shoot her in the eyes. In fact, she will probably interpret it that way and claim victimhood all over again, and never notice the irony of complaining about someone putting a target on another person.

[Pale Blue Dot]

5. I didn't even consider that interpretation.

I'm not sure I can change it now.

[Demeter]

20. I'd Leave It Just the Way It Is

and not worry about interpretation. After all, Sarah's web master, PR staff, etc. didn't worry.

[Tansy_Gold]

11. I almost thought the same thing, tc

The earrings, though, are the (dead??) give-away, the second (or third)layer of the irony.

The BF was asking me yesterday why it is that folks like Olbermann or Maddow or O'Donnell don't have a psychiatrist or psychologist on to give an analysis of just how wacko people like Palin really are. My response was that I would imagine most legitimate psychiatrists (who are MDs as well) and psychologists would refuse to diagnose on the basis of observation alone. That in order to make an informed diagnosis -- which would be under the protection of confidentiality also -- they would need controlled observation, testing, etc. To do otherwise might be a violation of professional ethics and/or leave them open to lawsuits.

But following up on that, I said I would prefer to see some sociologists on the TV once in a while, to give some analyses of the followers of such "leaders." Most of us here have read at least parts of Altemeyer's "The Authoritarians," but how often have you seen him on TV?

Of course, I have to sign off with the disclaimer that sociology is my major field of academic study, so I'm hardly an unbiased commentator.



TG, TT

[Pale Blue Dot]

12. I'm working on changing the cartoon now.

And yes, Palin is batshit crazy. :-)

[tclambert]

54. I didn't mean to spoil the fun.

I kinda wanted to hear the Palin camp's whining about anyone daring to put a target on their princess. Just like Glenn Beck complains if anyone else compares someone to Nazis.

And as far as psychiatrist vs. psychologist vs. sociologist, I think what you want is a profiler from the FBI's Behavorial Analysis Unit.

[Tansy_Gold]

63. Profiler, yeah, but I still want a sociologist to get out there

and explain how it is that people follow where the batshit crazies lead. We know they're batshit looney, but why do they still have their supporters? What makes people follow them?

Barry Glassner, author of "Culture of Fear," would be one of my first recommendations, after Altemeyer of course.

But that's just me.


TG, TT

[DemReadingDU]

16. or Palin sees herself as the target

edit to add, similar to tclambert's 2nd interpretation.

[xchrom]

6. Recommend

[Pale Blue Dot]

7. U.S. Stock-Index Futures Are Little Changed; Cree Sinks as Apple, IBM Gain

U.S. stock-index futures were little changed after the Standard & Poor’s 500 Index climbed to the highest level since August 2008 as investors awaited a report that may show the housing market remains subdued.

Cree Inc. tumbled 14 percent in German trading after its profit forecast trailed estimates. Apple Inc. rose 1.9 percent in pre-market New York trading and International Business Machines Corp. gained 2.4 percent after reporting profits that topped analyst projections. Goldman Sachs Group Inc. advanced 0.6 percent before reporting earnings today.

March contracts on the S&P 500 slipped 0.1 percent to 1,293 as of 10:49 a.m. in London. Dow Jones Industrial Average futures were little changed at 11,811, while Nasdaq-100 Index fell less than 0.1 percent to 2,330.5.

“This market is feeling a bit toppish and only some continued strong earnings could push things higher,” said Luis Benguerel, a trader at Interbrokers in Barcelona, Spain. “In the short term the rally should either pause or correct itself.

http://www.bloomberg.com/news/2011-01-19/u-s-stock-index-futures-are-little-changed-cree-sinks-as-apple-ibm-gain.html

[Pale Blue Dot]

8. Guest Post: Most Economists Fall Back Into Neoclassical Stupor

When the economic crisis hit in 2008, economists started to admit that neoclassical economics was wrong.

Specifically, they started to admit that the assumption that the economy is inherently stable is false, and that their models were faulty and needed to be adjusted. See this, this, this, this, this, this, this, this, this, this, this, this, this and this. (SMW readers: You'll have to read the original story to get all the links. Sorry!)

But now that – on the surface (here’s what you may see if you scratch below the surface) – things seem to be improving, most economists are falling back in their neoclassical stupor.

For example, two PhD economists – Steve Keen and Dean Baker – recently attended the annual meeting of the American Economics Association. They are both exasperated that most economists have not learned anything at all from the crisis.

Keen reported on his surreal experience on the Max Keiser show, stressing that most economists still use defective models and believe the fairy tell of the inherent stability of the economy.

http://www.nakedcapitalism.com/2011/01/guest-post-most-economists-fall-back-into-neoclassical-stupor-if-they-dont-know-anything-then-why-should-we-listen-to-them.html

Much more at the link...

[xchrom]

15. +1

[Demeter]

23. There's a Thread on this site about how Critical Thinking Is Not Taught

in America (especially in Business School, which is where most economists graduate, I believe)....guess this just proves the point.

Or that quotation from Upton Sinclair: "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"

[Fuddnik]

25. From the article:

And Baker writes:

The American Economics Association held its annual meeting in Denver last weekend. Most attendees appeared to be in a very forgiving mood. While the economists in Denver recognised the severity of the economic slump hitting the United States and much of the world, there were few who seemed to view this as a serious failure of the economics profession.

The fact that the overwhelming majority of economists in policy positions failed to see the signs of this disaster coming, and supported the policies that brought it on, did not seem to be a major concern for most of the economists at the convention. Instead, they seemed more intent on finding ways in which they could get ordinary workers to accept lower pay and reduced public benefits in the years ahead. This would lead to better outcomes in their models.

***

The willingness of economists to so quickly embrace this darker future is striking. After all, one of the reasons that we have economists is, ostensibly, so that we don’t get such unpleasant news about a “new normal”. This is like a football team calmly accepting the sports writers’ prediction that they would have a winless season, and deciding that their new goal was to minimise the margin of defeat.

***

If economists did their job, they would be pushing policies to get the economy quickly back to full employment. Instead, they just repeat lines about how “we” will just have to accept some rough times. Unfortunately, no one ever asks the economists who preach austerity how much time they expect to spend in the unemployment lines.

If they don’t know anything, then why should we listen to them?

[Tansy_Gold]

32. Welcome to SMW!

:hi:

[tclambert]

55. Why do I get the feeling . . .

that if killer robots started a campaign to wipe out humanity, these economists would only seek to get people to more quickly accept their fate? After all, the economy would run so much more smoothly once the killer robots were in charge.

[AnneD]

56. Welcome to SMW

Stock Market Watch . Kick your shoes off, sit a spell, don't hog the fire though, some of us live in the snow bound areas...:hi:

And TC, instead of robots, they substitute pod people that take over living peoples DNA and they are attatched to some evil matrix.....oh wait...wasn't that a SF movie or something. I need to turn the tv off before I go to bed-I am so confused.

[girl gone mad]

58. Steve Keen was at this meeting.

He mentioned the astounding ignorance (my words, not his) of most of the speakers.

[Demeter]

61. Welcome Fuddnik!

So nice to see a new face around here!

[Pale Blue Dot]

9. Downtown Hartford Office Buildings Nearly One-Third Empty

Greater Hartford's office market — a barometer for the health of the area's economy — grew even more fragile in 2010, with vacancy in downtown Hartford rising to levels not seen since the devastating recession of the early 1990s.

Nearly one-third of all the office space in the city's central business district — 2.4 million square feet — is empty. And it could get worse this year, experts say.

A new report from commercial real estate services firm CB Richard Ellis shows the troubling rise in vacancy in Hartford's central business district to 30.2 percent at the end of 2010, up from 18.3 percent a year earlier. In the broader region, office vacancies in Hartford and the surrounding suburbs jumped to 21.5 percent at the end of 2010, compared with 17.4 percent a year earlier.

Longtime commercial real estate observers in Hartford say the increased vacancies in the city are the highest in recent memory.

http://www.courant.com/business/hc-office-market-hartford-0118-20110117,0,7626247.story

I've been wondering if my adopted city is on Meredith Whitney's list - and now I'm even more concerned.

[Demeter]

24. Welcome to the Rust Belt--We'll Make Connecticut an Honorary Member!

I have a friend who lived closer to downtown Detroit than I did. We drove to the ballet, and she commented on how familiar it looked around her high school, except there used to be a lot more buildings!

[Pale Blue Dot]

10. Bill Fleckenstein: The Race To the Bottom Will Be Won By the Dollar

"This printing money is going to lead to huge trouble. It’s going to lead to higher interest rates. It’s going to lead to more inflation and at some point there is going to be a train wreck in the currency and the bond market."

Market commentator and money manager Bill Fleckenstein sat down for a recent interview with ChrisMartenson.com and excoriated the Fed and the monetary policy it's pursuing. He and Chris discuss the factors that enabled Bill to be one of the first to accurately identify and warn of the housing and credit bubbles - and how history is now repeating itself via the profligate printing of US dollars. The interview covers a wide range of topics meaningful to the investor trying to make sense of where things are headed from here - including central banking culture, bubble psychology, high-frequency trading, inflation/deflation, and the true relative value of the dollar vs the Euro.

http://www.chrismartenson.com/blog/bill-fleckenstein-race-bottom-will-be-won-dollar/51221

[Pale Blue Dot]

13. Today's spin: Commodities Boom Signals Growth as U.S. Companies Benefit

U.S. investors should welcome, not fear, climbing commodity prices.

The increases are “largely a reflection of the fact that the pace of economic growth, particularly in the U.S., has picked up,” said Nariman Behravesh, chief economist at consultants IHS in Lexington, Massachusetts, and a former Federal Reserve official who has been covering the global economy for more than 35 years. “It’s not something to be worried about.”

The Standard & Poor’s GSCI Spot Index of 24 commodities has climbed 24 percent during the past year to its highest level since September 2008 as prices of raw materials from oil and copper to wheat and cotton have increased. That has prompted investor concerns that that rising energy and other costs might derail the U.S. recovery by robbing consumers of purchasing power and pinching corporate profit margins.

History suggests they’re wrong to be concerned, said Michael Darda, chief economist for MKM Partners in Stamford, Conn. Commodity prices usually move in tandem with U.S. production, income and the stock market, so the increase is a reason to be bullish, not bearish, about the outlook, he said.

http://www.bloomberg.com/news/2011-01-19/commodity-boom-signals-u-s-accelerating-with-corporate-america-benefiting.html

[Po_d Mainiac]

27. Another anal-ist inflicted with excrement ala tete

With the Bernank pumping hundreds of billions into the money supply, these clowns just don't know what column to insert the numbers into. So instead of taking into account that the U$D is taking on TP status, they fall back on the old historical cycles.

[Robbien]

42. more than $200bn has been poured into food markets by speculators hunting profit

Price spikes of upwards of 70 per cent are being led by hedge funds, investment bankers and pension funds that have poured over $200bn into food markets since the financial crisis, betting on prices going ever higher. With few options to place your bets these days, and especially with the ready-made cash available through quantitative easing, food isn't a bad place to start – for the bankers, anyway.

<...>

Cargill reeled in $1.49bn in windfall profits in its last quarter, three times its profits the year before

http://www.newstatesman.com/blogs/the-staggers/2011/01/food-prices-markets-sector


Bankster greed is booming along with those commodities.

[Pale Blue Dot]

14. Volcker Rule Should Require Sign-Off by Bank CEOs, Panel Says

Regulators should carry out a “robust implementation” of the Volcker rule that includes requiring banks’ chief executives to vouch for their compliance systems, a U.S. government panel said.

The Financial Stability Oversight Council, charged with preventing a repeat of the 2008 financial crisis, released a study yesterday recommending that regulators mandate a “public attestation” on compliance by CEOs. The 81-page study analyzed ways that the Volcker rule, which bans banks from risking capital by trading for their own accounts, should be applied.

The council’s study “may be a workable approach to dealing with a hard requirement,” William Sweet, a former attorney at the Federal Reserve and a partner at Skadden, Arps, Slate, Meagher & Flom LLP in Washington, said in an interview. The sign-off requirement “puts the CEO in a very difficult position.”

The rule, named after former Fed Chairman Paul Volcker, is aimed at reducing the chance that banks will make risky investments with their own capital that put their federally insured deposits at risk. Goldman Sachs Group Inc. and JPMorgan Chase & Co. are among Wall Street firms breaking off or winding down proprietary trading units to comply with the rule, a provision of the Dodd-Frank financial-overhaul law approved by Congress last year.

http://www.bloomberg.com/news/2011-01-19/volcker-rule-should-require-bank-ceos-to-certify-compliance-panel-says.html

[Pale Blue Dot]

21. Goldman reports decline in quarterly profit

NEW YORK — Goldman Sachs Group Inc on Wednesday posted a decline in quarterly profit, in part reflecting lower results in fixed-income trading.

Fourth-quarter net income after payment of preferred stock dividends totaled $2.23 billion, or $3.79 per share, compared with $4.79 billion, or $8.20 a share, a year earlier.

Analysts on average expected $3.76 per share, Thomson Reuters I/B/E/S said.

http://www.msnbc.msn.com/id/41151326/ns/business-eye_on_the_economy/

[Pale Blue Dot]

46. Goldman Sachs Cuts Compensation Pool to $430,700 Per Employee

Goldman Sachs Group Inc.’s compensation and benefits expense fell 5 percent to $15.4 billion in 2010 as the firm’s revenue decreased 13 percent and the number of employees climbed.

The amount, equal to 39 percent of revenue, is enough to pay each of the firm’s 35,700 employees $430,700, according to a statement today from the New York-based bank. That’s down 14 percent from an average of $498,246 for each of the firm’s 32,500 workers a year earlier.

After setting an all-time high for Wall Street pay in 2007, Goldman Sachs cut its compensation expense to 36 percent of revenue in 2009, the lowest ratio ever, and reported record earnings. In 2010, the firm paid out a higher ratio as revenue fell. The year’s figures don’t include costs related to the U.K. bonus tax.

Average pay per employee at JPMorgan Chase & Co.’s investment bank fell 2.4 percent in 2010 to $369,651 from $378,600 in 2009, according to the New York-based bank’s results last week. JPMorgan is the second-biggest U.S. bank by assets and Goldman Sachs is the fifth-biggest.

http://www.bloomberg.com/news/2011-01-19/goldman-sachs-cuts-its-compensation-pool-by-14-to-430-700-per-employee.html

:puke:

[Demeter]

48. Poor Babies!

Go see Uncle Ben; He's a soft touch...

[Hotler]

26. k&r n/t

[Demeter]

28. Did Blogs Exercise Enough Influence To Alter Goldman’s Facebook Plans Or Did SEC... Get Serious?

http://www.zerohedge.com/article/did-blogs-exercise-enough-influence-alter-goldman%E2%80%99s-facebook-plans-or-did-sec-decide-get-ser

After hearing of Goldman’s plans to allow investors to skirt SEC guidelines and issue private shares of Facebook to the public, I had a plethora of warnings and admonitions. Once I (and my best analyst) took the time to parse the numbers and the logic behind the deal, I concluded that Facebook Registers The WHOLE WORLD! Or At Least They Would Have To In Order To Justify Goldman’s Pricing: Here’s What $2 Billion Or So Worth Of Goldman HNW Clients Probably Wish They Read This Time Last Week!

In a nutshell, not only is the offering unlawful on its face (although probably lawful due to the financial engineering cum law splicing from the wizards at Goldman), the valuations were simply stuff of fairy tails and dot.com implosions.

Well, it appears as if maybe someone at the SEC may have gotten pissed off enough to say “I’ve had it and I’m not going to take anymore!!!!” From the Wall Street Journal: Goldman to Exclude U.S. Clients From Facebook Deal:

Goldman Sachs Group Inc. decided to exclude U.S. clients from the private offering of as much as $1.5 billion in shares of social-networking company Facebook Inc., citing “intense media attention.” In a statement provided to The Wall Street Journal, Goldman said the move came after officials at the New York securities firm “concluded the level of media attention might not be consistent with the proper completion of a U.S. private placement under U.S. law.”

Goldman began notifying clients of its decision on Sunday night in Asia, and clients in Europe and the U.S. were being told on Monday, according to people familiar with the situation. In its statement, Goldman said the decision to limit the offering to “offshore” investors wasn’t “required or requested by any other party,” including the Securities and Exchange Commission. A Facebook spokesman said that Goldman “is in the best position to answer any questions.”

… Private placements like the Facebook deal are subject to strict SEC guidelines, and Goldman’s statement Monday suggests that executives grew concerned that huge interest in the offering could expose the securities firm to regulatory vulnerability. One Goldman client was told the deal is being offered only to non-U.S. clients because of regulatory concerns.

A total of about $7 billion in orders for Facebook shares has poured in, according to a person familiar with the matter. That means it is highly likely that Goldman still can pull off the offering at its original size without U.S. investors. Chinese demand is especially strong, said one person familiar with the offering.

That is a damn shame, but also a testament to the marketing prowess of Goldman’s brokers and bankers. Anyone who had the opportunity to review the subscription only research (File Icon FB note final) that I released on Facebook valuations should be flabbergasted in hearing that GS can raise $7 billion for a $1.5 billion offereing giving the simply ludicrous pricing.

“They’re still committed to doing the deal at the original size,” one Goldman client said. But U.S. investors are “going to be disappointed,” this person added.

MORE JUICY DETAILS AT LINK

[Demeter]

29. Hugh Hendry: Europe risks getting it wrong again on rate hikes

The euro project has not gone according to plan. It reminds me of the story of the James Bond character Q, based on the British intelligence officer Charles Fraser-Smith. It was he who invented a compass for spies hidden in a button that unscrewed clockwise. The contraption was based on the simple yet brilliant theory that the unswerving logic of the German mind would never guess that something might unscrew the wrong way. This is really what happened with the euro. New member states were supposed to take lower German interest rates and invest their resources wisely to improve and deepen their productive capacity. Instead, they used the advantage to finance speculative asset bubbles. The peripheral nations of Europe turned the wrong way. The Germans are unhappy.

Read more >>
http://link.ft.com/r/TWK799/72LMF4/K91WR/QFWZ4Z/72NY72/4O/t?a1=2011&a2=1&a3=19

[Demeter]

30. John Bolton - The west needs to stand up to Beijing

Mao Zedong once said that “all political power comes from the barrel of a gun”. Whether his apostolic successor President Hu Jintao, visiting President Barack Obama this week in Washington, believes this particular line in Mao’s catechism is unclear. Completely clear, however, is that the People’s Liberation Army not only believes it, but is implementing it.

Read more >>
http://link.ft.com/r/M2ZOXX/5CUC9H/3CWTA/V1IMEX/RNMLFK/AZ/t?a1=2011&a2=1&a3=18

OLD WALRUS FACE IS AT IT AGAIN

[Fuddnik]

41. Walruses resent that. (Walri?)

Has John Bolton ever found a problem he couldn't make worse? A problem that couldn't be solved by bullying and bombing?

[Demeter]

31. No. 2 bank overcharged troops on mortgages

http://today.msnbc.msn.com/id/41043127/ns/business-real_estate/

JP Morgan Chase — admits it has overcharged several thousand military families for their mortgages, including families of troops fighting in Afghanistan. The bank also tells NBC News that it improperly foreclosed on more than a dozen military families.

The admissions are an outgrowth of a lawsuit filed by Marine Capt. Jonathan Rowles. Rowles is the backseat pilot of an F/A 18 Delta fighter jet and has served the nation as a Marine for five years. He and his wife, Julia, say they’ve been battling Chase almost that long.

The dispute apparently caused the bank to review its handling of all mortgages involving active-duty military personnel. Under a law known as the Servicemembers Civil Relief Act (SCRA), active-duty troops generally get their mortgage interest rates lowered to 6 percent and are protected from foreclosure. Chase now appears to have repeatedly violated that law, which is designed to protect troops and their families from financial stress while they’re in harm's way.

A Chase official told NBC News that some 4,000 troops may have been overcharged. What’s more, the bank discovered it improperly foreclosed on the homes of 14 military families....MORE AND VIDEO AT LINK

[Roland99]

33. Before the bell - lackluster numbers

S&P 500 1,290 -4.50 -0.35%
DOW 11,803 -8.00 -0.07%
NASDAQ 2,331 0.00 0.00%

[Demeter]

34. WISHFUL THINKING DEPT: Oil wealth likely to keep Gulf calm

http://english.aljazeera.net/news/middleeast/2011/01/201111884114254827.html

About 2,000 Omanis have staged a rare protest demanding higher wages and salaries and a curb to rising prices and the high cost of living, the Associated Press news agency said. Other media outlets said the gathering was much smaller.

The demonstration on Monday, a rarity in the usually calm sultanate, was called for by the civil society groups and publicised on websites.

Protesters gathered in the district housing most government ministries under close watch by police. The demonstration ended peacefully.

One demonstrator said the march was a request to Sultan Qaboos to personally intervene against the greed of the merchants and raise government employees salaries including those in the police and the army.

Banners held by the demonstrators read "no to high prices" and "no to the merchant greed".

Free food and cash

Meanwhile, the ruler of Kuwait announced on Monday the distribution of $4bn and free food for 14 months to all citizens....

[Demeter]

36. The Myth of 'American Exceptionalism' Implodes

http://www.informationclearinghouse.info/article27289.htm

Until the 1970s, US capitalism shared its spoils with American workers. But since 2008, it has made them pay for its failures...

[Demeter]

37. Tough rules backed on US bank trading

Financial regulators moved towards tough prescriptions on banks’ trading activity, which could push more activity out of Wall Street and swell back office costs

Read more >>
http://link.ft.com/r/S4XZQQ/6V1ZWD/K91WR/WLEWWT/2692GD/1G/t?a1=2011&a2=1&a3=19

[Demeter]

38. Citi shares slide as results disappoint

Citigroup highlighted the challenges it faces in regaining the ground lost during the financial crisis, unveiling fourth-quarter results that disappointed investors and sent its shares sharply lower

Read more >>
http://link.ft.com/r/QM42II/3O3VIN/PNGIU/EW6LQM/PRZUSP/QR/t?a1=2011&a2=1&a3=19

[Po_d Mainiac]

43. In the face of the rising prospect of massive MBS buybacks,

Shiti's shares should be skidding :evilgrin:

[Demeter]

39. GE to sign slew of China deals in jobs boost

The largest US industrial group is signing a series of deals with China this week in energy, rail and aviation as it drives to improve its disappointing performance in the Chinese market

Read more >>
http://link.ft.com/r/QM42II/3O3VIN/PNGIU/EW6LQM/HD89XS/QR/t?a1=2011&a2=1&a3=19

[Demeter]

40. MOVIE REVIEW: GREEN HORNET

We went to see the Green Hornet in 3D for the holiday.

It was bizarre--the anti-hero taken to the Austin Powers level. The Kid didn't like it, probably because she hasn't enough background to understand the "inside jokes" of turning every superhero cliche on its ear.

In the grand finale of violence and car chases, the Green Hornet destroys the building of his real-life business and source of his Obscene Wealth while chasing the bad guys.

I was horrified by that. Losing months of production to rebuild a newspaper publishing business facility which is already on the skids due to the Internet, putting all those jobs at risk...it just didn't seem like a good tradeoff for one evil druglord and a crooked DA in LA. After all, they will be easily replaced...the presses and the jobs won't be.

LESSON FOR THE DAY:

An intense study of the economy can really deaden your ability to enjoy popular culture...

[Tansy_Gold]

45. I'm sure you've seen this, Demeter, but just in case.. . . .

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x228303

[Demeter]

49. Oh, That's Precious!

No, I hadn't seen it, thanks ever so much for telling me!

[Tansy_Gold]

50. I thought you'd appreciate it!

:hi:

[AnneD]

57. For God's sake....

do not take the Kid to see Black Swan. Now don't get me wrong, Natalie Portman will win an Oscar for it and Kunis stole every scene that wasn't nailed down....but do not see it if you want an evening of light entertainment.

I am a Nurse and even I was cringing it was so painful to see her descent into madness. I told my daughter it was like the Twilight Zone or an episode of Creep Show, but with better lighting.

It was good, but hard to watch.

Oh, and Tansy's toon cracked me up, and I don't even LIVE in a condo.

[Demeter]

62. Thanks for the heads up

If it's about a dancer going mad, I don't want to see it either.

I grew up in a serious school of ballet:

http://www.youtube.com/watch?v=oKTr67NUeSg

[tclambert]

59. Am I the only one who started hearing the music from "The Good, the Bad, and the Ugly?"

http://www.youtube.com/watch?v=1hYV-JSjpyU

That's the one I always think of, but another tune from that movie is titled "The Ecstasy of Gold." Possibly more relevant for an economic thread.

http://www.youtube.com/watch?v=NOKhQ8ObQ7E&feature=related

Guess what? Metallica did a version of "Ecstasy of Gold." http://www.youtube.com/watch?v=Zm7EeuWnc-8&feature=related

[xchrom]

44. kick

[TalkingDog]

51. Food Stocks to Watch ( frowny face)

http://www.thestreet.com/story/10977238/1/5-food-stocks-to-watch-as-inflation-rises.html

An interesting bit in here about Nixon asking the Fed to cook the books for him.

[Demeter]

64. Toilet Paper is a Leading Indicator for Inflation

Especially when the size of the roll keeps changing.

Today, one roll of toilet paper is $1 on sale.

It used to be a pack of 4 was on sale for $1, back in the 70's.

So I'm dating myself...I've had a Terrible, Horrible, No Good, Very Bad Day ...

and it wasn't anything catastrophic, just constant twanging of the strings that keep me tied together and functioning...all week long. And it's only Wednesday.

[DoBotherMe]

52. K&R