STOCK MARKET WATCH -- Tuesday, 13 November 2012

[Tansy_Gold]

[font size=3]STOCK MARKET WATCH, Tuesday, 13 November 2012[font color=black][/font]

SMW for 12 November 2012

AT THE CLOSING BELL ON 9 November 2012
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Dow Jones 12,815.39 +4.07 (0.03%)
S&P 500 1,379.85 +2.34 (0.17%)
Nasdaq 2,904.87 +9.29 (0.32%)


[font color=red]10 Year 1.61% +0.06 (3.87%)
30 Year 2.73% +0.01 (0.37%) [font color=black]


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[font size=2]Market Conditions During Trading Hours[/font]
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[font size=2]Euro, Yen, Loonie, Silver and Gold[center]

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[font color=black][font size=2]Handy Links - Market Data and News:[/font][/font]
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Economic Calendar
Marketwatch Data
Bloomberg Economic News
Yahoo Finance
Google Finance
Bank Tracker
Credit Union Tracker
Daily Job Cuts
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[font color=black][font size=2]Handy Links - Economic Blogs:[/font][/font]
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The Big Picture
Financial Sense
Calculated Risk
Naked Capitalism
Credit Writedowns
Brad DeLong
Bonddad
Atrios
goldmansachs666
The Stand-Up Economist
The Automatic Earth
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[font color=black][font size=2]Handy Links - Government Issues:[/font][/font]
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LegitGov
Open Government
Earmark Database
USA spending.gov
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[font color=black][font size=2]Handy Links - Videos:[/font][/font]
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Charlie Rose talks with Roubini
Charlie Rose talks with Krugman
William Black: This Economic Disaster
Bill Moyers with Kevin Drum and David Corn
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[font color=red]Partial List of Financial Sector Officials Convicted since 1/20/09 [/font][font color=red]
2/2/12 David Higgs and Salmaan Siddiqui, Credit Suisse, plead guilty to conspiracy involving valuation of MBS
3/6/12 Allen Stanford, former Caribbean billionaire and general schmuck, convicted on 13 of 14 counts in $2.2B Ponzi scheme, faces 20+ years in prison
6/4/12 Matthew Kluger, lawyer, sentenced to 12 years in prison, along with co-conspirator stock trader Garrett Bauer (9 years) and co-conspirator Kenneth Robinson (not yet sentenced) for 17 year insider trading scheme.
6/14/12 Allen Stanford sentenced to 110 years without parole.
6/15/12 Rajat Gupta, former Goldman Sachs director, found guilty of insider trading. Could face a decade in prison when sentenced later this year.
6/22/12 Timothy S. Durham, 49, former CEO of Fair Financial Company, convicted of one count conspiracy to commit wire and securities fraud, 10 counts of wire fraud, and one count of securities fraud.
6/22/12 James F. Cochran, 56, former chairman of the board of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and six counts of wire fraud.
6/22/12 Rick D. Snow, 48, former CFO of Fair, convicted of one count of conspiracy to commit wire and securities fraud, one count of securities fraud, and three counts of wire fraud.
7/13/12 Russell Wassendorf Sr., CEO of collapsed brokerage firm Peregrine Financial Group Inc. arrested and charged with lying to regulators after admitting to authorities he embezzled "millions of dollars" and forged bank statements for "nearly twenty years."
8/22/12 Doug Whitman, Whitman Capital LLC hedge fund founder, convicted of insider trading following a trial in which he spent more than two days on the stand telling jurors he was innocent
10/26/12 UPDATE: Former Goldman Sachs director Rajat Gupta sentenced to two years in federal prison. He will, of course, appeal. . .



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[font size=3][font color=red]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.[/font][/font][/font color=red][font color=black]

[Demeter]

1. That's an....interesting cartoon

I just can't see Obama having anything to do with it, though.

[Tansy_Gold]

2. That's exactly the point

It's the world according to Fox. . .. . .

[Demeter]

3. Here's Dilbert's Take on the Class War

Going to be busy today and worse tomorrow. I will post when I can.

[Demeter]

4. I took a peek at GD--the Delusion is Strong, there

I really hate associating with a cult that ignores facts and personalities to cling to Faith....in a faithless man.

[Fuddnik]

11. I'm getting ready to take a sabbatical myself.

Venture in there, and you'll be muttering to yourself for the rest of the day.

I could fire up the new bike for a while, pick up golf again, and spend more time at the gym and dog park. Or, I could listen to people tell me that I need to be beaten more for my own good and to improve morale. Big Brother and Jesus really love me. If only I will believe and donate.

Tough decision.

[bread_and_roses]

17. Beware, beware! I did that yesterday ...

... still trying to recover some sort of equilibrium.

PLUS I noticed several low-count posters with slick & predictable talking points on why we have to agree to cut SS/MA/MC. And THAT prickles my thumbs ....

Worth reposting, I think - any bets on how long the progression takes? It's a short window, unless they punt to the new Congress:

http://www.commondreams.org/view/2012/11/07-7

... the political leader in whose triumph liberals are today ecstatically basking is likely to target their most cherished government policies within a matter of weeks, even days. With their newly minted power, will they have any ability, or even will, to stop him? If history is any indication, this is how this "fight" will proceed:

[xchrom]

5. Happy Diwali!

[xchrom]

12. ...

[AnneD]

27. It is the triumph....

of light over dark, good over evil. Hubby has been busy with performances. It is a happy time in the Hindu community.

[westerebus]

13. Namaste.

[xchrom]

6. Rich People Are Using Delayed Financing To Game The Housing Market

http://www.businessinsider.com/real-estate-delayed-financing-rule-2012-11

***SNIP

That's how wealthy house hunters and real estate investors in coastal markets like New York and San Francisco have learned to cope with increasing competition. MarketWatch's AnnaMaria Andriotis reports:

"It’s called delayed financing, in which buyers pay cash for a home and then take out a mortgage soon after closing. Rarely used even two years ago, experts say it has picked up over the past 12 months....

After the deal is done, these buyers also want to regain some liquidity. So they get a mortgage and, in some cases, stash this money in investments that might have higher returns than what they pay in mortgage interest. Other options: They might use it to purchase another property or to simply bolster their cash cushion."

The strategy has gained traction since 2011, when Fannie Mae eliminated the six-month waiting period preventing new homebuyers from taking "cash out" on homes immediately after borrowing.


Read more: http://www.businessinsider.com/real-estate-delayed-financing-rule-2012-11#ixzz2C6dBPCRR

[xchrom]

7. It's A Horrible Idea For High-End Designers Get Into 'Cheap Chic'

http://www.businessinsider.com/cheap-chic-collections-are-a-bad-idea-2012-11

This week, the much-anticipated Maison Martin Margiela collection for H&M to hit stores. Other high-end designers to work with the retailer include Versace and Karl Lagerfeld.

Other designers have recently worked with value-based stores like Target and Kohl's.

But it's a horrible idea for designers to work with fast-fashion and value brands because it results in poorly-made clothes with the designer's name attached to them, according to Eugene Rabkin, editor-in-chief of StyleZeitgeist magazine.

"Fashion,’ in the sense now being co-opted by the high street, used to mean designer fashion; that is, something made by a creator who puts care and thought into what he or she is creating. It means carefully crafted designs made with attention to detail and aesthetic sensibility," Rabkin writes.


***i've maintained this for years - you can't be all things to all people.

[bread_and_roses]

28. "High-end designers" are a horrible idea

I followed the links from the cite above - what a farrago of elitist pearl-clutching over the behavior of "the masses" and fainting couch swooning over the co-opted fate of "real" "fashion." They are an excrescence. The utter ludicrousness of bewailing the "throw-away" culture of the peons while singing hosannas to clothing that 99.99999...% of the people on this earth could not afford sickens me.

I appreciate design. I appreciate well-made. I don't like a "throw-away" culture either. But that's the very culture that has made the only people who can afford "real designer" clothes rich.

And we won't even get into the image of women they promulgate - or of men, for that matter.

[xchrom]

29. i've been involved in the fashion business in the past -- owned my own store, blah, blah, blah...

the thing that always struck me was that it muddies the water for someone who works in high end design to lend their name or even submit designs for down market.

the whole thing about fashion -- is that it exists - partly - to knock each other off.

karl submits a collection -- and hundreds of others knock it off to one degree or another - each fitting a wallet niche.''

i don't know if big name designers are trying to influence future buyers or looking at mass sales -- but ultimately -- how does this benefit their brand?

i'm not sure i think coco would have done it.

[xchrom]

8. SINOFSKY'S FINAL MEMO: I Wasn't Fired. I Quit. And I'm Ready To Compete With Microsoft

http://www.businessinsider.com/sinofskys-final-memo-i-wasnt-fired-i-quit-and-im-ready-to-compete-with-microsoft-2012-11



Last night, we got shocking news out of Microsoft.
The man who saved Office, saved Vista, and launched Windows 8, Steven Sinofsky, is out of the company.
Sinofsky was often described as Microsoft's CEO-in-waiting, so this was especially surprising news.
In a memo to employees, Sinofsky says it was his decision to quit.


Read more: http://www.businessinsider.com/sinofskys-final-memo-i-wasnt-fired-i-quit-and-im-ready-to-compete-with-microsoft-2012-11#ixzz2C6fT5ahE

[xchrom]

9. The Sins Of General David Petraeus

http://www.buzzfeed.com/mhastings/the-sins-of-general-david-petraeus

The fraud that General David Petraeus perpetrated on America started many years before the general seduced Paula Broadwell, a lower-ranking officer 20 years his junior, after meeting her on a campus visit to Harvard.

More so than any other leading military figure, Petraeus’ entire philosophy has been based on hiding the truth, on deception, on building a false image. “Perception” is key, he wrote in his 1987 Princeton dissertation: "What policymakers believe to have taken place in any particular case is what matters — more than what actually occurred."

Yes, it’s not what actually happens that matters — it’s what you can convince the public it thinks happened.

Until this weekend, Petraeus had been incredibly successful in making the public think he was a man of great integrity and honor, among other things. Most of the stories written about him fall under what we hacks in the media like to call “a blow job." Vanity Fair. The New Yorker. The New York Times. The Washington Post. Time. Newsweek. In total, all the profiles, stage-managed and controlled by the Pentagon’s multimillion dollar public relations apparatus, built up an unrealistic and superhuman myth around the general that, in the end, did not do Petraeus or the public any favors. Ironically, despite all the media fellating, our esteemed and sex-obsessed press somehow missed the actual blow job.

[Tansy_Gold]

15. Mixing military with civilian adminstrations = not good

BF and I were talking at dinner last night about this, and I said I was of the opinion that it is almost never a good idea to put a military person into a civilian administration job. BF's contention was that since the military is the ultimate consumer of most of the CIA's "intelligence," it's a natural match. I disagreed, citing the obvious conflict of interest. And that's just on principle. (Wes Clarke for SoS? No Way!)

With Petraeus, the specifics made it even worse.

I have no issue with people's sex lives, and I think some of our laws and regulations -- even in the military -- of forced morality are stupid and invasive of privacy. But someone who enters into that particular lifestyle and knows the rules and then puts himself above them, well, that's the mark of the dedicated right winger, the believer in inequality and special treatment for the elites. They ae the enemy within, and we have no greater enemy.

Petraeus is a disgrace.

[xchrom]

16. i aree with you -- and i think the pentagon's consumption of the cia's product

presents a conflict of interest.

and i'm just a strong supporter of civilian control - period.

[xchrom]

10. Mini Pig picking on our Great Dane

[xchrom]

14. MARKETS ROILED BY GREEK BAILOUT DELAY

http://hosted.ap.org/dynamic/stories/W/WORLD_MARKETS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-11-13-06-48-56

LONDON (AP) -- Financial markets focused their concerns on the future of Greece on Tuesday as the country's creditors have still not agreed on giving it the next installment of its rescue loans.

Greece's fellow euro partners gave it a couple more years to meet its economic targets but remain at odds with the International Monetary Fund over how to make the country's debt manageable over the longer-term. They need to agree on that before they can release the (EURO)31.5 billion ($40 billion). They will meet again on Nov. 20 to discuss that.

The delay and seeming disagreements among the international creditors worried investors.

"As long as the situation in Greece remains unresolved, we can expect the markets to continue heading in the same direction," said Craig Erlam, market analyst at Alpari.

[Demeter]

22. What did the Greek People Ever Do to Germany?

Why should they be the Deutschland's whipping boy?

[xchrom]

23. they weren't loyal enough in ww2? -- that's all i got. nt

[tama]

30. German tourists are not very popular in Greece.

Never have been.

And EU authoritarians are very dissatisfied by how unruly and ungovernable Greek people are.

[xchrom]

18. US FUTURES DIP AS OPTIMISM ABOUT GREECE COOLS

http://hosted.ap.org/dynamic/stories/U/US_WALL_STREET_PREMARKET?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-11-13-08-16-08

NEW YORK (AP) -- U.S. stock futures are heading lower as a deal to rescue the Greek economy now looks much less iron clad than it had just one day ago, pushing markets down in Asia and Europe.

Dow Jones industrial futures are down 64 points to 13,716. The broader S&P futures have fallen 7.8 points to 1,370.40. Nasdaq futures are down 16 points to 2,565.

Finance ministers in Europe postponed desperately needed aid for Greece, some $40 billion. That comes as day after a much more optimistic tone Monday, when the head of the finance ministers of the 17 euro countries says lenders have prepared a "positive" report on the country.

On Tuesday, Home Depot posted rising profits for the third quarter thanks to an improving U.S. housing market.

[xchrom]

19. IMF OPENS TALKS ON NEW LOAN DEAL WITH SERBIA

http://hosted.ap.org/dynamic/stories/E/EU_SERBIA_IMF?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-11-13-07-17-10

BELGRADE, Serbia (AP) -- The International Monetary Fund has opened talks with Serbia that could potentially lead to a new loan deal for the Balkan country.

The talks which started Tuesday will focus on pledges by Serbia's new government to slash public spending in a 2013 draft budget.

Serbia's deficit in 2012 has soared to around 7 percent of gross domestic product. The draft budget projects the deficit falling to 3.6 percent.

The IMF froze a (EURO)1 billion ($1.27 billion) standby loan with Serbia in January over the country's rising public spending.

[xchrom]

20. Treasuries See U.S. Falling Over Cliff as Yields Converge

http://www.bloomberg.com/news/2012-11-13/treasuries-see-u-s-over-cliff-as-yields-converge-correct-.html

The biggest Treasury rally in five months is underlining market concern that President Barack Obama and House Republicans will fail to avert $607 billion in mandated spending cuts and tax increases starting Jan. 1.

Yields on 10-year Treasuries dropped the most in one day since May to 1.62 percent after Obama’s re-election Nov. 6. A figure below 1.7 percent indicates that investors expect gross domestic product to shrink by 0.3 percent next year as the so- called fiscal cliff takes effect, according to JPMorgan Chase & Co. Rates on longer-term Treasuries have converged with those of non-U.S. government bonds globally, after remaining about 1 percentage point above them in 2011.

While the economy is creating jobs, housing prices are recovering and consumer confidence is the highest in five years, bond investors are seeking safety from a possible downturn next year. Yields dropped to a two-month low on the prospect of a divided Congress stalling any budget deal and impeding the recovery from the worst recession since the Great Depression.

“The fiscal cliff is being priced in because it’s the biggest risk facing the market right now,” Priya Misra, head of U.S. rates strategy at Bank of America Merrill Lynch in New York, one of the 21 primary dealers that trade with the Federal Reserve, said Nov. 7 in a telephone interview. “Without the cliff we would grow 2 to 2.25 percent.”

[xchrom]

21. Wall Street Damps Pay Expectations After 2011 Bonus Shock

http://www.bloomberg.com/news/2012-11-13/wall-street-damps-pay-expectations-after-2011-bonus-shock.html


Wall Street banks are deflating pay expectations to avoid a replay of last year when cutbacks on bonuses and increased deferrals surprised bankers and traders.

Wall Street banks are deflating pay expectations to avoid a replay of last year when cutbacks on bonuses and increased deferrals surprised bankers and traders.

Almost 20 percent of employees won’t get year-end bonuses, according to Options Group, an executive-search company that advises banks on pay. Those collecting awards may see payouts unchanged from last year or boosted by as much as 10 percent, compensation consultant Johnson Associates Inc. estimates. Decisions are being made as banks cut costs and firms including UBS AG (UBSN) and Nomura Holdings Inc. (8604) fire investment-bank staff.

Some employees were surprised as companies chopped average 2011 bonuses by as much as 30 percent and capped how much could be paid in cash. That experience, along with public statements from top executives, low trading volumes in the first half and a dearth of hiring has employees bracing for another lackluster year, consultants and recruiters said.

“A lot of senior managers won’t have to pay up because they’re saying, ‘Where are these guys going to go?’” said Michael Karp, chief executive officer of New York-based Options Group. “We’re in an environment where a lot of people are just happy to have a job. Expectations have been managed so low that people will be happy with what they get.”

[xchrom]

24. Consumers Closing Wallets in Japan Add to Noda’s Woes: Economy

http://www.bloomberg.com/news/2012-11-12/consumers-flee-to-cash-in-japan-as-noda-s-economic-woes-deepen.html

Japanese consumers are closing their wallets as the economy’s outlook darkens, making it harder for Prime Minister Yoshihiko Noda to stave off the nation’s third recession in four years.

Households are holding the most cash since 2005, shunning risk as they grow gloomier, Bank of Japan data shows. Sliding private consumption contributed to an annualized 3.5 percent decline in gross domestic product in the past quarter, a Cabinet Office report showed yesterday.

While Noda may have avoided a fiscal cliff as the opposition agreed to a deal on deficit-financing legislation, the consumer malaise highlights the challenge of reviving growth in the world’s third-largest economy. At the same time as he tries to rebuild relations with China to support exports, Noda may need to come up with more incentives for consumer purchases at home.

“The Japanese government has no choice but to implement additional measures to shore up the economy,” said Junko Nishioka, chief economist at RBS Securities Japan Ltd and a former BOJ official. “The dispute with China, the decline of the stock market, and confusion over the political situation in Japan are hurting confidence.”

[xchrom]

25. Eurozone gives Greece more time on budget targets

http://www.bbc.co.uk/news/world-europe-20307514


Eurozone ministers have agreed to give Greece two more years, until 2016, to meet its deficit-reduction targets.

However the finance ministers delayed a decision on releasing the latest 31.5bn euro (£25.2bn; $40bn) tranche of bailout funds.

Differences also emerged among Greece's lenders on how to make its debt sustainable into the next decade.

Greek PM Antonis Samaras has warned that without the new funds Greece will run out of money within days.

[Demeter]

26. Love that Tolles!

http://assets.amuniversal.com/817fc7a00f4f0130fc74001dd8b71c47

Someday I'm going to learn enough to get the picture directly....

[Demeter]

31. Woo! Ugly Finish!

Fear is running with the bears.

[Demeter]

32. Flood Insurance, Already Fragile, Faces New Stress

http://www.nytimes.com/2012/11/13/nyregion/federal-flood-insurance-program-faces-new-stress.html?_r=0&gwh=09DF9AF132FC6BBD62E812C94F6433D3&pagewanted=print

WASHINGTON — The federal government’s flood insurance program, which fell $18 billion into debt after Hurricane Katrina, is once again at risk of running out of money as the daunting reconstruction from Hurricane Sandy gets under way. Early estimates suggest that Hurricane Sandy will rank as the nation’s second-worst storm for claims paid out by the National Flood Insurance Program. With 115,000 new claims submitted and thousands more being filed each day, the cost could reach $7 billion at a time when the program is allowed, by law, to add only an additional $3 billion to its onerous debt. Congress, just this summer, overhauled the flawed program by allowing large increases in premiums paid by vacation home owners and those repeatedly hit by floods. But critics say taxpayer money should not be used to bail it out again — essentially subsidizing the rebuilding of homes in risky areas — without Congress’ mandating even more radical changes.

“We are now just throwing money to support something that is going to end up creating more victims and costing more money in the future,” Representative Earl Blumenauer, Democrat of Oregon, said of the program, which insures 5.7 million homes nationwide near coasts or flood-prone rivers.

Even with the new rules, critics argue, it will be many years, if ever, before many homeowners are required to pay premiums that accurately reflect the market cost of the coverage. Some communities have long resisted imposing more appropriate building codes to prevent damage, putting the program at further risk of devastating losses when storms like Hurricane Sandy hit. And despite some efforts in recent years, many of the flood maps the program relies on are out of date — which can have expensive, and even deadly, consequences in this era of rising sea levels if homeowners are not cognizant of the risks they face. The program’s giant debt makes matters worse because simply covering the interest owed the Treasury consumes from $90 million to $750 million a year, depending on interest rates. This means it is much harder to build reserves for future catastrophes...Already, 44 members of the House of Representatives have called for Congress to appropriate whatever money is needed to help victims recover from Hurricane Sandy, and aides on Capitol Hill say that under such extreme losses, they expect lawmakers will do what they have to do to keep the program solvent — even amid a federal budget crisis.

“It is a program we require people to participate in, so we have to make sure it is adequately funded to handle claims,” said Representative Timothy H. Bishop, Democrat of New York, whose district in Long Island has more than 100 miles of coastline. “You can’t say: ‘Awfully sorry. Hope this works out for you.’ ”

The federal government’s flood insurance program, established in 1968, is one of the world’s largest. The insurance is mandatory for homeowners with a federally backed mortgage if they live in an area subject to flooding at least once every 100 years. The average annual flood insurance premium is about $615, but for homeowners in areas at higher risk of flooding, an annual policy can cost from $1,200 to $3,000, according to Steve Harty, president of National Flood Services, a claims-processing company, depending on the level of coverage. The federal program collects about $3.5 billion in annual premiums. But in four of the past eight years, claims will have eclipsed premiums, most glaringly in 2005 — the year of Hurricanes Katrina, Rita and Wilma — when claims totaled $17.7 billion. Private insurance companies have long avoided offering flood insurance to homeowners...But the program is still a moneymaker for the private insurance industry. Even though these companies bear none of the risk, they take, on average, $1 billion a year of the premiums the government collects, as compensation for help in selling and servicing the policies. Federal auditors argue the payments are excessive.

More than one million property owners who live in homes at least four decades old also have historically paid only about 40 percent of the estimated true cost of the coverage the government provides — in large part because of lobbying by the real estate industry, mortgage brokers, homeowners associations and other groups to keep federal authorities from charging more. Perhaps the most troubling problem, program officials acknowledge, is that only a tiny share of enrolled properties accounts for a giant share of the overall claims, as the properties are repeatedly flooded and rebuilt in low coastal regions and in hurricane flight paths....One Biloxi, Miss., property valued at $183,000 flooded 15 times over a decade, costing the program $1.47 million, according to federal data provided by the agency to a member of Congress. Another in Humble, Tex., has resulted in over $2 million in flood payouts even though it was worth just $116,000. An analysis of two decades of claims by the Wharton Risk Center at the University of Pennsylvania shows that certain states, like Texas, which has the second-largest number of policies, pay much less in insurance premiums than the homeowners there collect in damage claims, evidence of the inherent inequity in the national program...

The fact that many homeowners hit by Hurricane Sandy have no flood or homeowners insurance could prompt Congress to provide assistance to the uninsured, too, as happened after Hurricane Katrina, further raising the cost to the federal Treasury...Hurricane Katrina put the program so deeply into debt that federal officials have acknowledged they will never be able to fully repay the $18 billion Treasury-financed loan that bailed the program out. FEMA, as a result of this year’s legislation, has the authority to raise premiums by as much as 25 percent per year over the next five years. The increases will be imposed mostly on vacation homes and other properties that repeatedly flood, but whose owners have paid far below market insurance rates. The legislation also authorizes the creation of a national reserve fund to help the program handle major flood catastrophes, and urges Congress to appropriate $400 million a year to update the thousands of out-of-date flood control maps. That would likely force new homes to be built elevated off the ground in spots where rising sea levels or recent major storms have had an impact....

[Demeter]

33. Will Obama Agree to Entitlement Cuts? He Already Has By MATT BAI

http://thecaucus.blogs.nytimes.com/2012/11/13/will-obama-agree-to-entitlement-cuts-he-already-has/?gwh=FDE211680200219201170B69B0C891C0&pagewanted=print

Labor unions and other liberal groups that helped re-elect President Obama are starting a push this week to make sure that any new budget deal does not chisel away at entitlement programs. Their message to the president, beginning with a meeting at the White House on Tuesday, is that he won a mandate to raise taxes on the wealthy while resisting cuts to Medicare and Social Security, and that they intend to stand firm with him on that position. The problem here is that urging Mr. Obama not to join House Republicans in reducing entitlement spending is like pleading with John Travolta and Olivia Newton-John not to reunite for a Christmas album. It's just too late. Sure, there was a lot of specious debate during the campaign about which candidate would protect older people from the evil designs of the other. Mitt Romney claimed, dubiously, that Mr. Obama had raided sacred Medicare financing to pay for his health care plan. Mr. Obama said that Mr. Romney would follow the lead of his running mate, Representative Paul D. Ryan, and scrap Medicare altogether for future generations. But both candidates had to know how thoroughly disingenuous this debate really was. The fact is that Mr. Obama, during his "grand bargain" negotiations with the House speaker, John A. Boehner, in the summer of 2011, had already signed off on painful cuts to Medicare, Medicaid and Social Security, even if he never once mentioned that during his re-election campaign. So he knew there was a deal to be had that would preserve - and perhaps even strengthen - these programs without destroying them.

And if Republicans were outraged over those cuts, it's only because they were demanding far steeper reductions in all three programs. The idea that Republicans had to stop Mr. Obama from recklessly cutting Medicare was probably Mr. Romney's most misleading attack, and that's saying something. None of this is theoretical or subjective. It's spelled out clearly in the confidential offers that the two sides exchanged at the time and that I obtained while writing about the negotiations last spring. In his opening bid, after the rough framework of a grand bargain was reached, Mr. Boehner told the White House he wanted to cut $450 billion from Medicare and Medicaid in the next decade alone, with more cuts to follow. He also proposed raising the retirement age for Social Security and changing the formula to make benefits less generous. Mr. Obama wasn't willing to go quite that far. But in his counteroffer a few days later, he agreed to squeeze $250 billion from Medicare in the next 10 years, with $800 billion more in the decade after that. He was willing to cut $110 billion more from Medicaid in the short term. And while Mr. Obama rejected raising the retirement age, he did acquiesce to changing the Social Security formula so that benefits would grow at a slower rate. This distance between the two sides on entitlement spending was sizable but not unbridgeable. In the end, the deal fell apart over the ratio of cuts to revenue. Mr. Obama wanted $400 billion more in new revenue than he and Mr. Boehner had initially discussed. Mr. Boehner couldn't sell that number to his caucus, and he wasn't going to try without getting even more drastic cuts to entitlements in return.

What's relevant here, though, isn't simply that Mr. Obama agreed to scale back entitlement spending. It's that he had the support of his most liberal advisers and allies, too. No one working in the White House was thrilled by the prospect of slashing Medicare and especially Social Security, which Democrats firmly believe should be excluded from any budget negotiation. Even so, there was near unanimity among Mr. Obama's advisers that making those cuts was worth getting a framework that would avoid a debt default and begin to put the nation on a different fiscal trajectory. And just hours before the deal with the speaker unraveled, Mr. Obama met with his party's top Congressional leaders, Harry Reid and Nancy Pelosi, and asked for their support. Neither Mr. Reid nor Ms. Pelosi felt like celebrating over the terms, to be sure, but it's significant that both lawmakers told the president they would get behind it.

Liberal activists will tell the president that things are very different now. He's won a mandate, they will say, and that means he doesn't need to compromise. But while Mr. Obama can probably claim some vindication on the need to make the tax code more equitable, it would be a stretch to say that the voters demanded that he hold the line against entitlement cuts as part of a broader deal. The possible terms of a grand bargain hardly ever came up during the campaign, because neither side wanted to talk about it. Mr. Obama may have more leverage now than he did in 2011 to put a hard limit on the scale of entitlement cuts, but it's unthinkable that he could reach a comprehensive deal - something he still badly wants to do - without at least accepting the terms he found acceptable the first time around. That's how negotiations work.

So while it may be good strategy for progressive groups to pressure the White House on entitlement spending, no one should harbor the illusion that the president won't sign off on reductions. The simple fact is, he already has.

[Demeter]

34. WELL, HE CAN JUST RENEG AND RENEGOTIATE

Be a man. Be LBJ, not Jimmy Carter.

[bread_and_roses]

35. second that (n/t)